f i n a n c i a l RESULTS
taBle 1: conSolidated Statement of income (Summary) (in thousands of dollars)
| 2019 | 2018 | Change | |
|---|---|---|---|
| Revenue from the sale of electricity | 254,853 | 249,432 | 5,421 |
| Cost of electricity purchased | 255,384 | 252,700 | 2,684 |
| Net revenue (expense) from the sale of electricity | (531) | (3,268) | 2,737 |
| Distribution revenue | 51,400 | 51,866 | (466) |
| Other revenue | 26,693 | 26,985 | (292) |
| Net revenue | 77,562 | 75,583 | 1,979 |
| Operating Expenses | |||
| Operating and distribution expenses | 32,595 | 33,582 | (987) |
| Billing, collecting and administrative expenses | 15,322 | 15,071 | 251 |
| 47,917 | 48,653 | (736) | |
| Earnings before Interest, Taxes, Depreciation | |||
| and Amortization (EBITDA) | 29,645 | 26,930 | 2,715 |
| Depreciation expense | 13,160 | 14,009 | (849) |
| Net finance expense | 728 | 1,427 | (699) |
| Income before tax | 15,757 | 11,494 | 4,263 |
| Income tax | 3,602 | 3,035 | 567 |
| Net Income | 12,155 | 8,459 | 3,696 |
The selected consolidated financial results of the Corporation, presented below, should be viewed in conjunction with the audited consolidated financial statements and accompanying notes for the year ended December 31, 2019.
Windsor Canada Utilities Ltd. (WCU) has two wholly owned subsidiaries: ENWIN Utilities Ltd. (EWU) and ENWIN Energy Ltd. (EWE). The consolidated financial statements of WCU are a direct result of the activities generated by these two entities. EWU is the regulated Local Distribution Company that provides electricity and related utilities services to approximately 90,000 residential and business customers.
EWU and the Windsor Utilities Commission entered into a Water System Operating Agreement (WSOA) in 2012, under which EWU provides utility operating and administrative services to WUC.
EWE provides streetlight maintenance for the City of Windsor.
The financial statements are presented utilizing International Financial Reporting Standards (IFRS), as adopted by WCU initially in 2012. At the time of adoption, IFRS 14 – Regulatory Deferral Accounts was not available to EWU, and remains unavailable for EWU.
Accordingly, these statements do not reflect recognition of the regulatory deferral accounts. Regulatory deferral accounts are prescribed by the OEB for tracking revenues and expenses that are subject to the rate setting process for EWU.
Since these accounts cannot be utilized in these financial statements, revenue and expenses associated with the sale and cost of electricity are recognized on a cash basis. This results in earnings volatility when the settlement of differences between what EWU charges its customers for the cost of power and what it pays the provincial electrical system operator takes place over more than one fiscal year end.