Interim Financial Statements - FortisBC

FortisBC Holdings Inc.
A direct subsidiary of Fortis Inc.
Interim Consolidated Financial Statements
For the three and six months ended June 30, 2013 and 2012
(Unaudited)
Prepared in accordance with United States Generally Accepted Accounting Principles

FortisBC Holdings Inc.
Consolidated Balance Sheets (US GAAP) (Unaudited)
As at
(all amounts are in millions of Canadian dollars)
ASSETS
June 30,
2013
December 31,
2012
Current assets
Cash and cash equivalents $ 52 $ 37
Accounts receivable 153 237
Inventories 90 108
Prepaid expenses 1 4
Deferred income taxes 6 13
Regulatory assets 48 59
350 458
Property, plant and equipment 3,360 3,329
Intangible assets 142 144
Long-term investment 453 453
Goodwill 913 913
Regulatory assets 709 681
Other assets 27 27
$ 5,954 $ 6,005
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities
Short-term notes (note 7) $ 27 $ 69
Accounts payable and accrued liabilities 250 298
Income and other taxes payable 59 31
Current portion of long-term debt 10 23
Current portion of capital lease and finance obligations 7 7
Due to parent company 645 645
Regulatory liabilities 27 35
1,025 1,108
Long-term debt 2,221 2,221
Capital lease and finance obligations 113 116
Regulatory liabilities 169 143
Deferred income taxes 352 341
Other long-term liabilities 259 269
4,139 4,198
Shareholder’s equity
Common shares (a) 1,475 1,475
Preferred shares (a) 1,179 1,179
Additional paid-in capital (1,045) (1,045)
Accumulated other comprehensive loss (note 6) (6) (7)
Non-controlling interests 12 12
Retained earnings 200 193
1,815 1,807
$ 5,954 $ 6,005
(a)
no par value; unlimited authorized shares; 1.2 million preferred and 17.0 million common shares issued
and outstanding at June 30, 2013 and December 31, 2012.
Contingencies (note 15)
The accompanying notes are an integral part of these interim consolidated financial statements.
FortisBC Holdings Inc. Interim Consolidated Financial Statements 1

FortisBC Holdings Inc.
Consolidated Statements of Earnings (US GAAP) (Unaudited)
For the three and six months ended June 30
(all amounts are in millions of Canadian dollars)
Three months ended Six months ended
2013 2012 2013 2012
Revenue
Natural gas transmission and distribution $ 246 $ 265 $ 738 $ 815
Other income 1 2 2 2
Other activities (note 14) 6 6 13 13
253 273 753 830
Expenses
Cost of natural gas 90 109 322 411
Operation and maintenance (note 14) 51 50 109 106
Depreciation and amortization 46 39 92 80
Property and other taxes 15 15 31 30
202 213 554 627
Operating Income 51 60 199 203
Finance charges (notes 8 and 14) 47 47 94 94
Earnings before income taxes 4 13 105 109
Income tax (recovery) expense (5) 1 14 15
Net earnings before non-controlling
interest 9 12 91 94
Net earnings attributable to non-controlling
interests - 1 - 1
Net earnings $ 9 $ 11 $ 91 $ 93
The accompanying notes are an integral part of these interim consolidated financial statements.
FortisBC Holdings Inc. Interim Consolidated Financial Statements 2

FortisBC Holdings Inc.
Consolidated Statements of Comprehensive Earnings (US GAAP) (Unaudited)
For the three and six months ended June 30
(all amounts are in millions of Canadian dollars)
June 30, 2013
FortisBC
Holdings Inc.
Three months ended
Non-controlling
Interest
Total
FortisBC
Holdings Inc.
Six months ended
Non-controlling
Interest
Net earnings $ 9 $ - $ 9 $ 91 $ - $ 91
Other comprehensive earnings:
Defined benefit plans:
Amortization of actuarial loss
(note 6)
1 - 1 1 - 1
Corporate taxes - - - - - -
Comprehensive earnings $ 10 $ - $ 10 $ 92 $ - $ 92
Total
June 30, 2012
FortisBC
Holdings Inc.
Three months ended
Non-controlling
Interest
Total
FortisBC
Holdings Inc.
Six months ended
Non-controlling
Interest
Net earnings (loss) $ 12 $ (1) $ 11 $ 94 $ (1) $ 93
Other comprehensive loss:
Defined benefit plans:
Amortization of actuarial loss
(note 6)
- - - - - -
Corporate taxes - - - - - -
Comprehensive earnings (loss) $ 12 $ (1) $ 11 $ 94 $ (1) $ 93
Total
The accompanying notes are an integral part of these interim consolidated financial statements.
FortisBC Holdings Inc. Interim Consolidated Financial Statements 3

FortisBC Holdings Inc.
Consolidated Statements of Changes in Equity (US GAAP) (Unaudited)
For the six months ended June 30
(all amounts are in millions of Canadian dollars)
Common
Shares
Preferred
Shares
Additional
Paid-in Capital
Accumulated
Other
Comprehensive
Loss
Noncontrolling
Interest
Retained
Earnings
Total Equity
As at December 31, 2011 $ 1,475 $ 1,179 $ (1,045) $ (7) $ - $ 151 $ 1,753
Net earnings - - - - - 93 93
Investment in Mt. Hayes
Storage LP
- - - - 12 - 12
Dividends on common shares - - - - - (50) (50)
As at June 30, 2012 1,475 1,179 (1,045) (7) 12 194 1,808
As at December 31, 2012 1,475 1,179 (1,045) (7) 12 193 1,807
Net earnings - - - - - 91 91
Comprehensive earnings - - - 1 - - 1
Dividends on common shares - - - - - (84) (84)
As at June 30, 2013 $ 1,475 $ 1,179 $ (1,045) $ (6) $ 12 $ 200 $ 1,815
The accompanying notes are an integral part of these interim consolidated financial statements.
FortisBC Holdings Inc. Interim Consolidated Financial Statements 4

FortisBC Holdings Inc.
Consolidated Statements of Cash Flows (US GAAP) (Unaudited)
For the three and six months ended June 30
(all amounts in millions of Canadian dollars)
Three months ended Six months ended
2013 2012 2013 2012
Cash flows provided by (used for)
Operating activities
Net earnings $ 9 $ 11 $ 91 $ 93
Adjustments for non-cash items
Depreciation and amortization 46 39 92 80
Other (5) - (5) -
50 50 178 173
Changes in long-term regulatory assets and
liabilities
(13) (12) (16) (3)
Changes in non-cash working capital (note 10) 78 98 90 121
115 136 252 291
Investing activities
Property, plant and equipment (50) (32) (81) (64)
Intangible assets (5) (5) (7) (14)
Long-term investment - - - 4
Other assets and other long-term liabilities 1 (3) 3 (3)
(54) (40) (85) (77)
Financing activities
Decrease in short-term notes (8) (22) (42) (112)
Reduction of long-term debt, capital lease and
finance obligations
(5) (17) (26) (18)
Advances from parent company - 63 - 65
Contribution from non-controlling interest - 1 - 12
Dividends on common shares (69) (15) (84) (50)
(82) 10 (152) (103)
Net (decrease) increase in cash and cash
equivalents (21) 106 15 111
Cash and cash equivalents at beginning of period 73 43 37 38
Cash and cash equivalents at end of period $ 52 $ 149 $ 52 $ 149
Supplementary Information to Consolidated Statements of Cash Flows (note 10).
The accompanying notes are an integral part of these interim consolidated financial statements.
FortisBC Holdings Inc. Interim Consolidated Financial Statements 5

FortisBC Holdings Inc.
Notes to the Interim Consolidated Financial Statements (US GAAP) (Unaudited)
For the three and six months ended June 30, 2013 and 2012
(all tabular amounts are in millions of Canadian dollars, unless otherwise noted)
1. DESCRIPTION OF THE BUSINESS
FortisBC Holdings Inc. (“FortisBC Holdings” or “Corporation”) and its subsidiaries (collectively the
“Corporation”) provide energy transportation and utility asset management services. FortisBC
Holdings operates in two primary business segments which are separately managed to assess
operational performance.
a) Natural gas transmission and distribution operations involve the transmission and distribution of
natural gas for residential, commercial, institutional, and industrial customers in British
Columbia. The operations are conducted primarily through FortisBC Energy Inc. (“FEI”), serving
the Lower Mainland and Interior of British Columbia; FortisBC Energy (Vancouver Island) Inc.
(“FEVI”), serving Vancouver Island and the Sunshine Coast; and FortisBC Energy (Whistler) Inc.
(“FEW”), serving Whistler.
b) Other activities include FortisBC Holding’s 30 per cent interest in CustomerWorks LP, FortisBC
Alternative Energy Services and corporate finance and administration charges.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
These interim consolidated financial statements have been prepared in accordance with accounting
principles generally accepted in the United States (“US GAAP”) for interim financial statements. As a
result, these interim consolidated financial statements do not include all of the information and
disclosures required in the annual consolidated financial statements and should be read in
conjunction with the Corporation’s 2012 annual audited consolidated financial statements prepared in
accordance with US GAAP. In management’s opinion, the interim consolidated financial statements
include all adjustments, consisting solely of normal recurring adjustments, necessary to present fairly
such information.
The interim consolidated financial statements include the accounts of FortisBC Holdings, its
subsidiaries, and its equity share of the accounts of entities where less than a 50 per cent controlling
interest exists. All material inter-company transactions have been eliminated in the interim
consolidated financial statements except for those inter-company transactions recovered in rates
from customers.
An evaluation of subsequent events through August 1, 2013, the date these interim consolidated
financial statements were issued, was completed to determine whether any circumstances warranted
recognition and disclosure of events or transactions in the interim consolidated financial statements
as at June 30, 2013. Subsequent events have been appropriately disclosed in these consolidated
financial statements.
CHANGES IN ACCOUNTING POLICIES
These interim consolidated financial statements have been prepared following the same accounting
policies and methods as those used in preparing the most recent audited consolidated financial
statements referred to in “Basis of Presentation” above except for the following US GAAP accounting
pronouncements that are applicable to, and were adopted by, the Corporation effective January 1,
2013:
FortisBC Holdings Inc. Interim Consolidated Financial Statements 6

FortisBC Holdings Inc.
Notes to the Interim Consolidated Financial Statements (US GAAP) (Unaudited)
For the three and six months ended June 30, 2013 and 2012
(all tabular amounts are in millions of Canadian dollars, unless otherwise noted)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Disclosures About Offsetting Assets and Liabilities
The Corporation adopted the amendments to Accounting Standards Codification (“ASC”) Topic 210, Balance
Sheet - Disclosures About Offsetting Assets and Liabilities as outlined in Accounting Standards Update
("ASU") Nos. 2011-11 and 2013-01. The amendments improve the transparency of the effect or potential
effect of netting arrangements on a company’s financial position by expanding the level of disclosures
required by entities for such arrangements. The amended disclosures are intended to assist financial
statement users in understanding significant quantitative differences between balance sheets prepared
under US GAAP and International Financial Reporting Standards. ASU No. 2013-01 limits the scope of the
new offsetting disclosure requirements previously issued in ASU No. 2011-11, to certain derivative
instruments, repurchase and reverse repurchase agreements, and securities borrowing and lending
arrangements that are either offset on the balance sheet or subject to an enforceable master netting or
similar arrangement. The above-noted amendments were applied retrospectively.
Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income
The Corporation adopted the amendments to ASC Topic 220, Comprehensive Income – Reporting of
Amounts Out of Accumulated Other Comprehensive Income (“AOCI”) as outlined in ASU No. 2013-02. The
amendments improve the reporting of reclassifications out of AOCI and require entities to report, in one
place, information about reclassifications out of AOCI and to present details of the reclassifications in the
disclosure of changes in AOCI balances. The effect of the reclassification of significant items to net income
in their entirety during the reporting period must be reported in the respective line items in the statement
where net income is presented. The effect of items not reclassified to net income in their entirety during the
reporting period are to be presented in the notes to the consolidated financial statements. The amendments
were applied by the Corporation prospectively.
The above noted amendments did not materially impact the Corporation’s interim consolidated financial
statements for the three and six months ended June 30, 2013 and 2012.
3. REGULATORY MATTERS
Allowed Return on Equity (“ROE”) and Capital Structure
In February 2012, the British Columbia Utilities Commission (“BCUC”) established that a Generic Cost of
Capital (“GCOC”) Proceeding would occur and in April 2012, issued a final scoping document identifying
specific items that would be reviewed as part of the GCOC Proceeding.
The BCUC also determined that a second, subsequent phase be added to the GCOC Proceeding to determine
an appropriate ROE and capital structure for all other regulated utilities in BC, once the benchmark has
been established in the first phase of the GCOC Proceeding. FEI has been designated as the benchmark
utility. FEVI and FEW will have their ROE and capital structure determined in phase two.
Pursuant to a BCUC order released in December 2012, effective January 1, 2013, the approved 2012 ROE
and capital structure for FEI and all other regulated entities in BC that rely on the benchmark utility to
establish rates were to be maintained and made interim. In May 2013, the BCUC issued its decision on the
first phase of the GCOC Proceeding. The decision determined that the ROE of the benchmark utility would
be set at 8.75 per cent with a 38.5 per cent common equity component, both effective January 1, 2013.
The common equity component in capital structure will remain in effect through December 31, 2015.
Effective January 2014, the BCUC is also introducing an Automatic Adjustment Mechanism (“AAM”) to set
the ROE on an annual basis for the benchmark utility. The AAM will take effect when the actual long-term
Government of Canada bond yield exceeds 3.8 per cent. The formula will be in effect until December 31,
2015.
FEVI and FEW are currently approved for a risk premium of 50 basis points over the benchmark utility. As a
result of the BCUC’s decision on the first phase of the GCOC Proceeding, which reduced the ROE of the
benchmark utility by 75 basis points, the interim allowed ROE of FEVI and FEW decreased to 9.25 per cent
effective January 1, 2013, while the deemed equity component of capital structure remained unchanged.
FortisBC Holdings Inc. Interim Consolidated Financial Statements 7

FortisBC Holdings Inc.
Notes to the Interim Consolidated Financial Statements (US GAAP) (Unaudited)
For the three and six months ended June 30, 2013 and 2012
(all tabular amounts are in millions of Canadian dollars, unless otherwise noted)
3. REGULATORY MATTERS (continued)
Allowed Return on Equity (“ROE”) and Capital Structure (continued)
The allowed ROE and capital structure for FEVI and FEW could change further as a result of phase two of
the GCOC Proceeding.
In March 2013, the BCUC initiated the second phase of the GCOC Proceeding and the review process for the
second phase is underway, with a decision expected in the first half of 2014. In July 2013, FEVI and FEW
filed risk premium and equity ratio evidence for the second phase of the GCOC Proceeding.
4. SEASONALITY OF OPERATIONS
Due to the seasonal nature of the Corporation’s natural gas transmission and distribution operations
and its impact on, natural gas consumption patterns, the natural gas transmission and distribution
operations of the Corporation normally generate higher earnings in the first and fourth quarters and
lower earnings in the second quarter, which are partially offset by losses in the third quarter. As a
result of the seasonality, interim earnings are not indicative of earnings on an annual basis.
5. SEGMENT DISCLOSURES
Three months ended
June 30, 2013
Natural gas
transmission
and distribution Other activities Total
Revenues $ 246 $ 6 $ 252
Other income - 1 1
246 7 253
Net earnings 6 3 9
Total assets 5,440 514 5,954
Goodwill 913 - 913
Capital expenditures 48 7 55
Three months ended
June 30, 2012
Natural gas
transmission
and distribution Other activities Total
Revenues $ 265 $ 6 $ 271
Other income 1 1 2
266 7 273
Net earnings (loss) 13 (2) 11
Total assets (December 31, 2012) 5,499 506 6,005
Goodwill (December 31, 2012) 913 - 913
Capital expenditures 37 - 37
Six months ended
June 30, 2013
Natural gas
transmission
and distribution Other activities Total
Revenues $ 738 $ 13 $ 751
Other income 1 1 2
739 14 753
Net earnings 91 - 91
Total assets 5,440 514 5,954
Goodwill 913 - 913
Capital expenditures 80 8 88
FortisBC Holdings Inc. Interim Consolidated Financial Statements 8

FortisBC Holdings Inc.
Notes to the Interim Consolidated Financial Statements (US GAAP) (Unaudited)
For the three and six months ended June 30, 2013 and 2012
(all tabular amounts are in millions of Canadian dollars, unless otherwise noted)
5. SEGMENT DISCLOSURES (continued)
Six months ended
June 30, 2012
Natural gas
transmission
and distribution Other activities Total
Revenues $ 815 $ 13 $ 828
Other income 1 1 2
816 14 830
Net earnings (loss) 95 (2) 93
Total assets (December 31, 2012) 5,499 506 6,005
Goodwill (December 31, 2012) 913 - 913
Capital expenditures 78 - 78
6. OTHER COMPREHENSIVE EARNINGS
Comprehensive earnings is a measure of earnings which includes both net earnings and other
comprehensive income or loss (“OCI”). OCI results from items deferred from recognition on the
statement of earnings.
The components of net benefit cost, on an after-tax basis, recognized in other comprehensive
earnings for the defined benefit pension plans and other post-retirement benefit (“OPEB”) plans for
the three and six months ended June 30 were as follows:
Defined benefit
pension plans
OPEB plans
2013 2012 2013 2012
Net actuarial losses $ - $ - $ - $ -
Amortization of actuarial loss 1 - - -
$ 1 $ - $ - $ -
7. CREDIT FACILITIES
The Corporation had consolidated credit facilities of $730 million available, (December 31, 2012 -
$730 million), of which $653 million was unused at June 30, 2013 (December 31, 2012 - $610
million).
FortisBC
Holdings FEI FEVI
June 30,
2013
December 31,
2012
Total credit facilities $ 30 $ 500 $ 200 $ 730 $ 730
Credit facilities utilized:
Short-term notes - - (27) (27) (69)
Letters of credit outstanding - (50) - (50) (51)
Credit facilities unused $ 30 $ 450 $ 173 $ 653 $ 610
On April 25, 2013, FortisBC Holdings extended its $30 million operating credit facility to mature on May 1,
2014. The new agreement has substantially similar terms to the facility it replaced. The facility was
unutilized at June 30, 2013 and December 31, 2012.
On July 5, 2013, FEI extended its $500 million credit facility to mature on August 24, 2015. The new
agreement has substantially similar terms to the facility it replaced.
On July 19, 2013, FEVI extended its $200 million credit facility to mature on December 31, 2015. The new
agreement has substantially similar terms to the facility it replaced.
FortisBC Holdings Inc. Interim Consolidated Financial Statements 9

FortisBC Holdings Inc.
Notes to the Interim Consolidated Financial Statements (US GAAP) (Unaudited)
For the three and six months ended June 30, 2013 and 2012
(all tabular amounts are in millions of Canadian dollars, unless otherwise noted)
8. FINANCE CHARGES
The total finance charges for the three and six months ended June 30 were as follows:
Three months ended
June 30
Six months ended
June 30
2013 2012 2013 2012
Interest on long-term debt, capital leases, and
finance obligations
$ 39 $ 38 $ 77 $ 77
Interest on short-term debt 9 9 18 17
Interest capitalized (1) - (1) -
$ 47 $ 47 $ 94 $ 94
9. EMPLOYEE FUTURE BENEFITS
The Corporation sponsors a number of employee post-employment benefit plans for eligible employees.
These plans include defined benefit pension plans, unfunded supplemental plans, and various OPEB plans.
The total net benefit cost for the three months ended June 30 were as follows:
Defined benefit
pension plans
OPEB plans
2013 2012 2013 2012
Service costs $ 4 $ 3 $ 1 $ -
Interest costs 5 5 1 1
Expected return on plan assets (5) (5) - -
Amortization:
Actuarial losses 3 3 1 1
Past service costs - - (1) -
Actuarial determined net benefit cost 7 6 2 2
Regulatory adjustment (2) (2) (1) -
Net benefit cost $ 5 $ 4 $ 1 $ 2
The total net benefit cost for the six months ended June 30 were as follows:
Defined benefit
pension plans
OPEB plans
2013 2012 2013 2012
Service costs $ 8 $ 7 $ 2 $ 1
Interest costs 10 9 2 2
Expected return on plan assets (10) (10) - -
Amortization:
Actuarial losses 6 6 2 2
Past service costs - - (2) (1)
Actuarial determined net benefit cost 14 12 4 4
Regulatory adjustment (5) (4) (2) (1)
Net benefit cost $ 9 $ 8 $ 2 $ 3
FortisBC Holdings Inc. Interim Consolidated Financial Statements 10

FortisBC Holdings Inc.
Notes to the Interim Consolidated Financial Statements (US GAAP) (Unaudited)
For the three and six months ended June 30, 2013 and 2012
(all tabular amounts are in millions of Canadian dollars, unless otherwise noted)
10. SUPPLEMENTARY INFORMATION TO CONSOLIDATED STATEMENTS OF CASH FLOWS
The supplementary information to the consolidated statements of cash flows for the three and six
months ended June 30 is as follows:
Three months ended
June 30
Six months ended
June 30
Significant Non-cash Transactions 2013 2012 2013 2012
Mark-to-market of natural gas commodity
derivatives
$ (3) $ (42) $ (26) $ (45)
Capital accruals - 3 4 4
Regulatory assets and regulatory liabilities
accruals
- 3 6 1
Contributions in aid of construction accruals (4) (1) (7) (3)
Regulated asset for deferred income taxes 8 7 11 11
Three months ended
June 30
Six months ended
June 30
Changes in Non-cash Working Capital 2013 2012 2013 2012
Accounts receivable $ 133 $ 146 $ 84 $ 110
Inventory (39) (30) 18 29
Prepaid expenses 1 1 3 3
Accounts payable and accrued liabilities 14 (43) (48) (103)
Income and other taxes payable (22) (17) 21 16
Net regulatory assets and liabilities (10) 36 3 78
Other 1 5 9 (12)
$ 78 $ 98 $ 90 $ 121
The non-cash investing activities balances as at June 30 are as follows:
2013 2012
Additions to property, plant and equipment and intangible assets
included in current liabilities $ 2 $ 5
Contributions in aid of construction included in current assets 4 2
11. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
The Corporation hedges its exposure to fluctuations in natural gas prices through the use of
derivative instruments. FEI and FEVI’s price risk management strategy aims to (i) improve the
likelihood that natural gas prices remain competitive, (ii) dampen price volatility on customer rates
and (iii) reduce the risk of regional price disconnects. As a result of regulatory proceedings in 2011, FEI
and FEVI have suspended all commodity hedging activity with the exception of certain elements to
address the risk of regional price disconnects. The existing hedging contracts continue in effect through to
their maturity and FEI and FEVI’s ability to fully recover the commodity cost of gas in customer rates
remains unchanged.
FortisBC Holdings Inc. Interim Consolidated Financial Statements 11

FortisBC Holdings Inc.
Notes to the Interim Consolidated Financial Statements (US GAAP) (Unaudited)
For the three and six months ended June 30, 2013 and 2012
(all tabular amounts are in millions of Canadian dollars, unless otherwise noted)
11. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (continued)
Volume of Derivative Activity
As at June 30, 2013, the Corporation had the following notional volumes of outstanding natural gas
commodity derivatives, designated for regulatory approval that are expected to be settled as outlined
below:
2013 2014 2015
Natural gas commodity derivatives
Swaps and options (petajoules (PJ)) 7 7 -
Gas purchase contract premiums (PJ) 46 26 6
Presentation of Derivative Instruments in the Financial Statements
In the Corporation’s consolidated balance sheets, derivative instruments are presented on a net basis
by counterparty where the right of offset exists.
At June 30, 2013, the Corporation’s outstanding derivative balances were as follows:
Gross
derivatives
Cash
balance 1 Netting 2 collateral
Total
derivatives
balance
Natural gas commodity derivatives:
Accounts payable and accrued
liabilities $ 33 $ - $ - $ 33
1 See note 12 for a discussion of the valuation techniques used to calculate the fair value of these instruments.
2 Positions, by counterparty, are netted where the intent and legal right to offset exists.
At December 31, 2012, the Corporation’s outstanding derivative balances were as follows:
Gross
derivatives
Cash
balance 1 Netting 2 collateral
Total
derivatives
balance
Natural gas commodity derivatives:
Accounts payable and accrued
liabilities $ 59 $ - $ - $ 59
1 See note 12 for a discussion of the valuation techniques used to calculate the fair value of these instruments.
2 Positions, by counterparty, are netted where the intent and legal right to offset exists.
The following table shows the cumulative unrealized losses at June 30, 2013 and December 31, 2012,
with respect to the derivative instruments:
1
June 30,
2013
December 31,
2012
Unrealized loss natural gas commodity derivatives – Current portion
of regulatory assets 1,2 $ 33 $ 59
Unrealized gains and losses on commodity risk-related derivative instruments are recorded to regulatory assets or
liabilities rather than being recorded to the consolidated statement of earnings or other comprehensive earnings.
2 These amounts are fully passed through to customers in rates. Accordingly, net earnings were not impacted by realized
amounts on these instruments.
Cash inflows and outflows associated with the settlement of all derivative instruments are included in
operating cash flows on the Corporation’s consolidated statements of cash flows.
FortisBC Holdings Inc. Interim Consolidated Financial Statements 12

FortisBC Holdings Inc.
Notes to the Interim Consolidated Financial Statements (US GAAP) (Unaudited)
For the three and six months ended June 30, 2013 and 2012
(all tabular amounts are in millions of Canadian dollars, unless otherwise noted)
12. FAIR VALUE MEASUREMENT
Fair value is the price at which a market participant could sell an asset or transfer a liability to an unrelated
party. A fair value measurement is required to reflect the assumptions that market participants would use in
pricing an asset or liability based on the best available information. These assumptions include the risks
inherent in a particular valuation technique, such as a pricing model, and the risks inherent in the inputs to
the model. A fair value hierarchy exists that prioritizes the inputs used to measure fair value. The
Corporation is required to record all derivative instruments at fair value except those which would qualify
for the normal purchase and normal sale exception.
The three levels of the fair value hierarchy are defined as follows:
Level 1:
Level 2:
Level 3:
Fair value determined using unadjusted quoted prices in active markets.
Fair value determined using pricing inputs that are observable.
Fair value determined using unobservable inputs only when relevant observable inputs
are not available.
The fair values of the Corporation’s financial instruments, including derivatives, reflect a point-intime
estimate based on current and relevant market information about the instruments as at the
balance sheet dates. The estimates cannot be determined with precision as they involve uncertainties
and matters of judgment and, therefore, may not be relevant in predicting the Corporation’s future
consolidated earnings or cash flows.
The carrying values of cash and cash equivalents, account receivable, accounts payable and shortterm
notes on the consolidated balance sheet of the Corporation approximate their fair values.
The natural gas commodity derivatives are used to fix the effective purchase price of natural gas, as
the majority of the natural gas supply contracts have floating, rather than fixed, prices. Any resulting
gains or losses are recorded in regulatory liabilities or assets in the consolidated balance sheet. The
fair value of the natural gas commodity derivatives is calculated using the present value of cash flows
based on market prices and forward curves for the commodity cost of natural gas.
The fair values of the natural gas commodity derivatives are estimates of the amounts that the
Corporation would receive or pay to terminate the outstanding contracts as at the balance sheet
date. As at June 30, 2013 and December 31, 2012, none of the natural gas commodity derivatives
were designated as hedges of the natural gas supply contracts. However, any changes in the fair
value of the natural gas commodity derivatives are deferred as a regulatory asset or liability for
recovery from, or refund to, customers in future rates, as permitted by the BCUC.
The following table summarizes the fair value measurements of the Corporation’s long-term debt and
natural gas derivative contracts as of June 30, 2013 and December 31, 2012, all of which are Level 2
of the fair value hierarchy and recorded on the consolidated balance sheets at their carrying value:
Carrying
value
June 30, 2013 December 31, 2012
Estimated Carrying
fair value
value
Estimated
fair value
Long-term debt, including
current portion $ 2,231 $ 2,667 $ 2,244 $ 2,848
Natural gas commodity swaps
and options and gas
purchase contract premium 1 33 33 59 59
1 Included in accounts payable as at June 30, 2013 and December 31, 2012.
FortisBC Holdings Inc. Interim Consolidated Financial Statements 13

FortisBC Holdings Inc.
Notes to the Interim Consolidated Financial Statements (US GAAP) (Unaudited)
For the three and six months ended June 30, 2013 and 2012
(all tabular amounts are in millions of Canadian dollars, unless otherwise noted)
12. FAIR VALUE MEASUREMENT (continued)
When quoted market prices are not available, the fair value is determined by discounting the future
cash flows of the specific debt instrument at an estimated yield to maturity equivalent to benchmark
government bonds or treasury bills, with similar terms to maturity, plus a market credit risk premium
equal to that of issuers of similar credit quality. Since the Corporation does not intend to settle the
long-term debt prior to maturity, the fair value estimate does not represent an actual liability and,
therefore, does not include exchange or settlement costs.
13. FINANCIAL RISK MANAGEMENT
The Corporation is exposed to credit risk, liquidity risk and market risk as a result of holding financial
instruments in the normal course of business.
In June 2013, Moody's Investors Service affirmed the long-term credit ratings of the Corporation of
Baa2 and FEI of A3 but changed the rating outlooks from stable to negative. There have been no
other changes to the Corporation’s credit ratings from those reported in the Corporation’s 2012
annual financial statements.
The following table summarizes the Corporation’s net credit risk exposure to its counterparties, as
well as credit risk exposure to counterparties accounting for greater than 10 per cent net credit
exposure, as of June 30, 2013 and December 31, 2012:
Gross credit
exposure
before credit
collateral 1
Credit
collateral
Net credit
exposure 2
Number of
counterparties
>10%
Net exposure
to
counterparties
>10%
June 30, 2013 $ 31 $ - $ 31 4 $ 29
December 31, 2012 $ 51 $ - $ 51 4 $ 45
1 Gross credit exposure equals mark-to-market value on physically and financially settled contracts, notes receivable,
and net receivables (payables) where netting is contractually allowed. Gross and net credit exposure amounts reported
above do not include adjustments for time value or liquidity.
2 Net credit exposure is the gross credit exposure collateral minus credit collateral (cash deposits and letters of credit).
For purposes of this table, parental guarantees are not included as part of the calculation.
14. RELATED PARTY TRANSACTIONS
In the normal course of business, the Corporation transacts with its parent and other related
companies under common control to provide or receive services and materials based on commercial
terms or on terms approved by the BCUC. The following transactions were measured at the exchange
amount unless otherwise indicated:
(a) The Corporation’s parent company Fortis Inc. (“Fortis”) provided corporate management services
totaling approximately $2 million (2012 – $1 million) for the three months ended June 30, 2013
and $3 million (2012 - $3 million) for the six months ended June 30, 2013. The corporate
management services fee was included in operation and maintenance expenses on the
consolidated statements of earnings.
(b) The Corporation was charged interest of approximately $1 million (2012 - $1 million) during the
three months ended June 30, 2013 and $2 million (2012 - $2 million) during the six months
ended June 30, 2013 by Fortis on the borrowings from the parent company. The amount due to
the parent company was unsecured and due on demand and accrues interest at Fortis’ average
cost of short term borrowing plus twenty five basis points.
FortisBC Holdings Inc. Interim Consolidated Financial Statements 14

FortisBC Holdings Inc.
Notes to the Interim Consolidated Financial Statements (US GAAP) (Unaudited)
For the three and six months ended June 30, 2013 and 2012
(all tabular amounts are in millions of Canadian dollars, unless otherwise noted)
14. RELATED PARTY TRANSACTIONS (continued)
(c) On December 31, 2010, the Corporation entered into a $200 million promissory note at a
prescribed interest rate of 5 per cent with Fortis. The Corporation was charged interest of $3
million (2012 - $3 million) and $5 million (2012 - $5 million), respectively, for the three and six
months ended June 30, 2013, by Fortis on the promissory note. The promissory note is due on
December 31, 2020 and is unsecured.
(d) The Corporation received dividends from its $450 million investment in FortisWest Inc. of $6
million (2012 - $6 million) during the three months ended June 30, 2013 and $13 million (2012 -
$13 million) during the six months ended June 30, 2013 on the Series C Preferred Shares owned
by the Corporation. For the three and six months ended June 30, 2013, the Corporation paid
interest of $6 million (2012 - $6 million) and $12 million (2012 - $12 million), respectively, to
Fortis on the demand loan. The dividend income was included in other activities revenue, and
interest expense was recorded in finance charges on the consolidated statements of earnings.
(e) For the three and six months ended June 30, 2013, the Corporation and FEI were charged $1
million (2012 - nil) and $2 million (2012 – $1 million), respectively, by FortisBC Inc. (“FBC”) (a
subsidiary of Fortis) for electricity purchases and management services. For the three and six
months ended June 30, 2013 the Corporation charged $1 million (2012 - $1 million) and $1
million (2012 - $1 million), respectively, to FBC for natural gas purchases, rent and management
services. These charges were included in operation and maintenance expenses on the
consolidated statements of earnings.
(f) FEI was charged $4 million (2012 - $4 million) and $8 million (2012 - $8 million), respectively,
for the three and six months ended June 30, 2013 by FEVI for storing gas at the Mt. Hayes LNG
storage facility. These charges were included in regulatory liabilities on the consolidated balance
sheets.
15. CONTINGENCIES
The Corporation and its subsidiaries are subject to various legal proceedings and claims associated
with the ordinary course of business operations. Management believes that the amount of liability, if
any, from these actions would not have a material effect on the Corporation’s consolidated financial
position or results of operations.
During 2007 and 2008, a non-regulated subsidiary of the Corporation received Notices of Assessment
from Canada Revenue Agency for additional taxes related to its 1999 through 2003 taxation years.
The Corporation has previously fully provided for the exposure. During the quarter, a settlement was
reached with the Canada Revenue Agency resulting in a release of unrecognized tax benefits totaling
approximately $5 million.
On April 29, 2013, the Corporation was named as a defendant in an action in the British Columbia
Supreme Court by the Coldwater Indian Band. The claim is in regard to interests in a pipeline right of
way on reserve lands. The pipeline on the right of way was transferred by the Corporation (then
Terasen Inc.) to the Kinder Morgan group in 2007. The Coldwater Indian Band seeks orders
cancelling the right of way and claims damages for wrongful interference with the Band’s use and
enjoyment of reserve lands. The amount and outcome are indeterminable at this time and,
accordingly, no amount has been accrued in the financial statements.
16. GUARANTEES
The Corporation has letters of credit outstanding at June 30, 2013 totaling $50 million (December 31,
2012 - $51 million) primarily to support its unfunded supplemental pension benefit plans.
17. COMPARATIVE FIGURES
Certain comparative figures have been reclassified to comply with the current period’s classifications.
FortisBC Holdings Inc. Interim Consolidated Financial Statements 15