1 HYDRO ONE ANNUAL REPORT 2013 Transmission $11,846 Distribution $8,805 Transmission $11,846 Distribution $8,805 Year ended December 31, 2013 (CAD $ millions, except as otherwise noted) 2013 2012 $ Change  % Change Revenues   6,074  5,728  346  6  Purchased power   3,020  2,774  246  9  Operating costs   1,782  1,730  52  3  Net income   803  745  58  8 Net cash from operating activities   1,404  1,294  110  9  Average annual Ontario 60-minute peak demand  (MW) 1 21,493   21,132  361  2  Distribution – units distributed to customers  (TWh) 1 29.8  29.2 0.6  2 CAPITAL INVESTMENTS (CAD $ millions) TOTAL ASSETS December 31, 2013 (CAD $ millions) NET INCOME (CAD $ millions) 641 745 1 1 1 1 1,394 803 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 641 745 1 1 1 1 1,394 803 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 T ransmission $11,846 Other $974 Distribution $8,805 1  based on Canadian GAAP 1 based on Canadian GAAP CONSOLIDATED FINANCIAL HIGHLIGHTS AND STA TISTICS TABLE OF CONTENTS 02  Letter from the Chair 04  Letter from the President and CEO 06  Safety 08  Reliability 10  Innovation & Pr oductivity 12  Community 14  Hydro One Senior Management 15  Management’ Discussion and Analysis 48  Management’s Report 49  Independent Auditors’ Report 50  Consolidated S tatements of Operations and Comprehensive Income 51  Consolidated Balance Sheets 53  Consolidated S tatements of Changes in Shareholder’s Equity 54  Consolidated Statements of Cash Flows  55  Notes to Consolidated Financial Statements 95  Board of Directors 1  System-related statistics are preliminary.