EX-4.4



 Exhibit 4.4 

HYDRO ONE LIMITED 
 CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (unaudited) 
 For the three months ended March 31, 2018 and 2017 

 

									
	  Three months ended March 31 (millions of Canadian dollars, except per share amounts) 	  	2018	 	  	2017	 
	 Revenues
	  				  			
	 Distribution (includes $67 related party revenues; 2017 – $69) (Note
22) 
	  	 	1,145	 	  	 	1,279	 
	 Transmission (includes $405 related party revenues; 2017 – $369) (Note
22) 
	  	 	421	 	  	 	367	 
	 Other
	  	 	10	 	  	 	12	 
	  
	 
		  	 	1,576	 	  	 	1,658	 
	  
	 
			
	 Costs
	  				  			
	 Purchased power (includes $518 related party costs; 2017 – $656) (Note
22) 
	  	 	751	 	  	 	889	 
	 Operation, maintenance and administration (Note 22) 
	  	 	270	 	  	 	271	 
	 Depreciation and amortization (Note 5) 
	  	 	197	 	  	 	195	 
	  
	 
		  	 	1,218	 	  	 	1,355	 
	  
	 
			
	 Income before financing charges and income taxes
	  	 	358	 	  	 	303	 
	 Financing charges
	  	 	88	 	  	 	103	 
	  
	 
			
	 Income before income taxes
	  	 	270	 	  	 	200	 
	 Income taxes (Note 6) 
	  	 	42	 	  	 	27	 
	  
	 
	 Net income
	  	 	228	 	  	 	173	 
	  
	 
			
	 Other comprehensive income
	  	 	—	 	  	 	1	 
	  
	 
	 Comprehensive income
	  	 	228	 	  	 	174	 
	  
	 
			
	 Net income attributable to:
	  				  			
	 Noncontrolling interest
	  	 	1	 	  	 	1	 
	 Preferred shareholders
	  	 	5	 	  	 	5	 
	 Common shareholders
	  	 	222	 	  	 	167	 
	  
	 
		  	 	228	 	  	 	173	 
	  
	 
			
	 Comprehensive income attributable to:
	  				  			
	 Noncontrolling interest
	  	 	1	 	  	 	1	 
	 Preferred shareholders
	  	 	5	 	  	 	5	 
	 Common shareholders
	  	 	222	 	  	 	168	 
	  
	 
		  	 	228	 	  	 	174	 
	  
	 
			
	 Earnings per common share (Note 20) 
	  				  			
	 Basic
	  	$	0.37	 	  	$	0.28	 
	 Diluted
	  	$	0.37	 	  	$	0.28	 
	  
	 
			
	 Dividends per common share declared (Note 19)

	  	$	0.22	 	  	$	0.21	 
	  
	 

 See accompanying notes to Condensed Interim Consolidated Financial Statements (unaudited). 

  

					
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 HYDRO ONE LIMITED 
 CONDENSED
INTERIM CONSOLIDATED BALANCE SHEETS (unaudited) 
 At March 31, 2018 and December 31, 2017 

 

									
	  (millions of Canadian dollars)	  	March 31,
2018	 	 	December 31,
2017	 
	 Assets
	  				 			
	 Current assets:
	  				 			
	 Cash and cash equivalents
	  	 	28	 	 	 	25	 
	 Accounts receivable (Note 7) 
	  	 	588	 	 	 	636	 
	 Due from related parties
	  	 	243	 	 	 	253	 
	 Other current assets (Note 8) 
	  	 	143	 	 	 	105	 
	  
	 
		  	 	1,002	 	 	 	1,019	 
	  
	 
			
	 Property, plant and equipment (Note 9) 
	  	 	20,069	 	 	 	19,947	 
	 Other long-term assets:
	  				 			
	 Regulatory assets
	  	 	3,105	 	 	 	3,049	 
	 Deferred income tax assets
	  	 	918	 	 	 	987	 
	 Intangible assets (net of accumulated amortization – $392; 2017 – $375)
	  	 	365	 	 	 	369	 
	 Goodwill
	  	 	325	 	 	 	325	 
	 Other assets
	  	 	5	 	 	 	5	 
	  
	 
		  	 	4,718	 	 	 	4,735	 
	  
	 
	 Total assets
	  	 	25,789	 	 	 	25,701	 
	  
	 
			
	 Liabilities
	  				 			
	 Current liabilities:
	  				 			
	 Short-term notes payable (Note 13) 
	  	 	989	 	 	 	926	 
	 Long-term debt payable within one year (Notes 13, 15) 
	  	 	981	 	 	 	752	 
	 Accounts payable and other current liabilities (Note 11)

	  	 	911	 	 	 	905	 
	 Due to related parties
	  	 	37	 	 	 	157	 
	  
	 
		  	 	2,918	 	 	 	2,740	 
	  
	 
			
	 Long-term liabilities:
	  				 			
	 Long-term debt (includes $541 measured at fair value; 2017 – $541)
(Notes 13, 15) 
	  	 	9,085	 	 	 	9,315	 
	 Convertible debentures (Note 14, 15) 
	  	 	488	 	 	 	487	 
	 Regulatory liabilities
	  	 	160	 	 	 	128	 
	 Deferred income tax liabilities
	  	 	72	 	 	 	71	 
	 Other long-term liabilities (Note 12) 
	  	 	2,718	 	 	 	2,707	 
	  
	 
		  	 	12,523	 	 	 	12,708	 
	  
	 
	 Total liabilities
	  	 	15,441	 	 	 	15,448	 
	  
	 
			
	 Contingencies and Commitments (Notes 24, 25)
	  				 			
	 Subsequent Events (Note 27)
	  				 			
			
	 Noncontrolling interest subject to redemption
	  	 	21	 	 	 	22	 
			
	 Equity
	  				 			
	 Common shares (Note 18) 
	  	 	5,631	 	 	 	5,631	 
	 Preferred shares (Note 18) 
	  	 	418	 	 	 	418	 
	 Additional paid-in capital
	  	 	55	 	 	 	49	 
	 Retained earnings
	  	 	4,181	 	 	 	4,090	 
	 Accumulated other comprehensive loss
	  	 	(7	) 	 	 	(7	) 
	  
	 
	 Hydro One shareholders’ equity
	  	 	10,278	 	 	 	10,181	 
			
	 Noncontrolling interest
	  	 	49	 	 	 	50	 
	  
	 
	 Total equity
	  	 	10,327	 	 	 	10,231	 
	  
	 
		  	 	25,789	 	 	 	25,701	 
	  
	 

 See accompanying notes to Condensed Interim Consolidated Financial Statements (unaudited). 

  

					
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 HYDRO ONE LIMITED 
 CONDENSED
INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (unaudited)  
 For the three months ended March 31,
2018 and 2017 
  
  

																																	
	 Three months ended March 31, 2018

(millions of Canadian dollars)
	  	Common
Shares	 	  	Preferred
Shares	 	  	Additional
Paid-in
Capital	 	  	Retained
Earnings	 	 	 Accumulated

Other
 Comprehensive

Income (Loss)
	 	 	Hydro One
Shareholders’
Equity	 	 	Non-
controlling
Interest	 	 	Total   
Equity   	 
	 January 1, 2018
	  	 	5,631	 	  	 	418	 	  	 	49	 	  	 	4,090	 	 	 	(7	) 	 	 	10,181	 	 	 	50	 	 	 	10,231   	 
	 Net income
	  	 	—	 	  	 	—	 	  	 	—	 	  	 	227	 	 	 	—	 	 	 	227	 	 	 	1	 	 	 	228   	 
	 Distributions to noncontrolling interest
	  	 	—	 	  	 	—	 	  	 	—	 	  	 	—	 	 	 	—	 	 	 	—	 	 	 	(2	) 	 	 	(2)  	 
	 Dividends on preferred shares
	  	 	—	 	  	 	—	 	  	 	—	 	  	 	(5	) 	 	 	—	 	 	 	(5	) 	 	 	—	 	 	 	(5)  	 
	 Dividends on common shares
	  	 	—	 	  	 	—	 	  	 	—	 	  	 	(131	) 	 	 	—	 	 	 	(131	) 	 	 	—	 	 	 	(131)  	 
	 Stock-based compensation
	  	 	—	 	  	 	—	 	  	 	6	 	  	 	—	 	 	 	—	 	 	 	6	 	 	 	—	 	 	 	6   	 
	  
	 
	 March 31, 2018
	  	 	5,631	 	  	 	418	 	  	 	55	 	  	 	4,181	 	 	 	(7	) 	 	 	10,278	 	 	 	49	 	 	 	10,327   	 
	  
	 
	 Three months ended March 31, 2017

(millions of Canadian dollars)
	  	Common
Shares	 	  	Preferred
Shares	 	  	Additional
Paid-in
Capital	 	  	Retained
Earnings	 	 	  

Accumulated
Other
 Comprehensive

Income (Loss)
	 	 	Hydro One
Shareholders’
Equity	 	 	Non-
controlling
Interest	 	 	Total   
Equity   	 
	 January 1, 2017
	  	 	5,623	 	  	 	418	 	  	 	34	 	  	 	3,950	 	 	 	(8	) 	 	 	10,017	 	 	 	50	 	 	 	10,067   	 
	 Net income
	  	 	—	 	  	 	—	 	  	 	—	 	  	 	172	 	 	 	—	 	 	 	172	 	 	 	1	 	 	 	173   	 
	 Other comprehensive income
	  	 	—	 	  	 	—	 	  	 	—	 	  	 	—	 	 	 	1	 	 	 	1	 	 	 	—	 	 	 	1   	 
	 Dividends on preferred shares
	  	 	—	 	  	 	—	 	  	 	—	 	  	 	(5	) 	 	 	—	 	 	 	(5	) 	 	 	—	 	 	 	(5)  	 
	 Dividends on common shares
	  	 	—	 	  	 	—	 	  	 	—	 	  	 	(125	) 	 	 	—	 	 	 	(125	) 	 	 	—	 	 	 	(125)  	 
	 Stock-based compensation
	  	 	—	 	  	 	—	 	  	 	6	 	  	 	—	 	 	 	—	 	 	 	6	 	 	 	—	 	 	 	6   	 
	  
	 
	 March 31, 2017
	  	 	5,623	 	  	 	418	 	  	 	40	 	  	 	3,992	 	 	 	(7	) 	 	 	10,066	 	 	 	51	 	 	 	10,117   	 
	  
	 

 See accompanying notes to Condensed Interim Consolidated Financial Statements (unaudited). 

  

					
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 HYDRO ONE LIMITED 
 CONDENSED
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)  
 For the three months ended March 31, 2018 and
2017 
  
  

									
	Three months ended March 31 (millions of Canadian dollars) 	  	2018	 	 	2017	 
	 	 
	 Operating activities
	  				 			
	 Net income
	  	 	228	 	 	 	173	 
	 Environmental expenditures
	  	 	(4	) 	 	 	(4	) 
	 Adjustments for non-cash items:
	  				 			
	 Depreciation and amortization (excluding asset removal costs)
	  	 	179	 	 	 	174	 
	 Regulatory assets and liabilities
	  	 	8	 	 	 	31	 
	 Deferred income taxes
	  	 	35	 	 	 	20	 
	 Unrealized gain on foreign exchange contract
	  	 	(27	) 	 	 	—	 
	 Other
	  	 	3	 	 	 	—	 
	 Changes in non-cash balances related to operations (Note 23) 
	  	 	(46	) 	 	 	77	 
	 	 
	 Net cash from operating activities
	  	 	376	 	 	 	471	 
	 	 
			
	 Financing activities
	  				 			
	 Short-term notes issued
	  	 	1,172	 	 	 	572	 
	 Short-term notes repaid
	  	 	(1,109	) 	 	 	(590	) 
	 Dividends paid
	  	 	(136	) 	 	 	(130	) 
	 Distributions paid to noncontrolling interest
	  	 	(3	) 	 	 	—	 
	 	 
	 Net cash used in financing activities
	  	 	(76	) 	 	 	(148	) 
	 	 
			
	 Investing activities
	  				 			
	 Capital expenditures (Note 23) 
	  				 			
	 Property, plant and equipment
	  	 	(286	) 	 	 	(335	) 
	 Intangible assets
	  	 	(14	) 	 	 	(14	) 
	 Capital contributions received
	  	 	—	 	 	 	7	 
	 Other
	  	 	3	 	 	 	(8	) 
	 	 
	 Net cash used in investing activities
	  	 	(297	) 	 	 	(350	) 
	 	 
			
	 Net change in cash and cash equivalents
	  	 	3	 	 	 	(27	) 
	 Cash and cash equivalents, beginning of period
	  	 	25	 	 	 	50	 
	 	 
	 Cash and cash equivalents, end of period
	  	 	28	 	 	 	23	 
	 	 

 See accompanying notes to Condensed Interim Consolidated Financial Statements (unaudited). 

  

					
		  	4	  	 














 HYDRO ONE LIMITED 
 NOTES TO
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (unaudited)  
 For the three months ended March 31,
2018 and 2017 
  
  

	1.	 DESCRIPTION OF THE BUSINESS 



Hydro One Limited (Hydro One or the Company) was incorporated on August 31, 2015, under the Business Corporations Act (Ontario). On
October 31, 2015, the Company acquired Hydro One Inc., a company previously wholly-owned by the Province of Ontario (Province). The acquisition of Hydro One Inc. by Hydro One was accounted for as a common control transaction and Hydro One is a
continuation of business operations of Hydro One Inc. At March 31, 2018, the Province held approximately 47.4% (December 31, 2017 - 47.4%) of the common shares of Hydro One. The principal businesses of Hydro One are the transmission and
distribution of electricity to customers within Ontario. 
 Earnings for interim periods may not be indicative of results for the year due to the impact
of seasonal weather conditions on customer demand and market pricing. 
 Rate Setting 

Transmission 
 In December 2017, the Ontario Energy Board (OEB)
approved Hydro One Networks Inc.‘s (Hydro One Networks) 2018 rates revenue requirement of $1,511 million. See Note 10 - Regulatory Assets and Liabilities for additional information. 

On May 10, 2018, the OEB issued its Decision and Rate Order on B2M LP’s 2018 transmission application reflecting revenue requirement of
$36 million, effective January 1, 2018. 
 Distribution 

In March 2017, Hydro One Networks filed an application with the OEB for 2018-2022 distribution rates, requesting revenue requirements of
$1,517 million for 2018, $1,564 million for 2019, $1,611 million for 2020, $1,684 million for 2021, and $1,726 million for 2022. The OEB approval is pending. 

 

	2.	 SIGNIFICANT ACCOUNTING POLICIES 



Basis of Consolidation 
 These unaudited condensed interim
Consolidated Financial Statements (Consolidated Financial Statements) include the accounts of the Company and its subsidiaries. Intercompany transactions and balances have been eliminated. 

Basis of Accounting 
 These Consolidated Financial Statements are
prepared and presented in accordance with United States (US) Generally Accepted Accounting Principles (GAAP) for interim financial statements and in Canadian dollars. 

The accounting policies applied are consistent with those outlined in Hydro One’s annual audited consolidated financial statements for the year ended
December 31, 2017, with the exception of the adoption of new accounting standards as described below and in Note 3. These Consolidated Financial Statements reflect adjustments, that are, in the opinion of management, necessary to reflect fairly
the financial position and results of operations for the respective periods. These Consolidated Financial Statements do not include all disclosures required in the annual financial statements and should be read in conjunction with the 2017 annual
audited consolidated financial statements. 
 Revenue Recognition 

The Company adopted Accounting Standard Codification (ASC) 606 - Revenue from Contracts with Customers on January 1, 2018 using the
retrospective method, without the election of any practical expedients. There was no material impact to the Company’s revenue recognition policy as a result of adopting ASC 606. 

Nature of Revenues 
 Transmission revenues are collected through OEB-approved rates, which are based on an approved revenue requirement that includes a rate of return. Such revenue is recognized as electricity is transmitted and delivered to customers. 

Distribution revenues attributable to the delivery of electricity are based on OEB-approved distribution rates and
are recognized on an accrual basis and include billed and unbilled revenues. Billed revenues are based on electricity delivered as measured from customer meters. At the end of each month, electricity delivered to customers since the date of the last
billed meter reading is estimated, and the corresponding unbilled revenue is recorded. The unbilled revenue estimate is affected by energy consumption, weather, and changes in the composition of customer classes. 

Distribution revenue also includes an amount relating to rate protection for rural, residential, and remote customers, which is received from the
Independent Electricity System Operator (IESO) based on a standardized customer rate that is approved by the OEB. 
 Revenues also include amounts
related to sales of other services and equipment. Such revenue is recognized as services are rendered or as equipment is delivered. Revenues are recorded net of indirect taxes. 

  

					
		  	5	  	 














 HYDRO ONE LIMITED 
 NOTES TO
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued) 
 For the three months ended
March 31, 2018 and 2017 
  
 Employee Future Benefits 

The Company adopted Accounting Standard Update (ASU) 2017-07 on January 1, 2018. The Company used the
retrospective method for guidance relating to the presentation of the service cost component and the other components of net periodic pension and post-retirement benefit costs in the Statement of Operations and Comprehensive Income. There was no
change in presentation in the Statement of Operations and Comprehensive Income. The Company used the prospective method for guidance relating to the capitalization of the service cost component of net periodic pension and post-retirement and
post-employment benefit costs in assets. Upon adoption of ASU 2017-07, the Company recognized the Post-Retirement and Post-Employment Benefits Non-Service Costs
Regulatory Asset. See Note 10 - Regulatory Assets and Liabilities for additional information. 
 Defined Benefit Pension 

Defined benefit pension costs are recorded on an accrual basis for financial reporting purposes. Hydro One records a regulatory asset equal to the net
underfunded projected benefit obligation for its defined benefit pension plan. Defined benefit pension costs are attributed to labour and a portion not exceeding the service cost component of accrual basis defined benefit pension costs is
capitalized as part of the cost of property, plant and equipment and intangible assets. The remaining defined benefit pension costs are charged to results of operations (operation, maintenance and administration costs). 

Post-Retirement and Post-Employment Benefits 
 All
post-retirement and post-employment benefit costs are attributed to labour and are either charged to results of operations (operation, maintenance and administration costs) or capitalized as part of the cost of property, plant and equipment and
intangible assets for service cost component and to regulatory assets for all other components of the benefit costs, consistent with their inclusion in OEB-approved rates. 

 

	3.	 NEW ACCOUNTING PRONOUNCEMENTS 



The following tables present ASUs and ASC guidance issued by the Financial Accounting Standards Board that are applicable to Hydro One: 

Recently Adopted Accounting Guidance 
  

									
	Guidance	  	Date issued	  	Description	  	Effective date	  	Impact on Hydro One
	ASC
 Topic 606
	  	May 2014 –
November
2017	  	 ASC Topic 606 Revenue from Contracts with Customers replaced ASC Topic 605 Revenue
Recognition. ASC Topic 606 provides guidance on revenue recognition relating to the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange
for those goods and services.
  
	  	January 1, 2018	  	Hydro One adopted ASC 606 on January 1, 2018 using the retrospective method, without the election of any practical expedients. The Company has included the disclosure requirements of ASC
606 for interim periods in the year of adoption.
	ASU
 2017-07
	  	March
 2017
	  	 Service cost components of net benefit cost associated with defined benefit plans are required to be
reported in the same line as other compensation costs arising from services rendered by the Company’s employees. All other components of net benefit cost are to be presented in the income statement separately from the service cost component.
Only the service cost component is eligible for capitalization where applicable.
  
	  	January 1, 2018	  	Hydro One applied for a regulatory deferral account to maintain the capitalization of post-employment benefit related costs and as such, there is no material impact upon adoption.

 Recently Issued Accounting Guidance Not Yet Adopted 
  

									
	ASU	  	Date issued	  	Description	  	Effective date	  	Anticipated impact on Hydro One
	2016-02
 2018-01
	  	February
 2016 –
January
2018
	  	 Lessees are required to recognize the rights and obligations resulting from operating leases as assets
(right to use the underlying asset for the term of the lease) and liabilities (obligation to make future lease payments) on the balance sheet. ASU 2018-01 permits an entity to elect an optional practical
expedient to not evaluate under ASC Topic 842 land easements that exist or expired before the entity’s adoption of ASC Topic 842 and that were not previously accounted for as leases under ASC Topic 840.

 
	  	January 1, 2019	  	An initial assessment is currently underway encompassing a review of existing leases, which will be followed by a review of relevant contracts. No quantitative determination has been made
at this time. The Company is on track for implementation of this standard by the effective date.


  

					
		  	6	  	 














 HYDRO ONE LIMITED 
 NOTES TO
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued) 
 For the three months ended
March 31, 2018 and 2017 
  
  

	4.	 BUSINESS COMBINATIONS 



Avista Corporation Purchase Agreement 
 In July 2017, Hydro One
reached an agreement to acquire Avista Corporation (Merger) for approximately $6.7 billion in an all-cash transaction. Avista Corporation is an investor-owned utility providing electric generation,
transmission, and distribution services. It is headquartered in Spokane, Washington, with service areas in Washington, Idaho, Oregon, Montana and Alaska. The closing of the Merger is subject to receipt of certain regulatory and government approvals,
and the satisfaction of customary closing conditions. See Note 14 - Convertible Debentures and Note 15 - Fair Value of Financial Instruments and Risk Management for details of convertible debentures and foreign exchange contract, respectively,
related to financing of the Merger. 
  

	5.	 DEPRECIATION AND AMORTIZATION 



 

									
	Three months ended March 31 (millions of dollars) 	  	2018	 	  	2017	 
	 Depreciation of property, plant and equipment
	  	 	158	 	  	 	155	 
	 Asset removal costs
	  	 	18	 	  	 	21	 
	 Amortization of intangible assets
	  	 	17	 	  	 	15	 
	 Amortization of regulatory assets
	  	 	4	 	  	 	4	 
	 	  	 	197	 	  	 	195	 

  

	6.	 INCOME TAXES 



Income tax expense differs from the amount that would have been recorded using the combined Canadian federal and Ontario statutory income tax rate. The
reconciliation between the statutory and the effective tax rates is provided as follows: 
  

									
	Three months ended March 31 (millions of dollars) 	  	2018	 	 	2017   	 
	 Income before income taxes
	  	 	270	 	 	 	200   	 
	 Income taxes at statutory rate of 26.5% (2017 - 26.5%)
	  	 	72	 	 	 	53   	 
	 Increase (decrease) resulting from:
	  				 			
	 Net temporary differences recoverable in future rates charged to customers:
	  				 			
	 Capital cost allowance in excess of depreciation and amortization
	  	 	(12	) 	 	 	(11)  	 
	 Overheads capitalized for accounting but deducted for tax purposes
	  	 	(5	) 	 	 	(4)  	 
	 Interest capitalized for accounting but deducted for tax purposes
	  	 	(4	) 	 	 	(4)  	 
	 Pension contributions in excess of pension expense
	  	 	(3	) 	 	 	(5)  	 
	 Environmental expenditures
	  	 	(2	) 	 	 	(3)  	 
	 Other
	  	 	(1	) 	 	 	—   	 
	  
	 
	 Net temporary differences
	  	 	(27	) 	 	 	(27)  	 
	 Net permanent differences
	  	 	(3	) 	 	 	1   	 
	  
	 
	 Total income taxes
	  	 	42	 	 	 	27   	 
	  
	 
			
	 Effective income tax rate
	  	 	15.6	% 	 	 	13.5%	 
	  
	 

  

	7.	 ACCOUNTS RECEIVABLE 


  

									
	(millions of dollars)	  	March 31,
2018	 	 	December 31,   
2017   	 
	 Accounts receivable – billed
	  	 	307	 	 	 	298   	 
	 Accounts receivable – unbilled
	  	 	307	 	 	 	367   	 
	  
	 
	 Accounts receivable, gross
	  	 	614	 	 	 	665   	 
	 Allowance for doubtful accounts
	  	 	(26	) 	 	 	(29)  	 
	  
	 
	 Accounts receivable, net
	  	 	588	 	 	 	636   	 
	  
	 

 The following table shows the movements in the allowance for doubtful accounts for the three months ended March 31,
2018 and the year ended December 31, 2017: 
  

									
	(millions of dollars)	  	 Three months ended
March 31,

2018
	 	 	Year ended   
December 31,   
2017   	 
	 Allowance for doubtful accounts – beginning
	  	 	(29	) 	 	 	(35)  	 
	 Write-offs
	  	 	8	 	 	 	25   	 
	 Additions to allowance for doubtful accounts
	  	 	(5	) 	 	 	(19)  	 
	  
	 
	 Allowance for doubtful accounts – ending
	  	 	(26	) 	 	 	(29)  	 
	  
	 


  

					
		  	7	  	 














 HYDRO ONE LIMITED 
 NOTES TO
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued) 
 For the three months ended
March 31, 2018 and 2017 
  
  

	8.	 OTHER CURRENT ASSETS 


  

									
	  (millions of dollars)	  	March 31,
2018	 	  	December 31,
2017	 
	 Regulatory assets
	  	 	49	 	  	 	46	 
	 Materials and supplies
	  	 	20	 	  	 	18	 
	 Prepaid expenses and other assets
	  	 	50	 	  	 	41	 
	 Derivative instrument - foreign exchange contract
	  	 	24	 	  	 	—	 
	  
	 
		  	 	143	 	  	 	105	 
	  
	 

  

	9.	 PROPERTY, PLANT AND EQUIPMENT 



 

									
	(millions of dollars)	  	March 31,
2018	 	 	December 31,
2017	 
	 Property, plant and equipment
	  	 	29,025	 	 	 	29,025 	 
	 Less: accumulated depreciation
	  	 	(10,490	) 	 	 	(10,455)	 
	  
	 
		  	 	18,535	 	 	 	18,570 	 
	 Construction in progress
	  	 	1,372	 	 	 	1,215 	 
	 Future use land, components and spares
	  	 	162	 	 	 	162 	 
	  
	 
		  	 	20,069	 	 	 	19,947 	 
	  
	 

  

	10.	 REGULATORY ASSETS AND LIABILITIES 



Deferred Income Tax Regulatory Asset 
 On September 28,
2017, the OEB issued its Decision and Order on Hydro One Networks’ 2017 and 2018 transmission rates revenue requirements (Decision). In its Decision, the OEB concluded that the net deferred tax asset resulting from transition from the payments
in lieu of tax regime under the Electricity Act (Ontario) to tax payments under the federal and provincial tax regime should not accrue entirely to Hydro One’s shareholders and that a portion should be shared with ratepayers. On
November 9, 2017, the OEB issued a Decision and Order that calculated the portion of the tax savings that should be shared with ratepayers. The OEB’s calculation would result in an impairment of Hydro One Networks’ transmission
deferred income tax regulatory asset of up to approximately $515 million. If the OEB were to apply the same calculation for sharing in Hydro One Networks’ 2018-2022 distribution rates, for which a decision is currently outstanding, it
would result in an additional impairment of up to approximately $370 million related to Hydro One Networks’ distribution deferred income tax regulatory asset. In October 2017, the Company filed a Motion to Review and Vary (Motion) the
Decision and filed an appeal with the Divisional Court of Ontario (Appeal). On December 19, 2017, the OEB granted a hearing of the merits of the Motion which was held on February 12, 2018. In both cases, the Company’s position is that
the OEB made errors of fact and law in its determination of allocation of the tax savings between the shareholders and ratepayers. The Appeal is being held in abeyance pending the outcome of the Motion. If the Decision is upheld, based on the facts
known at this time, the exposure from the potential impairments would be a one-time decrease in net income of up to approximately $885 million. Based on the assumptions that the OEB applies established
rate making principles in a manner consistent with its past practice and does not exercise its discretion to take other policy considerations into account, management is of the view that it is likely that the Company’s Motion will be granted
and the aforementioned tax savings will be allocated to the benefit of Hydro One shareholders. 
 Foregone Revenue Deferral 

As part of its September 2017 decision on Hydro One Networks’ transmission rate application for 2017 and 2018 rates, the OEB approved the foregone
revenue account to record the difference between revenue earned under the rates approved as part of the decision, effective January 1, 2017, and revenue earned under the interim rates until the approved 2017 rates were implemented. The OEB
approved a similar account for B2M LP in June 2017 to record the difference between revenue earned under the newly approved rates, effective January 1, 2017, and the revenue recorded under the interim 2017 rates. The balances of these accounts
are being returned to or recovered from ratepayers, respectively, over a one-year period ending December 31, 2018. The draft rate order submitted by Hydro One Networks was approved by the OEB in November
2017. This draft rate order reflects the September 2017 decision, including a reduction of the amount of cash taxes approved for recovery in transmission rates due to the OEB’s basis to share the savings resulting from a deferred tax asset with
ratepayers. The Company’s position in the aforementioned Motion is that the OEB made errors of fact and law in its determination of allocation of the tax savings between the shareholders and ratepayers. Therefore, the Company has also reflected
the impact of the Company’s position with respect to the Motion in the Foregone Revenue Deferral account. The timing for recovery of this impact will be determined as part of the outcome of the Motion. 

Post-Retirement and Post-Employment Benefits Non-Service Cost Regulatory Asset 

Hydro One applied to the OEB for a deferral account to record the components other than service costs relating to its post-retirement and post-employment
benefits that would have been capitalized to property, plant and equipment and intangible assets prior to adoption of ASU 2017-07. In May 2018, the OEB approved the deferral account for Hydro One
Networks’ Transmission Business. 

  

					
		  	8	  	 














 HYDRO ONE LIMITED 
 NOTES TO
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued) 
 For the three months ended
March 31, 2018 and 2017 
  
 It is expected that the deferral account
application for Hydro One Networks’ Distribution business will be considered as part of Hydro One Networks’ application for 2018-2022 distribution rates, OEB approval of which is currently pending. Hydro One has recorded the components
other than service costs relating to its post-retirement and post-employment benefits that would have been capitalized to property, plant and equipment and intangible assets in the Post-Retirement and Post-Employment Benefits Non-Service Cost Regulatory Asset. 
  

	11.	 ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES 



 

									
	  (millions of dollars)	  	March 31,
2018	 	  	December 31,
2017	 
	 Accounts payable
	  	 	143	 	  	 	177	 
	 Accrued liabilities
	  	 	606	 	  	 	572	 
	 Accrued interest
	  	 	116	 	  	 	99	 
	 Regulatory liabilities
	  	 	46	 	  	 	57	 
	  
	 
		  	 	911	 	  	 	905	 
	  
	 

  

	12.	 OTHER LONG-TERM LIABILITIES 



 

									
	  (millions of dollars)	  	March 31,
2018	 	  	December 31,
2017	 
	 Post-retirement and post-employment benefit liability
	  	 	1,534	 	  	 	1,519	 
	 Pension benefit liability
	  	 	982	 	  	 	981	 
	 Environmental liabilities (Note 17) 
	  	 	162	 	  	 	168	 
	 Asset retirement obligations
	  	 	9	 	  	 	9	 
	 Long-term accounts payable and other liabilities
	  	 	31	 	  	 	30	 
	  
	 
		  	 	2,718	 	  	 	2,707	 
	  
	 

  

	13.	 DEBT AND CREDIT AGREEMENTS 



Short-Term Notes and Credit Facilities 
 Hydro One meets its
short-term liquidity requirements in part through the issuance of commercial paper under Hydro One Inc.’s Commercial Paper Program which has a maximum authorized amount of $1.5 billion. These short-term notes are denominated in Canadian
dollars with varying maturities up to 365 days. The Commercial Paper Program is supported by Hydro One Inc.’s committed revolving credit facilities totalling $2.3 billion. 

At March 31, 2018, Hydro One’s consolidated committed, unsecured and undrawn credit facilities totalling $2,550 million included Hydro
One’s credit facilities of $250 million and Hydro One Inc.’s credit facilities of $2.3 billion. 
 Long-Term Debt 

The following table presents long-term debt outstanding at March 31, 2018 and December 31, 2017: 

 

									
	  (millions of dollars)	  	March 31,
2018	 	 	December 31,
2017	 
	 Hydro One Inc. long-term debt (a) 
	  	 	9,923	 	 	 	9,923 	 
	 HOSSM long-term debt (b) 
	  	 	175	 	 	 	176 	 
	  
	 
		  	 	10,098	 	 	 	10,099 	 
	 Add: Net unamortized debt premiums
	  	 	14	 	 	 	14 	 
	 Add: Unrealized
mark-to-market gain1 
	  	 	(9	) 	 	 	(9)	 
	 Less: Unamortized deferred debt issuance costs
	  	 	(37	) 	 	 	(37)	 
	  
	 
	 Total long-term debt
	  	 	10,066	 	 	 	10,067 	 
	  
	 
			
	 Less: Long-term debt payable within one year
	  	 	(981	) 	 	 	(752)	 
	  
	 
		  	 	9,085	 	 	 	9,315 	 
	  
	 

  

	1 	 The unrealized mark-to-market net gain
relates to $50 million of the Series 33 notes due 2020 and $500 million Series 37 notes due 2019. The unrealized mark-to- market net gain is offset by a
$9 million (December 31, 2017 - $9 million) unrealized mark-to-market net loss on the related
fixed-to-floating interest-rate swap agreements, which are accounted for as fair value hedges. 



 

	(a)	 Hydro One Inc. long-term debt 



At March 31, 2018, long-term debt of $9,923 million (December 31, 2017 - $9,923 million) was outstanding, the majority of which
was issued under Hydro One Inc.’s Medium Term Note (MTN) Program. The maximum authorized principal amount of notes issuable under the current MTN Program prospectus filed in March 2018 is $4.0 billion. At March 31, 2018, the entire


  

					
		  	9	  	 














 HYDRO ONE LIMITED 
 NOTES TO
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued) 
 For the three months ended
March 31, 2018 and 2017 
  
 amount remained available for
issuance until April 2020. During the three months ended March 31, 2018 and 2017, no long-term debt was issued or repaid. 
  

	(b)	 Hydro One Sault Ste. Marie LP (HOSSM) long-term debt 



At March 31, 2018, long-term debt of $175 million (December 31, 2017 - $176 million), with a face value of $146 million
(December 31, 2017 - $146 million) was held by HOSSM. During the three months ended March 31, 2018 and 2017, no long-term debt was issued or repaid. 

Principal and Interest Payments 
 Principal repayments and
related weighted average interest rates are summarized by the number of years to maturity in the following table: 
  

									
	 	  	Long-term Debt
Principal Repayments	 	  	Weighted Average
Interest Rate	 
	  Years to Maturity	  	(millions of dollars)	 	  	(%)	 
	 1 year
	  	 	981	 	  	 	2.6	 
	 2 years
	  	 	503	 	  	 	1.5	 
	 3 years
	  	 	1,153	 	  	 	2.5	 
	 4 years
	  	 	603	 	  	 	3.2	 
	 5 years
	  	 	3	 	  	 	6.6	 
	  
	 
		  	 	3,243	 	  	 	2.5	 
	 6 – 10 years
	  	 	631	 	  	 	3.5	 
	 Over 10 years
	  	 	6,195	 	  	 	5.2	 
	  
	 
		  	 	10,069	 	  	 	4.2	 
	  
	 

 Interest payment obligations related to long-term debt are summarized by year in the following table: 

 

					
	 	  	Interest Payments	 
	  Year	  	(millions of dollars)	 
	 Remainder of 2018
	  	 	365	 
	 2019
	  	 	402	 
	 2020
	  	 	384	 
	 2021
	  	 	370	 
	 2022
	  	 	355	 
	  
	 
		  	 	1,876	 
	 2023-2027
	  	 	1,672	 
	 2028+
	  	 	4,081	 
	  
	 
		  	 	7,629	 
	  
	 

  

	14.	 CONVERTIBLE DEBENTURES 



On August 9, 2017, in connection with the acquisition of Avista Corporation, the Company completed the sale of $1,540 million aggregate
principal amount of convertible unsecured subordinated debentures (Convertible Debentures). The Convertible Debentures were sold on an instalment basis at a price of $1,000 per Convertible Debenture, of which $333 (Initial Instalment) was paid on
closing of the Debenture Offering and the remaining $667 (Final Instalment) is payable on a date (Final Instalment Date) to be fixed by the Company following satisfaction of conditions precedent to the closing of the acquisition of Avista
Corporation. The gross proceeds received from the Initial Instalment were $513 million. The Convertible Debentures will mature on September 30, 2027. A coupon rate of 4% is paid on the $1,540 million aggregate principal amount of the
Convertible Debentures, and based on the carrying value of the Initial Instalment, this translates into an effective annual yield of 12%. After the Final Instalment Date, the interest rate will be 0%. The interest expense recorded during the three
months ended March 31, 2018 was $15 million (2017—$nil). At the option of the holders and provided that payment of the Final Instalment has been made, each Convertible Debenture will be convertible into common shares of the Company at
any time on or after the Final Instalment Date, but prior to the earlier of maturity or redemption by the Company, at a conversion price of $21.40 per common share. 

  

					
		  	10	  	 














 HYDRO ONE LIMITED 
 NOTES TO
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued) 
 For the three months ended
March 31, 2018 and 2017 
  
 The following table shows the movements in
convertible debentures during the three months ended March 31, 2018 and the year ended December 31, 2017: 
  

									
	  (millions of dollars)	  	 Three months ended
March 31,

2018
	 	  	Year ended
December 31,
2017	 
	 Carrying value - beginning
	  	 	487	 	  	 	—	 
	 Receipt of Initial Instalment, net of deferred financing costs
	  	 	—	 	  	 	486	 
	 Amortization of deferred financing costs
	  	 	1	 	  	 	1	 
	  
	 
	 Carrying value - ending
	  	 	488	 	  	 	487	 
	  
	 
			
	 Face value - ending
	  	 	513	 	  	 	513	 
	  
	 

  

	15.	 FAIR VALUE OF FINANCIAL INSTRUMENTS AND RISK MANAGEMENT 



Non-Derivative Financial Assets and Liabilities 

At March 31, 2018 and December 31, 2017, the Company’s carrying amounts of cash and cash equivalents, accounts receivable, due from related
parties, short-term notes payable, accounts payable, and due to related parties are representative of fair value due to the short-term nature of these instruments. 

Fair Value Measurements of Long-Term Debt 
 The fair values and
carrying values of the Company’s long-term debt at March 31, 2018 and December 31, 2017 are as follows: 
  

																	
	 	  	March 31, 2018	 	  	December 31, 2017	 
	  (millions of dollars)	  	Carrying Value	 	  	Fair Value	 	  	Carrying Value	 	  	Fair Value	 
	 $50 million of MTN Series 33 notes
	  	 	49	 	  	 	49	 	  	 	49	 	  	 	49	 
	 $500 million MTN Series 37 notes
	  	 	492	 	  	 	492	 	  	 	492	 	  	 	492	 
	 Other notes and debentures
	  	 	9,525	 	  	 	10,906	 	  	 	9,526	 	  	 	11,027	 
	  
	 
	 Long-term debt, including current portion
	  	 	10,066	 	  	 	11,447	 	  	 	10,067	 	  	 	11,568	 
	  
	 

 Fair Value Measurements of Derivative Instruments 

At March 31, 2018, Hydro One Inc. had interest-rate swaps in the amount of $550 million (December 31, 2017 – $550 million) that were used
to convert fixed-rate debt to floating-rate debt. These swaps are classified as fair value hedges. Hydro One Inc.’s fair value hedge exposure was approximately 6% (December 31, 2017 – 6%) of its total long-term debt. At March 31,
2018, Hydro One Inc. had the following interest-rate swaps designated as fair value hedges: 
  

	•	 	 a $50 million fixed-to-floating
interest-rate swap agreement to convert $50 million of the $350 million MTN Series 33 notes maturing April 30, 2020 into three-month variable rate debt; and 



 

	•	 	 two $125 million and one $250 million
fixed-to-floating interest-rate swap agreements to convert the $500 million MTN Series 37 notes maturing November 18, 2019 into three-month variable rate debt.



 At March 31, 2018 and December 31, 2017, the Company had no interest-rate swaps classified as undesignated contracts.

 In October 2017, the Company entered into a deal-contingent foreign exchange forward contract to convert $1.4 billion Canadian to US dollars at
an initial forward rate of 1.27486 Canadian per 1.00 US dollars, and a range up to 1.28735 Canadian per 1.00 US dollars based on the settlement date. The contract is contingent on the Company closing the proposed Avista Corporation acquisition and
is intended to mitigate the foreign currency risk related to the portion of the Avista Corporation acquisition purchase price financed with the issuance of Convertible Debentures. If the acquisition does not close, the contract would not be
completed and no amounts would be exchanged. The contract can be executed upon approval of the acquisition up to March 31, 2019. This contract is an economic hedge and does not qualify for hedge accounting. It has been accounted for as an
undesignated contract. 

  

					
		  	11	  	 














 HYDRO ONE LIMITED 
 NOTES TO
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued) 
 For the three months ended
March 31, 2018 and 2017 
  
 Fair Value Hierarchy 

The fair value hierarchy of financial assets and liabilities at March 31, 2018 and December 31, 2017 is as follows: 

 

																					
	  March 31, 2018 (millions of dollars) 	  	Carrying
Value	 	  	Fair
Value	 	  	Level 1	 	  	Level 2	 	  	Level 3 	 
	 Assets:
	  				  				  				  				  			
	 Cash and cash equivalents
	  	 	28	 	  	 	28	 	  	 	28	 	  	 	—	 	  	 	—	 
	 Derivative instrument
	  				  				  				  				  			
	 Foreign exchange contract
	  	 	24	 	  	 	24	 	  	 	—	 	  	 	—	 	  	 	24	 
	  
	 
		  	 	52	 	  	 	52	 	  	 	28	 	  	 	—	 	  	 	24	 
	  
	 
						
	 Liabilities:
	  				  				  				  				  			
	 Short-term notes payable
	  	 	989	 	  	 	989	 	  	 	989	 	  	 	—	 	  	 	—	 
	 Long-term debt, including current portion
	  	 	10,066	 	  	 	11,447	 	  	 	—	 	  	 	11,447	 	  	 	—	 
	 Convertible debentures
	  	 	488	 	  	 	491	 	  	 	491	 	  	 	—	 	  	 	—	 
	 Derivative instruments
	  				  				  				  				  			
	 Fair value hedges – interest-rate swaps
	  	 	9	 	  	 	9	 	  	 	9	 	  	 	—	 	  	 	—	 
	  
	 
		  	 	11,552	 	  	 	12,936	 	  	 	1,489	 	  	 	11,447	 	  	 	—	 
	  
	 
						
	  December 31, 2017 (millions of dollars) 	  	Carrying
Value	 	  	Fair
Value	 	  	Level 1	 	  	Level 2	 	  	Level 3	 
	 Assets:
	  				  				  				  				  			
	 Cash and cash equivalents
	  	 	25	 	  	 	25	 	  	 	25	 	  	 	—	 	  	 	—	 
	  
	 
		  	 	25	 	  	 	25	 	  	 	25	 	  	 	—	 	  	 	—	 
	  
	 
						
	 Liabilities:
	  				  				  				  				  			
	 Short-term notes payable
	  	 	926	 	  	 	926	 	  	 	926	 	  	 	—	 	  	 	—	 
	 Long-term debt, including current portion
	  	 	10,067	 	  	 	11,568	 	  	 	—	 	  	 	11,568	 	  	 	—	 
	 Convertible debentures
	  	 	487	 	  	 	574	 	  	 	574	 	  	 	—	 	  	 	—	 
	 Derivative instruments
	  				  				  				  				  			
	 Fair value hedges – interest-rate swaps
	  	 	9	 	  	 	9	 	  	 	9	 	  	 	—	 	  	 	—	 
	 Foreign exchange contract
	  	 	3	 	  	 	3	 	  	 	—	 	  	 	—	 	  	 	3	 
	  
	 
		  	 	11,492	 	  	 	13,080	 	  	 	1,509	 	  	 	11,568	 	  	 	3	 
	  
	 

 Cash and cash equivalents include cash and short-term investments. The carrying values are representative of fair value
because of the short-term nature of these instruments. 
 The fair value of the hedged portion of the long-term debt is primarily based on the present
value of future cash flows using a swap yield curve to determine the assumption for interest rates. The fair value of the unhedged portion of the long-term debt is based on unadjusted period-end market prices
for the same or similar debt of the same remaining maturities. 
 The fair value of the convertible debentures is based on their closing price on
March 29, 2018 (last business day in March 2018), as posted on the Toronto Stock Exchange. 
 The Company uses derivative instruments as an
economic hedge for foreign exchange risk. The value of the foreign exchange contract is derived using valuation models commonly used for derivatives. These valuation models require a variety of inputs, including contractual terms, forward price
yield curves, probability of closing the Avista Corporation acquisition, and the contract settlement date. The Company’s valuation models also reflect measurements for credit risk. The fair value of the foreign exchange contract includes
significant unobservable inputs, and therefore has been classified accordingly as Level 3. The significant unobservable inputs used in the fair value measurement of the foreign exchange contract relates to the assessment of probability of
closing the Avista Corporation acquisition and the contract settlement date. 
 Changes in the Fair Value of Financial Instruments Classified in
Level 3 
 The following table summarizes the changes in fair value of financial instruments classified in Level 3 for the three months
ended March 31, 2018 and the year ended December 31, 2017: 
  

									
	  (millions of dollars)	  	 Three months ended
March 31,

2018
	 	 	Year ended
December 31,
2017	 
	 Fair value of asset (liability) - beginning
	  	 	(3	) 	 	 	—	 
	 Unrealized gain (loss) on foreign exchange contract included in financing charges
	  	 	27	 	 	 	(3	) 
	  
	 
	 Fair value of asset (liability) - ending
	  	 	24	 	 	 	(3	) 
	  
	 

 There were no transfers between any of the fair value levels during the three months ended March 31, 2018 and the
year ended December 31, 2017. 

  

					
		  	12	  	 














 HYDRO ONE LIMITED 
 NOTES TO
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued) 
 For the three months ended
March 31, 2018 and 2017 
  
 Risk Management 

Exposure to market risk, credit risk and liquidity risk arises in the normal course of the Company’s business. 

Market Risk 
 Market risk refers primarily to the risk of loss
which results from changes in costs, foreign exchange rates and interest rates. The Company is exposed to fluctuations in interest rates, as its regulated return on equity is derived using a formulaic approach that takes anticipated interest rates
into account. The Company is not currently exposed to material commodity price risk. 
 The Company uses a combination of fixed and variable-rate debt
to manage the mix of its debt portfolio. The Company also uses derivative financial instruments to manage interest-rate risk. The Company utilizes interest-rate swaps, which are typically designated as fair value hedges, as a means to manage its
interest rate exposure to achieve a lower cost of debt. The Company may also utilize interest-rate derivative instruments to lock in interest-rate levels in anticipation of future financing. 

A hypothetical 100 basis points increase in interest rates associated with variable-rate debt would not have resulted in a significant decrease in Hydro
One’s net income for the three months ended March 31, 2018 and 2017. 
 The Company is exposed to foreign exchange fluctuations as a result of
entering into a deal-contingent foreign exchange forward agreement. This agreement is intended to mitigate the foreign currency risk related to the portion of the Avista Corporation acquisition purchase price financed with the issuance of
Convertible Debentures. 
 For derivative instruments that are designated and qualify as fair value hedges, the gain or loss on the derivative
instrument as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in the Consolidated Statements of Operations and Comprehensive Income. The net unrealized loss (gain) on the hedged debt and the
related interest-rate swaps for the three months ended March 31, 2018 and 2017 was not material. 
 Credit Risk 

Financial assets create a risk that a counterparty will fail to discharge an obligation, causing a financial loss. At March 31, 2018 and
December 31, 2017, there were no significant concentrations of credit risk with respect to any class of financial assets. The Company’s revenue is earned from a broad base of customers. As a result, Hydro One did not earn a material amount
of revenue from any single customer. At March 31, 2018 and December 31, 2017, there was no material accounts receivable balance due from any single customer. 

At March 31, 2018, the Company’s provision for bad debts was $26 million (December 31, 2017 – $29 million). Adjustments and write-offs
are determined on the basis of a review of overdue accounts, taking into consideration historical experience. At March 31, 2018, approximately 5% (December 31, 2017 – 5%) of the Company’s net accounts receivable were outstanding for
more than 60 days. 
 Hydro One manages its counterparty credit risk through various techniques including: entering into transactions with highly rated
counterparties; limiting total exposure levels with individual counterparties; entering into master agreements which enable net settlement and the contractual right of offset; and monitoring the financial condition of counterparties. The Company
monitors current credit exposure to counterparties both on an individual and an aggregate basis. The Company’s credit risk for accounts receivable is limited to the carrying amounts on the Consolidated Balance Sheets. 

Derivative financial instruments result in exposure to credit risk since there is a risk of counterparty default. The credit exposure of derivative
contracts, before collateral, is represented by the fair value of contracts at the reporting date. At March 31, 2018 and December 31, 2017, the counterparty credit risk exposure on the fair value of these interest-rate swap contracts was
not material. At March 31, 2018, Hydro One’s credit exposure for all derivative instruments, and applicable payables and receivables, had a credit rating of investment grade, with four financial institutions as the counterparties. 

Liquidity Risk 
 Liquidity risk refers to the Company’s
ability to meet its financial obligations as they come due. Hydro One meets its short-term liquidity requirements using cash and cash equivalents on hand, funds from operations, the issuance of commercial paper, and the revolving standby credit
facilities. The short-term liquidity under the Commercial Paper Program, revolving standby credit facilities, and anticipated levels of funds from operations are expected to be sufficient to fund normal operating requirements. 

16. PENSION AND POST-RETIREMENT AND POST-EMPLOYMENT BENEFITS 

Estimated annual defined benefit pension plan contributions for 2018 and 2019 are approximately $71 million for each year based on an actuarial
valuation as at December 31, 2016 and projected levels of pensionable earnings. Employer contributions made during the three months ended March 31, 2018 were $18 million (2017 – $28 million). 

  

					
		  	13	  	 














 HYDRO ONE LIMITED 
 NOTES TO
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued) 
 For the three months ended
March 31, 2018 and 2017 
  
 The following table provides the components of the
net periodic benefit costs for the three months ended March 31, 2018 and 2017: 
  

																	
	 	  	 Pension Benefits
	 	 	Post-Retirement and
Post-Employment Benefits	 
	  Three months ended March 31 (millions of dollars) 	  	2018	 	 	2017	 	 	2018	 	  	2017	 
	 Current service cost
	  	 	44	 	 	 	36	 	 	 	12	 	  	 	12	 
	 Interest cost
	  	 	71	 	 	 	76	 	 	 	14	 	  	 	17	 
	 Expected return on plan assets, net of expenses1

	  	 	(117	) 	 	 	(110	) 	 	 	—	 	  	 	—	 
	 Amortization of actuarial losses
	  	 	21	 	 	 	20	 	 	 	1	 	  	 	2	 
	  
	 
	 Net periodic benefit costs
	  	 	19	 	 	 	22	 	 	 	27	 	  	 	31	 
	  
	 
					
	 Charged to results of operations2 
	  	 	9	 	 	 	13	 	 	 	12	 	  	 	14	 
	  
	 

  

	1	 The expected long-term rate of return on pension plan assets for the year ending December 31, 2018 is 6.5% (2017
– 6.5%). 


  

	2	 The Company accounts for pension costs consistent with their inclusion in
OEB-approved rates. During the three months ended March 31, 2018, pension costs of $21 million (2017 – $30 million) were attributed to labour, of which $9 million (2017 – $13 million)
was charged to operations, and $12 million (2017 – $17 million) was capitalized as part of the cost of property, plant and equipment and intangible assets. 



 

	17.	 ENVIRONMENTAL LIABILITIES 



The following table shows the movements in environmental liabilities for the three months ended March 31, 2018 and the year ended December 31,
2017: 
  

									
	  (millions of dollars)	  	 Three months ended
March 31,

2018
	 	 	 Year ended

December 31,
2017
	 
	 Environmental liabilities – beginning
	  	 	196	 	 	 	204	 
	 Interest accretion
	  	 	2	 	 	 	8	 
	 Expenditures
	  	 	(4	) 	 	 	(24	) 
	 Revaluation adjustment
	  	 	—	 	 	 	8	 
	  
	 
	 Environmental liabilities – ending
	  	 	194	 	 	 	196	 
	 Less: current portion
	  	 	(32	) 	 	 	(28	) 
	  
	 
		  	 	162	 	 	 	168	 
	  
	 

 The following table shows the reconciliation between the undiscounted basis of environmental liabilities and the amount
recognized on the Consolidated Balance Sheets after factoring in the discount rate: 
  

									
	  (millions of dollars)	  	March 31,
2018	 	 	December 31,
2017	 
	 Undiscounted environmental liabilities
	  	 	202	 	 	 	206	 
	 Less: discounting environmental liabilities to present value
	  	 	(8	) 	 	 	(10	) 
	  
	 
	 Discounted environmental liabilities
	  	 	194	 	 	 	196	 
	  
	 

 At March 31, 2018, the estimated future environmental expenditures were as follows: 

 

					
	  (millions of dollars)	  	  	 
	 Remainder of 2018
	  	 	24	 
	 2019
	  	 	27	 
	 2020
	  	 	32	 
	 2021
	  	 	34	 
	 2022
	  	 	31	 
	 Thereafter
	  	 	54	 
	  
	 
		  	 	202	 
	  
	 

 18. SHARE CAPITAL 
 Common Shares 

The Company is authorized to issue an unlimited number of common shares. At March 31, 2018, the Company had 595,386,711 common shares issued and
outstanding (December 31, 2017 - 595,386,711). 
 Preferred Shares 

The Company is authorized to issue an unlimited number of preferred shares, issuable in series. At March 31, 2018 and December 31, 2017, two
series of preferred shares are authorized for issuance: the Series 1 preferred shares and the Series 2 preferred shares. 

  

					
		  	14	  	 














 HYDRO ONE LIMITED 
 NOTES TO
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued) 
 For the three months ended March 31, 2018 and 2017 

 
 At March 31, 2018 and December 31, 2017, the Company had 16,720,000
Series 1 preferred shares and no Series 2 preferred shares issued and outstanding. 
  

	19.	 DIVIDENDS 



During the three months ended March 31, 2018, preferred share dividends in the amount of $5 million (2017 - $5 million) and common share
dividends in the amount of $131 million (2017 - $125 million) were declared and paid. 
  

	20.	 EARNINGS PER COMMON SHARE 



Basic earnings per common share (EPS) is calculated by dividing net income attributable to common shareholders of Hydro One by the weighted average number
of common shares outstanding. 
 Diluted EPS is calculated by dividing net income attributable to common shareholders of Hydro One by the weighted
average number of common shares outstanding adjusted for the effects of potentially dilutive stock-based compensation plans, including the share grant plans and the Long-term Incentive Plan (LTIP), which are calculated using the treasury stock
method. 
  

									
	  Three months ended March 31	  	2018	 	  	2017  	 
	 Net income attributable to common shareholders (millions of dollars)

	  	 	222	 	  	 	167  	 
	 Weighted average number of shares
	  				  			
	 Basic
	  	 	595,386,711	 	  	 	595,000,000  	 
	 Effect of dilutive stock-based compensation plans
	  	 	2,322,393	 	  	 	2,257,005  	 
	  
	 
	 Diluted
	  	 	597,709,104	 	  	 	597,257,005  	 
	 EPS
	  				  			
	 Basic
	  	$	0.37	 	  	$	0.28  	 
	 Diluted
	  	$	0.37	 	  	$	0.28  	 
	  
	 

 The common shares contingently issuable as a result of the Convertible Debentures are not included in diluted EPS until
conditions for closing the Avista Corporation acquisition are met. 
  

	21.	 STOCK-BASED COMPENSATION 



Share Grant Plans 
 There were no changes in share grants under
the Share Grant Plans during the three months ended March 31, 2018 and 2017. 
 Directors’ Deferred Share Unit (DSU) Plan 

A summary of DSUs activity under the Directors’ DSU Plan during the three months ended March 31, 2018 and 2017 is presented below: 

 

									
	  Three months ended March 31 (number of DSUs) 	  	2018	 	  	2017  	 
	 DSUs outstanding - beginning
	  	 	187,090	 	  	 	99,083  	 
	 Granted
	  	 	27,753	 	  	 	20,680  	 
	  
	 
	 DSUs outstanding - ending
	  	 	214,843	 	  	 	119,763  	 
	  
	 

 At March 31, 2018, a liability of $4 million (December 31, 2017 - $4 million) related to outstanding DSUs has
been recorded at the closing price of the Company’s common shares of $20.92 (December 31, 2017 - $22.40) and is included in long-term accounts payable and other liabilities on the Consolidated Balance Sheets. 

Management DSU Plan 
 A summary of DSUs activity under the
Management DSU Plan during the three months ended March 31, 2018 and 2017 is presented below: 
  

									
	  Three months ended March 31 (number of DSUs) 	  	2018	 	  	2017  	 
	 DSUs outstanding - beginning
	  	 	67,829	 	  	 	—    	 
	 Granted
	  	 	36,809	 	  	 	66,952  	 
	  
	 
	 DSUs outstanding - ending
	  	 	104,638	 	  	 	66,952  	 
	  
	 

 At March 31, 2018, a liability of $2 million (December 31, 2017 - $2 million) related to outstanding DSUs has
been recorded at the closing price of the Company’s common shares of $20.92 (December 31, 2017 - $22.40) and is included in long-term accounts payable and other liabilities on the Consolidated Balance Sheets. 

  

					
		  	15	  	 














 HYDRO ONE LIMITED 
 NOTES TO
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued) 
 For the three months ended
March 31, 2018 and 2017 
  
 LTIP 

Performance Share Units (PSU) and Restricted Share Units (RSU) 

A summary of PSU and RSU awards activity under the LTIP during the three months ended March 31, 2018 and 2017 is presented below: 

 

																	
	 	  	PSUs	 	 	RSUs	 
	  Three months ended March 31 (number of units) 	  	2018	 	 	2017	 	 	2018	 	 	2017   	 
	 Units outstanding - beginning
	  	 	429,980	 	 	 	230,600	 	 	 	393,430	 	 	 	254,150   	 
	 Granted
	  	 	427,940	 	 	 	267,450	 	 	 	332,440	 	 	 	218,950   	 
	 Forfeited
	  	 	(13,220	) 	 	 	(14,435	) 	 	 	(9,880	) 	 	 	(15,885)  	 
	  
	 
	 Units outstanding - ending
	  	 	844,700	 	 	 	483,615	 	 	 	715,990	 	 	 	457,215   	 
	  
	 

 The grant date total fair value of the awards granted during the three months ended March 31, 2018 was
$16 million (2017 - $12 million). The compensation expense related to these awards recognized by the Company during the three months ended March 31, 2018 was $2 million (2017 - $1 million). 

Stock Options 
 The Company is authorized to grant stock options
under its LTIP to certain eligible employees. During the three months ended March 31, 2018, the Company granted 1,450,880 stock options (2017 - nil). The stock options granted are exercisable for a period not to exceed seven years from the date
of grant and vest evenly over a three-year period on each anniversary of the date of grant. 
 The Company uses the fair value based method to measure
compensation expense related to stock options and recognizes the expense over the vesting period on a straight-line basis. The fair value of the stock option awards granted was estimated on the date of grant using a Black-Scholes valuation model.

 Stock options granted and the weighted average assumptions used in the valuation model for options granted during the three months ended
March 31, 2018 are as follows: 
  

					
	  
	 
	 Exercise price1 
	  	$	20.70	 
	 Grant date fair value per option
	  	$	1.66	 
	 Valuation assumptions:
	  			
	 Expected dividend yield2 
	  	 	3.78	% 
	 Expected volatility3 
	  	 	15.01	% 
	 Risk-free interest rate4 
	  	 	2.00	% 
	 Expected option term5 
	  	 	4.5 years	 
	  
	 

  

	1	 Hydro One common share price on the date of the grant.




	2	 Based on dividend and Hydro One common share price on the date of
the grant. 



	3	 Based on average daily volatility of peer entities for a 4.5-year term. 



	4	 Based on bond yield for an equivalent Canadian government bond.




	5	 Determined using the option term and the vesting period.



 A summary of stock options activity during the three months ended March 31, 2018 is presented below: 

 

					
	  Three months ended March 31 (number of stock options) 	  	2018  	 
	 Stock options outstanding - beginning
	  	 	—  	 
	 Granted1 
	  	 	1,450,880  	 
	  
	 
	 Stock options outstanding - ending1 
	  	 	1,450,880  	 
	  
	 

  

	1 	 All stock options granted and outstanding at March 31, 2018 are non-vested.



 The compensation expense related to stock options recognized by the Company during the three months ended March 31, 2018 was
not material. At March 31, 2018, there was $2 million of unrecognized compensation expense related to stock options not yet vested, which is expected to be recognized over a weighted average period of approximately three years. 

  

					
		  	16	  	 














 HYDRO ONE LIMITED 
 NOTES TO
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued) 
 For the three months ended
March 31, 2018 and 2017 
  
  

	22.	 RELATED PARTY TRANSACTIONS 



The Province is a shareholder of Hydro One with approximately 47.4% ownership at March 31, 2018. The IESO, Ontario Power Generation Inc. (OPG),
Ontario Electricity Financial Corporation (OEFC), and the OEB, are related parties to Hydro One because they are controlled or significantly influenced by the Province. 
  

											
	  Three months ended March 31 (millions of dollars) 	 
	  Related Party	  	Transaction	  	2018	 	  	2017  	 
	 Province
	  	Dividends paid	  	 	67	 	  	 	92  	 
	  
	 
	 IESO
	  	Power purchased	  	 	513	 	  	 	651  	 
		  	Revenues for transmission services	  	 	405	 	  	 	369  	 
		  	Amounts related to electricity rebates	  	 	137	 	  	 	77  	 
		  	Distribution revenues related to rural rate protection	  	 	57	 	  	 	61  	 
		  	Distribution revenues related to the supply of electricity to remote northern communities	  	 	8	 	  	 	8  	 
		  	Funding received related to Conservation and Demand Management programs	  	 	12	 	  	 	16  	 
	  
	 
	 OPG
	  	Power purchased	  	 	4	 	  	 	4  	 
		  	Revenues related to provision of construction and equipment maintenance services	  	 	2	 	  	 	—  	 
	  
	 
	 OEFC
	  	Power purchased from power contracts administered by the OEFC	  	 	1	 	  	 	1  	 
	  
	 
	 OEB
	  	OEB fees	  	 	2	 	  	 	2  	 
	  
	 

 Sales to and purchases from related parties are based on the requirements of the OEB’s Affiliate Relationships Code.
Outstanding balances at period end are interest-free and settled in cash. 
  

	23.	 CONSOLIDATED STATEMENTS OF CASH FLOWS 



The changes in non-cash balances related to operations consist of the following: 

 

									
	  Three months ended March 31 (millions of dollars) 	  	2018	 	 	2017	 
	 Accounts receivable
	  	 	48	 	 	 	91	 
	 Due from related parties
	  	 	10	 	 	 	(45	) 
	 Materials and supplies
	  	 	(2	) 	 	 	—	 
	 Prepaid expenses and other assets
	  	 	(9	) 	 	 	—	 
	 Accounts payable
	  	 	(31	) 	 	 	(3	) 
	 Accrued liabilities
	  	 	33	 	 	 	20	 
	 Due to related parties
	  	 	(120	) 	 	 	(36	) 
	 Accrued interest
	  	 	17	 	 	 	25	 
	 Long-term accounts payable and other liabilities
	  	 	1	 	 	 	2	 
	 Post-retirement and post-employment benefit liability
	  	 	7	 	 	 	23	 
	  
	 
		  	 	(46	) 	 	 	77	 
	  
	 

 Capital Expenditures 
 The
following tables reconcile investments in property, plant and equipment, intangible assets and regulatory assets and the amounts presented in the Consolidated Statements of Cash Flows for the three months ended March 31, 2018 and 2017: 

 

													
	  Three months ended March 31, 2018 (millions of dollars) 	  	Property,
Plant and
Equipment	 	 	Intangible
Assets	 	 	Total   	 
	 Capital investments
	  	 	(293	) 	 	 	(12	) 	 	 	(305)  	 
	 Net change in accruals included in capital investments1

	  	 	7	 	 	 	(2	) 	 	 	5   	 
	  
	 
	 Cash outflow for capital expenditures
	  	 	(286	) 	 	 	(14	) 	 	 	(300)   	 
	  
	 

  

	1 	 For property, plant and equipment, the amount also includes capitalized depreciation. 



 

													
	  Three months ended March 31, 2017 (millions of dollars) 	  	Property,
Plant and
Equipment	 	 	Intangible
Assets	 	 	Total   	 
	 Capital investments
	  	 	(337	) 	 	 	(13	) 	 	 	(350)  	 
	 Net change in accruals included in capital investments1

	  	 	2	 	 	 	(1	) 	 	 	1   	 
	  
	 
	 Cash outflow for capital expenditures
	  	 	(335	) 	 	 	(14	) 	 	 	(349)  	 
	  
	 

  

	1 	 For property, plant and equipment, the amount also includes capitalized depreciation. 



  

					
		  	17	  	 














 HYDRO ONE LIMITED 
 NOTES TO
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued) 
 For the three months ended March 31, 2018 and 2017 

 
 Supplementary Information 

 

									
	 Three months ended March 31 (millions of dollars) 	  	2018	 	  	2017	 
	  Net interest paid
	  	 	105	 	  	 	88	 
	  Income taxes paid
	  	 	6	 	  	 	4	 
	  
	 

  

	24.	 CONTINGENCIES 



Hydro One is involved in various lawsuits and claims in the normal course of business. In the opinion of management, the outcome of such matters will not
have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. 
 Hydro One Inc., Hydro One
Networks, Hydro One Remote Communities Inc., and Norfolk Power Distribution Inc. are defendants in a class action suit in which the representative plaintiff is seeking up to $125 million in damages related to allegations of improper billing
practices. The plaintiff’s motion for certification was dismissed by the court on November 28, 2017, but the plaintiff has appealed the court’s decision. The appeal is scheduled to be heard on October 16, 2018, and it is possible
that no decision will be rendered by the appeal court until the first quarter of 2019. At this time, an estimate of a possible loss related to this claim cannot be made.     

To date, four putative class action lawsuits were filed by purported Avista Corporation shareholders in relation to the Merger. First, Fink v. Morris,
et al., was filed in Washington state court and the amended complaint names as defendants Avista Corporation’s directors, Hydro One, Olympus Holding Corp., Olympus Corp., and Bank of America Merrill Lynch. The suit alleges that Avista
Corporation’s directors breached their fiduciary duties in relation to the Merger, aided and abetted by Hydro One, Olympus Holding Corp., Olympus Corp. and Bank of America Merrill Lynch. The Washington state court issued an order staying the
litigation until after the plaintiffs file an amended complaint, which must be no later than 30 days after Avista Corporation or Hydro One publicly announces that the Merger has closed. Second, Jenß v. Avista Corp., et al., Samuel v. Avista
Corp., et al., and Sharpenter v. Avista Corp., et al., were each filed in the US District Court for the Eastern District of Washington and named as defendants Avista Corporation and its directors; Sharpenter also named Hydro One, Olympus
Holding Corp., and Olympus Corp. The lawsuits alleged that the preliminary proxy statement omitted material facts necessary to make the statements therein not false or misleading. Jenß, Samuel, and Sharpenter were all voluntarily
dismissed by the respective plaintiffs with no consideration paid by any of the defendants. The one remaining class action is consistent with expectations for US merger transactions and, while there is no certainty as to outcome, Hydro One believes
that the lawsuit is not material to Hydro One. 
  

	25.	 COMMITMENTS 



The following table presents a summary of Hydro One’s commitments under leases, outsourcing and other agreements due in the next 5 years and
thereafter: 
  

																									
	 March 31, 2018 (millions of dollars) 	  	Year 1	 	  	Year 2	 	  	Year 3	 	  	Year 4	 	  	Year 5	 	  	Thereafter	 
	  Outsourcing agreements
	  	 	145	 	  	 	112	 	  	 	84	 	  	 	2	 	  	 	3	 	  	 	5	 
	  Long-term software/meter agreement
	  	 	17	 	  	 	17	 	  	 	13	 	  	 	1	 	  	 	1	 	  	 	3	 
	  Operating lease commitments
	  	 	12	 	  	 	7	 	  	 	9	 	  	 	4	 	  	 	1	 	  	 	3	 
	  
	 

 The following table presents a summary of Hydro One’s other commercial commitments by year of expiry in the next 5
years and thereafter: 
  

																									
	 March 31, 2018 (millions of dollars) 	  	Year 1	 	  	Year 2	 	  	Year 3	 	  	Year 4	 	  	Year 5	 	  	Thereafter	 
	  Credit facilities
	  	 	—	 	  	 	—	 	  	 	—	 	  	 	250	 	  	 	2,300	 	  	 	—	 
	  Letters of credit1 
	  	 	173	 	  	 	—	 	  	 	—	 	  	 	—	 	  	 	—	 	  	 	—	 
	  Guarantees2 
	  	 	325	 	  	 	—	 	  	 	—	 	  	 	—	 	  	 	—	 	  	 	—	 
	  
	 

  

	1 	 Letters of credit consist of a $154 million letter of credit related to retirement compensation arrangements, a
$12 million letter of credit provided to the IESO for prudential support, $6 million in letters of credit to satisfy debt service reserve requirements, and $1 million in letters of credit for various operating purposes.



  

	2 	 Guarantees consist of prudential support provided to the IESO by Hydro One Inc. on behalf of its subsidiaries.



  

	26.	 SEGMENTED REPORTING 



Hydro One has three reportable segments: 
  

	•	 	 The Transmission Segment, which comprises the transmission of high voltage electricity across the province,
interconnecting more than 70 local distribution companies and certain large directly connected industrial customers throughout the Ontario electricity grid; 



  

					
		  	18	  	 














 HYDRO ONE LIMITED 
 NOTES TO
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued) 
 For the three months ended
March 31, 2018 and 2017 
  
  

	•	 	 The Distribution Segment, which comprises the delivery of electricity to end customers and certain other municipal
electricity distributors; and 


  

	•	 	 Other Segment, which includes certain corporate activities and the operations of the Company’s telecommunications
business. 


 The designation of segments has been based on a combination of regulatory status and the nature of the services provided.
Operating segments of the Company are determined based on information used by the chief operating decision maker in deciding how to allocate resources and evaluate the performance of each of the segments. The Company evaluates segment performance
based on income before financing charges and income taxes from continuing operations (excluding certain allocated corporate governance costs). 
  

																	
	 Three months ended March 31, 2018 (millions of dollars) 	  	Transmission	 	  	Distribution	 	  	Other	 	 	Consolidated	 
	  Revenues
	  	 	421	 	  	 	1,145	 	  	 	10	 	 	 	1,576	 
	  Purchased power
	  	 	—	 	  	 	751	 	  	 	—	 	 	 	751	 
	  Operation, maintenance and administration
	  	 	105	 	  	 	145	 	  	 	20	 	 	 	270	 
	  Depreciation and amortization
	  	 	103	 	  	 	92	 	  	 	2	 	 	 	197	 
	  
	 
	  Income (loss) before financing charges and income taxes
	  	 	213	 	  	 	157	 	  	 	(12	) 	 	 	358	 
	  
	 
	  
  Capital
investments
	  	 	190	 	  	 	114	 	  	 	1	 	 	 	305	 
	  
	 
					
	  Three months ended March 31, 2017 (millions of
dollars) 
	  	Transmission	 	  	Distribution	 	  	Other	 	 	Consolidated	 
	  Revenues
	  	 	367	 	  	 	1,279	 	  	 	12	 	 	 	1,658	 
	  Purchased power
	  	 	—	 	  	 	889	 	  	 	—	 	 	 	889	 
	  Operation, maintenance and administration
	  	 	102	 	  	 	145	 	  	 	24	 	 	 	271	 
	  Depreciation and amortization
	  	 	101	 	  	 	92	 	  	 	2	 	 	 	195	 
	  
	 
	  Income (loss) before financing charges and income taxes
	  	 	164	 	  	 	153	 	  	 	(14	) 	 	 	303	 
	  
	 
					
	  Capital investments
	  	 	209	 	  	 	138	 	  	 	3	 	 	 	350	 
	  
	 

  Total Assets by Segment: 
  

									
	 (millions of dollars)	  	March 31,
2018	 	  	December 31,
2017	 
	  Transmission
	  	 	13,698	 	  	 	13,608	 
	  Distribution
	  	 	9,253	 	  	 	9,259	 
	  Other
	  	 	2,838	 	  	 	2,834	 
	  
	 
	  Total assets
	  	 	25,789	 	  	 	25,701	 
	  
	 
	  
 Total Goodwill by Segment:

 
	  				  			
	 (millions of dollars)	  	March 31,
2018	 	  	December 31,
2017	 
	  Transmission
	  	 	157	 	  	 	157	 
	  Distribution
	  	 	168	 	  	 	168	 
	  
	 
	  Total goodwill
	  	 	325	 	  	 	325	 
	  
	 

 All revenues, costs and assets, as the case may be, are earned, incurred or held in Canada. 

 

	27.	 SUBSEQUENT EVENTS 



Dividends 
 On May 14, 2018, preferred share dividends in
the amount of $4 million and common share dividends in the amount of $137 million ($0.23 per common share) were declared. 
 Share Grant Plans 

On April 1, 2018, Hydro One issued from treasury 481,227 common shares to eligible employees in accordance with provisions of the Power Workers’
Union and the Society of Energy Professionals Share Grant Plans. 
 Agreement to Purchase Orillia Power 

In 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, subject to regulatory approval by the OEB. On April 12, 2018, the OEB issued a decision denying Hydro One’s proposed acquisition of Orillia Power. In May 2018, Hydro One filed a Motion
to Review and Vary the OEB’s decision. 

  

					
		  	19