UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of April, 2025

Commission File Number: 000-54516

 

 

Emera Incorporated

(Exact name of registrant as specified in its charter)

 

 

5151 Terminal Road

Halifax NS B3J 1A1

Canada

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☐   Form 40-F ☒

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

 

 
 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

    EMERA INCORPORATED
Date: April 8, 2025     By:  

/s/ Brian Curry

      Name: Brian Curry
      Title: Corporate Secretary

EXHIBIT INDEX

 

Exhibit No.

   

Description

99.1    2025 Form of Proxy – Emera Incorporated
99.2    2025 Voting Instructions Form
99.3    Notice to Registered Shareholders regarding Access to Emera’s Management Information Circular and Annual Report
99.4    Notice to Non-Registered Shareholders regarding Access to Emera’s Management Information Circular and Annual Report
99.5    Notice of Annual Meeting of Common Shareholders and Management Information Circular
99.6    Emera’s 2024 Annual Report
99.7    Notice of Emera’s 2025 Annual Meeting of Shareholders

Exhibit 99.1

 

LOGO    LOGO

Form of Proxy - Emera Incorporated

Annual Shareholders Meeting of May 22, 2025

Appointment of Proxyholder

I/We, being holder(s) of Emera Incorporated (the “Company”) common shares, hereby appoint: Karen H. Sheriff, or failing her, Scott C. Balfour, or failing him, Brian C. Curry, OR

 

 

[Print the name of the person you are appointing if this person is someone other than the individuals listed above.]

as proxy of the undersigned, to participate, act and vote on behalf of the undersigned in accordance with the below direction (or if no directions have been given, as the proxy sees fit) on all of the following matters and any other matter that may properly come before the Annual Meeting of Shareholders of the Company to be held at 2:00 p.m. Atlantic time on Thursday, May 22, 2025, virtually at:
https://meetings.lumiconnect.com/400-560-695-216, using password: emera2025 (case sensitive) (the “Meeting”), and at any and all adjournments or postponements thereof in the same manner, to the same extent and with the same powers as if the undersigned were personally present, with full power of substitution.

Management recommends voting FOR Resolutions 1, 2, 3 and 4. Please use a dark black pencil or pen.

 

  1.    Election of Directors   FOR    WITHHOLD           FOR    WITHHOLD
  

01.  Scott C. Balfour

   ☐    ☐     

07.  Brian J. Porter

    ☐    ☐
  

02.  James V. Bertram

   ☐    ☐     

08.  Ian E. Robertson

    ☐    ☐
  

03.  Henry E. Demone

   ☐    ☐     

09.  M. Jacqueline Sheppard

    ☐    ☐
  

04.  Paula Y. Gold-Williams

   ☐    ☐     

10.  Karen H. Sheriff

    ☐    ☐
  

05.  Kent M. Harvey

   ☐    ☐     

11.  Jochen E. Tilk

    ☐    ☐
  

06.  B. Lynn Loewen

   ☐    ☐     

12.  Carla M. Tully

    ☐    ☐
  2.    Appointment of Auditors    FOR    WITHHOLD
   Appointment of Ernst & Young LLP as auditors    ☐    ☐
  3.    Authorize Remuneration of Auditors    FOR    AGAINST
   Authorize the directors to fix the remuneration of the Auditors pursuant to the Nova Scotia Companies Act    ☐    ☐
  4.    Advisory Vote on Executive Compensation    FOR    AGAINST
   Consider and approve, on an advisory basis, a resolution on Emera’s approach to executive compensation as disclosed in the Management Information Circular   

☐

   

☐

I/We authorize you to act in accordance with my/our instructions set out above. I/We hereby revoke any proxy previously given with respect to the Meeting.

If no voting instructions are indicated above, this proxy will be voted FOR a matter by Management’s appointees or, if you appoint another proxyholder, as that other proxyholder sees fit. On any amendments or variations proposed or any new business properly submitted before the Meeting, I/We authorize you to vote as you see fit.

 

 

           

 

Signature(s)       Date

Please sign exactly as your name(s) appears on this proxy. Please see reverse for instructions. All proxies must be received by 5:00 p.m. Atlantic time, Tuesday, May 20, 2025 or if the meeting is adjourned or postponed, by 5:00 p.m. Atlantic time two business days prior to the reconvened meeting date.

Under Canadian Securities Law, you are entitled to receive certain investor documents. Electronic financial statements and MD&A are available at www.emera.com and at www.sedarplus.com. If you wish to receive copies, please tick the box below or go to the website https://services.tsxtrust.com/financialstatements and input code 1705a.

 

❑

I would like to receive interim financial statements and MD&A.

❑

I would like to receive annual financial statements and MD&A.

LOGO    LOGO

Form of Proxy - Emera Incorporated

Annual Shareholders Meeting of May 22, 2025

 

 

1.

Every shareholder has the right to appoint some other person or company of the shareholder’s choice, who need not be a shareholder of Emera Incorporated, as that shareholder’s proxyholder to participate, act and vote on the shareholder’s behalf at the meeting or any adjournment or postponement thereof. If you wish to appoint a person or company other than the persons whose names are printed herein, please insert the name of your chosen proxyholder in the space provided on the reverse and return your proxy by mail, fax or email. In addition, to enable your chosen proxyholder to participate and vote virtually at the Meeting, YOU MUST contact TSX Trust Company “TSX” either by calling 1-866-751-6315 (toll-free within North America) or 1-416-682-3860 (outside North America) or by logging onto the TSX website at: https://www.tsxtrust.com/control-number-request, by 5:00 p.m. Atlantic time on May 20, 2025 or if the meeting is adjourned or postponed, by 5:00 p.m. Atlantic time two business days prior to the reconvened meeting date, to request a new Control Number for the meeting. This new Control Number will allow your proxyholder to log in to and vote at the meeting. Without a new Control Number your proxyholder will only be able to log in to the meeting as a guest and will not be able to vote.

 

2.

This proxy confers discretionary authority on the appointee to vote as the appointee sees fit in respect of amendments or variations to matters identified in the notice of meeting or other matters as may properly come before the Meeting or any adjournment or postponement thereof, in each instance to the extent permitted by law, whether or not the amendment or other matter that comes before the meeting is routine and whether or not the amendment or other matter that comes before the meeting is contested.

 

3.

This proxy must be signed by a holder or his or her attorney duly authorized in writing. If you are an individual, please sign exactly as your name appears on this proxy. If the holder is a corporation, a duly authorized officer or attorney of the corporation must sign this proxy.

 

4.

If the securities are registered in the name of an executor, administrator or trustee, please sign exactly as your name appears on this proxy. If the securities are registered in the name of a deceased or other holder, the proxy must be signed by the legal representative with his or her name printed below his or her signature, and evidence of authority to sign on behalf of the deceased or other holder must be attached to this proxy.

 

5.

Some holders may own securities as both a registered and a beneficial holder and will need to vote separately as a registered holder and as a beneficial holder. Beneficial holders may be forwarded either a form of proxy already signed by the intermediary or a voting instruction form to allow them to direct the voting of securities they beneficially own. Beneficial holders should follow instructions for voting conveyed to them by their intermediaries.

 

6.

If a security is held by two or more individuals, any one of them present or represented by proxy at the Meeting may, in the absence of the other or others, vote at the Meeting. However, if one or more of them are present or represented by proxy, they must vote together the number of securities indicated on the proxy.

 

7.

If this proxy is not dated, it will be deemed to bear the date on which it was mailed on behalf of management of the Company to you.

All holders should refer to the Management Information Circular for further information regarding completion and use of this proxy and other information pertaining to the Meeting.

This proxy is solicited by and on behalf of Management of the Company.

Emera offers a number of ways to cast your vote prior to the meeting. By using one of these ways provided for you, you will be considered to have signed and returned this proxy.

 

LOGO

 

•  Go to www.meeting-vote.com

•  Follow the instructions on the screen

•  You will be required to enter the 13-digit control number located on the reverse

•  No need to return this proxy

   

LOGO

 

•  Use any touch-tone telephone, call toll free in Canada and United States

1-888-489-5760 (English only) or

1-888-489-7352 (Bilingual)

•  Follow the voice instructions

•  When prompted, enter the 13-digit control number located on the reverse

•  No need to return this proxy

   

LOGO

 

To vote using your smartphone, please scan this QR Code. No need to return this proxy.

LOGO

LOGO

 

•  Complete the reverse of this form

•  Return your signed proxy in the envelope provided or send to:

TSX Trust Company Proxy Department

P.O. Box 721

Agincourt, ON M1S 0A1

   

LOGO

 

•  Complete the reverse of this form and fax your signed proxy to 416-595-9593.

   

LOGO

 

•  Complete the reverse of this form

•  Scan your signed proxy and email it to proxyvote@tmx.com.

All proxies must be received by 5:00 p.m. Atlantic time, Tuesday, May 20, 2025 or if the meeting is adjourned or postponed, by 5:00 p.m. Atlantic time two business days prior to the reconvened meeting date.

Exhibit 99.2

 

LOGO    LOGO

Voting Instruction Form (“VIF”) - Emera Incorporated

Annual Shareholders Meeting of May 22, 2025

Appointee

I/We, being holder(s) of Emera Incorporated (the “Company”) common shares, hereby appoint: Karen H. Sheriff, or failing her, Scott C. Balfour, or failing him, Brian C. Curry, OR

 

 

[To participate in the meeting and vote or to appoint someone to participate and vote on your behalf, print the name of the attendee here.]

as proxy of the undersigned, to participate, act and vote on behalf of the undersigned in accordance with the below direction (or if no directions have been given, as the proxy sees fit) on all of the following matters and any other matter that may properly come before the Annual Meeting of Shareholders of the Company to be held at 2:00 p.m. Atlantic time on Thursday, May 22, 2025, virtually via live webcast at: https://meetings.lumiconnect.com/400-560-695-216, using password: emera2025 (case sensitive) (the “Meeting”), and at any and all adjournments or postponements thereof in the same manner, to the same extent and with the same powers as if the undersigned were personally present, with full power of substitution.

Management recommends voting FOR Resolutions 1, 2, 3 and 4. Please use a dark black pencil or pen.

 

  1.    Election of Directors   FOR    WITHHOLD           FOR    WITHHOLD
  

01.  Scott C. Balfour

   ☐    ☐     

07.  Brian J. Porter

    ☐    ☐
  

02.  James V. Bertram

   ☐    ☐     

08.  Ian E. Robertson

    ☐    ☐
  

03.  Henry E. Demone

   ☐    ☐     

09.  M. Jacqueline Sheppard

    ☐    ☐
  

04.  Paula Y. Gold-Williams

   ☐    ☐     

10.  Karen H. Sheriff

    ☐    ☐
  

05.  Kent M. Harvey

   ☐    ☐     

11.  Jochen E. Tilk

    ☐    ☐
  

06.  B. Lynn Loewen

   ☐    ☐     

12.  Carla M. Tully

    ☐    ☐
  2.    Appointment of Auditors    FOR    WITHHOLD
   Appointment of Ernst & Young LLP as auditors    ☐    ☐
  3.    Authorized Remuneration of Auditors    FOR    AGAINST
   Authorize Directors to fix the remuneration of the Auditors pursuant to the Nova Scotia Companies Act    ☐    ☐
  4.    Advisory Vote on Executive Compensation    FOR    AGAINST
   Consider and approve, on an advisory basis, a resolution on Emera’s approach to executive compensation as disclosed in the Management Information Circular    ☐    ☐

I/We authorize you to act in accordance with my/our instructions set out above. I/We hereby revoke any proxy previously given with respect to the Meeting.

If no voting instructions are indicated above, this VIF will be voted FOR a matter by Management’s appointees or, if you appoint another person, as such other person sees fit. On any amendments or variations proposed or any new business properly submitted before the Meeting, I/We authorize you to vote as you see fit.

 

 

           

 

Signature(s)       Date

Please sign exactly as your name(s) appears on this VIF. Please see reverse for instructions. All VIFs must be received by 5:00 p.m. Atlantic time, Tuesday, May 20, 2025 or if the meeting is adjourned or postponed, by 5:00 p.m. Atlantic time two business days prior to the reconvened meeting date.

Under Canadian Securities Law, you are entitled to receive certain investor documents. Electronic financial statements and MD&A are available at www.emera.com and at www.sedarplus.com. If you wish copies, please tick the box below or go to the website https://services.tsxtrust.com/financialstatements and input code 1705a.

 

❑

I would like to receive interim financial statements and MD&A

❑

I would like to receive annual financial statements and MD&A

LOGO    LOGO

Voting Instruction Form (“VIF”) - Emera Incorporated

Annual Shareholders Meeting of May 22, 2025

 

 

1.

We are sending to you the enclosed proxy-related materials that relate to a meeting of holders of Emera Incorporated’s common shares. Unless you, as an appointee, or an alternate appointee participate(s) in the Meeting and vote(s) in person or virtually, your securities can be voted only by management, as appointee of the registered holder, in accordance with your instructions.

 

2.

Every shareholder has the right to appoint some other person or company of the shareholder’s choice, who need not be a shareholder of Emera Incorporated, to participate and act on the shareholder’s behalf at the meeting or any adjournment or postponement thereof. If you wish to appoint a person or company other than the persons whose names are printed herein, please insert the name of your chosen proxyholder in the space provided on the reverse and return your proxy by mail, fax or email. In addition, to enable your chosen proxyholder to participate and vote virtually at the Meeting YOU MUST contact TSX Trust Company “TSX” either by calling 1-866-751-6315 (toll-free within North America) or 1-416-682-3860 (outside North America) or logging onto the TSX website at:
https://www.tsxtrust.com/control-number-request, by 5:00 p.m. Atlantic time on May 20, 2025 or if the meeting is adjourned or postponed, by 5:00 p.m. Atlantic time two business days prior to the reconvened meeting date, to request a new Control Number for the meeting. This new Control Number will allow your proxyholder to log in to and vote at the meeting. Without a new Control Number your proxyholder will only be able to log in to the meeting as a guest and will not be able to vote. Unless prohibited by law, the person whose name is written in the space provided will have full authority to present matters to the Meeting and vote on all matters that are presented at the Meeting, even if those matters are not set out in this form or the Management Information Circular. Consult a legal advisor if you wish to modify the authority of that person in any way. If you require help, please contact the Registered Representative who services your account.

 

3.

This VIF confers discretionary authority on the appointee to vote as the appointee sees fit in respect of amendments or variations to matters identified in the notice of meeting or other matters as may properly come before the Meeting or any adjournment or postponement thereof, in each instance to the extent permitted by law, whether or not the amendment or other matter that comes before the meeting is routine and whether or not the amendment or other matter that comes before the meeting is contested.

 

4.

We are prohibited from voting these securities on any of the matters to be acted upon at the Meeting without your specific voting instructions. In order for these securities to be voted at the Meeting, it will be necessary for us to have your specific voting instructions. Please complete and return the information requested in this VIF to provide your voting instructions to us promptly.

 

5.

This VIF should be signed by you in the exact manner as your name appears on the VIF. If these voting instructions are given on behalf of a body corporate, set out the full legal name of the body corporate, the name and position of the person giving voting instructions on behalf of the body corporate, and the address for service of the body corporate.

 

6.

If this VIF is not dated it will be deemed to bear the date on which it is mailed by management to you.

 

7.

When properly signed and delivered, securities represented by this VIF will be voted as directed by you, however, if such a direction is not made in respect of any matter, the VIF will direct the voting of the securities to be made as recommended in the documentation provided by Management for the Meeting.

 

8.

Your voting instructions will be recorded on receipt of the VIF.

 

9.

By providing voting instructions as requested, you are acknowledging that you are the beneficial owner of, and are entitled to instruct us with respect to the voting of, these securities.

 

10.

If you have any questions regarding the enclosed documents, please contact the Registered Representative who services your account.

 

11.

This VIF should be read in conjunction with the Management Information Circular and other proxy materials provided by Management.

All holders should refer to the Management Information Circular for further information regarding completion and use of this VIF and other information pertaining to the Meeting.

Emera offers a number of ways to cast your vote prior to the meeting.

 

LOGO

 

•  Go to www.meeting-vote.com

•  Follow the instructions on the screen

•  You will be required to enter the 13-digit control number located on the reverse

•  No need to return this VIF

   

LOGO

 

•  Use any touch-tone telephone, call toll free in Canada and United States
1-888-489-5760 (English only) or
1-888-489-7352 (Bilingual)

•  Follow the voice instructions

•  When prompted, enter the 13-digit control number located on the reverse

•  No need to return this VIF

   

LOGO

 

To vote using your smartphone, please scan this QR Code. There is no need to return this VIF.

LOGO

LOGO

 

•  Complete the reverse of this form

•  Return your signed VIF in the envelope provided or send to:

TSX Trust Company Proxy Department

P.O. Box 721

Agincourt, ON M1S 0A1

   

LOGO

 

•  Complete the reverse of this form Fax your signed VIF to 416-595-9593

   

LOGO

 

•  Complete the reverse of this form

•  Scan your signed VIF and email it to proxyvote@tmx.com.

All VIFs must be received by 5:00 p.m. Atlantic time, Tuesday, May 20, 2025 or if the meeting is adjourned or postponed,

by 5:00 p.m. Atlantic time two business days prior to the reconvened meeting date.

Exhibit 99.3

 

LOGO

ANNUAL SHAREHOLDERS MEETING OF

EMERA INCORPORATED

NOTICE TO REGISTERED SHAREHOLDERS

REGARDING ACCESS TO EMERA’S MANAGEMENT INFORMATION CIRCULAR

and ANNUAL REPORT

 

MEETING DATE and LOCATION
Date:    Thursday, May 22, 2025
Time:    2:00 p.m. Atlantic time
Place:    Virtual-only meeting via live webcast online at: https://meetings.lumiconnect.com/400-560-695-216
   Meeting password: emera2025 (case sensitive)

 

Q

WHY AM I RECEIVING THIS NOTICE?

 

A

As permitted by Canadian securities regulators, Emera Incorporated (“Company”) is providing you with access to our management information circular (“Information Circular”) for the annual shareholders meeting (“Meeting”) as well as the 2024 Annual Report (together, the “Meeting Materials”), electronically, instead of mailing paper copies. This notice provides you with information on how to view the Meeting Materials online and / or request paper copies. Accompanying this notice is the proxy form that you will need to vote.

 

Q

WHERE CAN I ACCESS THE MEETING MATERIALS ON-LINE?

 

A

The Meeting Materials can be viewed online at www.meetingdocuments.com/TSXT/ema as of Tuesday, April 8, 2025 for a period of one year following the Meeting, or at www.sedarplus.com.

 

Q

HOW CAN I OBTAIN A PAPER COPY OF THE MEETING MATERIALS?

 

A

At any time prior to the date of the Meeting, you can request a paper copy of the Meeting Materials free of charge by calling the phone number, sending an email or accessing the website below:

 

  •  

Phone number: Toll free 1-888-433-6443 (or 1-416-682-3801 for shareholders outside of Canada and the United States)

 

  •  

Email address: tsxt-fulfilment@tmx.com

 

  •  

Website: www.meetingdocuments.com/TSXT/ema

Paper copies requested before the date of the Meeting will be sent to you within three business days of receiving your request. Therefore, to receive the Meeting Materials prior to the proxy deadline for the Meeting described below, you should make your request before 11:00 a.m. Atlantic time on Wednesday, May 7, 2025. To receive the Meeting Materials prior to the Meeting you should make your request before 11:00 a.m. Atlantic time on Friday, May 9, 2025.

Paper copies of the Meeting Materials requested on or after the date of the Meeting will be sent to you within 10 calendar days after receiving the request. Requests for paper copies of the Meeting Materials can be made until one year following the Meeting.

LOGO

 

Q

WHAT MATTERS ARE BEING RECEIVED OR VOTED ON AT THE MEETING?

 

A

Shareholders are being asked to vote on the following items of business:

 

MEETING BUSINESS ITEM

   

INFORMATION CIRCULAR REFERENCE

1.  Election of the Board of Directors – elect Directors of the Company for the ensuing year.

    See the section entitled “Business of the Meeting - Election of the Board of Directors” in the Information Circular for more information.

2.  Appointment of Auditors – appoint Ernst & Young LLP as auditors for the ensuing year.

    See the section entitled “Business of the Meeting - Appointment of Auditors” in the Information Circular for more information.

3.  Authorize Remuneration of Auditors – authorize the Directors to fix the remuneration of the Auditors.

    See the section entitled “Business of the Meeting - Auditors’ Fee” in the Information Circular for more information.

4.  Advisory Vote on Executive Compensation - Consider and approve, on an advisory basis, a resolution on Emera’s approach to executive compensation.

    See the section entitled “Business of the Meeting - Advisory Vote on Executive Compensation (‘say on pay’)” in the Information Circular for more information.

All Shareholders are reminded to review the Information Circular before voting.

 

Q

HOW DO I VOTE MY SHARES?

 

A

You may vote by Internet, telephone, posted mail, delivered mail, e-mail, fax or via live webcast. Details of the methods of voting can be found on your accompanying proxy form. You will need your control number contained in the proxy form in order to vote by telephone, by Internet or via the live webcast.

To be valid, proxy forms or voting instructions must be received by Emera’s Corporate Secretary, c/o TSX Trust Company, Attention Proxy Department at P.O. Box 721, Agincourt, ON M1S 0A1 by no later than 5:00 p.m. Atlantic time on Tuesday, May 20, 2025 or, if the Meeting is adjourned or postponed, by 5:00 p.m. Atlantic time two business days before the reconvened meeting date. Emera reserves the right to accept late proxies or voting instructions and to waive the proxy deadline, with or without notice, but is under no obligation to accept or reject any particular late proxy or voting instructions.

If you wish to appoint someone else to participate and vote virtually on your behalf, you MUST appoint your chosen proxyholder using your proxy form. IN ADDITION, in order for your chosen proxyholder to participate and vote virtually at the Meeting, you must contact TSX Trust by 5:00 p.m. Atlantic time on Tuesday, May 20, 2025 to request a new Control Number for the Meeting. In order to request a new Control Number, please visit TSX Trust’s website at: https://www.tsxtrust.com/control-number-request and complete an electronic form. This form once completed and submitted online will generate a message to TSX Trust to send the new Control Number to the designated proxyholder. This new Control Number will allow your chosen proxyholder to log in to and vote at the Meeting. Without a new Control Number your proxyholder will only be able to log in to the Meeting as a guest and will not be able to vote.

 

Q

WHO CAN I CONTACT IF I HAVE QUESTIONS ABOUT NOTICE & ACCESS?

 

A

Shareholders with questions about notice and access can call toll free at 1-888-433-6443 or shareholders outside of Canada and the United States can call 1-416-682-3801, or email tsxt-fulfilment@tmx.com.

 

2

Exhibit 99.4

 

LOGO

ANNUAL SHAREHOLDERS MEETING OF

EMERA INCORPORATED

NOTICE TO NON-REGISTERED SHAREHOLDERS

REGARDING ACCESS TO EMERA’S MANAGEMENT INFORMATION CIRCULAR

and ANNUAL REPORT

 

MEETING DATE and LOCATION
Date:    Thursday, May 22, 2025
Time:    2:00 p.m. Atlantic Time
Place:    Virtual-only meeting via live webcast online at: https://meetings.lumiconnect.com/400-560-695-216
   Meeting password: emera2025 (case sensitive)

 

Q

WHY AM I RECEIVING THIS NOTICE?

 

A

As permitted by Canadian securities regulators, Emera Incorporated (“Company”) is providing you with access to our management information circular (“Information Circular”) for the annual shareholders meeting (“Meeting”) as well as the 2024 Annual Report (together, the “Meeting Materials”), electronically, instead of mailing paper copies. This notice provides you with information on how to view the Meeting Materials online and / or request paper copies. Accompanying this notice is the voting instruction form that you will need to vote.

 

Q

WHERE CAN I ACCESS THE MEETING MATERIALS ON-LINE?

 

A

The Meeting Materials can be viewed online www.meetingdocuments.com/TSXT/ema as of Tuesday, April 8, 2025 for a period of one year following the Meeting, or at www.sedarplus.com.

 

Q

HOW CAN I OBTAIN A PAPER COPY OF THE MEETING MATERIALS?

 

A

At any time prior to the date of the Meeting, you can request a paper copy of the Meeting Materials free of charge by calling the phone number, sending an email or accessing the website below:

 

  •  

Phone number: Toll free 1-888-433-6443 (or 1-416-682-3801 for shareholders outside of Canada and the United States)

 

  •  

Email address: tsxt-fulfilment@tmx.com

 

  •  

Website: www.meetingdocuments.com/TSXT/ema

Paper copies requested before the date of the Meeting will be sent to you within three business days of receiving your request. Therefore, to receive the Meeting Materials prior to the proxy deadline for the Meeting described below, you should make your request before 11:00 a.m. Atlantic time on Wednesday, May 7, 2025. To receive the Meeting Materials prior to the Meeting you should make your request before 11:00 a.m. Atlantic time on Friday, May 9, 2025.

Paper copies of the Meeting Materials requested on or after the date of the Meeting will be sent to you within 10 calendar days after receiving the request. Requests for paper copies of the Meeting Materials can be made until one year following the Meeting.

LOGO

 

Q

WHAT MATTERS ARE BEING RECEIVED OR VOTED ON AT THE MEETING?

 

A

Shareholders are being asked to vote on the following items of business:

 

MEETING BUSINESS ITEM

   

INFORMATION CIRCULAR REFERENCE

1.  Election of the Board of Directors – elect Directors of the Company for the ensuing year.

    See the section entitled “Business of the Meeting - Election of the Board of Directors” in the Information Circular for more information.

2.  Appointment of Auditors – appoint Ernst & Young LLP as auditors for the ensuing year.

    See the section entitled “Business of the Meeting - Appointment of Auditors” in the Information Circular for more information.

3.  Authorize Remuneration of Auditors – authorize the Directors to fix the remuneration of the Auditors.

    See the section entitled “Business of the Meeting - Auditors’ Fee” in the Information Circular for more information.

4.  Advisory Vote on Executive Compensation - Consider and approve, on an advisory basis, a resolution on Emera’s approach to executive compensation.

    See the section entitled “Business of the Meeting – Advisory Vote on Executive Compensation” in the Information Circular for more information.

All Shareholders are reminded to review the Information Circular before voting.

 

Q

HOW DO I VOTE MY SHARES?

 

A

Details of the methods of voting can be found on your accompanying voting instruction form (“VIF”). To the extent specified on your VIF, you may vote by Internet, telephone, posted mail, delivered mail, e-mail, fax or via live webcast. You will need your control number contained in the VIF in order to vote by telephone, by Internet or via the live webcast.

To be valid, voting instructions must be received by Emera’s Corporate Secretary, c/o TSX Trust Company, Attention Proxy Department at P.O. Box 721, Agincourt, ON M1S 0A1 by no later than 5:00 p.m. Atlantic time on Tuesday, May 20, 2025 or, if the Meeting is adjourned or postponed, by 5:00 p.m. Atlantic time two business days before the reconvened meeting date. However, it is important to note that your voting instructions must be submitted to your broker or other intermediary by the deadline specified in the VIF and, in any case, at least one business day in advance of the proxy deadline to provide sufficient time for your broker or other intermediary to act on those instructions prior to the proxy deadline. Emera reserves the right to accept late voting instructions and to waive the proxy deadline, with or without notice, but is under no obligation to accept or reject any particular late voting instructions.

To participate and vote at the Meeting virtually, or if you wish to appoint someone else to participate and vote virtually on your behalf, you MUST appoint yourself or your chosen proxyholder using your VIF. IN ADDITION, in order for your chosen proxyholder to participate and vote virtually at the Meeting, you must contact TSX Trust by 5:00 p.m. Atlantic time on Tuesday, May 20, 2025 to request a new Control Number for the Meeting. In order to request a new Control Number, please visit TSX Trust’s website at: https://www.tsxtrust.com/control-number-request and complete an electronic form. This form once completed and submitted online will generate a message to TSX Trust to send the new Control Number to the designated proxyholder. This new Control Number will allow you or your chosen proxyholder to log in to and vote at the Meeting. Without a new Control Number you or your proxyholder will only be able to log in to the Meeting as a guest and will not be able to vote.

 

Q

WHO CAN I CONTACT IF I HAVE QUESTIONS ABOUT NOTICE & ACCESS?

 

A

Shareholders with questions about notice and access can call toll free at 1-888-433-6443 or shareholders outside of Canada and the United States can call 1-416-682-3801, or email tsxt-fulfilment@tmx.com.

 

2

Exhibit 99.5

 

LOGO

Notice of Annual Meeting of Common Shareholders and Management Information Circular Thursday, May 22, 2025

Notice of Annual Meeting of Common Shareholders and Management Information Circular

TABLE OF CONTENTS

 

 

08    Notice of Emera’s 2025 Annual Meeting of Shareholders
09    Management Information Circular
10    Annual Meeting of Shareholders
11    Voting Information
15    Business of the Meeting
17    Director Nominees
31    Additional Information
35    Corporate Governance
36    Corporate Governance Practices
37    Board of Directors – About the Board
46    Strategic Oversight
51    Risk Management
52    Ethical Business Conduct
53    Transparency and Disclosure
55    Committees of the Board of Directors
64    Director Compensation
67    Additional Information
68    Executive Compensation
69    Message from the Management Resources and Compensation Committee to Our Shareholders
70    Compensation Discussion and Analysis
95    Performance Graph
97    NEO Summary Compensation Table
110    Appendix “A” – Emera Incorporated Board of Directors Charter
 

 

FORWARD-LOOKING INFORMATION

 

This Circular contains forward-looking information and forward-looking statements within the meaning of applicable securities laws (collectively, “forward-looking information”). Words such as anticipates, believes, budget, could, estimates, expects, forecast, intends, may, might, plans, projects, schedule, should, targets, will, would and similar expressions are often intended to identify forward-looking information, although not all forward-looking information contains these identifying words. References to “Emera” in this section include references to the subsidiaries of Emera.

The forward-looking information includes, without limitation, statements which reflect the current view of Emera’s management with respect to Emera’s objectives, plans, financial and operating performance, carbon dioxide emissions reduction goals, business prospects and opportunities. All such forward-looking information is provided pursuant to safe harbour provisions contained in applicable securities laws.

The forecasts and projections that make up the forward-looking information are based on reasonable assumptions which include, but are not limited to: the receipt of applicable regulatory approvals and requested rate decisions; expectations regarding the nature, timing and costs of capital investments of Emera and its subsidiaries; continued investment in solar, wind and hydro generation; sufficient liquidity and capital resources; the absence of significant changes in government energy plans and environmental laws and regulations that may materially affect Emera’s operations and cash flows; and sufficient human resources to deliver service and execute Emera’s capital investment plan.

The forward-looking information is subject to risks, uncertainties and other factors that could cause actual results to differ materially from historical results or results anticipated by the forward-looking information. Factors that could cause results or events to differ from current expectations include, but are not limited to: regulatory and political risk; changes in economic conditions; liquidity and capital market risk; changes in credit ratings; future dividend growth; timing and costs associated with certain capital investments; supply chain risk; global climate change; weather risk, including higher frequency and severity of weather events; risk of wildfires; regulatory and government decisions, including changes to environmental legislation; uncertainties associated with infectious diseases, pandemics and similar public health threats; labour relations; and availability of labour and management resources.

Readers are cautioned not to place undue reliance on forward-looking information as actual results could differ materially from the plans, expectations, estimates or intentions and statements expressed in the forward-looking information. For additional information with respect to certain of these risks or factors, refer to the continuous disclosure materials filed from time to time by Emera with Canadian securities regulatory authorities and the United States Securities and Exchange Commission. All such forward-looking information is qualified in its entirety by the above cautionary statements and, except as required by law, Emera undertakes no obligation to revise or update any forward-looking information as a result of new information, future events or otherwise.

 

 

 

EMERA 2025 MANAGEMENT INFORMATION CIRCULAR

LOGO

Notice of Annual Meeting of Common Shareholders and Management Information Circular About Emera Data is as of December 31, 2024, unless otherwise indicated. Emera is a leading North American provider of energy services headquartered in Halifax, Nova Scotia. Emera delivers safe, reliable and cleaner energy to customers through investments in regulated electric and natural gas utilities, and related businesses and assets. $43B total assets $7.2B revenue 2.6M 7,600 6 electric and natural gas utilities 95% 99% average vote in favour of the election of our 11 Director Nominees for 20241 1 In total, 134,107,653 votes were received out of a possible 286,346,776 votes available, representing 46.83%. The highest vote in favour was 99.73% and the lowest was 96.16%. EMERA 2025 MANAGEMENT INFORMATION CIRCULAR 1

LOGO

Notice of Annual Meeting of Common Shareholders and Management Information Circular Who We Are OUR STRATEGY We seek reliable, growing, forward-thinking utility investment opportunities, focused on premium operations in high-growth jurisdictions, a robust capital investment strategy, and a thoughtful approach to risk management, all of which drive value and steady growth for our shareholders. OUR PURPOSE Energizing modern life and delivering a cleaner energy future for all. OUR VISION To be the energy provider of choice for our customers, the employer of choice for our people and a preferred choice for investors. OUR VALUES Our core values shape our culture and guide our work every day. •We put safety above all else. •We put customers at the centre of everything we do. •We value candour, respect and collaboration. •We care for each other, the environment and our communities. •We set a high bar and take on big things. CLIMATE PROGRESS Building on more than two decades of cost-effective investments, we’re proud of our track record with system enhancements and reductions in CO2 emissions that have addressed government requirements along a path to net-zero by 2050.1 TRACK RECORD 2024 PROGRESS Delivered: Florida solar & coal conversion Nova Scotia wind2 Maritime Link hydro Achieved: 49% reduction in C02 emissions3 80% reduction in coal used in generation3 2025+ MOMENTUM 2025-2029 Capital Plan investments include:4 $20B • Grid reliability & modernization Renewable integration Technological innovation 2040 GOAL 80% reduction in CO2 emissions and retirement of our last coal unit by end of 2040 2050 VISION Net-Zero 2 Includes provincial procurement programs and independent power purchase agreements. 3 Our reductions in CO2 emissions, coal used in generation (GWh), and our net-zero vision are compared to 2005 levels and include CO2 Scope 1 generation emissions for Tampa Electric and Nova Scotia Power only. These values are still undergoing review and verification. We have previously shared an internal 2025 target to achieve a 55% reduction in CO2 emissions compared to 2005 levels. 4 90% of our 2025-2029 capital plan is focused on cost-effective investments in grid reliability and modernization, renewable integration and technological innovation. 5. Where required by legislation or otherwise proven to be cost effective for customers. 2 EMERA 2025 MANAGEMENT INFORMATION CIRCULAR

LOGO

Why Invest in Emera Emera is at the forefront of a transformative era in energy with robust opportunities to invest on behalf of customers across the portfolio. Our proven strategy and operational excellence ensure we can capitalize on these opportunities and deliver earnings, cash flow and dividend growth for investors. PREMIUM PORTFOLIO OF REGULATED UTILITIES FOCUSED IN FLORIDA ~70% of adjusted net income,1 excluding Corporate costs, comes from Florida ~80% of capital plan through 2029 is being invested in Florida, supporting strong customer growth at both Tampa Electric and Peoples Gas. VISIBLE GROWTH PLAN $20B capital investment plan through 2029, focused on grid reliability, resiliency & modernization, system expansion to meet customer growth, renewable integration, technology and customer-facing solutions 7% to 8% annualized, forecasted rate-base growth through 2029 CONSTRUCTIVE REGULATORY ENVIRONMENTS Highly rated regulatory environments 98% of adjusted net income,1 excluding Corporate costs, derived from our regulated utilities RELIABLE EARNINGS AND DIVIDEND GROWTH 5-7% average adjusted EPS2 growth target through 20273 18 years of consecutive dividend growth 1-2% annual dividend growth target 1 Based on 2024 adjusted net income, attributable to common shareholders (“adjusted net income”), excluding Corporate costs of $360 million. Adjusted net income is a non-GAAP measure, which does not have a standardized meaning under United States Generally Accepted Accounting Principles (“USGAAP“ or “GAAP”). For more information and a reconciliation to the nearest GAAP measure, refer to “Non-GAAP Financial Measures and Ratios” in Emera’s Q4 2024 MD&A. 2 Adjusted earnings per share (“EPS”) is a non-GAAP ratio, which does not have standardized meaning under USGAAP. For more information, refer to “Non-GAAP Financial Measures and Ratios” in Emera’s Q4 2024 MD&A. 3 Adjusted EPS growth forecast uses 2024 as base year.

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Letter from the Chair and the CEO

 

 

Karen Sheriff

Chair, Emera Inc. Board of Directors

 

Scott Balfour

President and Chief Executive Officer, Emera Inc.

    LOGO    LOGO

 

  

   

 

Fellow shareholders,    Utilities remain at the forefront of significant cross-industry transformation, driven by economic, demographic, environmental and technological trends.
   As a result, we’re seeing significant growth in demand for energy and for resilient, flexible and cost-efficient delivery systems. While the global transition to cleaner energy continues, and with government mandated targets in some of our operating jurisdictions, customer expectations for reliability, resiliency and affordability are increasingly taking precedence.
   Utilities are making the necessary investments to deliver for customer needs, while also focusing on affordability and working toward meeting clean energy mandates — and Emera, along with our operating companies, is leading the charge.
   2024 Highlights
   Our commitment to customers remained front and centre in our operating companies throughout the year. Tampa Electric carried out its largest ever storm response after back- to-back hurricanes. Following Hurricane Milton, more than 6,000 field staff, including from Nova Scotia Power, worked tirelessly in difficult conditions, to restore service to hundreds of thousands of customers within a week — and they did so with no serious safety incidents. In recognition of this extraordinary effort, Tampa Electric was awarded the Edison Electric Institute Emergency Response Award for 2024. We’re incredibly proud of the team’s dedication to customers.
   From a regulatory perspective, new rates came into effect at Peoples Gas early in January and at New Mexico Gas in October, supporting customer-focused investments while also ensuring a fair and predictable return on capital for investors. In December, the Florida Public Service Commission approved essentially all of Tampa Electric’s capital plan based upon a midpoint return on equity of 10.5%, with an allowed range of 9.5% to 11.5%. New rates went into effect in January 2025.

 

 
4   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

We successfully completed our $3.2 billion capital plan for 2024 with a focus on enhancing and expanding our infrastructure to deliver on customer needs today and in the future. Highlights from across our utilities include:

 

  •   Two new solar projects were brought online at Tampa Electric, bringing total solar capacity to 1,350 MW, with another 150 MW planned for this year. Solar is supporting reliability and has saved Tampa Electric customers $321 million USD in fuel costs since 2017.

 

  •   Peoples Gas constructed pipelines to two renewable natural gas (RNG) producers to connect additional RNG into Florida’s natural gas supply. In addition to the three RNG facilities already connected, the team is building pipelines to connect two more production facilities to the intrastate transmission pipeline, with one being a bidirectional connection to allow the facility to access natural gas as a backup as needed. Both projects are expected to be in service this year.

 

  •   Construction has started on the 150 MW grid-scale battery project that will support reliability for customers and enable more renewables — a partnership between Nova Scotia Power and Nova Scotia’s 13 Mi’kmaq communities.

 

  •   The Maritime Link once again achieved 99.9 per cent availability for the year, delivering nearly 2 TWh of clean hydroelectricity to Nova Scotia, serving 19 per cent of Nova Scotia Power’s energy requirements and resulting in $100M savings for Nova Scotia customers in 2024.

 

  •   Solar is now part of the mix at Grand Bahama Power for the first time with power purchase agreements now in place. The team is also working to launch its own 5 MW solar site later this year.

As a result of our collective focus, we achieved a 49 per cent reduction in CO2 emissions across Emera and reduced our use of coal in generation (GWh) by 80 per cent, since 2005.1

Through our $20 billion capital plan through 2029, we will continue to make significant, cost-effective investments in reliability, resiliency and grid modernization, as well as in renewable integration, new and emerging technologies and customer-facing solutions. This is our largest capital campaign in our history, demonstrating our commitment to meeting the evolving demands in the industry and our confidence in the growth opportunities ahead.

Safety

Our teams remained focused on safety throughout 2024. We continued working to reduce serious injuries and fatalities, enhance our hazard identification and mitigation programs, and continually reinforce our strong speak-up culture.

Despite remaining well below the industry average, our annual performance metrics were disappointing. Our total recordable injury rate and our lost time injury frequency rate increased by 30 per cent and 40 per cent for the year, respectively. We’re committed to learning from each and every incident as we strive for an Emera where no one gets hurt.

Governance

Emera is guided by strong governance and effective risk management led by our Board of Directors.

In 2024, the Board provided essential guidance and oversight to the strategic plan to strengthen our balance sheet, optimize our portfolio, and improve our credit metrics. The Board also guided the advancement of Emera’s Digital Strategy, with a focus on artificial intelligence, to ensure the Company is investing in new and emerging technologies that further support innovation, increased efficiency and the energy transformation.

 

1

These reductions are undergoing third-party verification.

 

$3.2B

capital plan executed in 2024

 

 

49%

reduction in CO2 emissions since 2005

 

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   5

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

 

 

$849M

annual adjusted net income in 20241

 

 

6%

growth in our regulated utilities in 2024

Early in 2025, the Board adjusted its committee structure to maximize effectiveness. The Health, Safety and Environment and the Risk and Sustainability committees were dissolved, and responsibilities have been transferred to the newly formed Safety and Risk Committee. The Board’s health and wellness mandate now falls under the Management Resources and Compensation Committee.

We also announced changes to Board composition early this year. Jackie Sheppard stepped down as Chair after more than a decade of strong leadership. Jackie’s commitment to corporate governance and her expertise in strategic planning were critical in guiding Emera through a period of significant growth and expansion. She will continue to contribute as a Director through 2025. Thank you, Jackie, for your dedication to Emera.

Karen Sheriff has been appointed our new Chair. She joined as a Director in 2021, bringing leadership experience in public and private companies, as well as in regulated environments. Karen has been a strong addition to the Board and will be instrumental in guiding Emera’s next phase of growth.

We welcomed Carla Tully to the Board. As former Chief Executive Officer and Co-Founder of Earthrise Energy, Carla’s profound experience in the energy and infrastructure sectors in North America and Europe, along with her leadership track record, make her a valuable addition to our Board.

Financial Results

We reported annual adjusted net income1 of $849 million and adjusted EPS1 of $2.94 for 2024. Despite the impact of the sale of our equity interest in the Labrador-Island Link these results were in line with $2.96 in 2023 and the benchmark for our adjusted EPS growth guidance we shared in June.

Our regulated utilities, particularly those in Florida, continue to drive our earnings and growth, with six per cent year-over-year growth in 2024. Earnings contributions have been increasing as we continue to make rate base investments to support the significant population and economic growth across our jurisdictions, increase reliability as we work to meet government mandated decarbonization targets.

In line with our adjusted dividend growth target and our commitment to providing value to our shareholders over the long term, we raised our quarterly dividend by $0.03 per common share in 2024, continuing our more than 18-year history of growing our dividend.

We began 2024 with a strategic plan to drive long-term value for shareholders and allow the Company to pursue compelling growth opportunities across our portfolio. This included the sale of our equity interest in the Labrador-Island Link (completed in June) and the sale of New Mexico Gas (expected to close later this year.)

In June, following the closing of the Labrador-Island Link transaction, we provided a strategic update to the market, adjusting our dividend growth target, extending our rate base growth guidance of seven to eight per cent out through 2029 and introducing an adjusted EPS1 average growth target of five to seven per cent through 2027.2 Subsequently, we saw strong share price performance on both an absolute and relative basis with an 18 per cent increase in our share price over the last 6 months of 2024. We outperformed both the Canadian and US utility sectors and the broader market over this period.

 
1

Adjusted net income and adjusted EPS are a non-GAAP measure and non-GAAP ratio, respectively, which do not have standardized meaning under USGAAP. For more information and a reconciliation to the nearest GAAP measure, refer to “Non-GAAP Financial Measures and Ratios” in Emera’s Q4 2024 MD&A.

2

Adjusted EPS growth forecast uses 2024 as base year.

 

 
6   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

The successful execution of our strategic plan strengthened our balance sheet and optimized our portfolio. This is a pivotal time in our industry as we invest to meet growing demand, while enhancing resilience and efficiency. With our dedicated teams across our strong operating utilities, we’re focused on executing on the robust growth opportunities ahead as we continue to deliver for customers and provide value for shareholders.   
2025 Annual Meeting   
On behalf of Emera’s Board of Directors and management team, we are pleased to invite you to our 2025 Annual General Meeting (AGM) of Shareholders on May 22, 2025, at 2:00 p.m. (Atlantic time) via live webcast only. This meeting will allow for greater shareholder interaction and transparency via an enhanced technology platform that will offer even more direct shareholder engagement opportunities including voting and a chance to have your questions answered by Emera’s Board Chair and CEO.   
As a shareholder, there are several ways to have your questions answered during the virtual meeting. You can ask questions in real-time either verbally or in writing via the online meeting platform. You can also send questions in advance of the meeting to AGM@emera.com, or to the mailing address below.   
Details on how to participate in the meeting, vote and submit questions are available on page 11 of this Circular and on our website at http://www.emera.com/investors.   
We strongly encourage you to take advantage of the option to vote in advance by proxy. Information on how to do this can be found on page 13 of this Circular.   
If you have any questions regarding our Annual Meeting of Shareholders, please contact Brian Curry, Emera’s Corporate Secretary:   

 

Mail    P.O. Box 910, Halifax, Nova Scotia, B3J 2W5
Phone    1-800-358-1995 from anywhere in North America
Email    AGM@emera.com

 

 

 

We welcome feedback from our shareholders and strive to provide multiple ways to connect with us.    Thank You
We encourage you to review the information within this Circular and exercise your right to vote at our AGM. This is an important way for us to engage with you, our valued shareholders, and it’s important to us that your views be expressed and your votes be counted.   
On behalf of the Board and management team, thank you for your confidence in Emera.   

Karen Sheriff

 

Karen Sheriff    Scott Balfour

Chair, Board of Directors,

Emera Inc.

   

President and Chief Executive Officer,

Emera Inc.

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   7

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Notice of Emera’s 2025

Annual Meeting of Shareholders

 

   
WHEN:   

Thursday, May 22, 2025, 2:00 p.m. (Atlantic time)

 

HOW:   

Accessible, transparent and interactive virtual-only meeting via live webcast at https://meetings.lumiconnect.com/400-560-695-216

 

Password: emera2025 (case sensitive)

 

The virtual meeting format is designed to ensure that opportunities for shareholders to participate are comparable to attending an in-person meeting

 

   
AGENDA:   

The meeting will cover the following items of business:

 

1.  Receiving the audited financial statements for the year ended December 31, 2024 and the Auditors’ report thereon;

2.  Electing Directors to serve until the next Annual Meeting of Shareholders;

 

3.  Appointing auditors;

 

4.  Authorizing the Directors to establish the auditors’ fee;

 

5.  Considering an advisory resolution on the Company’s approach to executive compensation; and

 

6.  Transacting any other business that properly comes before the meeting.

 

The accompanying Management Information Circular provides detailed information on these items.

 

   
WHO:   

Emera shareholders as of close of business on March 25, 2025 (the “Record Date”) have the right to receive notice of and vote at the meeting or any adjournment.

 

HOW TO VOTE:   

Participate and vote your shares in real time during the meeting by visiting https://meetings.lumiconnect.com/400-560-695-216, using password emera2025 (case sensitive). Please note, only registered shareholders and duly appointed proxyholders can vote at the meeting.

 

For more information about how to vote during the meeting, please see the accompanying Management Information Circular.

 

If you do not plan to participate in the meeting:

 

•  Mail your proxy or voting instruction form using the postage-paid, pre-addressed envelope provided.

 

•  Vote by telephone or via internet (see the proxy or voting instruction form). Proxies must be received prior to 5:00 p.m. Atlantic time on Tuesday May 20, 2025, or, if the meeting is adjourned, or postponed, 5:00 p.m. Atlantic time two business days prior to the reconvened meeting date.

 

   
QUESTIONS:   

If you have any questions about any of the information contained within the Management Information Circular, please contact us by writing to the Corporate Secretary, Emera Incorporated, P.O. Box 910, Halifax, Nova Scotia B3J 2W5 or by telephone at 1-800-358-1995 from anywhere in North America or by email at AGM@emera.com.

 

  

By order of the Board

 

Brian C. Curry

Corporate Secretary

 

 
8   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Management Information Circular

All information is as of March 19, 2025

(unless otherwise noted)

You are receiving Emera’s Management Information Circular (the “Circular”) because you held common shares of Emera Incorporated (TSE: EMA) as of March 25, 2025 (the “Record Date”). You are entitled to receive notice of and vote at our Annual Meeting of Shareholders on Thursday, May 22, 2025 at 2:00 p.m. Atlantic time (the “Meeting” or “Annual Meeting”). Only shareholders of record at the close of business on the Record Date can vote. Each common share owned as of the Record Date entitles the holder to one vote.

To the knowledge of the Directors and Officers, as of the date of this Circular, no person owned or exercised control over more than 10 per cent of the outstanding common shares of the Company and the only outstanding voting shares were 297,737,244 common shares.

In this Circular:

 

  •  

we, us, our, Company and Emera mean Emera Incorporated;

 

  •  

you, your and shareholder refer to holders of Emera common shares;

 

  •  

shares and Emera shares mean common shares of Emera, unless otherwise indicated;

 

  •  

“Board of Directors” or “Emera’s Board” or the “Board” means the Board of Directors of Emera Incorporated, unless otherwise indicated;

 

  •  

all dollar amounts are in Canadian dollars, unless indicated otherwise; and

 

  •  

all information is as of March 19, 2025, unless otherwise noted.

Meeting Materials and Notice and Access

Canadian securities rules called “Notice and Access” permit us to provide electronic access to this Circular and the 2024 Annual Report (the “Meeting Materials”) instead of sending you paper copies. We are sending Meeting Materials to registered holders and beneficial owners using Notice and Access. The notice also provides instructions on voting by proxy at the Meeting and how to request a paper copy of the Meeting Materials.

Shareholders who have previously provided instructions to receive paper copies of Meeting Materials have been sent a paper copy in addition to the notice regarding their electronic availability.

Solicitation of Proxies

This Circular is being provided in connection with the solicitation of proxies by the Board of Directors and management of Emera for use at the Meeting. All shareholders have received a proxy or voting instruction form. The solicitation of proxies will be primarily by mail although proxies may also be solicited by telephone, facsimile or email, in writing or in-person, by directors of the Company (“Directors”), Officers or other employees or agents of the Company.

We have retained TMX Investor Solutions Inc. as the proxy solicitation agent to assist with the solicitation of votes from shareholders. The proxy solicitation agent will monitor the number of shareholders voting and will contact shareholders in order to increase participation in voting. The cost of this solicitation is covered by Emera and is not expected to exceed $50,000.

Your vote is important. We encourage all shareholders to review this Circular carefully and exercise your vote. Details on how to vote are included on page 12.

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   9

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

1. Annual Meeting of Shareholders

This section includes everything you need to know about your participation in the meeting.

In This Section

 

 

1.1 Voting Information

      11  

1.2 Business of the Meeting

      15  

1.3 Director Nominees

      17  

1.4 Additional Information

      31  

 

 
10   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

1.1

Voting Information

Meeting Details

Emera’s 2025 Annual Meeting is a virtual-only meeting, with a live video feed of the Company’s representatives and options for interactive shareholder participation.

You can participate in the Meeting online with your smartphone, tabletor computer at https://meetings.lumiconnect.com/400-560-695-216, using password: emera2025 (case sensitive). The format of the Meeting is designed to help ensure that as a shareholder your access and participation is comparable to attending an in-person meeting. The Meeting will include a live video feed of the Company representatives. Registered shareholders and duly appointed proxyholders (including non-registered shareholders who have duly appointed themselves as proxyholder) will be able to vote in real time and ask questions, similar to if they were attending the Meeting in-person.

It is our view that conducting the Meeting in a virtual format will maximize shareholder attendance and participation by providing each shareholder, regardless of physical location, with an equal opportunity to attend the Meeting and engage with the Company, without incurring any cost. The virtual platform to be used this year will ensure effective, transparent and interactive communication between shareholders and Company representatives.

Voting Details and Instructions

You are eligible to receive notice and vote at the Meeting if you are a shareholder as of March 25, 2025 (the “Record Date”). You can vote in advance or during the Meeting.

REGISTERED SHAREHOLDERS

If you have shares registered in your own name, then you are a registered shareholder.

BENEFICIAL OR NON-REGISTERED SHAREHOLDERS

If your shares are listed in the name of a nominee, then you are a beneficial or non-registered shareholder. For example, if an account statement is provided to you by a broker, then it is likely that those shares will not be registered in your name and are instead registered under the broker’s name or under the name of an agent of the broker such as CDS Clearing and Depository Services Inc., the nominee for many Canadian brokerage firms, or its nominee.

Registered shareholders and duly appointed proxyholders (including non-registered shareholders who have duly appointed themselves as proxyholder) can participate in and vote at the Meeting in real time.

Non-registered shareholders who do not duly appoint themselves as proxyholder may still attend the Meeting as guests. Guests can listen to and view a live webcast of the Meeting, but will not be able to vote at the Meeting or ask questions.

The Meeting is virtual-only via live webcast. While you will not be able to attend in-person, the technology platform to be used for the Meeting facilitates virtual shareholder access, voting and participation. In addition to being able to listen to and view the live webcast of the meeting, registered shareholders and duly appointed proxyholders will also have substantially the same opportunity to vote and ask questions as if they were participating in-person.

We recommend logging in online at least 15 minutes prior to the start of the Meeting. To help ensure that your vote is recorded, make sure that you are connected to the internet at all times. It is your responsibility to ensure internet connectivity for the duration of the Meeting. Please ensure you use the latest versions of Chrome, Safari, Edge or Firefox (please do not use Internet Explorer). Please note that internal network security protocols, including firewalls and VPN connections, may block access to the virtual meeting technology. If, during the Meeting, participants experience any difficulty connecting, they should ensure their VPN setting is disabled or use their computer on a network that is not restricted to security settings of a participant’s organization.

Shareholders are encouraged to vote in advance of the Meeting as described below under the heading How to Vote in Advance, particularly if they are unsure of their ability to remain connected to the internet for the duration of the Meeting.

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   11

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

How to Vote During the Meeting

REGISTERED SHAREHOLDERS AND PROXYHOLDERS

Registered shareholders can participate in the Meeting by logging in to https://meetings.lumiconnect.com/400-560-695-216 and entering their Control Number as their username, using the password: emera2025 (case sensitive).

If you are a registered shareholder and have appointed a proxyholder to act on your behalf at the Meeting, you must register your proxyholder prior to the proxy deadline. Once your proxyholder has been registered, they will receive a Control Number from TSX Trust Company (“TSX Trust”) to access the virtual meeting. If you do not register your proxyholder, your proxyholder will not receive a Control Number to log into the Meeting. For additional information on appointing a proxyholder, please see How to Vote in Advance – Registering Your Proxyholder below.

Proxyholders for all shareholders can participate in the Meeting by logging in in the same manner as for registered shareholders (as described above) and entering the Control Number provided to the proxyholder by TSX Trust.

BENEFICIAL (OR NON-REGISTERED) OWNERS

Non-registered shareholders wishing to participate in the Meeting must:

 

1.

Appoint themselves as proxyholder;

 

2.

Register themselves as proxyholder; and

 

3.

Access the meeting as a proxyholder using the Control Number received after registering as a proxyholder.

If you do not register yourself as proxyholder, you will not receive a Control Number to log into the Meeting. The Control Number included in any voting instruction form sent to you will not enable you to log in to the Meeting. A new Control Number will be needed to log in, and one will be issued to you upon registering yourself as a proxyholder.

In order to appoint yourself as a proxyholder, follow the instructions in the form of proxy or voting instruction form sent to you by your intermediary. In most cases, you can simply insert your own name in the form of proxy or voting instruction form, sign it and return it in the envelope provided, or you can make the appointment online. Do not complete the voting instructions, as you will be voting at the Meeting. However, many Objecting Beneficial Owners located in the United States instead will need to: (i) send a request to their intermediary or its agent to send them a legal proxy appointing them as proxyholder; and (ii) promptly, following receipt of the legal proxy, submit the legal proxy to TSX Trust Company, Proxy Department, P.O. Box 721, Agincourt, ON, M1S 0A1 prior to 5:00 p.m. Atlantic time on Tuesday, May 20, 2025.

Once a beneficial or non-registered owner has been appointed a proxyholder and has registered as proxyholder, they will receive a Control Number from TSX Trust to access the Meeting. The beneficial owner should follow the instructions under Registered Shareholders and Proxyholders above to log in to the virtual meeting as a proxyholder.

There are two kinds of beneficial (non-registered) owners: (i) Non-Objecting Beneficial Owners — those who do not object to their name being made known to the issuers of the shares that they own; and (ii) Objecting Beneficial Owners — those who object to their name being made known to the issuers of shares that they own.

NON-OBJECTING BENEFICIAL OWNERS

Non-Objecting Beneficial Owners will receive a voting instruction form from Emera’s registrar and transfer agent, TSX Trust. This is to be completed and returned to TSX Trust in the envelope provided. In addition, TSX Trust provides both telephone voting and internet voting as described on the voting instruction form that can be used to vote or to appoint your proxyholder. Note that proxyholders (including a beneficial shareholder wishing to appoint themselves as proxyholder), other than the named proxyholders described below, cannot be appointed by telephone.

OBJECTING BENEFICIAL OWNERS

Securities regulation requires brokers or agents to seek voting instructions from Objecting Beneficial Owners in advance of the Meeting. Objecting Beneficial Owners should be aware that brokers or agents can only vote if instructed to do so by the Objecting Beneficial Owner. Your broker or agent (or their agent, Broadridge) will have provided you with a voting instruction form or form of proxy for the purpose of obtaining your voting instructions. Every broker has its own mailing procedures and provides instructions for voting. You must follow those instructions carefully to ensure your shares are voted at the Meeting.

Please note that if you are an Objecting Beneficial Owner receiving a voting instruction form or proxy from a broker or agent, you cannot use that proxy to vote at the Meeting. To vote at the Meeting, the voting instruction form or proxy must be returned as instructed by the broker well in advance of the Meeting (with sufficient time for your intermediary to act on your instructions prior to the proxy cut-off). If you wish to attend virtually and vote at the Meeting, follow the instructions for doing so provided by your broker or agent.

 

 
12   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

How Can I Ask Questions at the Meeting?

We are committed to transparent and interactive communication during the Meeting. The virtual platform to be used for the Meeting facilitates shareholder inclusion and participation. Virtual attendees will have substantially the same opportunities to participate as if attending in-person. During the Meeting, registered shareholders and duly appointed proxyholders (including beneficial shareholders who have appointed themselves as proxyholder) will be able to ask questions either verbally or in writing via the online Meeting platform. Questions being asked aloud will be asked directly by the registered shareholder or duly appointed proxyholder and heard by all Meeting participants. Written questions received from shareholders will be read aloud by the chair of the Meeting or a representative of Emera. Questions will be responded to by a representative of Emera at the applicable point in the Meeting or during the question and answer session. The meeting will also include a live video feed of the Company’s representatives, enabling registered shareholders and duly appointed proxyholders to watch them as they respond to questions.

The chair of the Meeting will decide the amount of time allocated to each question and will have the right to limit or consolidate questions from shareholders to help ensure as many shareholders as possible will have the opportunity to ask questions. We do not intend to address questions that:

 

  •  

Are irrelevant to the business of the meeting or to Emera’s operations;

 

  •  

Are related to personal grievances;

 

  •  

Are related to non-public information about Emera;

 

  •  

Constitute derogatory references to individuals or that are otherwise offensive to third parties;

 

  •  

Are repetitious or have already been asked by other registered shareholders or proxyholders;

 

  •  

Are in furtherance of a shareholder’s or proxyholder’s personal or business interest; or

 

  •  

Are out of order or not otherwise appropriate as determined by the chair of the Meeting in their reasonable judgement.

Who Do I Contact If I Cannot Log In to the Meeting?

If you have any difficulties logging in to the Meeting online, please contact Lumi’s online shareholder meeting email support via the address: support-ca@lumiglobal.com.

Even if you currently plan to participate in the Meeting, we encourage you to vote in advance so that your vote will be counted in the event you experience any difficulties.

The webcast will be open in advance of the Meeting to allow registered shareholders and duly appointed proxyholders time to test their access and be sure they will be able to participate.

How to Vote in Advance

You can appoint a proxyholder in advance of the Meeting to attend the Meeting and vote for you. You can do so by following the instructions on your form of proxy or voting instruction form.

REGISTERING YOUR PROXYHOLDER

Registered shareholders and beneficial (or non-registered) owners wishing to appoint a proxyholder to participate virtually in the Meeting (including beneficial or non-registered owners wishing to appoint themselves as proxyholder to participate in the Meeting) and who have validly appointed a proxyholder (including beneficial (or non-registered) owners wishing to appoint themselves as proxyholder) must then contact TSX Trust, Emera’s registrar and transfer agent, before 5:00 p.m. Atlantic time on Tuesday, May 20, 2025 to obtain a new Control Number to use to access the virtual meeting by:

 

(i)

calling:

1-866-751-6315 (within North America); or

1-416-682-3860 (outside of North America); or

 

(ii)

going to TSX Trust’s website at https://www.tsxtrust.com/control-number-request to request the Control Number by completing an electronic form. This form, once completed and submitted online, will generate a message to TSX Trust to send the Control Number to the designated proxyholder.

If you do not validly appoint and then register your proxyholder (including beneficial (or non-registered) owners wishing to appoint themselves as proxyholder) by the deadline as described above, then your proxyholder will not be able to attend and vote at the meeting on your behalf.

SHAREHOLDER PROXY MATERIALS

These securityholder materials are being sent to both registered and non-registered owners of the securities. If you are a non-registered owner, and the issuer or its agent has sent these materials directly to you, your name, address and information about your holdings of securities have been obtained in accordance with applicable securities regulatory requirements from the intermediary holding on your

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   13

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

behalf. Emera has arranged for its registrar and transfer agent, TSX Trust, to send materials directly to Non-Objecting Beneficial Owners in accordance with National Instrument 54-101 – Communication with Beneficial Owners of Securities of a Reporting Issuer.

By choosing to send these materials to you directly, Emera (and not the intermediary holding on your behalf) has assumed responsibility for: (i) delivering these materials to you as a Non-Objecting Beneficial Owner; and (ii) executing your proper voting instructions. Please return voting instructions as specified in the request for voting instructions.

Emera will bear the costs of delivering shareholder proxy materials and the request for voting instructions, as applicable, to registered shareholders, Non-Objecting Beneficial Owners and Objecting Beneficial Owners.

APPOINTMENT AND REVOCATION OF PROXIES

The persons named as proxyholders in the enclosed proxy are Karen H. Sheriff, Chair of the Board, Scott C. Balfour, President and Chief Executive Officer (“CEO”), and Brian C. Curry, Corporate Secretary of the Company, each with full power of substitution.

For a vote by proxy or voting instruction form to be counted, it must be received prior to 5:00 p.m. Atlantic time on Tuesday, May 20, 2025, or if the meeting is adjourned or postponed, by 5:00 p.m. Atlantic time two business days prior to the reconvened meeting date. Please note that non-registered owners must provide their voting instructions to their intermediary in advance of this deadline so that the intermediary may act on the voting instructions.

The Company reserves the right to accept late proxies and to waive the proxy cut-off with or without notice, but is under no obligation to accept or reject a late proxy. For Canadian residents, a postage-paid, pre-addressed envelope is provided for this purpose.

You may vote by proxy or voting instruction form via mail, the internet or telephone by following the instructions on your form of proxy or voting instruction form.

Completion of a proxy gives discretionary authority to the proxyholder to vote as they see fit in respect of amendments to matters identified in the Notice and other matters that may properly come before the Meeting or any adjournment or postponement thereof, whether or not the amendment or other matter that comes before the Meeting is, or is not, routine and whether or not the amendment or other matter that comes before the Meeting is contested. Management of the Company is not aware of any amendments or other matters to be presented for action at the Meeting.

If you appoint Ms. Sheriff, Mr. Balfour or Mr. Curry as your proxyholder, they will vote or withhold from voting, in accordance with your directions. If you do not specify how you want your shares voted, they will vote “FOR” the:

 

  •  

Election of each of the Director Nominees named in this Circular;

 

  •  

Appointment of Ernst & Young LLP as Auditors;

 

  •  

Authorization of the Directors to establish the Auditors’ fee;

 

  •  

Advisory resolution on the Company’s approach to executive compensation.

They will vote in accordance with their best judgement if any other matters are properly brought before the Meeting.

You may appoint any other person (who need not be a shareholder) to represent you at the Meeting by inserting that person’s name in the space provided on the proxy or voting instruction form. That person is your proxyholder and must participate and vote at the Meeting for your vote to count. You will also need to register this person with TSX Trust; see Registering Your Proxyholder above.

You may revoke your proxy by providing new voting instructions in a new proxy or voting instruction form with a later date, or at a later time if you are voting on the internet or by telephone. Any new voting instructions, however, will only take effect if received prior to 5:00 p.m. Atlantic time on Tuesday, May 20, 2025, or if the meeting is adjourned or postponed, 5:00 p.m. Atlantic time two business days prior to the reconvened meeting date. You may also revoke your proxy without providing new voting instructions by giving written notification addressed to Mr. Brian Curry, Corporate Secretary, P.O. Box 910, Halifax, Nova Scotia B3J 2W5, no later than the last business day preceding the day of the Meeting or preceding the day of any postponement or adjournment thereof or to the chair of the Meeting on the day of the Meeting or the day of any postponement or adjournment thereof or in any other manner permitted by law. If your new voting instructions (including the appointment of a new proxyholder) are received after the proxy cut-off described above, they may only be effective to revoke your previously provided instructions. Similarly, registered shareholders may participate in the Meeting and vote their shares and, if they do so, any voting instructions previously given by such persons for such shares will be revoked.

RESTRICTION ON SHARE OWNERSHIP AND VOTING

Under Nova Scotia legislation, no Emera shareholder may own or control, directly or indirectly, more than 15 per cent of the outstanding voting shares. This restriction may be enforced by limiting non-complying shareholders’ voting rights (including by disqualifying or deeming votes to have not been cast by such non-complying shareholders), dividend rights and transfer rights. Shareholders may be required, at any time, to furnish a statutory declaration to verify the number of shares held to ensure compliance with this restriction.

If you have any questions about the share ownership and voting restriction, please contact the Corporate Secretary.

 

 
14   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

1.2

Business of the Meeting

Our consolidated financial statements for the year ending December 31, 2024, will be received together with the report of the Auditors. These consolidated financial statements are contained in our 2024 Annual Report. You will find a copy of our 2024 Annual Report on our website (www.emera.com) and on SEDAR+ (www.sedarplus.com).

You will also have the opportunity to vote on the following items:

 

1.

Election of the Board of Directors: The 12 nominees proposed for election as Directors at the Meeting are identified under Director Nominees in this Circular. For more information about the process for nominating Directors, see Nomination of Directors and Director Recruitment Process in the Corporate Governance section of this Circular.

All nominees are currently Directors of the Company. Each nominee has indicated their willingness to serve as a Director. Each Director elected at the Meeting will hold office until the next annual meeting of shareholders.

Ms. Sheriff, Mr. Balfour and Mr. Curry intend to vote proxies received “FOR” the 12 nominees unless a shareholder instructs otherwise in their proxy.

The Board of Directors recommends you vote FOR the election of each of the 12 nominated Directors.

 

2.

Appointment of Auditors: The Audit Committee has assessed the performance and independence of Ernst & Young LLP (“EY”) and the Board of Directors recommends that EY be re-appointed as auditor of the Company and serve until the next Annual Meeting.

The independence of the auditors is of utmost importance to the Audit Committee. Consistent with best practices and their mandate, the Audit Committee annually reassesses the performance and independence of the auditors, with a comprehensive review conducted every five years (the last review having been conducted in 2022). These reviews align with the recommendations of the Chartered Professional Accountants of Canada (“CPA Canada”), the Canadian Public Accountability Board (“CPAB”) and the Institute of Corporate Directors. CPA Canada and CPAB recommend periodic comprehensive reviews as the preferred alternative to mandatory firm rotation or re-tendering to address the threat of institutional familiarity and to enhance audit quality.

To help ensure independence, the Audit Committee also reviews and pre-approves any non-audit services to be provided by EY and has a policy restricting the hiring by the Company of former EY partners and employees.

In recommending the appointment of auditors, the Audit Committee considers the benefits and risks of auditor tenure and the controls and processes in place to help ensure the auditor’s independence, such as mandatory partner rotations. The lead audit partner with EY is rotated at least every five years, with the current lead audit partner having commenced their rotation in 2021. A new lead audit partner will be selected in 2025 to commence their rotation in 2026.

EY has been Emera’s auditors since 1998. However, until 2018, PricewaterhouseCoopers served as auditors for Tampa Electric Company, Peoples Gas System, Inc. and New Mexico Gas Company, which together represent more than 74 per cent of the Company’s total assets at the end of 2024. In addition, until 2012, Grant Thornton, LLP served as auditors for Nova Scotia Power Incorporated. In 2017, the Company initiated a competitive process for external audit services. The process was overseen by the Audit Committee, which selected EY as auditors for Emera’s full business starting in 2018.

The recommendation to appoint EY as auditor for 2025 is based on the comprehensive review of EY’s performance conducted by the Audit Committee in 2022 and an updated annual review by the Audit Committee. The Audit Committee completed an annual review in 2024, prior to making its recommendation.

Ms. Sheriff, Mr. Balfour and Mr. Curry intend to vote proxies received “FOR” the appointment of EY as auditors of the Company, to hold office until the close of the next Annual Meeting, unless a shareholder specifies their shares be withheld from voting.

The Board of Directors recommends you vote FOR the appointment of Ernst & Young LLP as auditors of the Company.

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   15

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

3.

Auditors’ Fee: The Company is incorporated under the Nova Scotia Companies Act. Shareholder approval of the authorization of Directors to establish the Auditors’ fee is required pursuant to the Companies Act. The aggregate fees billed by EY, during the last two fiscal years ended December 31, 2024 and December 31, 2023, were as follows:

 

Service fee

    2024 ($)      2023 ($)  

Audit fees

    $ 5,689,398      $ 3,910,266  

Audit-related fees (1)

      240,080        174,410  

Tax fees (2)

      323,252        39,450  

All Other Fees

      —         75,000  
  

 

 

     

 

 

  

Total

    $ 6,252,730      $ 4,199,126  
  

 

 

     

 

 

  

 

(1)

Audit-related fees for Emera relate to fees associated with agreed-upon procedures over rate-case filings and the audit of pension plans.

(2)

Tax fees for Emera relate to tax compliance services and general tax consulting advice on various matters.

The Auditors’ fees for the 2023 through 2025 period is based on a three-year audit fee proposal, subject to auditor appointment and audit fee approval each year. The Auditors’ fees are reflective of market rates for professional services, which have increased in recent years.

Ms. Sheriff, Mr. Balfour and Mr. Curry intend to vote proxies received “FOR” the authorization of Directors to establish the Auditors’ fee for 2025, unless a shareholder instructs otherwise in their proxy.

The Board of Directors recommends that you vote FOR the authorization of Directors to establish the Auditors’ fee for 2025.

 

4.

Advisory Vote on Executive Compensation (“say on pay”): You will be asked to consider and approve, on an advisory basis, the resolution stated below on Emera’s approach to executive compensation as disclosed in this Circular. This advisory vote forms an important part of the ongoing process of engagement between shareholders and the Board on executive compensation. At the 2023 and 2024 Annual Meetings, Emera’s approach to executive compensation was approved with 94.46% in 2023 and 95.12%% in 2024, respectively, of the votes cast “FOR” the advisory resolution on executive compensation.

Our executive compensation programs are designed to attract, retain, motivate and reward high-calibre leaders to deliver strong performance in alignment with Emera’s corporate strategy and to create and sustain shareholder value. Programs are designed to reflect a blend of short- and long-term incentive plans to reflect our pay-for-performance philosophy and to provide for a significant portion of an executive’s compensation to be at risk, while aligning the structure of programs and payouts with sound risk management and good governance principles.

The Board, through the Management Resources and Compensation Committee (“MRCC”), has directed and reviewed the contents of the Statement of Executive Compensation in this Circular and has unanimously approved it as part of the MRCC’s report to you.

As our shareholder, on an advisory basis, you have the opportunity to vote “FOR” or “Against” our approach to executive compensation through the following resolution:

“RESOLVED, on an advisory basis, and not to diminish the role and responsibilities of the Board of Directors, that the shareholders accept the approach to executive compensation disclosed in the Company’s Management Information Circular delivered in advance of the 2025 Annual Meeting of Shareholders of Emera Incorporated.”

Since your vote is advisory, it will not be binding on the Board; however, the Board, and particularly the MRCC, will seriously consider the outcome of the vote and may communicate with certain shareholders as a follow-up matter as part of its ongoing review of executive compensation.

Ms. Sheriff, Mr. Balfour and Mr. Curry intend to vote proxies received “FOR” the non-binding advisory resolution on executive compensation, unless otherwise instructed.

The Board of Directors recommends you vote FOR the non-binding advisory resolution on executive compensation.

 

 
16   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

1.3

Director Nominees

There are 12 individuals nominated to serve on the Board. All Director Nominees, except Mr. Balfour, are considered by the Board to be independent. Mr. Balfour is not considered independent because he is also the President and CEO of the Company. For more information about the Company’s definition of independence, see Director and Chair Independence in the Corporate Governance section later in this Circular.

Director Nominees at a Glance

 

Name (1)

    Age    Independent    Residency    % Votes in favour
at 2024 AGM		    2024
Board meetings (6)		     2025
Committees (7)

Scott C. Balfour (2)

Director since 2018

    60    No    Canada    99.69      100 %    N/A

James V. Bertram

Director since 2018

    69    Yes    Canada    99.53      100 %    MRCC

NCGC

Henry E. Demone

Director since 2014

    70    Yes    Canada    96.22      100 %    MRCC (Chair)
NCGC

Paula Y. Gold-Williams

Director since 2022

    62    Yes    United States    99.58      100 %    Audit

MRCC

Kent M. Harvey

Director since 2017

    67    Yes    United States    99.15      100 %    Audit (Chair)
SRC

B. Lynn Loewen

Director since 2013

    64    Yes    Canada    99.35      100 %    Audit

NCGC

Brian J. Porter

Director since 2024

    67    Yes    Canada    99.67      100 %    MRCC

SRC

Ian E. Robertson

Director since 2022

    65    Yes    Canada    99.73      100 %    SRC (Chair)
Audit

M. Jacqueline Sheppard (3)

Director since 2009

    69    Yes    Canada    96.16      100 %    N/A

Karen H. Sheriff (4)

Director since 2021

    67    Yes    Canada    99.28      100 %    Board (Chair)

Jochen E. Tilk

Director since 2018

    61    Yes    Canada    99.22      100 %    NCGC (Chair)
MRCC

SRC

Carla M. Tully (5)

Director since 2024

    52    Yes    United States    N/A      100 %    Audit

SRC

 

(1)

Information about each Director Nominees is current as of the date of this Circular, unless otherwise indicated.

(2)

Mr. Balfour, as President and CEO, does not serve as a member of any Committee but attends all Committee meetings.

 

(3)

Ms. Sheppard was Chair of the Board of Emera until February 21, 2025, when Ms. Sheriff became Chair of the Board. As Chair of the Board in 2024, Ms. Sheppard was not a member of any Board Committee but attended all Committee meetings in her then capacity as Chair of the Board. Ms. Sheppard is not currently a member of any Committees.

 

(4)

Ms. Sheriff was appointed as Chair of the Board of Emera effective February 21, 2025. As Chair of the Board, she is no longer a member of any Board Committees but attends all Committee meetings.

 

(5)

Ms. Tully was appointed on June 26, 2024, after the 2024 Annual Meeting of Shareholders on May 23, 2024.

 

(6)

This reflects attendance at all scheduled Board meetings and special Board meetings scheduled on short notice in 2024.

In the normal course, a Director who would be 72 years of age at the Annual Meeting would not be nominated for re-election. See Board Renewal in the Corporate Governance section later in this Circular.

(7)

In February 2025, the Board, on the recommendation of the Nominating and Corporate Governance Committee (“NCGC”), approved changes to its Committees and Committee Membership. Effective February 21, 2025, the Health, Safety and Environment Committee and the Risk and Sustainability Committee were dissolved and replaced with the newly established Safety and Risk Committee (“SRC”). The table reflects all Committee and Committee Chair appointments as of the date of this Circular. “Audit” refers to the Audit Committee and “MRCC” to the Management Resources and Compensation Committee. For more information, see the section entitled Board Committees on page 37 of this Circular.

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   17

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

LOGO

See pages 41 and 44 for more information about Director tenure and Board composition, respectively.

Director Nominee Profiles

The profiles that follow provide important information on each of the 12 Director Nominees, including age, municipality and country of residence, year first elected or appointed as a Director, principal occupation, education, skills and experience.(1)

Committee memberships and attendance (where applicable) for meetings held in 2024,(2) as well as any memberships on other public company boards in the last five years, are also provided.

Also included in the profiles, is information about the common shares and deferred share units (“DSUs”) of Emera held as of the last trading day of each year by each Director Nominee for the past three years. The estimated value of each Director Nominee’s common shares and DSU holdings is based on the following:

 

Year-end

    Closing price of Emera common shares ($)  

December 31, 2022

      51.75  

December 30, 2023

      50.30  

December 31, 2024

      53.73  

All Director Nominees are required to meet Emera’s share ownership guideline. The information below also details their status under the guideline. For further information regarding the required level of share ownership for Emera’s Directors, see Director Share Ownership Guideline in the Corporate Governance section later in this Circular. For further information on the share ownership guidelines for the Company’s executive officers, including Mr. Balfour, see Executive Share Ownership Requirements and Anti-Hedging Policy in the Statement of Executive Compensation later in this Circular.

 
(1)

Information about each Director Nominee is current as of the date of this Circular, unless indicated otherwise.

(2)

In February 2025, the Board, on the recommendation of the Nominating and Corporate Governance Committee, approved changes to its Committees and Committee Membership. Effective February 21, 2025, the Health, Safety and Environment Committee (“HSEC”) and the Risk and Sustainability Committee (“RSC”) were dissolved and replaced with the newly established Safety and Risk Committee (“SRC”). For more information, see the section entitled Board Committees on page 37 of this Circular for more information.

 

 
18   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Scott C. Balfour

 

LOGO

Halifax, Nova Scotia

Canada

Age: 60

Skills and Experience

 

  •   CEO/Senior Executive

 

  •   Sustainability/ESG

 

  •   Governance

 

  •   Risk Management

 

  •   Customer/Stakeholder

 

  •   Energy Sector or Utility Sector

 

  •   Strategic Planning, M&A or Growth Strategy

 

  •   Talent Management and Executive Compensation

 

  •   Financial Literacy and Accounting

 

  •   Government Relations, Public Policy and Regulatory

2024 Annual Meeting Votes for: 99.69%

Other Public Company Boards

(last five years)

 

  •   Martinrea International Inc. (June 2013 to June 2020)
Director Since: 2018    Not Independent, President and CEO of Emera

Mr. Balfour was appointed President and CEO of Emera and became a Director of the Board in March 2018.

Mr. Balfour first joined Emera in April 2012 as Chief Financial Officer (“CFO”), later becoming CEO. Before joining Emera, he held a variety of roles, including President and CFO at Aecon Group Inc., a Canadian publicly traded construction and infrastructure development company.

Mr. Balfour is a Director of many Emera subsidiaries and serves as Chair of the Boards of Tampa Electric Company, Nova Scotia Power Incorporated and Peoples Gas System, Inc. He also serves as Director of the Business Council of Canada and Edison Electric Institute. He is a former Director of Martinrea International Inc. and past Chair of the Ontario Energy Association.

Mr. Balfour received his Master of Business Administration from the Richard Ivey School of Business at the University of Western Ontario. He earned a Bachelor of Business Administration (Honours) from Wilfrid Laurier University.

Mr. Balfour’s strong experience in strategy, finance and operations, and as a public company executive provide the foundation for his contribution to the Board and his leadership of Emera. His knowledge of capital markets, along with his experience in growing a business through the development and execution of strategy, and through mergers and acquisitions, as well as leading teams and structuring systems to manage that growth, are tremendous assets for Emera.

 

2024 Board and Committee membership

    Attendance      Total  

•  Board (1)

      9 of 9        100 % 
  

 

 

     

 

 

  

Total Attendance

      9 of 9        100 % 
  

 

 

     

 

 

  

 

DSUs awarded and held

  

2024 share-based

awards ($)

    Total 2024 change in value
of all DSUs held ($)		      Market value of total
DSU holdings ($)		  
1,229,707      558,048        8,741,664  

 

Emera Securities held (2)

    

2022

   

2023

   

2024

Common shares (3)    72,392    76,190    115,454
DSUs    122,135    139,809    162,696
Value of shares and DSUs ($)    10,066,772    10,864,756    14,944,981
Status under Executive Share Ownership Requirements (4)    As President and CEO of Emera, Mr. Balfour is subject to Executive Share Ownership Requirements. This requires that he owns shares and/or DSUs valued at no less than five times his salary. He owns shares and DSUs valued at 12.6x his base salary which exceeds the Executive Share Ownership Requirement of five times his salary.

 

(1)

Mr. Balfour, as President and Chief Executive Officer, does not serve on any of the Board Committees but attends all Committee meetings.

 

(2)

As stated on page 18, the information about the common shares and DSUs held by each Director Nominee is as of the last trading day of each year.

 

(3)

Includes all shares controlled directly or indirectly by Mr. Balfour.

 

(4)

For more information, see Executive Share Ownership Requirements and Anti-Hedging Policy in the Statement of Executive Compensation in this Circular.

 

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   19

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

James V. Bertram

 

 

LOGO

Calgary, Alberta

Canada

Age: 69

Skills and Experience

 

  •   CEO/Senior Executive

 

  •   Sustainability/ESG

 

  •   Governance

 

  •   Risk Management

 

  •   Customer/Stakeholder

 

  •   Energy Sector or Utility Sector

 

  •   Strategic Planning, M&A or Growth Strategy

 

  •   Talent Management and Executive Compensation

2024 Annual Meeting Votes for: 99.53%

Other Public Company Boards

(last five years)

 

  •   Keyera Corp. (March 2003 to present)

 

  •   Methanex Corporation (October 2018 to present)
Director Since: 2018    Independent Director

Mr. Bertram joined the Emera Board in July 2018. He was appointed to the Management Resources and Compensation Committee in November 2018. He was appointed Chair of the Health, Safety and Environment Committee in May 2019 and served on that committee until February 2025. In February 2025, he was appointed to the Nominating and Corporate Governance Committee.

Mr. Bertram was CEO of Keyera Corp., one of Canada’s leading publicly traded midstream oil and gas operators, from its inception in 1998 until 2015 when he became Executive Chair. He retired as an officer of Keyera in 2016. Prior to this, he was Vice President, Marketing for the worldwide operations of Gulf Canada.

Mr. Bertram is a corporate director and Chair of the Board of Keyera Corp. He is also a Director of Methanex Corporation, the world’s largest producer and supplier of methanol to major international markets.

Mr. Bertram received his Bachelor of Commerce from the University of Calgary.

With his experience in growing a business and completing major acquisitions, while also enabling consistent delivery of value to customers and shareholders, Mr. Bertram makes an important contribution to Emera’s Board.

 

2024 Board and Committee membership

    Attendance      Total  

•  Board

      9 of 9        100 % 

•  Health, Safety and Environment Committee (Chair)

      3 of 3        100 % 

•  Management Resources and Compensation Committee

      5 of 5        100 % 
  

 

 

     

 

 

  

Total Attendance

      17 of 17        100 % 
  

 

 

     

 

 

  

 

Total compensation

  

Fees earned in 2024 ($)

    All other compensation ($)      Total ($)  

320,500

      Nil        320,500  

 

DSUs awarded and held

  

2024 share-based

awards ($)

    Total 2024 change in value
of all DSUs held ($)		      Market value of total
DSU holdings ($)		  

320,500

      107,953        2,141,169  

 

Emera Securities held

  
     2022      2023      2024  

Common shares

      14,170        14,170        14,170  

DSUs

      24,325        31,473        39,850  

Value of shares and DSUs ($)

      1,992,140        2,295,850        2,902,523  

Status under share ownership guideline (1)

     

 Mr. Bertram owns shares and DSUs valued at over
10.5x the Annual Director’s retainer; therefore,
the guideline has been met.		  
 
 

 

(1)

Under Emera’s Director Share Ownership Guideline, a Director must own three times the total cash and equity-based annual Director retainer in Emera common shares or DSUs, or a combination of the two, within three years of the date of their appointment. The Chair of the Board must own three times the total cash and equity-based annual Board Chair retainer in Emera common shares or DSUs, or a combination of the two, within three years of their appointment date as Chair of the Board. For more information, see Director Share Ownership Guideline in the Corporate Governance section later in this Circular.

 

 

 
20   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Henry E. Demone

 

LOGO

Lunenburg, Nova Scotia

Canada

Age: 70

Skills and Experience

 

  •   CEO/Senior Executive

 

  •   Sustainability/ESG

 

  •   Governance

 

  •   Customer/Stakeholder

 

  •   Strategic Planning, M&A or Growth Strategy

 

  •   Talent Management and Executive Compensation

2024 Annual Meeting Votes for: 96.22%

Other Public Company Boards

(last five years)

 

  •   Saputo Inc. (June 2012 to September 2024)
Director Since: 2014    Independent Director

Mr. Demone joined the Emera Board in September 2014. At that time, he was appointed to the Management Resources and Compensation Committee and became Chair of that Committee in May 2021. He was appointed to the Nominating and Corporate Governance Committee in May 2017.

Mr. Demone is the former Chair of High Liner Foods Inc. of Lunenburg, Nova Scotia, the leading North American processor and marketer of value-added frozen seafood. He became President of High Liner Foods Inc. in 1989. In 1992, he was appointed President and CEO, a position he held until May 2015. He was reappointed CEO of High Liner Foods on an interim basis from August 2017 until April 2018.

Mr. Demone is a corporate director and from June 2012 to September 2024, was a member of the board of directors of Saputo Inc., a Montreal-based dairy company that produces, markets and distributes a wide array of dairy products. He is past Chair of the Fisheries Council of Canada and The Groundfish Forum, a global trade association representing industry leaders. He has served on the boards of Dover Industries Ltd. and Maritime Tel & Tel (Aliant). Mr. Demone was also the first non- United States citizen to be named Chair of the National Fisheries Institute, a United States national trade association.

Mr. Demone received his Bachelor of Science in Mathematics with honours from Acadia University.

In both public and private entities, Mr. Demone has extensive experience in strategic planning, global markets and mergers and acquisitions. As a long-time business leader in Atlantic Canada, Mr. Demone’s robust business relationships and his solid reputation make him a valuable member of Emera’s Board of Directors.

 

2024 Board and Committee membership

    Attendance      Total  

•  Board

      9 of 9        100 % 

•  Management Resources and Compensation Committee (Chair)

      5 of 5        100 % 

•  Nominating and Corporate Governance Committee

      3 of 3        100 % 
  

 

 

     

 

 

  

Total Attendance

      17 of 17        100 % 
  

 

 

     

 

 

  

 

Total compensation

  

Fees earned in 2024 ($)

    All other compensation ($)      Total ($)  

320,500

      Nil        320,500  

 

DSUs awarded and held

  

2024 share-based

awards ($)

    Total 2024 change in value
of all DSUs held ($)		      Market value of total
DSU holdings ($)		  

160,000

      147,986        2,630,324  

 

Emera Securities held

  
     2022      2023      2024  

Common shares

      9,062        9,062        10,864  

DSUs

      37,933        43,145        48,954  

Value of shares and DSUs ($)

      2,432,006        2,625,990        3,214,046  

Status under share ownership guideline (1)

     

 Mr. Demone owns shares and DSUs valued at over
11.6x the Annual Director’s retainer; therefore, the
guideline has been met.		  
 
 

 

(1)

Under Emera’s Director Share Ownership Guideline, a Director must own three times the total cash and equity-based annual Director retainer in Emera common shares or DSUs, or a combination of the two, within three years of the date of their appointment. The Chair of the Board must own three times the total cash and equity-based annual Board Chair retainer in Emera common shares or DSUs, or a combination of the two, within three years of their appointment date as Chair of the Board. For more information, see Director Share Ownership Guideline in the Corporate Governance section later in this Circular.

 

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   21

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Paula Y. Gold-Williams

 

 

LOGO

San Antonio, Texas

United States

Age: 62

Skills and Experience

 

  •   CEO/Senior Executive

 

  •   Sustainability/ESG

 

  •   Governance

 

  •   Risk Management

 

  •   Customer/Stakeholder

 

  •   Energy Sector or Utility Sector

 

  •   Strategic Planning, M&A or Growth Strategy

 

  •   Talent Management and Executive Compensation

 

  •   Financial Literacy and Accounting

 

  •   Government Relations, Public Policy and Regulatory

2024 Annual Meeting Votes for: 99.58%

Other Public Company Boards

(last five years)

 

  •   ReNew Energy Global Plc (August 2023 to present)
Director Since: 2022    Independent Director

Ms. Gold-Williams joined the Emera Board in February 2022. She was appointed to the Audit Committee in May 2023 and served on the Health, Safety and Environment Committee from May 2022 to February 2025. In February 2025, she was appointed to the Management Resources and Compensation Committee.

Ms. Gold-Williams is the former President and CEO of CPS Energy, a fully integrated electric and natural gas municipal utility based in San Antonio, Texas. Before becoming CEO in 2015, she served in positions of increasing responsibility during her 17-year career at CPS Energy, including Group EVP – Financial & Administrative Services, CFO and Treasurer.

Ms. Gold-Williams is a corporate director and serves as Co-Chair of the Keystone Policy Center, having been a member of both the Policy Center and its Energy Board since 2016. She serves as an Energy Pillar Co-Chair of Dentons’ Global Smart Cities & Communities Initiatives and Think Tank. She is also a member of the board of directors of ReNew Energy Global Plc, a renewable energy company based in India. She is also a member of the Nasdaq’s Center for Board Excellence, a community of like-minded board members, leaders and innovators committed to advancing corporate governance best practices and effectiveness. Previously, Ms. Gold-Williams held other board positions, including serving on the United States’ Secretary of Energy’s Advisory Board; being a First Vice Chair of the Electric Power Resource Institute (“EPRI”); a member and designated Chair Pro Tem of the Federal Reserve Bank of Dallas’ San Antonio Branch; and a past Chair of the San Antonio Chamber of Commerce.

Ms. Gold-Williams has an Associate Degree in Fine Arts from San Antonio College. She has a Bachelor of Business Administration in accounting from St. Mary’s University in Texas. She earned her Master of Business Administration in Finance and Accounting from Regis University in Denver, Colorado. She is a Certified Public Accountant and a Chartered Global Management Accountant.

Ms. Gold-Williams’ skills and experience in developing business strategies focused on consistently prioritizing customers, community and employees is tremendously important to Emera’s Board.

 

2024 Board and Committee membership

    Attendance      Total  

•  Board

      9 of 9        100 % 

•  Health, Safety and Environment Committee

      3 of 3        100 % 

•  Audit Committee

      5 of 5        100 % 
  

 

 

     

 

 

  

Total Attendance

      17 of 17        100 % 
  

 

 

     

 

 

  

 

Total compensation

  

Fees earned in 2024 ($)

    All other compensation ($)      Total ($)  

363,142

      Nil        363,142  

 

DSUs awarded and held

  

2024 share-based

awards ($)

    Total 2024 change in value
of all DSUs held ($)		      Market value of total
DSU holdings ($)		  

363,142

      38,429        1,033,968  

 

Emera Securities held

  
     2022      2023      2024  

Common shares

      Nil        Nil        Nil  

DSUs

      4,450        11,204        19,243  

Value of shares and DSUs ($)

      230,280        563,549        1,033,968  

Status under share ownership guideline (1)

     

 Ms. Gold-Williams owns shares valued at over
3.7x the Annual Director’s retainer; therefore,
the guideline has been met.		  
 
 

 

  (1)

Under Emera’s Director Share Ownership Guideline, a Director must own three times the total cash and equity-based annual Director retainer in Emera common shares or DSUs, or a combination of the two, within three years of the date of their appointment. The Chair of the Board must own three times the total cash and equity-based annual Board Chair retainer in Emera common shares or DSUs, or a combination of the two, within three years of their appointment date as Chair of the Board. For more information, see Director Share Ownership Guideline in the Corporate Governance section later in this Circular.

 

 

 
22   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Kent M. Harvey

 

 

 

LOGO

New York, New

York United States

Age: 67

Skills and Experience

 

  •   CEO/Senior Executive

 

  •   Governance

 

  •   Risk Management

 

  •   Energy Sector or Utility Sector

 

  •   Strategic Planning, M&A or Growth Strategy

 

  •   Financial Literacy and Accounting

 

  •   Government Relations, Public Policy and Regulatory

2024 Annual Meeting Votes for: 99.15%

Other Public Company Boards

(last five years)

 

  •   None
Director Since: 2017    Independent Director

Mr. Harvey joined the Emera Board in November 2017. At that time, he was appointed to the Audit Committee and became Chair of the Audit Committee in June 2020. He served on the Health, Safety and Environment Committee from May 2019 to February 2025. In February 2025, he was appointed to the newly established Safety and Risk Committee.

Mr. Harvey is the former CFO for San Francisco-based PG&E Corporation, the parent company of Pacific Gas and Electric Company, one of the largest combined natural gas and electric energy companies in the United States. After 33 years in progressively senior roles, he retired from PG&E in 2016.

Born in Montreal, Mr. Harvey is a naturalized United States citizen. He holds a bachelor’s degree in economics and a master’s degree in engineering, both from Stanford University. He volunteers as a crisis services provider at the Trevor Project, a United States non-profit organization that is focused on suicide prevention among LGBTQ youth.

Mr. Harvey is an experienced energy industry leader and strategic thinker with deep financial knowledge and strong expertise in United States markets, making him a significant asset to Emera’s Board.

 

2024 Board and Committee membership

    Attendance      Total  

•  Board

      9 of 9        100 % 

•  Audit Committee (Chair)

      5 of 5        100 % 

•  Health, Safety and Environment Committee

      3 of 3        100 % 
  

 

 

     

 

 

  

Total Attendance

      17 of 17        100 % 
  

 

 

     

 

 

  

 

Total compensation

  

Fees earned in 2024 ($)

    All other compensation ($)      Total ($)  

383,730

      13,726        397,456  

 

DSUs awarded and held

  

2024 share-based

awards ($)

    Total 2024 change in value
of all DSUs held ($)		      Market value of total
DSU holdings ($)		  

160,000

      89,748        1,663,913  

 

Emera Securities held

  
     2022      2023      2024  

Common shares

      Nil        Nil        Nil  

DSUs

      21,827        26,166        30,968  

Value of shares and DSUs ($)

      1,129,530        1,316,130        1,663,913  

Status under share ownership guideline (1)

     

 Mr. Harvey owns DSUs valued at over
6.0x the Annual Director’s retainer;
therefore, the guideline has been met.		  
 
 

 

(1)

Under Emera’s Director Share Ownership Guideline, a Director must own three times the total cash and equity-based annual Director retainer in Emera common shares or DSUs, or a combination of the two, within three years of the date of their appointment. The Chair of the Board must own three times the total cash and equity-based annual Board Chair retainer in Emera common shares or DSUs, or a combination of the two, within three years of their appointment date as Chair of the Board. For more information, see Director Share Ownership Guideline in the Corporate Governance section later in this Circular.

 

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   23

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

B. Lynn Loewen, FCPA, FCA

 

LOGO

Montreal, Quebec

Canada

Age: 64

Skills and Experience

 

  •   CEO/Senior Executive

 

  •   Financial Literacy and Accounting

 

  •   Governance

 

  •   Risk Management

 

  •   Sustainability/ESG

 

  •   Customer/Stakeholder

 

  •   Energy Sector or Utility Sector

 

  •   Strategic Planning, M&A or Growth Strategy

 

  •   Talent Management and Executive Compensation

 

  •   Government Relations, Public Policy and Regulatory

2024 Annual Meeting Votes for: 99.35%

Other Public Company Boards

(last five years)

 

  •   National Bank of Canada (2022 to present)

 

  •   Kinaxis Inc. (January 2025 to present)

 

  •   Gildan Activewear Inc. (2024)
Director Since: 2013    Independent Director

Ms. Loewen joined the Emera Board in February 2013. She has been a member of the Audit Committee since May 2013. She served on the Health, Safety and Environment Committee from May 2017 to February 2025 and on the Risk and Sustainability Committee from September 2021 to February 2025. In February 2025, she was appointed to the Nominating and Corporate Governance Committee.

A seasoned executive and finance leader, Ms. Loewen is the former President of Minogue Medical Inc., a Canadian supplier of innovative medical technologies, supplies and equipment. From 2008 to 2011, she was President of Expertech Network Installation Inc., a Canadian network infrastructure service provider. She also held key positions with Bell Canada Enterprises, as Vice President of Finance Operations from 2005 to 2008, and as Vice President of Financial Controls from 2003 to 2005. Earlier in her career, she was with Air Canada Jazz where she held positions of increasing responsibility, including Chief Financial Officer and Vice President of Corporate Services.

Ms. Loewen is a member of the Board of Directors of National Bank of Canada, serving as Chair of the Audit Committee and as a member of the Risk Management and Technology Committees. Ms. Loewen is also a member of the Board of Directors of Kinaxis Inc., a Canadian company that has been revolutionizing supply chain management for more than three decades. She also serves on Kinaxis’ Audit Committee.

Ms. Loewen has been the Chancellor of Mount Allison University, Chair of its Nominating and Governance Committee and a member of its Executive Committee since 2018. She was a member of its Board of Regents from 1998 to 2008, serving as Chair from 2007–2008.

She also was a member of the Board of Directors of Gildan Activewear Inc., a Canadian apparel manufacturer in 2024. Ms. Loewen was a member of the Board of Directors of Xplore Inc., a Canadian broadband service provider, and a member of its Audit Committee from 2021 to 2023. She is also a former member of the Public Sector Pension Investment Board from 2001 to 2007, where she served on the Audit and Conflicts Committee from 2003 to 2007 and as Audit and Conflicts Committee Chair from 2006 to 2007. She was also Chair of its Governance Committee from 2003 to 2006.

Ms. Loewen holds a Bachelor of Commerce from Mount Allison University. She is a Fellow of the Chartered Professional Accountants and has received the Directors’ designation from the Institute of Corporate Directors.

Ms. Loewen’s deep financial and governance expertise are valuable assets for the Emera Board.

 

2024 Board and Committee membership

    Attendance      Total  

•  Board

      9 of 9        100 % 

•  Audit Committee

      5 of 5        100 % 

•  Health, Safety and Environment Committee

      3 of 3        100 % 

•  Risk and Sustainability Committee

      3 of 3        100 % 
  

 

 

     

 

 

  

Total Attendance

      20 of 20        100 % 
  

 

 

     

 

 

  

 

Total compensation

  

Fees earned in 2024 ($)

    All other compensation ($)      Total ($)  

318,500

      Nil        318,500  

 

DSUs awarded and held

  

2024 share-based

awards ($)

    Total 2024 change in value
of all DSUs held ($)		      Market value of total
DSU holdings ($)		  

318,500

      215,016        3,913,425  

 

Emera Securities held

  
     2022      2023      2024  

Common shares

      4,490        4,490        4,490  

DSUs

      53,926        62,687        72,875  

Value of shares and DSUs ($)

      3,023,033        3,378,994        4,156,859  

Status under share ownership guideline (1)

     

 Ms. Loewen owns shares and DSUs valued at over
15.1x the value of the Annual Director’s retainer;
therefore, the guideline has been met.		  
 
 

 

(1)

Under Emera’s Director Share Ownership Guideline, a Director must own three times the total cash and equity-based annual Director retainer in Emera common shares or DSUs, or a combination of the two, within three years of the date of their appointment. The Chair of the Board must own three times the total cash and equity-based annual Board Chair retainer in Emera common shares or DSUs, or a combination of the two, within three years of their appointment date as Chair of the Board. For more information, see Director Share Ownership Guideline in the Corporate Governance section later in this Circular.

 

 

 
24   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Brian J. Porter

 

LOGO

Toronto, Ontario

Canada

Age: 67

Skills and Experience

 

  •   CEO/Senior Executive

 

  •   Sustainability/ESG

 

  •   Governance

 

  •   Risk Management

 

  •   Customer/Stakeholder

 

  •   Strategic Planning, M&A or Growth Strategy

 

  •   Talent Management and Executive Compensation

 

  •   Financial Literacy and Accounting

 

  •   Government Relations, Public Policy and Regulatory

2024 Annual Meeting Votes for: 99.67%

Other Public Company Boards (last five years)

 

  •   Fairfax Financial Holdings Ltd. (April 2023 to present)

 

  •   Bank of Nova Scotia (November 2013 to January 2023)
Director Since: 2024    Independent Director

Mr. Porter joined the Emera Board in March 2024. He served on the Audit Committee and the Risk and Sustainability Committee from May 2024 to February 2025. In February 2025, he was appointed to the Management Resources and Compensation Committee and the newly established Safety and Risk Committee.

Mr. Porter was the President and CEO of The Bank of Nova Scotia, operating as Scotiabank, a global bank operating in Canada and the Americas, from November 2013 until his retirement in January 2023.

Mr. Porter is Chair of the Board of Governors of Huron University College at Western University, Chair of the Building Ontario and Chair of the Atlantic Salmon Federation (Canada). He previously served as Chair of the University Health Network Board of Trustees.

He is a Director of Fairfax Financial Holdings Ltd.

Mr. Porter received a Bachelor of Commerce from Dalhousie University, and was awarded an honorary Doctor of Laws from Dalhousie University in 2008 and from Ryerson University in 2018. He is a graduate of the Advanced Management Program of the Harvard Business School.

Mr. Porter’s extensive experience in banking and capital markets and as a public company executive leading one of Canada’s largest chartered banks through a period of significant growth and expansion are significant assets for the Emera Board.

 

2024 Board and Committee membership

    Attendance (1)      Total  

•  Board

      6 of 6        100 % 

•  Audit Committee

      2 of 3        67 % 

•  Risk and Sustainability Committee

      1 of 2        50 % 
  

 

 

     

 

 

  

Total Attendance

      9 of 11        82 % 
  

 

 

     

 

 

  

 

(1)

2024 was Mr. Porter’s first year on the Board. He joined the Board in March 2024 and was appointed to the Audit Committee and the Risk and Sustainability Committee in May 2024. His 2024 attendance record is based on the meetings attended since the date of his appointment. Mr. Porter was not able to attend certain committee meetings in 2024 as a result of known prior commitments that conflicted with the 2024 Board and Committee schedule, which was set prior to Mr. Porter joining the Board.

 

Total compensation

  

Fees earned in 2024 ($)

    All other compensation ($)      Total ($)  

245,238

      Nil        245,238  

 

DSUs awarded and held

  

2024 share-based

awards ($)

    Total 2024 change in value
of all DSUs held ($)		      Market value of total
DSU holdings ($)		  

245,238

      N/A        266,245  

 

Emera Securities held

  
     2022      2023      2024  

Common shares

      Nil        10,000        15,000  

DSUs

      Nil        Nil        4,955  

Value of shares and DSUs ($)

      Nil        503,000        1,072,194  

Status under share ownership guideline (2)

     



 Mr. Porter joined the Board in March 2024
and owns shares and DSUs valued at over
3.8x the value of the Annual Director’s
retainer; therefore, the guideline has been
met.		  
 
 
 
 

 

  (2)

Under Emera’s Director Share Ownership Guideline, a Director must own three times the total cash and equity-based annual Director retainer in Emera common shares or DSUs, or a combination of the two, within three years of the date of their appointment. The Chair of the Board must own three times the total cash and equity-based annual Board Chair retainer in Emera common shares or DSUs, or a combination of the two, within three years of their appointment date as Chair of the Board. For more information, see Director Share Ownership Guideline in the Corporate Governance section later in this Circular.

 

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   25

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Ian E. Robertson

 

LOGO

Oakville, Ontario

Canada

Age: 65

Skills and Experience

 

  •   CEO/Senior Executive

 

  •   Sustainability/ESG

 

  •   Governance

 

  •   Risk Management

 

  •   Customer/Stakeholder

 

  •   Energy Sector or Utility Sector

 

  •   Strategic Planning, M&A or Growth Strategy

 

  •   Talent Management and Executive Compensation

 

  •   Financial Literacy and Accounting

 

  •   Government Relations, Public Policy and Regulatory

2024 Annual Meeting Votes for: 99.73%

Other Public Company Boards (last five years)

 

  •   Embark Technology, Inc. (November 2021 to August 2023)

 

  •   Northern Genesis Acquisition Corp III (March 2021 to May 2023)

 

  •   Largo Resources Ltd. (March 2021 to July 2022)

 

  •   Lion Electric Company (May 2021 to November 2021)

 

  •   Northern Genesis Acquisition Corp. (August 2020 to May 2021) (1)

 

  •   Northern Genesis Acquisition Corp. II (January 2021 to November 2021) (2)

 

  •   Algonquin Power & Utilities Corp. (December 2009 to July 2020)

 

  •   Atlantica Sustainable Infrastructure plc (March 2018 to April 2020)

 

Director Since: 2022    Independent Director

Mr. Robertson joined the Emera Board in February 2022. He was appointed to the Audit Committee in May 2022. He served on the Risk and Sustainability Committee from May 2022 to February 2025. In February 2025, he was appointed Chair of the newly established Safety and Risk Committee.

Mr. Robertson has over 30 years of experience in the development of electric power generating projects and the operation of diversified regulated utilities. He is a principal of the Northern Genesis Capital Group, an investment group focused on identifying and investing in energy transition businesses. He is the former CEO of Algonquin Power & Utilities Corp. (“Algonquin Power”), a publicly traded, diversified, international generation, transmission and distribution utility. He was also the founder and principal of Algonquin Power’s predecessor, Algonquin Power Corporation Inc., a private independent power developer formed in 1988.

Mr. Robertson is an electrical engineer and holds a Professional Engineering designation through his Bachelor of Applied Science from the University of Waterloo. He earned a Master of Business Administration from York University’s Schulich School of Business. He holds a Chartered Financial Analyst designation, as well as a global professional Master of Laws from the University of Toronto. He received a Chartered Director designation from the Directors College of McMaster University.

During his time as CEO of Algonquin Power and its predecessor entities, Mr. Robertson led the organization through a period of extraordinary growth. His entrepreneurial approach to building a leading North American regulated utility business, focused on renewable energy, is a distinct asset to Emera’s Board.

 

 

2024 Board and Committee membership

    Attendance      Total  

•  Board

      9 of 9        100 % 

•  Audit Committee

      5 of 5        100 % 

•  Risk and Sustainability Committee

      3 of 3        100 % 
  

 

 

     

 

 

  

Total Attendance

      17 of 17        100 % 
  

 

 

     

 

 

  

 

Total compensation

  

Fees earned in 2024 ($)

    All other compensation ($)      Total ($)  

308,000

      Nil        308,000  

 

DSUs awarded and held

  

2024 share-based

awards ($)

    Total 2024 change in value
of all DSUs held ($)		      Market value of total
DSU holdings ($)		  

308,000

      33,466        891,481  

 

Emera Securities held

  
     2022      2023      2024  

Common shares

      12,600        32,600        32,600  

DSUs

      3,912        9,757        16,592  

Value of shares and DSUs ($)

      854,503        2,130,552        2,643,078  

Status under share ownership guideline (3)

     

 Mr. Robertson owns shares and DSUs valued at over
9.6x the value of the Annual Director’s retainer;
therefore, the guideline has been met.		  
 
 

 

(1)

Mr. Robertson was a member of the board of Northern Genesis Acquisition Corp. from August 2020 to May 2021 when it merged with Lion Electric Company.

(2)

Mr. Robertson was on the board of directors of Northern Genesis Acquisition Corp. II from January 2021 to November 2021, when it merged with Embark Technology, Inc.

(3)

Under Emera’s Director Share Ownership Guideline, a Director must own three times the total cash and equity-based annual Director retainer in Emera common shares or DSUs, or a combination of the two, within three years of the date of their appointment. The Chair of the Board must own three times the total cash and equity-based annual Board Chair retainer in Emera common shares or DSUs, or a combination of the two, within three years of their appointment date as Chair of the Board. For more information, see Director Share Ownership Guideline in the Corporate Governance section later in this Circular.

 

 

 
26   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

M. Jacqueline Sheppard

 

LOGO

Calgary, Alberta

Canada

Age: 69

Skills and Experience

 

  •   CEO/Senior Executive

 

  •   Sustainability/ESG

 

  •   Governance

 

  •   Risk Management

 

  •   Customer/Stakeholder

 

  •   Energy Sector or Utility Sector

 

  •   Strategic Planning, M&A or Growth Strategy

 

  •   Talent Management and Executive Compensation

 

  •   Financial Literacy and Accounting

 

  •   Government Relations, Public Policy and Regulatory

2024 Annual Meeting Votes for: 96.16%

Other Public Company Boards

(last five years)

 

  •   Suncor Energy Inc. (July 2022 to present)

 

  •   ARC Resources Ltd. (March 2021 to present)

 

  •   Seven Generations Energy Ltd. (May 2016 to March 2021) (1)

 

Director Since: 2009    Independent Director

Ms. Sheppard joined the Emera Board in February 2009 and was Chair of the Board from May 2014 to February 21, 2025.

She was a member of the Management Resources and Compensation Committee from May 2009 to May 2014, and the Audit Committee from May 2009 to October 2014. She was Chair of the two ad hoc committees formed by the Board in August 2015 and November 2016 to oversee certain aspects of the financing related to the TECO transaction and the equity offering completed in December 2016. She was also Chair of the ad hoc committee formed by the Board in November 2017 to oversee the equity offering completed in December 2017.

Ms. Sheppard is a former Director of Emera’s subsidiary Emera Newfoundland & Labrador Holdings Inc. from 2011 until May 2016.

Ms. Sheppard is the former Executive Vice President, Corporate and Legal of Talisman Energy Inc. She is a corporate director and currently sits on the boards of Suncor Energy Inc., a Canadian integrated energy company, and ARC Resources Ltd., a publicly traded Canadian energy company. She was founder and Lead Director of Black Swan Energy Inc., an Alberta upstream energy company that was sold in July 2021. She is a former Director of Cairn Energy PLC, a publicly traded UK-based international upstream company, and the Alberta Investment Management Corporation (“AIMCo”), an institutional investment manager, as well as a former director of the general partner of Pacific Northwest LNG LP. She also served as Chair of the Research and Development Corporation of the Province of Newfoundland and Labrador, a provincial Crown corporation, until June 2014.

Ms. Sheppard is a Rhodes Scholar, having received an Honours Jurisprudence, Bachelor of Arts and Master of Arts from Oxford University. She earned a Bachelor of Laws (Honours) from McGill University and a Bachelor of Arts from Memorial University of Newfoundland. She was awarded an honorary Doctor of Laws from Memorial University in 2019. In 2008, Ms. Sheppard was appointed the King’s Counsel designation and in 2023 became a Fellow of the Institute of Corporate Directors, Canada’s preeminent distinction for directors.

With her extensive experience as an executive in the energy industry and as a director of public, private and Crown corporations, Ms. Sheppard’s expertise in strategic planning, business development, public markets, legal and governance is of significant value to Emera’s Board.

 

2024 Board and Committee membership

    Attendance      Total  

• Board (Chair) (2)

      9 of 9        100 % 
  

 

 

     

 

 

  

Total Attendance

      9 of 9        100 % 
  

 

 

     

 

 

  

 

Total compensation

  

Fees earned in 2024 ($)

    All other compensation ($)      Total ($)  

485,000

      N/A        485,000  

 

DSUs awarded and held

  

2024 share-based

awards ($)

    Total 2024 change in value
of all DSUs held ($)		      Market value of total
DSU holdings ($)		  

485,000

      446,659        7,941,258  

 

Emera Securities held

  
     2022      2023      2024  

Common shares

      11,947        11,947        11,947  

DSUs

      114,921        130,221        147,799  

Value of shares and DSUs ($)

      6,565,436        7,151,066        8,583,170  

Status under share ownership guideline (3)

     

 Ms. Sheppard owns shares and DSUs valued at over 18x
the value of the Annual Chair’s retainer; therefore, the
guideline has been met.		  
 
 

 

(1)

Ms. Sheppard was a member of the board of Seven Generations Energy Ltd. from May 2016 until March 31, 2021, when it merged with ARC Resources Ltd.

 

(2)

Ms. Sheppard was Chair of the Board until February 21, 2025, when Ms. Sheriff became Chair of the Board. As Chair of the Board, Ms. Sheppard did not serve on any Board Committees but attended all Committee meetings in 2024.

 

(3)

Under Emera’s Director Share Ownership Guideline, a Director must own three times the total cash and equity-based annual Director retainer in Emera common shares or DSUs, or a combination of the two, within three years of the date of their appointment. The Chair of the Board must own three times the total cash and equity-based annual Board Chair retainer in Emera common shares or DSUs, or a combination of the two, within three years of their appointment date as Chair of the Board. For more information, see Director Share Ownership Guideline in the Corporate Governance section later in this Circular.

 

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   27

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Karen H. Sheriff

 

 

LOGO

Picton, Ontario

Canada

Age: 67

Skills and Experience

 

  •   CEO/Senior Executive

 

  •   Sustainability/ESG

 

  •   Governance

 

  •   Risk Management

 

  •   Customer/Stakeholder

 

  •   Energy Sector or Utility Sector

 

  •   Strategic Planning, M&A or Growth Strategy

 

  •   Talent Management and Executive Compensation

 

  •   Financial Literacy and Accounting

 

  •   Government Relations, Public Policy and Regulatory

2024 Annual Meeting Votes for: 99.28%

Other Public Company Boards (last five years)

 

  •   BCE Inc. (April 2017 to present)
Director Since: 2021    Independent Director

Ms. Sheriff joined the Emera Board in February 2021 and became Chair of the Board on February 21, 2025. She served on the Management Resources and Compensation Committee from May 2021 to February 2025 and on the Risk and Sustainability Committee from September 2021 to February 2025. She was Chair of the Nominating and Corporate Governance Committee from May 2024 to February 2025.

Ms. Sheriff is a corporate director and the former President and CEO of Q9 Networks Inc., a data centre services provider. From 2008 to 2014, she was President and CEO of Bell Aliant, Inc., a telecommunications company. She was in senior leadership positions for more than nine years with BCE Inc. and currently serves on the Board of Directors of BCE Inc. She also spent over 10 years at United Airlines in the areas of marketing, strategy, human resources and finance.

Ms. Sheriff is a former member of the Board of CPP Investments and WestJet Airlines Ltd.

Ms. Sheriff received her master of Business Administration with concentrations in marketing and finance from the University of Chicago. She was named one of Canada’s top 25 Women of Influence for 2013 and 2014 by Women of Influence Inc., and named Woman of the Year by Canadian Women in Communications. She has been recognized as one of Atlantic Canada’s Top 50 CEOs by Atlantic Business Magazine and one of Canada’s Top 100 Most Powerful Women on multiple occasions.

With her extensive senior executive experience, including as CEO of a public company and as a leader in the transformation of Bell Aliant, Ms. Sheriff brings 20 years of technology-based industry experience. Along with this, her experience in leading a regulated utility and her involvement in significant mergers and acquisitions, including Bell Aliant, Q9, CTV and the sale of WestJet to Onex, make Ms. Sheriff a valuable member of Emera’s Board.

 

2024 Board and Committee membership(1)

    Attendance      Total  

•  Board

      9 of 9        100 % 

•  Nominating and Corporate Governance Committee (Chair)

      3 of 3        100 % 

•  Management Resources and Compensation Committee

      5 of 5        100 % 

•  Risk and Sustainability Committee

      3 of 3        100 % 
  

 

 

     

 

 

  

Total Attendance

      20 of 20        100 % 
  

 

 

     

 

 

  

 

Total compensation

  

Fees earned in 2024 ($)

    All other compensation ($)      Total ($)  

320,749

      Nil        320,749  

 

DSUs awarded and held

  

2024 share-based

awards ($)

    Total 2024 change in value
of all DSUs held ($)		      Market value of total
DSU holdings ($)		  

320,749

      52,352        1,218,630  

 

Emera Securities held

  
     2022      2023      2024  

Common shares

      1,000        1,000        3,000  

DSUs

      9,112        15,263        22,681  

Value of shares and DSUs ($)

      523,285        818,029        1,379,819  

Status under share ownership guideline (2)

     



 Ms. Sheriff owns shares and DSUs valued at over 5x
the value of the Annual Director’s retainer and 2.9x
the value of the Annual Chair’s retainer; she has
until February 2028 to achieve the threshold under
the guideline for Chair of the Board.		  
 
 
 
 

 

(1)

As Chair of the Board, Ms. Sheriff is no longer a member of any Board Committees but attends Committee meetings in her capacity as Chair of the Board.

(2)

Under Emera’s Director Share Ownership Guideline, a Director must own three times the total cash and equity-based annual Director retainer in Emera common shares or DSUs, or a combination of the two, within three years of the date of their appointment. The Chair of the Board must own three times the total cash and equity-based annual Board Chair retainer in Emera common shares or DSUs, or a combination of the two, within three years of their appointment date as Chair of the Board. Ms. Sheriff has achieved the threshold for a Director, and now has until February 2028 to achieve the threshold for Chair of the Board. For more information, see Director Share Ownership Guideline in the Corporate Governance section later in this Circular.

 

 

 
28   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Jochen E. Tilk

 

LOGO

Toronto, Ontario

Canada

Age: 61

Skills and Experience

 

  •   CEO/Senior Executive

 

  •   Sustainability/ESG

 

  •   Governance

 

  •   Risk Management

 

  •   Strategic Planning, M&A or Growth Strategy

 

  •   Talent Management and Executive Compensation

2024 Annual Meeting Votes for: 99.22%

Other Public Company Boards

(last five years)

 

  •   AngloGold Ashanti Limited (January 2019 to present)
Director Since: 2018    Independent Director

Mr. Tilk joined the Emera Board in July 2018. He served as a member of the Audit Committee from November 2018 to May 2021. He was appointed to the Management Resources and Compensation Committee in May 2019 and the Nominating and Corporate Governance Committee in May 2021. He was also appointed to and served as Chair of the Risk and Sustainability Committee from September 2021 to February 2025. In February 2025, he was appointed Chair of the Nominating and Corporate Governance Committee and as a member of the newly established Safety and Risk Committee.

Mr. Tilk is the former Executive Chair of Nutrien Ltd., a Canadian global supplier of agricultural products and services based in Saskatoon, Saskatchewan. He is the former President and CEO of Potash Corporation of Saskatchewan. Previously, Mr. Tilk spent 25 years with Inmet Mining Corporation, a Canadian-based, international metals company, with five of those years as the company’s President and CEO.

Mr. Tilk is a corporate director and currently serves as Chair of the board of AngloGold Ashanti Plc, a publicly listed international gold mining company based in London, UK. He is also Chair of the Princess Margaret Cancer Foundation, a not-for-profit organization in Toronto, Ontario. He is the former Chair of the Board of Canpotex Limited, a Canadian potash exporter, and a former Director of the Fertilizer Institute, a United States-based industry organization. He is also a former director of the International Fertilizer Association.

Mr. Tilk received his master in mining engineering from Rheinisch-Westfälische Technische Hochschule, a research university located in Aachen, North Rhine-Westphalia, Germany.

Mr. Tilk’s track record of growing companies and leading multi-billion-dollar capital expenditure programs makes him an important contributor to Emera’s Board.

 

2024 Board and Committee membership

    Attendance      Total  

•  Board

      9 of 9        100 % 

•  Risk and Sustainability Committee (Chair)

      3 of 3        100 % 

•  Management Resources and Compensation Committee

      5 of 5        100 % 

•  Nominating and Corporate Governance Committee

      3 of 3        100 % 
  

 

 

     

 

 

  

Total Attendance

      20 of 20        100 % 
  

 

 

     

 

 

  

 

Total compensation

  

Fees earned in 2024 ($)

    All other compensation ($)      Total ($)  

331,000

      Nil        331,000  

 

DSUs awarded and held

  

2024 share-based

awards ($)

    Total 2024 change in value
of all DSUs held ($)		      Market value of total
DSU holdings ($)		  

331,000

      100,947        2,036,368  

 

Emera Securities held

  
     2022      2023      2024  

Common shares

      Nil        Nil        Nil  

DSUs

      22,191        29,431        37,900  

Value of shares and DSUs ($)

      1,148,399        1,480,356        2,036,368  

Status under share ownership guideline (1)

     

 Mr. Tilk owns DSUs valued at over 7.4x the value of
the annual Director retainer; therefore, the guideline
has been met.		  
 
 

 

(1)

Under Emera’s Director Share Ownership Guideline, a Director must own three times the total cash and equity-based annual Director retainer in Emera common shares or DSUs, or a combination of the two, within three years of the date of their appointment. The Chair of the Board must own three times the total cash and equity-based annual Board Chair retainer in Emera common shares or DSUs, or a combination of the two, within three years of their appointment date as Chair of the Board. For more information, see Director Share Ownership Guideline in the Corporate Governance section later in this Circular.

 

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   29

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Carla M. Tully

 

LOGO

Arlington, Virginia

United States

Age: 52

Skills and Experience

 

  •   CEO/Senior Executive

 

  •   Sustainability/ESG

 

  •   Governance

 

  •   Risk Management

 

  •   Customer/Stakeholder

 

  •   Energy Sector or Utility Sector

 

  •   Strategic Planning, M&A or Growth Strategy

 

  •   Talent Management and Executive Compensation

 

  •   Financial Literacy and Accounting

 

  •   Government Relations, Public Policy and Regulatory

2024 Annual Meeting Votes for: Not Applicable

Other Public Company Boards

(last five years)

 

  •   Nikola Corporation (February 2024 to present)
Director Since: 2024    Independent Director

Ms. Tully joined the Emera Board in June 2024. At that time, she was appointed to the Audit Committee. She also served on the Health Safety and Environment Committee from June 2024 to February 2025. In February 2025, she was appointed to the newly established Safety and Risk Committee.

Ms. Tully is a former CEO and Co-Founder of Earthrise Energy, an energy transition company she developed and grew into a successful independent power producer. Previously, she served as Executive Vice President and Managing Director of Renewable Energy at MAP Energy, a $2.4 billion energy investment firm, where she scaled the company’s renewable energy development business. At The AES Corporation, a global Fortune 500 utility and energy generation company, Ms. Tully held key senior leadership roles, including President of AES UK and Ireland.

Ms. Tully serves on the boards of the Nikola Corporation, Pattern Energy and the Citizens for Responsible Energy Solutions Forum. She is also a Senior Advisor for the Canadian Pension Plan Investment Board (CPPIB) and an advisor to several energy startups.

Ms. Tully holds a Master of Business Administration from Columbia Business School, a Master of Arts in Law and Diplomacy from the Fletcher School at Tufts University and a bachelor’s degree in international relations and economics from the University of Southern California. She received the 2016 UK Institute of Directors’ Award – Director of the Year for Corporate Responsibility.

Ms. Tully’s skills and experience in shaping corporate strategy, leading mergers and acquisitions and driving growth are of significant benefit to the Emera Board.

 

2024 Board and Committee membership(1)

    Attendance      Total  

•  Board

      4 of 4        100 % 

•  Audit Committee

      2 of 2        100 % 

•  Health, Safety and Environment Committee

      1 of 1        100 % 
  

 

 

     

 

 

  

Total Attendance

      7 of 7        100 % 
  

 

 

     

 

 

  

 

Total compensation

  

Fees earned in 2024 ($)

    All other compensation ($)      Total ($)  

188,251

      Nil        188,251  

 

DSUs awarded and held

  

2024 share-based

awards ($)

    Total 2024 change in value
of all DSUs held ($)		      Market value of total
DSU holdings ($)		  

183,283

      N/A        202,627  

 

Emera Securities held

  
     2022      2023      2024  

Common shares

      N/A        N/A        13,000  

DSUs

      N/A        N/A        3,771  

Value of shares and DSUs ($)

      N/A        N/A        901,116  

Status under share ownership guideline (2)

     

 Ms. Tully owns shares and DSUs valued at over 3.2x
the Annual Director’s retainer; therefore, the
guideline has been met.		  
 
 

 

(1)

Ms. Tully was appointed a Director and became a member of the Audit Committee and Health Safety and Environment Committee in June 2024 and attended all Board and Committee meetings since the date of her appointment.

(2)

Under Emera’s Director Share Ownership Guideline, a Director must own three times the total cash and equity-based annual Director retainer in Emera common shares or DSUs, or a combination of the two, within three years of the date of their appointment. The Chair of the Board must own three times the total cash and equity-based annual Board Chair retainer in Emera common shares or DSUs, or a combination of the two, within three years of their appointment date as Chair of the Board. For more information, see Director Share Ownership Guideline in the Corporate Governance section later in this Circular.

 

 

 
30   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

1.4

Additional Information

2024 Board and Committee Meeting Attendance

The total number of Board and Committee Meetings held in 2024 with overall Director attendance is summarized in the table and graph below.

 

TOTAL BOARD ATTENDANCE

LOGO

  

Type of meeting

    Number of meetings      Overall Attendance  
   Board      9        100 % 
   Audit Committee      5        96 % 
   Management Resources and Compensation Committee      5        100 % 
   Nominating and Corporate Governance Committee      3        100 % 
   Risk and Sustainability Committee (1)      3        93 % 
   Health, Safety and Environment Committee (1)      3        100 % 
     

 

 

     

 

 

  
   Total meetings:      28        98 % 
     

 

 

     

 

 

  

 

(1)

In February 2025, the Board, on the recommendation of the Nominating and Corporate Governance Committee, approved changes to its Committees and Committee Membership. Effective February 21, 2025, the Health, Safety and Environment Committee and the Risk and Sustainability Committee were dissolved and replaced with the newly established Safety and Risk Committee (“SRC”). The table reflects all Committee and Committee Chair appointments as of the date of this Circular. For more information, see Board Committees on page 37 of this Circular.

Director Nominee Skills and Experience

The following table shows the skills and experience of each Director Nominee in areas identified as necessary for effective oversight of Emera given its current operations and strategy. These qualifications are considered in reviewing Board succession and recruiting new Board members.

 

Name of Director

Nominees

   

CEO/Senior
Executive

   

Sustainability/
ESG

   

Governance

   

Risk
Management

   

Customer/
Stakeholder

   

Energy Sector
or Utility Sector

   

Strategic
Planning,

M&A or Growth

Strategy

   

Talent
Management
and Executive

Compensation

   

Financial
Literacy and
Accounting

   

Government
Relations,

Public Policy

and Regulatory

Scott C. Balfour    ✓    ✓    ✓    ✓    ✓    ✓    ✓    ✓    ✓    ✓
James V. Bertram    ✓    ✓    ✓    ✓    ✓    ✓    ✓    ✓      
Henry E. Demone    ✓    ✓    ✓       ✓       ✓    ✓      
Paula Y. Gold-Williams    ✓    ✓    ✓    ✓    ✓    ✓    ✓    ✓    ✓    ✓
Kent M. Harvey    ✓       ✓    ✓       ✓    ✓       ✓    ✓
B. Lynn Loewen    ✓    ✓    ✓    ✓    ✓    ✓    ✓    ✓    ✓    ✓
Brian J. Porter    ✓    ✓    ✓    ✓    ✓       ✓    ✓    ✓    ✓
Ian E. Robertson    ✓    ✓    ✓    ✓    ✓    ✓    ✓    ✓    ✓    ✓
M. Jacqueline Sheppard    ✓    ✓    ✓    ✓    ✓    ✓    ✓    ✓    ✓    ✓
Karen H. Sheriff    ✓    ✓    ✓    ✓    ✓    ✓    ✓    ✓    ✓    ✓
Jochen E. Tilk    ✓    ✓    ✓    ✓          ✓    ✓      
Carla M. Tully    ✓    ✓    ✓    ✓    ✓    ✓    ✓    ✓    ✓    ✓
  

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

Total Number of Directors with Skills    12    11    12    11    10    9    12    11    9    9
  

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   31

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

DESCRIPTION OF SKILLS AND EXPERIENCE

CEO/Senior Executive: CEO or senior executive experience with a large organization.

Sustainability/ESG: Experience as a senior executive leading, or as a director with oversight responsibilities for, a significant number of environmental, social and governance programs, sustainable practices and policies (including those in relation to climate risk), corporate social responsibility programs and inclusion initiatives.

Governance: Experience with corporate governance practices and principles at a major organization.

Risk Management: Experience overseeing the various risks facing an organization, with oversight of appropriate policies and procedures to effectively manage risk.

Customer/Stakeholder: Experience as a senior executive in a customer-centric product or service company.

Energy Sector or Utility Sector: Has been a senior executive of a public utility or energy company.

Strategic Planning, M&A or Growth Strategy: Experience defining and driving strategic direction and growth, including leading complex merger and acquisitions (“M&A”) transactions, or leading the growth or transformation of a company.

Talent Management and Executive Compensation: Experience in oversight of executive compensation and incentive-based compensation programs. Experience with talent recruitment and management, workplace culture, equity and inclusion, succession planning, leadership development, executive recruitment, management of organized labour in a large operating company.

Financial Literacy and Accounting: Experience in corporate finance, overseeing complex financial transactions; experience in financial accounting and reporting, auditing and internal controls.

Government Relations, Public Policy and Regulatory: Experience in the workings of government and public policy in Canada or the United States and/or experience within a public or major private corporation with complex legal and regulatory regimes in Canada or the United States.

Majority Voting for Election of Directors

The confidence of shareholders in the actions of the Board and management is important. In order to provide a mechanism for shareholders to express that confidence in each Director and in compliance with Subsection 461.3 of the TSX Company Manual, the Board has adopted a Majority Voting Policy for Directors.

MAJORITY VOTING POLICY

Should a Director Nominee, in an uncontested election at a meeting of shareholders of Emera Inc. at which Directors are to be elected, receive a majority of “withheld” votes from his or her election as a Director (a “Majority Withheld Vote”), the individual shall submit his or her resignation to the Board for consideration immediately following such shareholders’ meeting.

The votes determining a Majority Withheld Vote shall be the total votes cast by ballot by shareholders and proxyholders, or if a ballot vote was not conducted, shall be the total votes represented by proxies validly deposited prior to the shareholders’ meeting.

The Directors who received a majority “For” vote at the shareholders’ meeting shall consider whether or not to accept the resignation.

If there are less than three such Directors, the entire Board shall meet to consider the appropriate actions to be taken. The resignation of a Director who received a Majority Withheld Vote shall be accepted absent exceptional circumstances and is effective when accepted by the Directors. The determination shall be made within 90 days following the date of the shareholders’ meeting and a news release disclosing such determination shall be issued promptly following such determination. If the resignation is rejected, the news release shall include the reasons for rejecting the resignation. A copy of the press release shall be provided to the Toronto Stock Exchange.

Since the adoption of the Majority Voting Policy in 2008, all Director Nominees have received a majority “FOR” vote at the Company’s meetings of shareholders.

 

 
32   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

2024 Annual Meeting Voting Results

The following table provides the voting results for each item of business at the 2024 Annual Meeting on May 23, 2024 voted on by the common shareholders of the Company, being the only class of shares allowed to vote.

98.9% was the average vote in favour of our Director Nominees at the 2024 Annual Meeting.

 

     Number of Votes      Percentage of Votes Cast  

Resolutions

    For     

Against

    Withheld      TOTAL      For     

Against

    Withheld  

1   ELECTION OF DIRECTORS:

                     

Scott C. Balfour

      133,099,626           408,880        133,508,506        99.69 %          0.31 % 

James V. Bertram

      132,874,403           634,103        133,508,506        99.53 %          0.47 % 

Henry E. Demone

      128,457,267           5,051,239        133,508,506        96.22 %          3.78 % 

Paula Y. Gold-Williams

      132,954,174           554,332        133,508,506        99.58 %          0.42 % 

Kent M. Harvey

      132,370,714           1,137,792        133,508,506        99.15 %          0.85 % 

B. Lynn Loewen

      132,635,062           873,444        133,508,506        99.35 %          0.65 % 

Brian J. Porter

      133,067,628           440,878        133,508,506        99.67 %          0.33 % 

Ian E. Robertson

      133,144,277           364,229        133,508,506        99.73 %          0.27 % 

M. Jacqueline Sheppard

      128,382,043           5,126,463        133,508,506        96.16 %          3.84 % 

Karen H. Sheriff

      132,550,049           958,457        133,508,506        99.28 %          0.72 % 

Jochen E. Tilk

      132,467,989           1,040,517        133,508,506        99.22 %          0.78 % 

2   APPOINTMENT OF ERNST & YOUNG LLP AS AUDITORS

      128,038,402           6,069,251        134,107,653        95.47 %          4.53 % 

3   DIRECTORS TO ESTABLISH AUDITORS’ FEE

      128,638,923      4,877,410         133,516,333        96.35 %     3.65%   

4   ADVISORY RESOLUTION ON EXECUTIVE COMPENSATION

      126,998,281      6,517,662         133,515,943        95.12 %     4.88%   

VOTES AVAILABLE

      286,346,776                    

VOTES RECEIVED

      134,107,653                    

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   33

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Certain Proceedings

To the knowledge of the Company, none of the proposed nominees for election as Directors of the Company:

 

(a)

Are, as at the date of this Circular, or have been, within 10 years before the date of this Circular, a director, CEO or CFO of any company that:

 

  (i)

Was subject to a cease trade order, an order similar to a cease trade order or an order that denied the relevant company access to any exemption under securities legislation that was in effect for a period of more than 30 consecutive days (an “Order”) that was issued while the proposed nominee was acting in the capacity as director, CEO or CFO; or

 

  (ii)

Was subject to an Order that was issued after the proposed nominee ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, CEO or CFO;

 

(b)

Are, with the exception of Ms. Carla M. Tully as set forth below, as at the date of this Circular, or have been within 10 years before the date of this Circular, a director or executive officer of a company that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangements or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or

 

(c)

Have, within the 10 years before the date of this Circular, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the proposed nominee.

As of the date of this Circular, Carla M. Tully is a director of Nikola Corporation (“Nikola”). On February 19, 2025, Nikola announced that it and certain of its subsidiaries had filed voluntary petitions under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware and that Nikola had also filed a motion seeking authorization to pursue an auction and sale process under Section 363 of the U.S. Bankruptcy Code.

 

 
34   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

2.

Corporate Governance

Emera is committed to strong corporate governance. We review our approach to corporate governance annually and monitor best practices to help ensure we are continually enhancing our practices to create and preserve long-term shareholder value.

In This Section

 

 

2.1

   Corporate Governance Practices      36  

2.2

   Board of Directors – About the Board      37  

2.3

   Strategic Oversight      46  

2.4

   Risk Management      51  

2.5

   Ethical Business Conduct      52  

2.6

   Transparency and Disclosure      53  

2.7

   Committees of the Board of Directors      55  

2.8

   Director Compensation      64  

2.9

   Additional Information      67  

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   35

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

2.1

Corporate Governance Practices

Emera’s commitment to strong governance forms the foundation of our business and our commitment to shareholders. The Board annually reviews its approach to corporate governance. It monitors governance best practices, emerging trends of proxy advisors and other sources of governance thought leadership with a view to aligning Emera’s strategy with its governance practices to create and preserve long-term shareholder value.

Highlights of Emera’s Corporate Governance Practices

 

Director Independence. All Emera Directors are independent from management, except Emera’s President and CEO.

 

Board and Committee Leadership. The Charter of the Chair of the Board and position description for Committee Chairs describe the roles and responsibilities for these leadership positions on the Board.

 

Board Committees. Standing Committees of the Board assist the Board in carrying out its responsibilities: the Audit Committee, the Management Resources and Compensation Committee, the Nominating and Corporate Governance Committee and the Safety and Risk Committee. Ad hoc special committees are struck from time to time as needed for specific matters.

 

Separation of Chief Executive Officer and Board Chair. The role of Board Chair and Chief Executive Officer are split and there is a fully independent Chair.

 

Independent Directors meet without Management. The Board and each Committee hold an in-camera session at each meeting that excludes management, including the CEO.

 

Shareholder Engagement. Shareholders can communicate directly with the Chair of the Board or other independent Directors through private and confidential correspondence.

 

Rigorous Risk Management Process. The Board oversees the Company’s risk management framework and risk management with the support of the Board’s Safety and Risk Committee.

 

Director Orientation. In-depth orientation to the Board and the Company are provided to new Directors to allow them to efficiently and effectively step into their role.

 

Robust Board and Director Performance Assessments Process. The Board annually assesses its performance and that of its Chair, individual Directors and Board Committees in an effort to continuously improve its performance.

   

Director Recruitment. Directors are recruited on the basis that they will make a strong contribution and have the background, skills and experience needed in light of the Company’s strategy and long-term business plans.

 

Ongoing Director Education. Directors participate in training and education on special topics of focus or interest and site visits are organized to operating facilities and offices. Directors are also encouraged to pursue education opportunities of relevance to the Company to familiarize themselves with the Company’s business, investments and key personnel.

 

Board Renewal. The Board oversees the processes and mechanisms for renewal of the Board, which include a robust Director recruitment process, established internal governance practices, an annual Board and Director performance assessment process and consideration of established renewal principles.

 

Strong Cybersecurity and Artificial Intelligence (“AI”) Oversight. Cybersecurity risk and AI impacts on operations are overseen by the Board, with a report provided to the Safety and Risk Committee on a quarterly basis.

 

Share Ownership Requirement. A Director must own a minimum of three times (3x) the total cash and equity-based annual Board retainer in Emera common shares or DSUs, or a combination of the two, within three years of their appointment. The Chair of the Board must own three times (3x) the total cash and equity-based annual Board Chair retainer in Emera common shares or DSUs, or a combination of the two, within three years of their appointment date as Chair of the Board.

 

Culture of Integrity. Directors, Officers and employees are required to annually acknowledge that they have reviewed and understand the Emera Code of Conduct, which is overseen by the Nominating and Corporate Governance Committee.

Operating Company Governance

Emera’s operating companies also have robust and disciplined governance processes that align to reflect Emera’s governance principles. In our largest operating companies, external, independent and local Directors are added to the operating company Board until they form a majority on the Board. Local Directors bring additional connection to the community where the business is located.

The Chair of each operating company Board is elected in accordance with the operating company’s organizational documents and is typically Emera’s CEO or an Emera executive based on the CEO’s recommendation. Additional Emera and operating company executives may also be Directors but, combined, would typically form a minority of the Board. Emera’s operating companies seek to achieve and maintain a Board comprised of talented and dedicated Directors with a diverse mix of experience, skills and backgrounds.

 

 
36   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

As the parent company, Emera provides certain corporate-wide services to its operating companies. These include safety, environment, compliance, internal audit, insurance, corporate security and treasury services. Enterprise-wide policies such as Emera’s safety management system are either expressly adopted by an operating company Board or the impact is considered by Emera through consultation with the operating company, which may result in operating company-specific adjustments.

 

2.2

Board of Directors – About the Board

Board of Directors Charter

The Emera Board is responsible for overseeing the management of the business of the Company and for providing stewardship and governance for its long-term success.

The Board of Directors Charter (included in Appendix A) is reviewed annually and sets out the duties and responsibilities of the Board in the areas of:

 

•  

Strategic Planning

 

•  

Sustainability and Integrity

 

•  

Risk Responsibility

 

•  

Leadership and Succession

 

•  

Financial Performance

 

•  

Corporate Communications and Public Disclosure

 

•  

Governance Responsibility

BOARD COMMITTEES

The Board of Directors has standing Committees to assist it in carrying out its duties. The Board continually assesses the mandates of its standing Committees to ensure that each is efficiently and effectively assisting the Board in carrying out its responsibilities. In February 2025, the Board, on the recommendation of the Nominating and Corporate Governance Committee (“NCGC”), approved changes to its Committees and Committee Membership. The changes are intended to facilitate efficiencies within the Board’s Committee structure while ensuring ongoing strong governance and are reflected in the charts below.

 

LOGO

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   37

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

LOGO

In addition, from time to time, the Board may also establish ad hoc committees to assist the Board on specific matters of a temporary nature. There were no ad hoc committees established by the Board in 2024. For the full text of the current Audit Committee, MRCC, NCGC and SRC Charters, visit www.emera.com/governance.

The NCGC is responsible for assisting the Board and its Committees in determining Committee composition. Board Committees are appointed on an annual basis but the membership of each Director on Committees is reviewed by the Chair of the Board, in conjunction with the Committee Chairs, from time to time in the Board Chair’s discretion.

Committee membership rotation is structured to ensure an appropriate level of continuity on each Committee from year to year while at the same time ensuring Board members have appropriate exposure to the various Committees. Board members who may not be members of a Committee are extended an ongoing invitation to sit in on Committee meetings to experience first-hand the operations of other Committees and allow easier rotation of membership by increasing the familiarity of non-Committee members with the activities of the various Committees.

For a description of the mandate and the membership of each of the current four standing committees of the Board, as well as the activities of the Committees, please see the section entitled Committee Reports later in this Circular.

Director and Chair Independence

Ms. Sheriff, the Chair of the Board, is an independent Director. The Articles of Association of the Company (“Articles”) require that the Chair of the Board and the President and CEO be separate individuals. The Chair of the Board may not be an employee of the Company or of any subsidiary or affiliate of the Company.

All Emera Directors are independent from management, except for Mr. Balfour, who is President and CEO of Emera. All of the Board Committees are comprised entirely of independent Directors.

Use of the term “independent” in relation to a Director means a Director is independent as defined under applicable Canadian securities laws and, in particular, is free of any direct or indirect material relationship, which could, in the view of the Board of Directors, be reasonably expected to interfere with the Director’s independent judgement.

Except for Mr. Harvey, who receives a retainer for being a member of the Board of Emera’s subsidiary, Emera US Holdings Inc., Directors receive no other remuneration from Emera other than Directors’ retainers, fees or retainers for service as a Director or Chair of the Board or Chair or member of a Committee, and an annual travel allowance. Ms. Sheriff receives an all-inclusive annual retainer as Chair of the Board of Emera.(1) As noted later in this Circular under the section Total Director Compensation in 2024, Mr. Balfour does not receive any additional compensation for his services as a member of the Board of Emera or as a member of the Board of any of Emera’s subsidiaries or investments, beyond his compensation as Emera’s President and CEO.

The Articles provide that no more than two Directors may be employees of the Company or one of its operating companies. Mr. Balfour is the only Director employed by the Company or any of its operating companies.

 
(1)

Ms. Sheppard was Chair of the Board of Emera until February 21, 2025, when Ms. Sheriff became Chair of the Board. As such, Ms. Sheppard received the annual retainer as Chair of the Board in 2024.

 

 
38   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Position Descriptions

CHAIR OF THE BOARD

The Chair provides leadership to the Board, in order that it may fulfil its duties effectively, efficiently and independent of management. The Chair’s role is to ensure the Board and shareholder meetings function effectively. The Chair leads Board discussions and represents the Board in providing additional advice and counsel to the President and CEO and senior leadership. At the request of the President and CEO, or where appropriate, the Chair of the Board also represents the Board at official functions and meetings with major shareholders and other stakeholder groups.

The Chair oversees and monitors the work of the Board Committees to ensure that delegated Committee functions are carried out and reported to the Board. The Chair of the Board attends all Committee meetings in his or her capacity as Board Chair.

Under the leadership of the NCGC, the Chair participates in the recruitment and retention of Directors and oversees appropriate processes to determine that the Board of Directors has the requisite skill sets needed for effective oversight of the Company given its operations and strategy. The Chair also leads an annual assessment of the effectiveness of the overall Board and its members.

The Board has adopted a Chair of the Board of Directors Charter, which delineates the role of the Chair and their responsibilities. A copy of the Chair of the Board of Directors Charter can be found at www.emera.com/governance.

In November 2024, the Board of Directors, on the recommendation of the NCGC, appointed Karen H. Sheriff as Chair of the Board effective February 21, 2025. Ms. Sheriff replaced Ms. Sheppard, who stepped down as Chair of the Board after more than ten years of service.

COMMITTEE CHAIRS

The Board has adopted a written position description for Committee Chairs, which detail the duties of the Committee Chairs. Each Committee Chair is required to provide leadership to the Committee members and support the Committee’s effective fulfilment of its mandate. The position description for the Committee Chairs can be found at www.emera.com/governance.

PRESIDENT AND CHIEF EXECUTIVE OFFICER

The President and CEO is responsible for leadership of the Company and its employees. They are responsible for defining, communicating and implementing the direction, goals and core values of the Company, including:

 

•  

Leading the development of Emera’s vision and strategic plans;

 

•  

Delivering Emera’s financial performance; and

 

•  

Developing senior leadership succession planning and development as detailed in the Succession Planning and Leadership Development section found later in this Circular.

The roles and responsibilities of the President and CEO are contained in their employment contract. The President and CEO’s employment contract is reviewed by the Chair of the Board and the MRCC, and is approved by the Board of Directors.

Among the various responsibilities of the Board, CEO selection is of critical importance. The MRCC assists the Board in the succession planning process in respect of the President and CEO. For more information about the succession planning process for the President and CEO see the section entitled Succession Planning and Leadership Development later in this Circular.

Board and Committee Meetings

There were twenty-eight (28) Emera Board and Committee meetings during 2024. See the section entitled 2024 Board and Committee Meeting Attendance earlier in this Circular for more detailed information.

The Board and the Committees have adopted the practice of, at each meeting, holding an in-camera session, during which the President and CEO and all other members of management are excluded. The Board sessions are presided over by the Company’s independent Board Chair. The Committee sessions are presided over by the independent Chairs of the respective Committees. In 2024, the Board and each Committee held an in-camera session at each meeting of the Board (9 meetings) and each Committee meeting (19 meetings in total).

The Board generally holds an evening session before each regularly scheduled Board meeting and prior to the Board’s annual strategy meeting.

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   39

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Director’s Occupation

The Directors have also instituted a policy that requires them to submit their resignation as a Director if there is a significant change in their principal occupation. The resignation is then considered by the Board, which determines if the change in the Director’s circumstances warrant acceptance of the resignation, whether due to a conflict of interest arising by virtue of a new principal occupation or otherwise.

Limit on Directorships

Public company board membership for each Director Nominee during the last five years is included in their profiles in the section entitled Director Nominees.

In February 2025, the Board, on the recommendation of the NCGC, amended its policy whereby Directors must notify and obtain the approval of the Chair of the Board prior to accepting a position on the board of another public or private company, to include the additional requirement that unless approved by the Chair of the Board in consultation with the Chair of the NCGC:

 

•  

External Directors of the Company may not serve on more than three (3) public company boards (including the Company but not including the boards of affiliates or subsidiaries of the Company);

 

•  

Management Directors of the Company, including the President and Chief Executive Officer, may not serve on more than one (1) public company Board (excluding the Company and the boards of affiliates or subsidiaries of the Company); and

 

•  

Members of the Audit Committee may only serve on a maximum of three (3) public company audit committees (including the Company).

No current Director or Director Nominee serves on more than three (3) public company boards (including the Company) and no member of the audit committee serves on the audit committee of more than three (3) public company boards (including the Company).

Board Interlocks

An “interlock” occurs when two or more of Emera Directors are on the board of another public company. There are currently no Emera Directors who sit on the board of another public company with one or more other Emera Directors.

Board Size

The Articles provide that the number of Directors on the Company’s Board must not be less than eight and not more than 15. Twelve Director Nominees are being proposed for election at the 2025 Annual Meeting.

Nomination of Directors and Director Recruitment Process

The NCGC is responsible for providing the Company with a list of Director Nominees for election at the Company’s Annual Meeting. The NCGC is composed of entirely independent Directors and develops a list of nominees after carefully considering the mix of skills and experience of its Directors. The NCGC also evaluates the size of the Board and its composition having regard to the Board Diversity Policy. In accordance with the Board Diversity Policy, when identifying and considering the selection of qualified Director Nominees, the NCGC endeavours to ensure that women and men each comprise no less than 40 per cent of the independent directors.

Director Nominees must, in the opinion of the members of the NCGC, be able to fully discharge their duties as Directors and contribute to the broad range of issues that come before the Board for consideration. They must be able to devote the time necessary to prepare for and attend meetings of the Board and Committees of the Board to which they may be appointed. The NCGC evaluates the expected turnover of Directors in advance of their retirement from the Board and develops an effective succession plan.

Working with the Board Chair, the NCGC considers recruitment in the context of the age and tenure of current members and considers the Board’s overall policy of ensuring renewal and orderly Board succession. For more information about the average age and tenure of Emera’s Director Nominees for the Company’s 2025 Annual Meeting, refer to the section below entitled Board Renewal.

The NCGC also considers the potential tenure of a Director candidate before making a selection.

Board Renewal

The Board oversees processes for renewal of the Board, which balance many factors, and have as their ultimate objective the fulfilment of the fundamental responsibility of the Board to provide stewardship and good governance for the Company. Those processes address Board renewal in a deliberate manner and primarily include: a robust Director recruitment process, internal governance practices that regularly assess each of the Board’s desired skills, and the conduct of an annual performance assessment of the Board, its Committees and individual Board members.

 

 
40   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

While Emera has no formal term or age limits for its Directors, absent certain circumstances as determined by the Board, in the normal course, a Director who would be 72 years of age at the Annual Meeting would not be nominated, nor would a Director who has served as a Director for more than 15 years, in accordance with the Board Tenure Guideline that was adopted by the Board in 2021.

Emera’s governance practices include that planned departures of Board members in any one year will not exceed two Directors. This practice supports both Board renewal and continuity.

BOARD RENEWAL PRINCIPLES

When recommending the nomination of Directors for election, the NCGC members must consider certain principles:

 

Board renewal principle

   

Principle explained

Age    Absent certain circumstances as determined by the Board, in the normal course, a Director who would be 72 years of age at the Annual Meeting would not be nominated.
Tenure    The length of time that a nominee has served on the Company’s Board of Directors is considered, subject to the Board Tenure Guideline that established a general Director tenure guideline of not more than 15 years, with a view to the Board having Directors with an appropriate mix of tenures.
Average age    The average age of all of the Company’s Director Nominees is determined and considered.
Average tenure    The average tenure of all of the Company’s Director Nominees is determined and considered.
Other relevant factors    The NCGC considers any other factor Committee members determine to be relevant in the promotion of orderly succession and balanced renewal of membership on the Board, having as its ultimate objective the constitution of a Board of Directors that fulfils the fundamental responsibility of providing stewardship and good governance for the Company.

APPLICATION OF BOARD RENEWAL PRINCIPLES

The NCGC applied the Board renewal principles to the Director Nominees for Emera’s 2025 Annual Meeting. In addition to the other Board renewal principles, the Committee considered the average age and average tenure of all the Company’s Director Nominees for election at the 2025 Annual Meeting, as represented by the diagrams below.

 

LOGO

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   41

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

By comparison, the average age and average tenure of Directors in prior years was as follows:

 

Renewal principle

   

2022

   

2023

   

2024

   

2025

Average age

    64.07 years    64.23 years    64.92 years    64.42 years

Average tenure

    6.26 years    6.80 years    6.19 years    6.42 years

In applying the Board Renewal Principles as described, the NCGC has recommended to the Board of Directors all of the 12 Director Nominees presented earlier in this Circular under the Director Nominees section. The Board is confident that this is an appropriate size for the Board to fulfil its mandate, to ensure the committees have the appropriate leadership and skills and to facilitate board renewal.

 

      GUIDELINE ON BOARD TENURE
     In applying the tenure guideline of 15 years when considering re-nominations for Directors, the NCGC shall take into consideration the needs of the Board at the time, the best interests of Emera given its strategic objectives, orderly succession and the results of the annual Board and Director performance assessment.
As of the date of Emera’s 2025 Annual Meeting, all but one of the Director Nominees will have served on the Board for less than 15 years.    M. Jacqueline Sheppard joined the Emera Board in February 2009 and served as Chair of the Board from May 2014 to February 2025. Although her tenure exceeds the Board Tenure Guideline of 15 years, the Board has determined that she be re-nominated for election as a Director on the recommendation of the NCGC. The NCGC and the Board considered a number of factors in connection with her nomination, including the determination that Ms. Sheppard’s continuing service as a Director through 2025 will provide important continuity on the Board in light of Ms. Sheriff’s appointment as the new Chair of the Board and the integration of newer Board members. The continuation of Ms. Sheppard’s Board service through the end of 2025 will support a smoother transition and will balance the desire for renewal with the need for stability and effective knowledge transfer. In addition, Board members determined that she remains independent and that her experience in the energy industry, as well as her expertise in strategic planning and corporate governance continue to provide significant value to the Board. To help ensure the ongoing renewal of the Board, Ms. Tully was appointed to the Board in June 2024.

Board and Director Performance Assessments

The Board annually assesses its effectiveness in an effort to improve its performance.

Each year, the NCGC, in consultation with the Board Chair, determines the process by which assessments of the Board, individual Directors and Committees will be conducted on their effectiveness and contribution. The process includes the use of questionnaires and one-on-one interviews with each Director. A report on the assessment is provided to Board members and discussed at the NCGC. The Board considers the report, its findings and a set of priority actions for the year at a Directors-only session. Progress is then monitored throughout the year on the priority actions with oversight on that process by the NCGC.

In determining the 2024 Board and Director performance assessment process, the NCGC, in consultation with the Board Chair, agreed that the same process that was used for the 2023 Board and Director performance assessment would continue to be followed. In addition, in light of the Board Chair transition from Ms. Sheppard to Ms. Sheriff, it was agreed that the 2024 Board and Director Performance Assessment would be conducted by Ms. Sheriff, who also served as Chair of the NCGC until February 21, 2025.

Ms. Sheppard, in discussion with Directors, carried out the CEO’s annual assessment for 2024, which included an evaluation of the CEO’s performance in 2024 and CEO goals and objectives for 2025.

2023 ASSESSMENT

The 2023 assessment found that Directors believed the Board continued to maintain high standards of corporate governance and exercised the right level of oversight. It also determined that Directors view the Company as having an effective Board with diverse skills and perspectives. The prevalent themes that emerged related to the Company’s strategic goals, leadership development and succession planning, risk management processes and safety.

The 2023 assessment identified several areas of priority for 2024 related to the Company’s strategy and organizational structure and capacity. With the assistance of the NCGC, the Board Chair reviewed and reported to the Board on progress made in 2024 to address those priorities.

 

 
42   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

2024 ASSESSMENT

The current Chair of the Board, Ms. Sheriff, interviewed each independent Director as part of the 2024 Board and Director performance assessment and solicited general feedback from each Director. A series of questions were sent to each Director for consideration in advance of each interview. The questions pertained to a number of themes, including:

 

•  

Emera’s strategy and business;

 

•  

Organizational structure and capacity;

 

•  

Board and Committee effectiveness;

 

•  

Corporate governance;

 

•  

Board composition and succession; and

 

•  

Individual Director effectiveness, including the Director’s self-assessment of their own performance as a Director.

In 2025, upon completion of the assessment evaluation, Ms. Sheriff compiled a report with proposed actions for 2025. This report was discussed in a separate Director-only session where the actions were finalized.

The CEO assessment for 2024, carried out by Ms. Sheppard, was also discussed in an independent Director-only session that excluded the President and CEO.

The assessment of Ms. Sheppard’s performance as Chair of the Board in 2024 was led by Ms. Sheriff, in her then capacity as the Chair of the NCGC. Ms. Sheriff provided Directors with comments on Ms. Sheppard’s leadership in attaining the Board priorities for 2024. Directors were given an opportunity to provide input on those comments and any additional feedback to Ms. Sheriff in advance of the meeting. Directors acknowledged and thanked Ms. Sheppard for her leadership, contributions to Emera and commitment to excellence in corporate governance during her tenure. They agreed to more formally recognize the contributions she has made as Chair of the Board over the last 10 years at a later date.

2024 ASSESSMENT FINDINGS

The principal themes that came out of the 2025 Board and Director Performance Assessment related to strategy, executive leadership and succession planning, and Board effectiveness.

The Directors believe the Company’s strategic actions over 2024 have strengthened the Company’s financial and credit metrics, and positioned the business for future growth and resiliency.

All Directors expressed the view that the Board continues to function effectively and that the Company prioritizes strong governance. The Assessment identified the desire among Directors to improve and streamline board and committee processes and materials in order to further enhance the effectiveness of the Board.

2025 OBJECTIVES

While performing the Board and Director performance assessments, Directors proposed areas of future focus as it relates to strategy, management succession planning and Board effectiveness. These included:

 

•  

Work with management on the continued evolution of the Company’s corporate strategy;

 

•  

Continue to assess and advance executive succession plans across Emera’s businesses;

 

•  

Implement the new Board committee structure and operating model, which involved the combination of the Risk and Sustainability Committee and the Health, Safety and Environment Committee into a single committee, in a manner that further enhances Board effectiveness;

 

•  

Implement administrative improvements associated with Board and Committee meetings with the goal of enhancing overall Board effectiveness; and

 

•  

Continue to advance renewal of the Board and ensure effective on-going adherence with the Board succession plan.

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   43

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Board Composition

Emera is focused on establishing and maintaining a Board with a broad mix of experience, skills and backgrounds. To support this objective, Emera’s Board has adopted a Board Diversity Policy that can be found at www.emera.com/governance.

When identifying candidates for nomination to the Board, the NCGC will consider, among other things:

 

•  

The diverse nature of the business environment in which Emera operates;

 

•  

The need to maintain flexibility to effectively address succession planning and ensure that Emera continues to attract and retain highly qualified individuals to serve on the Board;

 

•  

Emera’s Board renewal principles, anticipated retirements of Directors and the Board’s succession planning, balancing the need to maintain flexibility to ensure that Emera continues to attract and retain highly qualified individuals to serve on the Board;

 

•  

The needs of the Board in the context of the mix of current Directors in terms of skills, experience, age, tenure and the level of representation of women and the benefits of diverse perspectives on the Board; and

 

•  

With respect to gender, endeavoring to ensure that women and men each comprise no less than 40 per cent of the independent Directors on the Board.

On behalf of the Board, the NCGC retains independent recruiters to assist with Director recruitment by helping to identify qualified candidates with the skills and experience determined to be required by the NCGC. To help ensure the broadest possible pool of qualified candidates is considered, these recruiters are mandated to seek qualified candidates of all backgrounds, experiences, perspectives and characteristics, including women and characteristics such as Indigenous heritage, racial status, disabilities and LGBTQ2SI+ persons.

The Board members voluntarily participate in an annual survey to provide self-identification data in support of the goal of maintaining a Board with a broad mix of experience, skills and backgrounds. Based on that survey:

 

•  

One Director Nominee identifies as a racialized person (persons, other than Indigenous peoples, who are non-Caucasian in race or non-white in colour);

 

•  

One Director Nominee identifies as a member of the LGBTQ2SI+ community;

 

•  

Five of the independent Director Nominees are women and six of the independent nominees are men (seven of all Director Nominees). Women therefore represent 45 per cent of the independent Director Nominees (42 per cent of all Director Nominees), which meets the objective of 40 per cent women or men independent Directors under the Board Diversity Policy; and

 

•  

None of the Director Nominees identified as being Indigenous or persons with a disability.

 

 

 

LOGO

 

 
44   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

OPERATING COMPANY BOARD COMPOSITION

The Company recognizes the value of having a broad mix of experience, skills and backgrounds among the directors on its operating company boards. Of the 20 external directors that serve on the boards of our four largest operating companies (Tampa Electric Company, Nova Scotia Power Incorporated, Peoples Gas Systems, Inc. and New Mexico Gas Company), 45 per cent are female and 30 per cent have an ethnic, racial or visible minority status or are of Indigenous heritage.

Orientation of Directors

New Directors receive an in-depth orientation to the role of the Board, its Committees and Directors, and to the nature and operation of the Company’s business, including its executive leaders, business, strategy, principal risks, financial information and governance practices. The orientation is designed to allow new Directors to effectively and efficiently step into their new role as Director and discharge their responsibilities. The Board and management have built and continue to expand a long-term program of training and information sharing for Directors to enhance their effectiveness and reinforce a collegial working relationship among members of the Board.

Orientation sessions are attended by the President and CEO and other executive officers or leaders of key subsidiaries. The Board Chair also attends the orientation with a new Director. Reference material is provided in advance of the session that includes:

 

(a)

Recent annual and interim management’s discussion & analysis and financials, Management Information Circular and Annual Information Form;

 

(b)

Board and Committee Charters;

 

(c)

Strategic Plan and Business Plan and Budget;

 

(d)

Guide to the Company’s management structure;

 

(e)

Emera Disclosure Policy;

 

(f)

Emera’s Code of Conduct; and

 

(g)

Minutes of previous Board meetings.

Continuing Education for Directors

The Board, with the support and oversight of the NCGC, regularly seeks opportunities to update, educate and inform the Directors in areas they request or that management determines, are relevant to issues facing the Company.

The Board and Committees receive regular presentations from management updating Directors about market and industry conditions and trends that may impact on the Company’s business and influence its strategy. Additionally, the Board aims to receive specialized presentations on various matters of significance to the Company.

Annually, the Board has also been provided with opportunities for site visits to operational facilities to help Directors get to know leaders, understand management structure and more fully understand the business.

Emera adopted a Guideline for Directors’ Attendance at Education Sessions, which is designed to encourage Directors to participate in education sessions from time to time that are directly related to the business of the Company and the performance of their duties as a Director of the Company. The Guideline provides that independent Directors who wish to attend an education session request the approval of the Board Chair to attend a particular education session and receive reimbursement of expenses in accordance with the Guideline.

In 2024, Directors participated in education sessions, received education materials about specific topics and participated in site visits to operational facilities, as follows:

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   45

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

2024 Director Education

 

    

Topic

   

Date

   

Participants

   Business and operations      
1.    Wildfire Risk    February    RSC and Board Chair
2.    Fundamentals of Artificial Intelligence    June    Board Members
3.    Advanced Analytics and Artificial Intelligence    June    Board Members
4.    Carbon Capture and Storage    June    Board Members
5.    Facilities site visits at Tampa Electric Company and related operations presentations    September    Board Members
6.    Climate-Related Risk and Scenario Analysis    November    RSC Members and Board Chair
   Market trends and regulatory updates      
7.    Climate Change-Related Disclosure Standards    January    Audit Committee and Board Chair
8.    Electrification and the Future of the Electricity Sector    June    Board Members
9.    Update on the Inflation Reduction Act and the Pace of Decarbonization in North America    June    Board Members
10.    Energy Transition Opportunities Landscape    June    Board Members
11.    Mandatory Climate Disclosures    September    RSC Members and Board Chair
12.    Bill C-59: New Anti-Greenwashing Provisions of the Competition Act (Canada)    September    RSC Members and Board Chair
13.    Executive Compensation and Board Effectiveness Trends    September    MRCC Members and Board Chair
14.    Disclosure and Securities Trading    October    Board Members

 

2.3

Strategic Oversight

The Emera team shares a common purpose of energizing modern life and delivering a cleaner energy future for all. As the energy landscape continues to shift, our vision is to be the energy provider of choice for our customers, the employer of choice for our people and a preferred choice for investors.

Emera is strategically positioned and well-prepared to capitalize on the growth drivers and evolving demands within the electric and gas utility sectors. Guided by our Purpose and Vision, the company’s strategy is centered on seeking reliable, growing, forward-thinking utility investment opportunities, focused on premium operations in high-growth jurisdictions, a robust capital investment strategy and a thoughtful approach to risk management, all of which drive value and steady growth for our shareholders.

Emera’s electric and gas utilities are at the forefront of a transformative era for energy, driven by economic, demographic, environmental and technological trends. These factors are driving significant growth in demand for the energy we produce and for resilient, flexible and cost-efficient energy supply and delivery systems. At the same time, governments, regulators and other stakeholders in some of the Company’s operating jurisdictions require a transition to lower emitting energy sources. Emera’s capital plan is largely centered on investments to support these transitions and trends.

Led by the President and CEO, the management team collaborates with the Board to establish the annual strategy agenda. Regular interactions between the Board and management help ensure an ongoing focus on strategy, with each scheduled Board meeting including substantial time to discuss key topics and updates on strategy and related matters. These include industry trends, growth initiatives, financial forecasts and emerging risks and opportunities. These updates ensure the Board remains aware of developments in the market, industry and within Emera, while providing an opportunity for the Board to offer input and direction on strategy throughout the year.

 

 
46   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Each year, the Board dedicates at least one meeting entirely to corporate strategy. In 2024, the Board’s dedicated strategy session focused on assessment of the trends and developments in the industry and macroeconomic landscape, evaluation criteria for assessment of potential future growth opportunities, progress updates on ongoing strategic initiatives and an overview of an enterprise-wide strategy for leveraging artificial intelligence to help create business value while managing its risk. It also included an updated financial forecast and long-term scenarios and updates on specific components of the Company’s strategy.

Sustainability

Emera’s focus on sustainability is a key driver of our strategy and a demonstration of our values.

GOVERNANCE AND RISK MANAGEMENT

Strong governance and risk management are foundational to everything we do at Emera, including our approach to sustainability. In 2024, the Sustainability Management Committee (“SMC”) and the RSC (now under the mandate of the SRC) remained focused on guiding our continued progress and oversee our performance in this area.

The SMC, consisting of senior leaders from across the business and chaired by our President and CEO, provides executive oversight of our sustainability function and progress.

The role of the new SRC is to assist the Board by overseeing Emera’s risk management framework and allocation of responsibilities for risk management, and by also overseeing the Company’s approach to environmental and sustainability matters and its performance relative to its environmental and sustainability objectives, including specifically climate-related risks, plans and disclosures.

SUSTAINABILITY MATERIALITY ASSESSMENT

Emera is committed to transparency, accountability, understanding stakeholder expectations and improving disclosures on the material sustainability priorities that matter most to stakeholders.(1) Those sustainability priorities inform our strategic sustainability planning and our sustainability reporting.

Based on our most recent sustainability materiality assessment, overseen by an independent third-party consultant, Emera has categorized our sustainability priorities into strategic, core and evolving priority levels. These sustainability priorities are reviewed on an annual basis with the SMC and SRC to help ensure they remain current, that they reflect the topics that have the greatest potential impact on the value of Emera and that they are of the most interest to our stakeholders. We conduct a full update to our sustainability materiality assessment every three years in alignment with best practice:

STRATEGIC SUSTAINABILITY PRIORITIES • Climate Change – Physical and Transition • System Reliability and Resiliency • Energy Affordability • Government and Regulatory

CORE SUSTAINABILITY PRIORITIES • Health and Safety • Governance and Ethics • Customers and Community • Our People • Indigenous Engagement and Opportunity • Human Rights • Cybersecurity • Air Emissions, Waste and Water Management

EVOLVING SUSTAINABILITY PRIORITIES • Biodiversity and Land Use • Supply Chain Management • Technology

MANDATORY SUSTAINABILITY FINANCIAL DISCLOSURES

Emera has formed a cross-functional Task Force to help ensure our readiness for mandatory climate-related disclosures and other sustainability disclosures currently under consideration by certain Canadian securities regulators. Our Task Force is actively monitoring and readying for these disclosure standards.

In terms of standards, Emera has been aligned with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) for many years in our sustainability reporting, including our climate reporting, helping prepare us for anticipated mandatory climate-related disclosures.

 
(1)

References to “material” and “materiality” when used in the context of sustainability matters in this section is different than the concept of materiality under applicable securities laws and the use of those terms in this section should not be taken as an indication that any particular matter is “material” for purposes of securities laws.

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   47

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

The four core TCFD elements that ground our current climate disclosures include:

 

GOVERNANCE

The organization’s governance around climate-related risks and opportunities

   

STRATEGY

The actual and potential impacts of climate-related risks and opportunities

on the organization’s businesses, strategy and financial planning

   

RISK MANAGEMENT

The processes used by the organization to identify, assess and manage climate- related risks

   

METRICS & TARGETS

The metrics and targets used to assess and manage relevant climate-related risks and opportunities

CLIMATE PROGRESS

Building on its strong decarbonization track record, Emera continues its carbon reduction efforts while managing the physical risks of climate change as we invest in a resilient grid for our customers.

The Board of Directors is responsible for oversight of the Company’s climate risks and adaptation efforts to address the impacts of climate change along with the energy transition process through the SRC. The SRC Chair reports to the Board of Directors on the SRC’s deliberations at the next Board meeting.

The SRC is responsible for assessing the Company’s approach to sustainability, including material climate risks and opportunities, and its performance relative to its sustainability objectives. Management reports to the SRC on the Company’s progress in relation to climate at least annually. Emera’s approach to climate-related matters, and sustainability more generally, are considered as part of the Board’s annual strategy discussions (see Strategic Oversight).

Emera continues to make investments focused on reliability and grid modernization, renewable energy integration and technological innovations to safely deliver reliable, cleaner energy to customers. Our regulated utilities must execute and comply with government climate policy and legislation while providing the most cost-effective energy to customers which are key considerations as we continue to invest in the grid.

MODERN SLAVERY ACT

Emera is committed to the human rights of employees, contractors and stakeholders across our supply chains. In Canada, the new Fighting Against Forced Labour and Child Labour in Supply Chains Act (commonly referred to as the Modern Slavery Act) requires Canadian government institutions and businesses that meet certain criteria, such as Emera, to annually report on their efforts to prevent and reduce the risk that forced labour or child labour is used by them or in their supply chain. Emera’s first report was filed with the Canadian federal government in May 2024. The SRC has oversight of Emera’s compliance with the Modern Slavery Act, including receiving and reviewing the annual report, which is ultimately approved by the Board. As part of its program for addressing the requirements of the Modern Slavery Act, the Company has developed and implemented a governance and compliance framework, including adopting the Reducing the Risk of Modern Slavery in Emera’s Business and Supply Chains Policy and the Emera Statement on Human Rights, vendor supply chain due diligence, risk assessment tool and associated contractual provisions, employee and Director training and annual compliance certifications within applicable Emera subsidiaries.

WOMEN IN EXECUTIVE ROLES

We believe that diverse perspectives among the senior executive teams at Emera is in the best interests of the Company and its shareholders. Emera and its operating companies are therefore committed to fostering the development of women into leadership positions. The appointment of executive officers is based on both individual qualifications and the relevant needs of the Company. With this in mind, Emera does not set specific targets for the representation of women in executive officer positions as these decisions are based on principles of merit. However, our hiring practices have resulted in more diverse hires and a positive change in the representation of women in executive roles across our business.

 

 
48   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Eight of the 20 executive officers(1) at Emera Inc. and its major subsidiary(2) are women, representing 40 per cent of these positions. In addition, 12 of the 25 senior-level positions at Emera Inc. beyond Emera’s senior executive leadership team are held by women, representing 48 per cent, and three of our operating companies (Peoples Gas Systems, Inc., Emera Energy and Grand Bahama Power Company) are currently led by women executives. Across all Emera companies, 34 individuals, representing 39 per cent of persons in senior-level positions, are female.

 

LOGO   

REPRESENTATION OF WOMEN

 

48% of senior-level positions at Emera Inc.

 

39% of senior-level positions across the Emera Group of Companies

 

45% independent Director Nominees

Management continues to be focused on helping ensure Emera’s hiring and pay practices promote equity between men and women. Progress is being made and we remain committed to:

 

1.

Analyzing our demographics and data annually to:

 

  a.

Monitor the rates of women in leadership and senior leadership roles;

 

  b.

Undertake regular wage gap analysis to track progress and identify challenges by operating company;

 

  c.

Exercise selective pay increases if wage disparity exists; and

 

  d.

Examine our recruitment strategies to ensure equity in pay at entry into the organization.

 

2.

Developing and promoting programs that are focused on increasing female participation in our industry, particularly for traditionally male-dominated roles.

 

3.

Drawing talent from diverse candidate pools to ensure we attract the best people.

OUR PEOPLE

Emera is committed to providing safe, and inclusive workplaces where everyone is treated with dignity, fairness and respect. This starts with our leadership and extends across all levels of the Company. These beliefs are underscored in Emera’s Values, Code of Conduct and Respectful Workplace Policy and help us attract and retain the best people, support an engaged and productive team, and bring fresh perspectives and new ideas to the table. They also reflect Emera’s communities and diverse customer base, enabling us to better understand the needs of our customers and the communities we serve.

OUR COMMITMENT TO SAFETY

Safety is Emera’s number one priority. Our most important goal is the elimination of serious injuries and fatalities (SIFs) across the Company. The number of High Energy serious injuries (HSIF) in 2024 was consistent with prior years and none of the operating companies experienced a life altering injury.

From a development perspective our safety leaders were trained in High Energy Control Assessment (HECA). This training builds on the best practice energy wheel utilized for hazard identification. Training our people to identify and mitigate risk before starting the work is critical to achieving a zero serious injury result.

In consultation with our operating companies, a new public safety standard was developed for our Safety Management System. Subsequently, we validated that we have robust programming in place. To strengthen our approach, we are conducting a gap analysis and audit to ensure best practice and consistency across the business. This work is tied to the organizations’ Balanced Scorecard.

Regarding our people, our leaders are passionate about safety. In 2024, focus on leadership engagement continued. Last year, leaders at Emera participated in multiple safety engagements. We believe in the positive impact of quality safety conversations. In addition, our focus on creating capacity to create psychologically safe workplaces continued. We strive to create an environment where all employees can bring their whole self to work, be accepted and have the conditions to do their best work safely.

 
(1)

The terms executive officer is defined under applicable securities law.

(2)

This term is defined under applicable securities law. Tampa Electric Company is Emera’s “major subsidiary” under this definition.

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   49

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

As a learning organization, we continually strive to discover best practices and learn from all incidents. To this end, we regularly bring our collective organizations and contractors together to discuss issues and share ideas. In 2024, some examples included contractor safety summits, exploring the use of cameras to improve fleet safety, reducing risky work by utilizing drones, standardizing public safety programming and sharing accident investigation results.

A highlight of 2024 included the Tampa Electric Company and Peoples Gas System, Inc. response to back-to-back hurricanes. After Hurricane Milton, we were proud that we were prepared and our service was restored in just 6 days. More importantly, more than 6,000 workers were added in the relief work and no serious injuries were recorded.

INVESTING IN OUR COMMUNITIES

Through Emera’s Community Investment Program, we are committed to supporting meaningful programs and initiatives in the communities where our employees live and work. Our commitment to being a good community partner starts with three key areas of focus: youth opportunities, innovation and entrepreneurship, planet and sustainability.

In 2024, Emera invested over $12.4 million in community initiatives in these areas and our employees volunteered over 36,250 non-working, self-reported volunteer hours to charitable organizations. In our Canadian businesses, employees reported more than 5,867 volunteer hours through the Good Neighbour Program. These reported hours were “matched” with Emera donations to these organizations.

To capture our community investment value and impact, Emera works with the London Benchmarking Group (“LBG”) Canada. The LBG model provides the global standard for reporting community investment, presenting a consistent and credible framework for impact measurement. You can read more about our community investment program on our website (www.emera.com/community).

INFORMATION SECURITY OVERSIGHT, CYBERSECURITY AND ARTIFICIAL INTELLIGENCE

Emera increasingly relies on information technology (“IT”) systems, as well as network and cloud infrastructure, to manage its business and safely operate its assets, including controls for interconnected systems of generation, distribution and transmission as well as financial, billing and other business systems.

Our reliance on technology exposes Emera to potential risks of business interruption or the unavailability, release, destruction or misuse of critical, sensitive or confidential information due to cyberattacks.

We seek to manage these risks by aligning to a common set of cybersecurity standards and policies derived, in part, from the National Institute of Standards and Technology’s Cybersecurity Framework, by following program maturity objectives, through periodic security assessments, by exercising and improving cybersecurity incident readiness and response programs and by employee communication and training. With respect to certain of its assets, the Company is required to comply with rules and standards relating to cybersecurity and IT including, but not limited to, those mandated by bodies such as the North American Electric Reliability Corporation, Northeast Power Coordinating Council and Department of Homeland Security.

The status of key elements of our cybersecurity program is currently reported to the new SRC on a quarterly basis. The SRC also receives reports on the Company’s approaches to addressing the impact from artificial intelligence (AI) on Company operations. In addition, the Board also oversees cybersecurity risk which is included in the risk dashboard/heat map provided to Directors at each regularly scheduled Board meeting. The Board also receives updates on cybersecurity and technological risks through the annual report it receives with respect to the Company’s digital transformation strategy, including the risks of the use of emerging technologies such as Generative AI.

INFORMATION TECHNOLOGY

Emera relies on various IT systems to manage its operations. This subjects Emera to inherent costs and risks associated with maintaining, upgrading, replacing and changing these systems. Emera’s digital transformation strategy, including investment in infrastructure modernization, emerging technologies such as Generative AI and customer-focused technologies, is driving increased investment in IT solutions, resulting in increased project risks associated with the implementation of these solutions. Emera manages these IT risks through IT asset lifecycle planning and management, governance, internal auditing and testing of systems, and executive oversight.

Emera’s digital transformation strategy is reported to the Board annually. Those reports include the annual refresh of the Emera 5-year technology plan, progress on strategic investment areas of the plan, as well as updates on innovation and the use of emerging technologies, such as Generative AI.

 

 
50   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

2.4

Risk Management

The Emera Board has a comprehensive and multi-faceted approach to its risk oversight. This includes responsibility for overseeing the implementation by management of appropriate systems to identify, report and manage the principal risks of Emera’s business. It is responsible for overseeing the development of Emera’s risk management framework, which it does with support from the SRC (and previously with the RSC).

Emera and its operating companies apply similar programs for risk identification and management. Each affiliate is governed by its own board, which allows for a focused approach to risk management oversight and governance.

The Board has endorsed a risk statement that articulates Emera’s risk appetite. The risk statement sets out the Company’s risk appetite across a number of areas and is intended to provide general guidance for decisions of the Company. The Board considers Emera’s risk profile in its oversight of Emera’s risk management by reviewing:

 

(a)

The identification and assessment of the principal risks of Emera;

 

(b)

The process for ongoing monitoring, updating and reporting of the principal risks of Emera;

 

(c)

The effectiveness of Emera’s mitigation response to its principal risks; and

 

(d)

The alignment of risk management with Emera’s risk profile, its strategy and its organizational objectives, including capital and resources allocation.

The Board, through the SRC, is also responsible for reviewing Emera’s annual insurance program and its uninsured exposure.

Under the Board’s oversight, management undertakes a robust cross-functional approach to the identification, evaluation and assessment of its high-impact enterprise risks. Risks are categorized as either primary, evolving or mature, and are tracked and currently reported on through a quarterly Risk Dashboard. Management considers the existing control environment, velocity of impact following the onset of a potential risk event as well as risk interdependencies, when assessing risks and developing appropriate mitigation plans and response protocols.

Additional in-depth analysis into certain principal risks is undertaken and reported to the Board (through the SRC or directly), as required. Board Committee oversight responsibilities for these principal risks are assigned per their respective Committee mandates (see Board Committees Risk Oversight below).

BOARD COMMITTEES RISK OVERSIGHT

 

LOGO   Emera Safety and Risk Committee (SRC)  

Assist the Board with carrying out oversight responsibilities relating to employee and public safety, identification of material risks to

the Company (including cyber security and information technology risks such as the impact of artificial intelligence on operations), and environmental and sustainability related matters.

 

  Emera Management Resources & Compensation Committee (MRCC)  

Assist the Board with carrying out responsibilities for management resource issues, health and wellness matters, and risks relating to compensation programs for executive officers.

 

 

Emera Audit

Committee

  

Assist the Board with oversight of responsibilities regarding Emera’s financial risk exposures (financial derivatives, hedging activities, credit, and trading), integrity of financial statements, internal control systems, audit processes, compliance with legal and regulatory requirements and the administration of the Ethics Hotline process.

 

  Emera Nominating and Corporate Governance Committee   Assist the Board with oversight of corporate governance practices and processes, including affiliate governance.
 

 

Operating Companies’ Board of Directors

  

 

Emera’s principal operating affiliates each have an established Board of Directors who are responsible for oversight of affiliate enterprise risks. Affiliate Boards are chaired by an Emera Executive Officer and have external directors.

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   51

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

2.5

Ethical Business Conduct

The Board is committed to sustaining a culture of integrity and ethical business practices throughout the Company.

Code of Conduct

The Board promotes a culture of ethical business conduct and has adopted our Code of Conduct (“Code”), which establishes a standard of ethical business conduct that is expected from all of our Directors, officers and employees. We have implemented annual Code training for all employees to support compliance and require Directors, officers and employees of Emera and its subsidiaries to acknowledge they have read, understand, are currently in compliance with and agree to comply with, our Code when they join the Company, and annually thereafter. In addition, Emera and its subsidiaries expect each of their contractors, suppliers, business partners, consultants and agents to act in a manner consistent with the Code.

The Code is available on Emera’s website at www.emera.com/about-us/code-of-conduct, or a copy may be obtained by contacting the Chief Human Resources Officer, Emera Inc., P.O. Box 910, Halifax, Nova Scotia B3J 2W5.

The Board regularly reviews the Code and revises to update the content with regard to best practices. Individuals are encouraged under the Code to, in good faith, seek advice, raise concerns and report suspected misconduct related to Emera’s business. Emera will not tolerate retaliation, threats of retaliation, termination from an Emera Company or discrimination that is directly or indirectly related to the good faith disclosure of suspected unethical activities or violations of laws, regulations or policies.

The Board monitors compliance with the Code, including as detailed in Related Party Transactions. In addition, the Board has oversight of the Company’s Ethics Hotline in the manner described below.

Respectful Workplace

The Code is supported by other key policies, including Emera’s Respectful Workplace Policy. The Respectful Workplace Policy applies to all Directors, officers and employees of Emera and its subsidiaries and is focused on providing a respectful and inclusive environment that is free from discrimination, harassment, sexual harassment and bullying in the workplace, and such conduct outside the workplace that contributes to a hostile work environment.

Comprehensive mandatory training is required when an employee joins the Company, which includes modules on harassment, sexual harassment, discrimination and bullying, and outlines available resources for employee support or to raise concerns. In addition, the Respectful Workplace Policy is included as part of the annual Code training.

Ethics Hotline

The Company has established a confidential and anonymous Ethics Hotline hosted by an independent external service provider. The Ethics Hotline is available to employees, contractors and third parties to report allegations of non-compliance with the Code. The internal audit department (“Audit Services”) is responsible for administering the Ethics Hotline process and ensuring all reports are investigated by the Company. Committees of the Board receive periodic updates on Ethics Hotline reports that fall within the scope of the Committee’s mandate based on the nature of the matter. For example, the Audit Committee receives updates related to financial reporting, accounting, auditing and business integrity matters; the MRCC receives updates related to people, wellness and workplace culture matters; and the SRC(1) receives updates related to safety and environment matters.

Conflicts of Interest

Directors are required to declare any conflict of interest that they may have in a matter before the Board. In any matter requiring approval of the Board, a Director is prohibited by the Articles from voting in respect of the matter in which the Director is interested.

 
(1) 

In 2024, those updates were received by the former Health, Safety and Environment Committee, which was replaced by the Safety and Risk Committee effective February 21, 2025.

 

 
52   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Related Party Transactions

Transactions between Emera and related parties are monitored in several ways to determine that such transactions comply with applicable laws, regulatory rules and the Code. In particular:

 

•  

The Audit Committee oversees the disclosure in Emera’s financial statements of related party transactions that are required to be disclosed pursuant to United States Generally Accepted Accounting Principles. In the ordinary course of business, Emera provides energy and other services and enters into transactions with its subsidiaries, associates and other related companies on terms similar to those offered to non-related parties. All material amounts are under normal interest and credit terms. Additional disclosure is provided in Emera’s financial statements regarding more significant transactions between Emera and its associated companies.

 

•  

The NCGC oversees the management of any conflicts of interest or potential conflicts of interest involving a Director. Under the Articles, any Director who has an interest in a transaction with the Company must disclose the existence and nature of the interest to the Board of Directors and such Director may not participate or vote on the matter.

 

•  

Annually, the NCGC reviews the Code. Under the Code, Directors, officers and employees of Emera cannot own more than a 10 per cent interest in, or act in the capacity of a director, officer, partner, consultant, employee or agent for a supplier, contractor, subcontractor, Emera customer, competitor or any other person or organization with which Emera has a similar relationship, without the express prior approval of their manager, or in the case of a member of the Board of Directors, the Board Chair. They must also seek similar approval when a company, partnership or business in which they, or a member of their family, own more than a 10 per cent interest, or in which they are a Director, partner, officer, consultant, employee or agent is seeking to do business with Emera.

 

•  

Also, as described in the Code, Emera’s operating companies are regulated by several Canadian, American and Caribbean energy regulators. Certain of these regulators have imposed specific codes and standards of conduct that address matters such as undue discrimination and preferential treatment between regulated companies and their affiliates. These rules may apply to and restrict arrangements between operating companies to conduct business or share employees. Emera’s operating companies have created separate codes and standards of conduct addressing these matters. Directors, officers and employees are required by the Code to be aware of, and comply with, these operating company rules at all times.

The Audit Committee is responsible for annually receiving and reviewing a report on executive officers’ compliance with the Code and receives quarterly reports on the Company’s ethics program, including information on reports received through the Ethics Hotline (see Ethics Hotline, above) or submitted directly to Audit Services.

 

2.6

Transparency and Disclosure

Disclosure Policy and Practices

The Board has adopted a Disclosure Policy to ensure all communications of material information to the investing public about the Company are accurate, that they fairly present in all material respects the Company’s financial condition and its results of operations and are made on a timely basis. For the full text of the Disclosure Policy, visit www.emera.com/governance.

Emera has established an executive Disclosure Committee responsible for overseeing the Company’s disclosure practices. The Company’s President and CEO, the CFO, the leaders of its businesses, and senior management responsible for legal, finance, investor relations and communications functions are members of the Disclosure Committee, which meets at least quarterly. Members of the Disclosure Committee are responsible for reviewing all core disclosure documents containing material information, including the Company’s management’s discussion and analysis and financial statements prior to their being presented to the Audit Committee and Board for approval.

Engagement

Emera has a mature and robust program of engaging with financial analysts, investors and other stakeholders through direct meetings, investor events, quarterly analyst calls and other initiatives. We broadcast our quarterly earnings calls with analysts live and archive them on the investor relations section of the Company’s website. In 2024, Emera’s executives met with many of the Company’s shareholders, including nearly all of Emera’s active top 20 investors. Emera held an investor day on December 4, 2024, to allow shareholders access to senior management and provide a more in-depth view of our business. Shareholders are also able to participate in our annual meeting via live webcast.

The Directors are interested in shareholders’ views about the Company, its governance and its operations. The Board oversees systems for receiving feedback from shareholders and it monitors feedback received by the Company.

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   53

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Shareholders are encouraged to provide feedback to management and/or the Board

   

Contact information

To reach management:   

President and CEO

    Email: Scott.Balfour@emera.com

Chief Financial Officer

    Email: Greg.Blunden@emera.com

Executive Vice President and General Counsel

    Email: Mike.Barrett@emera.com

Corporate Secretary

    Email: Brian.Curry@emera.com
To reach the Board: (1)   

Chair of the Board

    Email: info@emera.com

Chair of a Committee

    Email: info@emera.com

 

(1)

Confidential communications with the Chair of the Board or another Board member should be mailed to the address below marked “Private and Confidential.”

The Chair of the Board and other Directors engage with shareholders directly. In 2024, the Chair of the Board along with members of Management met with one of our largest shareholders. The meeting’s discussion topics included Emera’s Board renewal, executive succession planning and Board oversight of risk.

In addition, the Chair of the Board and other Directors also engaged directly with stakeholders. In 2024, the Chair of the Board and the Chair of the MRCC met with representatives of the Canadian Coalition for Good Governance, whose members are comprised of Canadian institutional investors. The discussion at the meeting focused on governance matters of primary importance to institutional investors.

The Board recognizes that shareholder engagement is an evolving practice and reviews its practices annually with a view to enhancing their effectiveness.

 

Shareholder engagement process

   

Contact information

Shareholders may communicate with the Chair of the Board or other independent Directors by sending them a letter using regular mail or other means of delivery. If the envelope is marked “Private and Confidential,” it will be delivered, unopened, to the Chair of the Board of Directors, or such other independent Director to whom it is addressed.   

Attention: Chair of the Board of Directors of Emera Inc. (or Name of Independent Director)

P.O. Box 910, Halifax, Nova Scotia B3J 2W5 in a sealed envelope marked “Private and Confidential”

Shareholder Proposals

Shareholders can submit proposals to be considered at the annual meeting of the Company provided they are duly submitted in advance and included in the Management Information Circular for the meeting. A shareholder intending to submit a proposal for consideration at an annual meeting must comply with the applicable provisions of the Nova Scotia Companies Act and the Articles. This includes compliance with the requirements for Director nominations contained in the Articles where the proposal includes a nomination for the election of an individual to the Board of Directors. In accordance with and subject to the requirements of the Companies Act, the Company will include a shareholder proposal in its Management Information Circular prepared for an annual meeting provided such proposal was received by the Company at least 90 days before the anniversary date of the previous annual meeting and provided such proposal is required by the Companies Act to be included in such Management Information Circular. Regardless of whether you are submitting a proposal, the nomination of Directors is still subject to compliance with the Articles, which require notice of the nomination not less than 30 days prior to the date of the annual meeting. Should you have any questions about shareholder proposals or Director nominations, please contact Emera’s Corporate Secretary using the contact information in the Notice of Meeting at the beginning of this Circular.

 

 
54   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

2.7

Committees of the Board of Directors

The Board is committed to effectively and efficiently carrying out its oversight responsibilities. As such, it strongly supports the work of its standing committees, to which certain functions are delegated as set forth in their written charters. All committees consist entirely of independent Directors. For more information about the Board’s standing committees, including information on the changes to the Committee structure approved in February 2025, please see the section entitled Board Committees earlier in this Circular.

 

Audit Committee   

Kent M. Harvey (Committee Chair)

Paula Y. Gold-Williams

B. Lynn Loewen

Ian E. Robertson

Carla M. Tully

   

ROLE OF THE AUDIT COMMITTEE

The Audit Committee assists the Board in discharging its oversight responsibilities concerning the integrity of Emera’s financial statements, its internal control systems, the internal audit and assurance process, the external audit process and its compliance with legal and regulatory requirements.

 

•  Committee Members are 100% independent

 

•  Mr. Harvey is the former CFO for PG&E Corporation

 

•  Ms. Gold-Williams is a Certified Public Accountant and former CFO for CPS Energy

 

•  Ms. Loewen is the former CFO for Air Canada Jazz

 

•  The Committee met in camera without management at every Committee meeting in 2024

 

•  Each Committee member identified as an Audit Committee Financial Expert under US Securities Law

   

The Audit Committee is responsible for reviewing and recommending to the Board the annual financial statements and all related management’s discussion and analysis and earnings press releases. The Audit Committee has also been delegated the authority by the Board to review and approve the interim financial statements and related management’s discussion and analysis and earnings press releases.

 

  

The Audit Committee evaluates and recommends to the Board the appointment of the external auditors and the compensation of such external auditors. Once appointed, the external auditors report directly to the Audit Committee, and the Audit Committee oversees the work of the external auditors concerning the preparation or issuance of the auditors’ reports or the performance of other audit, review or attest services for Emera.

 

  

The Company’s lead internal auditor also reports directly to the Audit Committee, and the Audit Committee approves the appointment, remuneration, removal and replacement of the lead internal auditor.

 

  

The Audit Committee reviews and approves the internal audit plan, including activities, organizational structure, staffing, qualifications and budget and all major changes to the plan.

 

  

The Audit Committee reviews and discusses Emera’s major financial risk exposures and the process management has taken to monitor and control such exposures, including the use of financial derivatives, hedging activities, credit and trading risks.

 

   The Audit Committee reviews management controls and processes concerning the administration of investment activities, financial reporting and financial performance and funding of the pension plans.

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   55

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

  ACTIVITIES OF THE AUDIT COMMITTEE IN 2024
  The Audit Committee met five (5) times in 2024. In accordance with its mandate as set out in the Audit Committee Charter, the Audit Committee performed the following key functions in 2024:
 

1.  Reviewed regular updates on accounting and disclosure issues;

 

2.  Reviewed developments in securities regulation and financial oversight;

 

3.  Reviewed an annual credit and market price risk report;

 

4.  Reviewed an annual tax report, which provides an update on material changes to tax policies, processes, legislation, tax planning initiatives, tax payments and reporting and pending tax audits or assessments;

 

5.  Reviewed quarterly payroll, pension and tax remittance statements;

 

6.  Reviewed the 2023 performance of the lead internal auditor;

 

7.  Provided feedback on the performance of the Chief Financial Officer for the prior year;

 

8.  Reviewed an annual corporate compliance report and quarterly compliance reports;

 

9.  Reviewed quarterly reports of material litigation;

 

10.  Reviewed quarterly reports on legal and regulatory compliance;

 

11.  Reviewed and recommended to the Board of Directors for approval the audited 2023 year-end financial statements, management’s discussion and analysis, and press release;

 

12.  Reviewed and approved interim financial statements, management’s discussion and analysis, and press releases;

 

13.  Reviewed the Chief Financial Officer’s quarterly reports on the Company’s financial results and forecasts;

 

14.  Oversaw the work of management’s Disclosure Committee;

 

15.  Reviewed and recommended amendments to the Disclosure Policy and Disclosure Committee Charter that were approved by the Board of Directors;

 

16.  Reviewed regular reports by management about the Company’s compliance program under National Instrument 52-109 and the Sarbanes-Oxley Act;

 

17.  Reviewed quarterly reports of internal Audit Services and quarterly reports on the Company’s Ethics program, including fraud investigations, provided by the lead internal auditor;

 

18.  Reviewed and approved updates to the Company’s internal Audit Services Charter;

 

19.  Reviewed and approved the assurance and advisory plan, including resource structure and budget for the internal Audit Services function;

 

20.  Reviewed pension plans performance in 2023;

 

21.  Reviewed the 2024 Audit Plan of the external auditors, EY;

 

22.  Evaluated the external auditors, including the lead external audit partner’s qualifications, performance, professional skepticism and independence; and

 

23.  Reviewed and approved the 2025 audit and non-audit services fees of EY.

 

 
56   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Management Resources and Compensation Committee (“MRCC”)

Henry E. Demone (Committee Chair)

James V. Bertram

Paula Y. Gold-Williams

Brian J. Porter

Jochen E. Tilk

 

•  Committee Members are 100% independent

 

•  The Committee met in camera without management at every Committee meeting in 2024

   

ROLE OF THE MRCC

The MRCC reviews overall compensation, including salary and benefits policies, and recommends such policies to the Board of Directors for approval.

 

The MRCC supports the Chair of the Board in conducting a review of corporate goals and objectives relevant to the President and CEO’s compensation and supports the Chair of the Board in recommending such goals and objectives for the current year to the Board of Directors. The MRCC ensures that an assessment of the President and CEO’s performance in relation to these goals and objectives is completed. It makes recommendations to the Board of Directors relating to the President and CEO’s total compensation, including participation in incentive compensation and equity-based plans. It also makes recommendations about senior management’s total compensation and incentive compensation and equity-based plans. It approves grants of stock options, performance share units (“PSUs”), restricted share units (“RSUs”) and deferred share units (“DSUs”) in accordance with the provisions of the respective plans. It reviews executive compensation disclosure prior to the Company releasing such information to the public.

 

The MRCC recommends executive officer appointments to the Board of Directors for approval. It supports and contributes to the Board’s succession planning process in respect of the President and CEO of the Company. It annually reviews the succession planning process for senior management and other potential senior management candidates, including for Emera’s subsidiaries, and oversees and contributes to that process. It reviews share ownership guidelines for executive officers. It satisfies itself that there are appropriate labour relations strategies in place and regularly reviews management’s direction and decisions made in support of labour and employee relations.

 

The MRCC is responsible for evaluating the compensation programs to determine that they do not reward executive officers for taking inappropriate risks that may harm the interests of the Company and its shareholders. Under its Charter, the MRCC must conduct a compensation risk review annually to ensure that the compensation policies are designed to take account of and mitigate:

 

(a)   incentive opportunities that inadvertently encourage excessive and unnecessary risk-taking;

 

(b)   pay structures that inadvertently encourage behaviour that negatively impacts long- term value;

 

(c)   misalignment of pay and performance; and

 

(d)   payouts that are not aligned with Emera’s business strategy.

 

Effective February 21, 2025, the MRCC also became responsible for reviewing policies, procedures and performance of the Company on health and wellbeing matters and whether the Company’s systems and policies relating to health and wellbeing matters are being approved, developed and effectively implemented.

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   57

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

  ACTIVITIES OF THE MRCC IN 2024
  The MRCC met five (5) times in 2024. In accordance with its mandate as set out in the MRCC Charter, performed the following key functions in 2024:
 

1.  Reviewed the 2023 Scorecard results for Emera and its operating companies and recommended approval by the Board of Directors;

 

2.  Reviewed executive performance in 2023 and recommended 2024 executive compensation to the Board of Directors;

 

3.  Reviewed and recommended Emera’s 2024 Corporate Scorecard to the Board of Directors;

 

4.  Reviewed operating company Scorecards for 2024;

 

5.  Reviewed and approved long-term incentive plan payouts in respect of 2021 grants;

 

6.  Reviewed and approved 2024 long-term incentive plan grants, including associated performance metrics for the 2024 PSU grant;

 

7.  Received reports on the status of labour negotiations across Emera and its operating companies;

 

8.  Reviewed annual succession plans for senior management and provided oversight of succession planning process for President and CEO and senior executives;

 

9.  Reviewed and recommended to the Board of Directors the 2024 compensation of the CEO;

 

10.  Received and reviewed updates on trends in executive compensation;

 

11.  Reviewed and recommended amendments to the Emera Employee Common Share Purchase Plan to address administrative changes in relation to updates to the Administrative Agent’s online platform, that were approved by the Board of Directors;

 

12.  Reviewed an annual compensation design risk assessment;

 

13.  Oversaw compensation-related disclosure in Emera’s 2024 Management Information Circular;

 

14.  Received updates in respect of Emera’s Ethics program and Respectful Workplace program;

 

15.  Reviewed the MRCC Charter;

 

16.  Reviewed and approved the 2025 Work Plan of the compensation consultants;

 

17.  Reviewed and approved changes to the group of comparator companies used in benchmarking compensation payable to executives in accordance with applicable law;

 

18.  Reviewed a report on the compensation trends and merit increase pools for the Emera Companies as part of the annual salary review process; and

 

19.  Reviewed a report on Emera People strategy.

 

 
58   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Nominating and Corporate Governance Committee (“NCGC”)

Jochen E. Tilk (Committee Chair)(1)

James V. Bertram

Henry E. Demone

B. Lynn Loewen

 

•  Committee Members are 100% independent

 

•  The Committee met in camera without management at every Committee meeting in 2024

   

ROLE OF THE NCGC

The NCGC assists the Board with a variety of matters relating to corporate governance. One of its primary duties is to provide the Company with a list of nominees for election as Directors to be included in the Company’s Management Information Circular prior to each Annual Meeting of Shareholders of the Company. The NCGC is responsible for identifying, considering and recruiting people qualified to become Directors, having regard to the skills, experience and qualifications of possible candidates, the key selection criteria approved by the Board.

 

The NCGC oversees the succession of Directors in accordance with the Board’s Renewal Principles and following a full skills assessment, having regard to the anticipated retirement of Directors.

 

The NCGC is responsible for developing and communicating the Company’s approach to corporate governance issues, and reviews and approves Emera’s disclosure of its corporate governance practices. The Committee keeps abreast of evolving governance best practices and regularly evaluates the governance practices of Emera. It reviews any disclosure of the Company’s corporate governance practice in accordance with applicable rules and regulations.

 

The NCGC is responsible for assisting the Board and its Committees in determining Committee composition, as well as reviewing and updating the mandate of each Committee, for submission to the Board. It also makes recommendations to the Board on all components of non-employee Director compensation, including the Board Chair and Committee Chairs. In addition, the NCGC is responsible for determining the process by which annual performance assessments are to be conducted, which evaluate the performance of the Board, the Board Chair, individual Directors, Board Committee Chairs and Board Committee members.

  

 

ACTIVITIES OF THE NCGC IN 2024

 

The NCGC met three (3) times in 2024. In accordance with its mandate as set out in the NCGGC Charter, the NCGC performed the following key functions in 2024:

 

1.  Oversaw the recruitment process that led to the appointment of Carla Tully to the Board in June 2024;

 

2.  Reviewed the plan for Director succession and developed a candidate profile for future recruitment;

 

3.  Together with the Board Chair, assisted with the process for Board Chair succession;

 

4.  Reviewed the Board Renewal Principles and the application of those Principles considering the average age and tenure of each member of the Board of Directors;

 

5.  Reviewed the Board Tenure Guideline;

 

6.  Recommended to the Board of Directors for approval, Director Nominees for election at Emera’s 2024 Annual Meeting of Shareholders;

 

7.  Recommended to the Board of Directors the appointment of a new Chair of the Board;

 

8.  Recommended to the Board of Directors the selection of Audit Committee financial experts for the purpose of Emera’s Form 40-F filed with the United States Securities and Exchange Commission;

 
(1)

Ms. Sheriff was Chair of the NCGC from May 2024 until Mr. Tilk’s appointment on February 21, 2025.

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   59

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

 

9.  Reviewed all components of non-employee Emera Director compensation and recommended increases to the Director’s annual retainer, the annual retainer of the Chair of the Board and Committee Chair retainers for the MRCC, NCGC and the former RSC and HSEC;

 

10.  Reviewed the annual retainers for non-employee Directors of operating companies and recommended changes that were approved by the Board of Directors;

 

11.  Reviewed and recommended to the Board of Directors for approval disclosure in respect of Director Nominees, Director compensation and the corporate governance practices for Emera’s 2024 Management Information Circular;

 

12.  Reviewed and recommended amendments to the pension oversight framework that were approved by the Board of Directors;

 

13.  Reviewed and recommended amendments to the Board of Directors Charter, which were approved by the Board of Directors;

 

14.  Reviewed the Committee Charters, the Chair of the Board of Directors Charter and the position description for Committee Chairs;

 

15.  Reviewed the Board Diversity Policy;

 

16.  Monitored the Company’s corporate governance practices against relevant best practices at leading corporations;

 

17.  Reviewed the program of Directors and Officers insurance coverage;

 

18.  Reviewed and recommended to the Board of Directors amendments to Emera’s Code of Conduct;

 

19.  Reviewed and recommend an amendment to the Emera’s Director Share Ownership Guideline to clarify the threshold for the Chair of the Board, which was approved by the Board of Directors;

 

20.  In consultation with the Chair of the Board, determined the process for conducting the annual Board and Director performance assessment;

 

21.  Reviewed and recommended to the Board of Directors revisions to the MRCC Committee Charter and the former RSC Charter;

 

22.  Reviewed and recommended amendments to the Disclosure Policy that were considered by the Audit Committee and approved by the Board of Directors; and

 

23.  Reviewed and recommended to the Board of Directors revisions to the NCGC Charter.

 

 
60   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Safety and Risk Committee (“SRC”)(1)     

Ian E. Robertson (Committee Chair)

Kent M. Harvey

Brian J. Porter

Jochen E. Tilk

Carla M. Tully

 

•  Committee Members are 100% independent

 

•  Established in February 2025 to replace the former HSEC and RSC

   

ROLE OF THE SRC

 

The SRC assists the Board in discharging its accountabilities for Company oversight in the specific areas related to (i) preservation of employee and public safety, (ii) identification and mitigation of material risks to the Company and (iii) environmental and sustainability related matters.

 

The SRC oversees the Company’s approach to the preservation of public and employee safety. It does this by receiving and reviewing with management:

 

(a)   The actual performance of the Company and its subsidiaries on safety matters;

 

(b)   The plans, policies and strategies employed by the Company to prioritize and manage safety including: (i) safety performance targets established by management; (ii) safety work plans; (iii) emergency response plans and programs; and (iv) the effectiveness of implementation of safety systems and policies;

 

(c)   The status of Company’s (i) compliance with applicable and proposed legislation, regulations and orders related to safety; and (ii) conformance with applicable management system standards, industry st andards and best practices;

 

(d)   The mitigation strategies set out in the risk management action plans for one or more safety-related risks selected by the Committee, including (i) the approaches being undertaken to ensure strategies are operationalized throughout the organization; and (ii) evidence that the accountabilities across the Company for the preservation of employee and public safety are clear; and

 

(e)   Any (i) incidents respecting the Company’s assets or operations involving: a fatality or a life-threatening injury to a person; any whistleblower events relating to safety matters; (ii) incidents involving personnel and public safety that have the potential to severely and adversely impact the Company’s reputation, financial situation and or business continuity; and (iii) significant regulatory audits, findings, orders, reports and/or recommendations issued by or to the Company related to safety matters or issues.

 

The SRC also oversees the Company’s approach to identifying and mitigating material risks facing the Company. It does this by receiving and reviewing with management:

 

(a)   The Company’s (i) Enterprise Risk Management function, governance and program framework employed to identify, assess, monitor and manage enterprise risk and the approaches being undertaken to ensure key enterprise risks have been identified and strategies are operationalized so that the accountabilities for reducing the impact and/or the likelihood of such material risks are clear; (ii) the Risk Dashboard (including the identified enterprise level risks, heat map control environment assessment); and (iii) Risk Statement;

 

(b)   The Company’s (i) insurance risk transfer program; and (ii) business continuity programs; and

 

(c)   The Company’s (i) cyber security program; and (ii) the Company’s approaches to addressing the impact from artificial intelligence on Company operations.

 

The Committee also oversees the Company’s approach to environmental and sustainability related matters. It does this by receiving and reviewing with management:

 

(a)   The environment and sustainability program framework and policies that the Company employs to monitor, manage and report on environmental compliance and sustainability- related risks and matters;

 
(1)

The SRC was established by the Board, on the recommendation of the NCGC, effective February 21, 2025. It consolidates the previous activities of the HSEC and RSC.

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   61

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

    
 

 

(b)   The Company’s Sustainability Report including any proposed public commitments regarding sustainability by the Company; and

 

(c)   Significant regulatory audits, findings, orders, reports and/or recommendations issued by or to the Company related to environmental matters or issues, together with management’s response thereto.

 

The SRC receives ethics updates under the Company’s Code of Conduct relating to matters within the SRC’s scope of responsibility and reviews activities within that scope under the Company’s Ethics Program. It also receives and recommends to the Board for approval, the Company’s Modern Slavery Act Report.

 

 

ACTIVITIES OF THE SRC (FORMERLY HSEC AND RSC)

 

The SRC was established by the Board effective February 21, 2025. In 2024, matters now within the mandate of the SRC, were within the mandates of either the former HSEC or the RSC. A report on the activities of each of the former HSEC and RSC in 2024 is set out below.

i.   2024 Report of former Health, Safety and Environment Committee (“HSEC”)

 

HSEC Members

(to February 21, 2025):

James V. Bertram (Committee Chair)

Paula Y. Gold-Williams

Kent M. Harvey

B. Lynn Loewen

Carla M. Tully

 

•  HSEC members were 100% Independent

 

•  HSEC met in camera without management at every Committee meeting in 2024

   

The role of the HSEC was to assist the Board in carrying out its responsibilities relating to oversight and coordination of Emera’s health, safety and environmental programs.

 

In 2024, all HSEC members were independent and met in camera without management at every meeting. The HSEC met three (3) times in 2024 and, in line with its then mandate, undertook the following key activities:

 

1.  Reviewed performance on the safety and environmental objectives and measures for the Company’s 2023 incentive compensation Scorecard;

 

2.  Reviewed the safety and environment objectives and measures for the Company’s 2024 incentive compensation Scorecard;

 

3.  Received and reviewed updates on health and wellbeing initiatives within the Company and its affiliates;

 

4.  Reviewed Emera’s Occupational Safety & Health Policy Statement;

 

5.  Received and reviewed reports on the environmental and safety performance of Emera’s businesses;

 

6.  Oversaw Emera’s corporate safety and environmental auditing program;

 

7.  Received reports on the software supporting incident management, risk management, audits and inspections and associated workflows;

 

8.  Received and reviewed regular reports on safety and environmental incidents, including root cause analysis and corrective action plans;

 

9.  Reviewed the Company’s safety and environmental priorities;

 

10.  Received and reviewed an enterprise risk oversight plan;

 

11.  Received a report on environmental release mitigation programs within the Company’s electric utilities;

 

12.  Received and reviewed a report on public safety risk and a public safety information standard for the organization;

 

13.  Reviewed a report on wildfire risk mitigation; and

 

14.  Received reports on Emera’s Ethics program.

 

 
62   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

II. 2024 Report of Former Risk and Sustainability Committee (“RSC”)

 

RSC Members

(to February 21, 2025):

Jochen E. Tilk (Chair)

B. Lynn Loewen

Brian J. Porter

Ian E. Robertson

Karen H. Sheriff

 

•  RSC members were 100% Independent

 

•  RSC met in camera without management at every Committee meeting in 2024

   

The role of the RSC was to assist the Board with the matters relating to risk and sustainability. It oversaw the Company’s risk management framework and allocation of responsibilities for risk management as well as the Company’s approach to sustainability and its performance relative to its sustainability objectives.

 

In 2024, all RSC members were independent and members met in camera without management at every meeting. The RSC held three (3) meetings in 2024 and, in accordance with its then mandate, performed the following key functions:

 

1.  Received and reviewed regular cybersecurity updates;

 

2.  Reviewed Emera’s Risk Management Governance workplan;

 

3.  Received and reviewed the quarterly Risk Dashboard and Heat Map, which captures the major enterprise risks, including primary, mature and evolving risks, as determined by management;

 

4.  Received and reviewed reports on wildfire risk and wildfire risk mitigation;

 

5.  Reviewed and approved Emera’s Risk Statement;

 

6.  Received and reviewed an annual insurance report;

 

7.  Reviewed Emera’s sustainability governance and program framework;

 

8.  Reviewed sustainability reports that capture Emera’s progress on material priorities;

 

9.  Reviewed the compliance program and governance framework to address Emera’s obligations under the Modern Slavery Act;

 

10.  Received and reviewed updated sustainability strategy and progress in relation to the sustainability strategy;

 

11.  Received and reviewed reports on mandatory climate disclosures;

 

12.  Received and reviewed reports on emerging sustainability risks and trends, including climate-related risks and trends;

 

13.  Reviewed an overview of and provided comments on the draft 2023 Emera Sustainability Report; and

 

14.  Received and reviewed report on Bill C-59 – Anti-Greenwashing provisions of the Competition Act.

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   63

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

2.8

Director Compensation

The Board of Directors determines the compensation for the Company’s Directors on the recommendation of the NCGC. The compensation of Directors is designed to:

 

•  

Recognize the substantial time commitments required to oversee management of the Company;

 

•  

Attract and retain highly skilled and experienced individuals to serve on Emera’s Board;

 

•  

Ensure alignment with shareholders’ long-term interests; and

 

•  

Support Directors’ independence from management.

2024 Compensation Rates for Directors

Listed below are the annual compensation rates for non-executive Directors in 2024.

In 2024, the annual retainer for each Director was $275,000, of which $160,000 was payable in DSUs and $115,000 in cash. Subject to Emera’s Share Ownership Guideline (as described later in this Circular), Directors can elect to receive some or all of their cash compensation in the form of additional DSUs. The Company does not offer option-based awards, non-equity incentive plan participation or participation in a Company pension plan to its non-executive Directors.

The Chair’s annual retainer is an all-inclusive fee, meaning the Board Chair receives no meeting fees or any other retainer for serving as Emera’s Board Chair. The all-inclusive annual retainer of the Board Chair in 2024 was $475,000. This was comprised of $237,500 in DSUs and $237,500 in cash.

 

Annual Retainers for Directors in 2024 (1)

    Cash amount
($)		      DSUs
($)		      Total
($)		  

Chair’s retainer

      237,500        237,500        475,000  

Director’s retainer

      115,000        160,000        275,000  

Audit Committee Chair’s retainer

      27,500        N/A        27,500  

Audit Committee member’s retainer

      12,500        N/A        12,500  

Management Resources and Compensation Committee Chair’s retainer

      25,000        N/A        25,000  

Management Resources and Compensation Committee member’s retainer

      10,500        N/A        10,500  

Nominating and Corporate Governance Committee Chair’s retainer

      25,000        N/A        25,000  

Nominating and Corporate Governance Committee member’s retainer

      10,500        N/A        10,500  

Health, Safety and Environment Committee Chair’s retainer

      25,000        N/A        25,000  

Health, Safety and Environment Committee member’s retainer

      10,500        N/A        10,500  

Risk and Sustainability Committee Chair’s retainer

      25,000        N/A        25,000  

Risk and Sustainability Committee member’s retainer

      10,500        N/A        10,500  

 

(1)

Note: The annual retainers for the new Safety and Risk Committee established effective February 21, 2025 are:

 

  i.

Safety and Risk Committee Chair’s retainer – $25,000 (cash); and

 

  ii.

Safety and Risk Committee member’s retainer – $10,500 (cash).

Each Director is entitled to an annual travel allowance of $10,000.

Members of ad hoc committees of the Board receive meeting fees ($1,750 in-person meeting fee; $1,250 videoconference/telephone meeting fee) for their participation in each committee meeting, but typically receive no annual retainer for being a member of an ad hoc committee because of the nature of the committee’s existence, having generally been established for a specific purpose and a temporary period of time. For further information on the Company’s committees, see Committees of the Board of Directors earlier in this Circular.

 

 
64   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Total Director Compensation in 2024

Compensation is made up of applicable retainers and the annual travel allowance of $10,000. The table below details the total compensation paid to Directors in 2024.

Mr. Balfour is not included in the table as his compensation for service as Emera’s President and CEO is disclosed in the Statement of Executive Compensation later in this Circular. He does not receive any additional compensation for his services as a member of the Board of Emera or as a member of the Board of any of Emera’s subsidiaries or investments.

TOTAL DIRECTOR COMPENSATION IN 2024

 

                   Board
Retainer		                                  DSUs held  
  

 

 

  

Director

    Cash fees
earned
($)(1)		      Share-Based
Awards
($)(2)		      All other
compensation
($)		      Total
($)		      Portion of
cash fees
taken in DSUs
(%)		      Total 2024
change in value
of all DSUs held
($)(3)		      Value of DSUs
vested or earned
during 2024
($)(4)		      Market value
of total
DSU holdings
($)(5)		  

James V. Bertram

      320,500        320,500           320,500        100        107,953        406,586        2,141,169  

Henry E. Demone

      320,500        160,000           320,500        0        147,986        282,441        2,630,324  

Paula Y. Gold-Williams (6)

      363,142        363,142           363,142        100        38,429        389,919        1,033,968  

Kent M. Harvey (6)

      383,730        160,000        13,726(6), (7)        397,456        100        89,748        233,257        1,663,913  

B. Lynn Loewen

      318,500        318,500           318,500        100        215,016        495,036        3,913,425  

Brian J. Porter (8)

      245,238        245,238           245,238        100        —         244,522        266,245  

Ian E. Robertson

      308,000        308,000           308,000        100        33,466        331,378        891,481  

Andrea Rosen (9)

      126,885        126,885           126,885        100        357,033        338,140        5,051,827  

M. Jacqueline Sheppard

      485,000        485,000           485,000        100        446,659        851,527        7,941,258  

Karen H. Sheriff

      320,749        320,749           320,749        100        52,352        360,554        1,218,630  

Jochen E. Tilk

      331,000        331,000           331,000        100        100,947        409,589        2,036,368  

Carla M. Tully (6), (8)

      188,251        183,283           188,251        100        —         197,202        202,627  

 

(1)

This column shows the annual cash retainer, committee retainers, travel allowance and ad hoc meeting fees. All fees were paid in Canadian dollars except where noted. Fees paid in U.S. dollars have been converted to Canadian dollars for purposes of this table using the applicable exchange.

(2)

This column shows the grant value of the portion of the annual retainer that is paid in the form of DSUs. DSUs are credited on the last business day of each calendar quarter. The number of DSUs credited to a Director is determined by dividing the dollar amount of the quarterly portion of the fee to be paid in DSUs by the fair market value of a share on the last trading day of the preceding calendar year.

(3)

This column shows the change in value of all DSUs held by each Director at the beginning of the year because of the change to the Emera common share closing price from $50.30 at the beginning of the year to $53.73 on December 31, 2024.

(4)

This column shows the market value, as of the applicable vesting date, of all DSUs that vested in 2024, including DSUs credited as dividend equivalents during the year. DSUs, including dividend equivalents, vest on the date of grant. The number of DSUs credited as dividend equivalents is determined by dividing the amount obtained by multiplying the amount of the dividend declared and paid per share by the number of DSUs recorded in the Director’s account on the record date by the fair market value of a share on the payment date.

(5)

This column shows the market value, as of the applicable vesting date, of all DSUs held by each Director at the end of 2024 based on the December 31, 2024 Emera common share closing price of $53.73.

(6)

As US-domiciled Directors, the annual cash retainer, committee retainers and travel allowance were paid to Ms. Gold-Williams, Mr. Harvey and Ms. Tully, in US dollars, using a one-to-one conversion rate to the Canadian dollar.

(7)

Mr. Harvey also received compensation for serving as a Director of Emera US Holdings Inc. This was paid in US dollars.

(8)

Mr. Porter and Ms. Tully commenced serving as Directors in 2024.

(9)

Ms. Rosen ceased to be a Director of the Company effective May 23, 2024.

The table above includes compensation earned by Emera Directors who served on the Board of Directors of Emera subsidiaries. What follows is more information about Emera’s Directors who served on the Boards of its subsidiaries.

Compensation of Emera Directors on Operating Company Boards

The Emera Board of Directors, on the recommendation of the NCGC, also determines the compensation to be received by Emera Directors who serve on the Boards of Emera’s subsidiaries. Such compensation received by each Emera Director that serves as a Director on the Board of an Emera subsidiary is reported under “All other compensation” and “Total” in the table above-entitled Total Director Compensation in 2024.

Emera US Holdings Inc. is a United States holding company that holds certain United States-based investments of Emera. Non-employee members of the Board of Directors of Emera US Holdings Inc. receive an annual retainer of $10,000 USD for serving on its Board, plus $1,000 USD for any meetings.

Mr. Harvey became a Director of Emera US Holdings Inc. effective May 24, 2024 and received $13,726 in compensation in 2024 for serving on its Board.(1)

 
(1)

Compensation amounts are stated in Canadian dollars.

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   65

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Annual Review

The NCGC annually reviews the compensation of Directors to help ensure it is appropriate. The last review was completed in 2024 with changes made effective January 1, 2024.

The NCGC reviews the compensation practices of publicly traded companies similar in size and complexity to Emera to determine whether the Directors are appropriately compensated for the responsibilities and risks involved in being a member of the Company’s Board. The review is based upon publicly available information concerning Directors’ compensation and the advice of Mercer (Canada) Limited, a third-party compensation consultant.

The NCGC has adopted the 50th percentile as a target for Director compensation and has determined it would be appropriate for Emera to continue to position total compensation of Directors at approximately the median of its peer group, which is the average of the Canadian and United States sub-groups. The peer group used for Director compensation purposes is the same as the benchmarking comparator group used for senior executive compensation purposes and disclosed in the Statement of Executive Compensation later in this Circular.

Director Share Ownership Guideline

Director common share and DSU ownership is viewed by Emera as an important means of enhancing the alignment of Director and shareholder interests. Under Emera’s Director Share Ownership Guideline, each Director must own three times (3x) the total cash and equity-based annual Board retainer in Emera common shares or DSUs, or a combination of the two. New Directors must meet the ownership requirement of the Share Ownership Guideline within three years of joining the Board and are required to take 100 per cent of their compensation in DSUs until they have met the Director Share Ownership Guideline (Directors appointed before November 2021 have five years to meet the guideline). The Chair of the Board must own three times (3x) the total cash and equity-based annual Board Chair retainer in Emera common shares or DSUs, or a combination of the two, within three years of their appointment date as Chair of the Board.

Based on the annual cash ($115,000) and equity-based ($160,000) retainer compensation, each Director must own Emera shares or DSUs, or a combination of the two, worth $825,000. The ownership requirement for the Chair of the Board, based on the Chair’s annual cash ($237,500) and equity-based ($237,500) retainer compensation, is $1,425,000.

The table below shows each Director Nominee’s equity ownership as at December 31, 2024 and their holdings for the previous year, except Mr. Balfour because he is required to meet the share ownership requirements for executive officers (see Executive Share Ownership Requirements and Anti-Hedging Policy in the Statement of Executive Compensation in this Circular). All of Emera’s Director Nominees are in compliance with the Director Share Ownership Guideline.

 

Director Nominee

    Total
common
shares		      Total DSUs      Value at
December 31, 2024(1)		      Multiple of 2024
annual retainer		      Share Ownership
Requirement(2)		      Year to meet
share ownership
requirement		  

Scott C. Balfour (3)

      115,454        162,696        14,944,981        —         —         —   

James V. Bertram

      14,170        39,850        2,902,523        10.5        3x        Achieved  

Henry E. Demone

      10,864        48,954        3,214,046        11.6        3x        Achieved  

Paula Y. Gold-Williams

      Nil        19,243        1,033,968        3.7        3x        Achieved  

Kent M. Harvey

      Nil        30,968        1,663,913        6.0        3x        Achieved  

B. Lynn Loewen

      4,490        72,875        4,156,859        15.1        3x        Achieved  

Brian J. Porter

      15,000        4,955        1,072,194        3.8        3x        Achieved  

Ian E. Robertson

      32,600        16,592        2,643,078        9.6        3x        Achieved  

M. Jacqueline Sheppard

      11,947        147,799        8,583,170        18.0        3x        Achieved  

Karen H. Sheriff (Chair) (4)

      3,000        22,681        1,379,819        2.9        3x        February 2028  

Jochen E. Tilk

      Nil        37,900        2,036,368        7.4        3x        Achieved  

Carla M. Tully

      13,000        3,771        901,116        3.2        3x        Achieved  

 

(1)

The payout or market value of common shares/DSUs is based on the Emera common share closing price of $53.73 as of December 31, 2024.

(2)

Under Emera’s Director Share Ownership Guideline, a Director must own three times the total cash and equity-based annual Director retainer in Emera common shares or DSUs, or a combination of the two. The Chair of the Board must own three times the total cash and equity-based annual Board Chair retainer in Emera common shares or DSUs, or a combination of the two, within three years of their appointment date as Chair of the Board.

(3)

Mr. Balfour is subject to the share ownership requirements for executive officers (see Executive Share Ownership Requirements and Anti-Hedging Policy in the Statement of Executive Compensation in this Circular).

(4)

Ms. Sheriff was appointed Chair of the Board effective February 21, 2025. She owns shares and DSUs valued at over 5x the Annual Director retainer and 2.9x the value of the Chair’s Annual retainer. She has until February 2028 to meet the threshold for the Chair of the Board. She takes 100 per cent of her compensation in DSUs.

 

 
66   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Directors Are Increasing Their Share/DSU Ownership Over Time

By virtue of the compensation payable in DSUs, more than 58 per cent of the annual retainer for Emera Directors will be paid in DSUs, which mirrors the value of Emera common shares. The Directors increase their DSU ownership by at least $160,000 per annum. Most of the Director Nominees have elected to receive DSUs in lieu of the cash component of the compensation they would otherwise be entitled to as Emera Directors.

Directors’ DSU Plan

Under the Directors’ Deferred Share Unit and Share Purchase Plan (the “Directors’ DSU Plan”), non-employee Directors may elect to receive all or any portion of their cash compensation in DSUs in lieu of that cash compensation, subject to the requirement to receive a minimum portion of their annual retainer in DSUs and subject to the Emera Director Share Ownership Guideline.

Directors’ fees are paid on a quarterly basis, at which time, the applicable amount is converted to DSUs. The number of DSUs to be credited is determined by dividing: (a) the quarterly portion of the Director’s annual fee that the Director is required to receive in DSUs, together with the portion the Director elected to be paid in DSUs by (b) the fair market value of an Emera common share on the last trading day of the preceding calendar year, with fractions computed to three decimal places.

A DSU is a unit that has a value based upon the value of one Emera common share. When a dividend is paid on Emera’s common shares, the Director’s DSU account is credited with additional DSUs computed by dividing: (a) the amount obtained by multiplying the amount of the dividend declared and paid per common share by the number of DSUs recorded in the Director’s account on the record date for the payment of such dividend by (b) the market price of a common share as of the dividend payment date.

To further encourage Directors to acquire Emera shares, the Directors’ DSU Plan was amended in September 2022 to provide them with the opportunity to elect to receive market-purchased shares. Under the Directors’ DSU Plan, Directors may elect in advance to receive DSUs, common shares of Emera, or a combination of DSUs and shares, in lieu of their cash compensation. Any portion of a Director’s fees that the Director elects to receive in the form of shares would not be deferred compensation (as is the case when a Director receives fees in the form of DSUs) and, therefore, would be subject to applicable income tax withholdings. Thus, compensation net of tax withholdings would be used to purchase shares. Under the Directors’ DSU Plan, Directors may request that Company shares acquired on their behalf be (i) sold or (ii) withdrawn from the revised Directors’ DSU Plan and delivered in accordance with such Director’s instructions. Absent special instructions, the custodian would hold the shares in an account maintained by the custodian for the benefit of the Director. Any dividends earned on such shares would be automatically reinvested in shares acquired on the market and credited to the Director’s account.

 

2.9

Additional Information

Additional information relating to the Company may be found on the System for Electronic Data Analysis and Retrieval (“SEDAR+”) at www.sedarplus.com. The Company’s financial information is contained in its comparative financial statements and management’s discussion and analysis for the financial year ended December 31, 2024.

Documents and websites referenced herein are not incorporated by reference into this Circular unless the incorporation by reference is explicit. References to our website address in this Circular are intended to be inactive textual references only.

For copies of the Company’s financial statements and management’s discussion and analysis, you may also contact the Office of the Corporate Secretary at:

Corporate Secretary

P.O. Box 910, Halifax, Nova Scotia B3J 2W5

Telephone: 902-428-6996;

Facsimile: 902-428-6171;

Email: Brian.Curry@emera.com.

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   67

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

3. Executive Compensation

Emera’s approach to executive compensation is supported by strong governance and robust risk management, and designed to achieve results, drive growth and deliver value to customers and shareholders. Recruiting and retaining top talent is fundamental to Emera’s success.

In This Section

 

 

3.1 Message from the Management Resources and Compensation Committee to Our Shareholders

      69  

3.2 Compensation Discussion and Analysis

      70  

3.3 Performance Graph

      95  

3.4 NEO Summary Compensation Table

      97  

 

 
68   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

3.1

Message from the Management Resources and Compensation Committee to Our Shareholders

Dear Shareholder,

In 2024, the Emera team made significant progress in advancing the corporate strategy through the execution of key transactions, including the sale of Emera’s equity interest in the Labrador-Island Link (“Sale of LIL”) and the pending sale of New Mexico Gas Company, further strengthening our balance sheet to enable value creation for shareholders.

All aspects of Emera’s compensation programs, including executive compensation, are overseen by the Management Resources and Compensation Committee of the Board (the “Committee” or “MRCC”). In this Circular, we are pleased to provide an overview of our approach to executive compensation, the Board’s assessment of Emera’s 2024 performance and our decisions relating to executive compensation.

Emera’s approach to executive compensation is designed to align pay with performance. We do this by ensuring a significant portion of the compensation paid to executives is directly linked to the achievement of corporate objectives and share price performance. Additionally, our share ownership guidelines require our executives to hold significant equity (or equity equivalent) in Emera. The MRCC carefully assesses performance measures and targets to ensure they reflect Emera’s values and strategic priorities and recommends changes to the Board as appropriate. The targets must be achieved within the principles of prudent risk management, good corporate governance and compliance with relevant regulations. Guided by these principles, along with input from other members of the Board and independent consultants, the MRCC oversees the establishment of Emera’s performance goals, which are based on Board-approved financial objectives and budgets. The MRCC also assesses Emera’s executive compensation programs, including short- and long-term incentive payouts for the executive team.

2024 Compensation

Our compensation philosophy is guided by the median level of compensation paid by our peer group, which is made up of companies of a similar size and scope as Emera. In addition to market competitive data, the Committee considers experience, uniqueness of responsibilities and performance of the Named Executive Officers (“NEOs”) in setting the level of target compensation.

At the end of 2023, the Committee reviewed benchmarking analyses from both Hugessen Consulting Inc. (“Hugessen”), the Board’s independent compensation advisor, and Mercer (Canada) Limited (“Mercer”), management’s external compensation advisor, using the Company’s peer comparator group.

Based on the comparative positioning of Emera’s target compensation to market, the Committee is satisfied that our NEOs are compensated competitively and in alignment with our compensation philosophy. The Committee will continue to monitor market trends to maintain our competitive positioning and our ability to attract the skills and talent required to effectively operate our assets and deliver on our strategy.

The Committee also conducted its annual assessment to identify potential risks associated with Emera’s compensation design and policies. The assessment concluded that there are no material risks associated with Emera’s compensation programs and the Company has an appropriate system of checks and balances to mitigate the level of risk undertaken by management.

Recognizing Emera’s performance against objectives established for the 2024 Emera Corporate Scorecard, the Board approved an annual Short-term Incentive Plan (“STIP”) payout of 122.4 per cent of target for the NEOs, which was slightly higher than the Company’s five-year average of 117.5 per cent. A full description of the 2024 Scorecard metrics and results is provided in 2024 Short-Term Incentive Results on page 82.

Our 2024 Long-term Incentive Program (“LTIP), which consisted of performance share units (“PSUs”), restricted share units (“RSUs”) and stock options, is also closely aligned with our performance objectives. PSUs are linked to performance metrics that are measured over a three-year period. The 2022 PSU grant, which had a performance period from January 1, 2022 to December 31, 2024, measured Emera’s growth in adjusted earnings per share for compensation purposes (“compensation EPS” (1)) and Emera’s total shareholder return (“TSR”) relative to a custom Canadian peer group. Both compensation EPS growth and Emera’s TSR performance fell below target level, which resulted in a performance factor of 51.4 per cent, a decrease compared to our five-year average of 105 per cent. A full description of the 2022 PSU grant result is provided on page 89.

 
(1)

Compensation EPS is a non-GAAP measure and does not have standardized meaning under United States Generally Accepted Accounting Principles (“USGAAP” or “GAAP”). A reconciliation of this non-GAAP measure to the nearest GAAP measure is discussed on page 90.

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   69

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

The Committee engaged Hugessen to conduct the annual pay-for-performance analysis of the compensation paid to the President and CEO. The analysis included both realized pay (consisting of amounts paid) and realizable pay (consisting of the value of any outstanding equity-based awards) from 2020 to 2024. The analysis concluded there was appropriate alignment between the President and CEO’s realized/realizable pay and shareholders’ return on investment experience over the long term. Please see Total Shareholder Return and President and CEO Compensation on page 95 for more information on the analysis.

Based on Emera’s performance in 2024 and the impact of that performance on the compensation paid to our executives, we remain confident that our incentive plans and resulting payouts are closely aligned with the interests of our shareholders.

Shareholder Feedback

At our 2024 Annual Meeting, we held our annual “Say on Pay” advisory vote allowing shareholders to indicate whether they agree with Emera’s compensation practices and policies. We are pleased that shareholders voted 95.12 per cent in favour of our approach to executive compensation. At this year’s Annual Meeting, we will again be presenting a “Say on Pay” non-binding advisory resolution. As part of our continued commitment to shareholder engagement, it is important for us to receive direct feedback from our shareholders and to have constructive dialogue about our compensation decisions and other governance matters. We encourage you to read the compensation discussion and analysis before you vote your shares. Please find the details on how to contact the Chair of the Committee or the Chair of the Board at the address listed on page 54.

 

3.2

Compensation Discussion and Analysis

Named Executive Officers for 2024

The NEOs disclosed in this Compensation Discussion and Analysis include the President and Chief Executive Officer (“CEO”), the Chief Financial Officer (“CFO”) and the next three highest-compensated executive officers of the Company or its subsidiaries, as defined by Canadian securities legislation.

Scott Balfour

 

    

President and CEO, Emera Inc.

LOGO    Mr. Balfour became President and CEO of Emera in 2018, after joining as CFO in 2012 and COO in 2016. He played a key role in the $10.4B acquisition of TECO Energy in 2016. Since assuming the CEO position, Emera’s TSR has grown at an annualized rate of 9.5%.(1) Under his leadership, Emera focuses on providing reliable, affordable and cleaner energy. Mr. Balfour was named CEO of the Year in 2021 by Atlantic Business Magazine. Prior to Emera, he led Aecon Group’s growth from $60 million to $2.8 billion. He serves as a director of several Emera companies, including Tampa Electric, and is a board member of the Edison Electric Institute and the Business Council of Canada. He holds a BBA from Wilfrid Laurier University and an MBA from the University of Western Ontario.
 
(1)

Measured from March 29, 2018 to December 31, 2024.

 

 
70   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Greg Blunden   
    

CFO, Emera Inc.

LOGO    Mr. Blunden became CFO of Emera Inc. in March 2016, after joining in 2000. He has held various leadership roles at Emera, Emera Maine and Nova Scotia Power, with expertise in finance, business development, utility operations and regulatory policy. He previously served as Vice President of Corporate Strategy & Planning at Emera and EVP at Nova Scotia Power. Mr. Blunden is a Mount Allison University graduate and a Fellow Chartered Professional Accountant (FCPA), awarded in 2019. In March 2025, Emera announced a CFO transition plan and further announced that Mr. Blunden would be taking on the new role of Executive Vice President, Finance, Emera USA, assuming Finance leadership responsibility for both Tampa Electric and Peoples Gas. Mr. Blunden will remain as the Emera CFO until a successor is appointed.
Archie Collins   
    

President and Chief Executive Officer, Tampa Electric

LOGO    Mr. Collins became President and CEO of Tampa Electric in May 2021. He started his career in 1990 with Nova Scotia Power and has held senior roles at NSP, Emera Energy, Emera Caribbean, and Tampa Electric. He is a chemical engineer with degrees from St. Francis Xavier University and Dalhousie University. Mr. Collins serves on several boards, including the Florida Chamber of Commerce, Florida State Fair, Tampa Bay Economic Development Committee (serves as vice-chair), and the Association of Edison Illuminating Companies and is a member of the Florida Council of 100.
Karen Hutt   
    

Executive Vice President, Business Development and Strategy, Emera Inc.

LOGO    Ms. Hutt leads Emera’s business development and strategy and oversees Corporate Affairs. She joined in 2021 after serving as President and CEO of Nova Scotia Power (2016–2019) and VP of Mergers and Acquisitions, where she helped execute the TECO Energy deal. Ms. Hutt has also been Executive VP at Emera Energy and President of Northeast Wind. Active in the community, she serves on the Acadia Board of Governors and has held leadership roles at the IWK Health Centre and Junior Achievement of Nova Scotia. She holds degrees from Acadia University and Mount Saint Vincent University and an ICD.D designation. In 2025, Ms. Hutt’s title has been changed to Chief Strategy and Growth Officer.
Dan Muldoon   
    

Executive Vice President, Project Development and Operations Support, Emera Inc.

LOGO    Mr. Muldoon leads project development and operational support across all Emera operating companies. He has been with Emera for over 35 years, holding several senior engineering and executive management roles such as EVP, Major Renewable and Alternative Energy, and President and COO of Emera Utility Services. In the past, he has served on the executive committee for Cigre Canada and the Canadian Electricity Association’s Transmission and Distribution Councils, and most recently served as a director with the Canadian Ocean Supercluster (OSC) where he chaired their Governance and HR sub-committees. Mr. Muldoon holds a bachelor’s degree in electrical engineering from the Technical University of Nova Scotia (Dalhousie University).

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   71

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Compensation Principles

Emera’s approach to executive compensation is designed to achieve results, drive growth and deliver value to customers and shareholders. We are committed to the following key principles:

 

Align executives’ financial interests

with Emera’s strategic goals and the

interests

of shareholders, customers and stakeholders.

   

Pay competitively with

our North American peers.

  

Balance short- and long-term incentive plans that reflect our pay-for-performance philosophy.

Reward Emera’s executives for

sustained growth in shareholder value.

Manage risk through good governance.

Market Competitiveness

Emera benchmarks executive compensation to ensure the Company pays competitively in the markets where it operates and to motivate, attract and retain high-quality talent. Emera’s executive compensation program is designed to generally provide total target compensation at the median of compensation paid by comparable companies whose operations are of a similar size and scope as Emera. Pay positioning, in some specific cases, may be above or below the median based on experience, uniqueness of responsibilities, performance, succession planning and affordability. Total target compensation for senior management, including the NEOs, is comprised of base salary, target short-term incentive and target long-term incentives linked to creating shareholder value.

Compensation Program

Emera’s compensation program includes the following components:

 

Annual   

Annual Base Salary

(Page 82)

   

Salaries are benchmarked against companies of similar size and scope as Emera or the respective affiliate and are set to reflect the degree of special skills and knowledge required now and in the future for the position and the performance and contribution of the individual.

 

  

Annual Short-term Incentive

(Page 82)

   

Short-term incentive objectives are set forth in scorecards and consist of key annual objectives linked to the Company’s corporate strategy. These scorecards establish measurable financial, organizational, environmental, people and governance objectives including safety that, if achieved, add value to the Company.

 

Long-term   

PSUs

(Page 88)

   

An equity-based incentive tied to performance criteria measured over a three-year period. PSUs vest at the end of the three-year performance period and payout in cash, with payment contingent on meeting the performance targets.

 

  

RSUs

(Page 91)

   

An equity-based incentive that creates further alignment with the shareholder experience. RSUs vest at the end of the three-year vesting period and payout in cash.

 

  

Stock Options

(Page 91)

   

Stock options encourage performance with a long-term focus, driving shareholder value.

 

Other Benefits   

Pension Plan

(Page 99)

   

The Pension Plan consists of either defined benefit or defined contribution components and a supplemental employee retirement plan, all of which are governed by a pension oversight governance framework.

 

  

Employee Common Share Purchase Plan (ECSPP)

(Page 102)

 

   

The ECSPP encourages share ownership and further links our employees to the success of the Company.

 

  

Perquisites

(Page 93)

    The Company offers market competitive non-compensation components such as group benefits and an annual executive medical.

 

 
72   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Pay-for-Performance Philosophy

A core principle of Emera’s executive compensation philosophy is that a significant portion of executive compensation is at risk and linked to share price performance and the achievement of performance objectives that measure whether shareholders are receiving appropriate return for their investment. The at-risk components include both short- and long-term incentives, which establish measurable financial, organizational, climate, environmental, safety and people measures that, if achieved, add value to the Company.

The incentive compensation plans are structured to reward higher payments for exceptional performance and lower payments if target performance is not met. Emera must reach a minimum performance threshold to make any payment toward a specific objective; otherwise, no payment will be made. The performance of the President and CEO is evaluated by the Board Chair, in collaboration with the MRCC and the full Board. The President and CEO assesses the performance of other executives against set objectives and provides a recommendation to the MRCC, which then discusses the evaluations with the Board of Directors for final approval.

Generally, the at-risk compensation component of total compensation increases in conjunction with the individual executive’s level of responsibility. The Company considers many factors when developing the incentive plans, including current compensation trends, plan costs (including maximum payout values), expected value to be delivered to participants and analysis of threshold, target and stretch payouts. Both short- and long-term incentive plans are modelled using historical and prospective performance scenarios. This stress testing provides the MRCC and the Board with reasonable assurance that the plan payouts will be appropriately aligned with shareholder and Company objectives. The Company conducts analyses every year to determine how actual payouts compare to expected payouts and whether the plan components and design remain appropriate or require any changes.

The MRCC and Board reserve the right to exercise discretion in adjusting compensation payouts up or down to align with Company results, which may include refraining from paying out any amounts under the incentive compensation plans where circumstances warrant.

The MRCC has previously approved a set of guiding principles to govern when discretion is applied to ensure consistency and fairness when adjustments are made to incentive compensation. These guidelines are detailed on page 84.

Management Resources and Compensation Committee

The Board has assigned responsibility to the MRCC to review, recommend and oversee the determination of the compensation for Emera’s executive officers and the administration of all the Company’s executive compensation plans and programs. Effective February 21, 2025, the current members of the MRCC are:

 

  •  

Henry E. Demone (Committee Chair)

 

  •  

James V. Bertram

 

  •  

Paula Y. Gold-Williams

 

  •  

Brian J. Porter

 

  •  

Jochen E. Tilk

All members of the MRCC are independent Directors. Each member of the MRCC has experience with human resources issues and compensation matters. More detailed information on each member’s qualifications and experience is contained in the section entitled Director Nominees earlier in this Circular.

The MRCC considers best practices in determining and monitoring executive compensation as discussed in this Circular. We are guided by the following key practices, which we believe promote good governance and serve the interests of our shareholders.

Align the Company’s compensation programs with its strategy, using performance metrics that support short- and long-term goals.

Align executive pay with shareholders’ interests by having a significant component at risk, tied to both short- and long-term performance.

Provide a significant portion of compensation through long-term incentives for the majority of the senior executives and for other employees whose actions may have a material impact on the Company’s risk profile to discourage the taking of short-term or excessive risks.

Do not provide for the payment of dividends on unvested share awards.

Conduct pay equity analyses to help ensure the Company’s hiring and pay practices promote equity.

Convert USD earnings to CAD using a budgeted exchange rate to prevent foreign exchange fluctuations from impacting performance measurement against targets.

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   73

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Monitor the ratio of the Company’s CEOs’ total compensation to the median employees’ total compensation.

Disclose a lookback table showing how much the President and CEO has received in compensation over the past five years.

Perform an annual risk assessment to identify risks associated with our pay structure.

Retain an independent compensation advisor for the MRCC that does not provide any services directly to management.

Permit payout reductions or withholdings and performance thresholds in short-term and equity-based incentives for underperforming results, at the MRCC and Board’s discretion.

Provide shareholders with the opportunity to vote on a “Say on Pay” resolution at the Company’s Annual Meeting.

Use double-trigger change of control agreements.

Apply anti-hedging and anti-monetizing policies to directors and officers.

Test compensation awards for appropriate alignment between pay and performance under several different outcome scenarios.

Annually review the ongoing appropriateness of the Company’s comparator group for compensation benchmarking purposes.

Do not compensate Emera’s executives for holding Board seats at operating companies.

Prohibit the repricing or backdating of stock options.

Have significant share ownership requirements for NEOs.

Impose a one-year post-retirement hold period and count only vested DSUs and shares held by the executive toward share ownership requirements.

Have a pension oversight governance framework in place for pension benefits.

Have a clawback policy that allows the Company to recoup short- and long-term incentive payments made to senior executives in cases where: (a) the payments were based on reported financial results that were subsequently corrected or restated as a result (or partial result) of the executive’s gross negligence, misconduct or fraud and the reward received would have been lower had the financial results been properly reported; or (b) the executive commits a serious breach of the Company’s Code of Conduct.

Provide guidance and oversee the Company’s extensive succession planning program.

MRCC Governance

The MRCC is responsible for reviewing the alignment of Emera’s compensation programs, including incentive pay programs, with Emera’s strategic plans, performance and risk management principles. The Committee annually reviews compensation for the President and CEO and senior management of the Company. The MRCC oversees the administration of the incentive plans providing for the award of short- term incentives, stock options, PSUs, RSUs and DSUs in accordance with the provisions of the respective plans.

The Committee reviews, and recommends to the Board of Directors, compensation policies and processes, any new incentive plan and the equity compensation plans and any changes to such plans.

The Board Chair specifically discusses the President and CEO’s performance with each Director individually, and as a group, and provides feedback to the MRCC, the Board and the President and CEO on at least an annual basis. In addition, the CEO reports, and the Committee reviews, the progress toward annual objectives at every Board meeting.

Risk Management and Compensation

As part of the Board and MRCC’s oversight responsibilities for the design and administration of Emera’s executive compensation programs, the MRCC identifies and discusses design features or processes that may potentially represent conflicts of interest or inducements for unnecessary or excessive risk-taking by senior executives.

 

 
74   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

The MRCC also regularly monitors industry trends with respect to risk management and conducts an annual risk assessment in consultation with an external compensation consultant. Emera’s compensation programs and policies are designed to incorporate the Company’s view on appropriate risk, as demonstrated by the elements shown below, which are discussed in greater detail in the sections that follow:

The Company regularly reviews its executive compensation programs with third-party compensation advisors to confirm the programs continue to align with shareholder and stakeholder interests, comply with regulatory requirements and are consistent with sound principles of risk management and governance. The MRCC retains an independent compensation advisor that does not provide any services directly to management.

The Company has a pay-for-performance philosophy and the mix of short- and long-term programs assists in mitigating excessive risk-taking.

Vesting requirements, stress testing of potential payouts, clawback provisions, an anti-hedging policy and share ownership requirements are part of the Company’s overall plan design to mitigate risk. For more information, please see the Executive Share Ownership Requirements and Anti-Hedging Policy section on page 94.

The Company’s compensation governance structure involves the Board, the MRCC, the MRCC’s external compensation advisor, management and management’s external compensation advisors.

All members of the MRCC have the necessary background and expertise in human resources issues and compensation matters to fulfil their obligations to the Board and to shareholders.

In 2024, management engaged Mercer to assist in the annual compensation risk assessment, which confirmed that Emera’s compensation practices align with market best practices and pose no material risks. The MRCC found that compensation is well-balanced, with appropriate checks in place to mitigate risks, such as performance-based incentives, share ownership requirements and clawback policies. Additionally, the use of multiple performance measures, capped payouts and retention-focused vesting conditions help align executive interests with those of shareholders. Based on these findings, the MRCC concluded that Emera’s compensation programs effectively manage risk and will continue to review their alignment with shareholder interests.

Succession Planning and Leadership Development

At Emera, succession planning is a dynamic, ongoing process of identifying, assessing and developing leadership competencies and business skills. The purpose is to confirm the Company’s capacity to meet future strategic objectives and to replenish critical organizational roles over time.

The MRCC supports the Board in succession planning for the President and CEO and oversees senior management succession for the Company and its subsidiaries, with the Board responsible for approving officer appointments. As part of Emera’s comprehensive succession planning, management and the MRCC annually review detailed succession and development plans, including potential candidates for CEO and senior management positions across the Company and its operating companies. The Committee oversees the process, assessing senior leadership across all subsidiaries to leverage Emera’s full talent pool. The Board receives progress updates from the CEO at each meeting during the in-camera session, and the Chair holds annual discussions with each Board member. External candidates are also considered when filling executive roles.

As part of Emera’s comprehensive succession planning process, management and the MRCC review, on an annual basis, the detailed management succession and development plans and potential candidates for CEO and senior management positions throughout the Company and its operating companies. The Committee oversees the management succession planning process and developmental strategy, which includes assessments of the senior leadership at all operating companies to leverage the entire talent pool across Emera. The Board receives a related progress report from the CEO at every Board meeting during the in-camera session. In addition, the process also involves an annual discussion between the Chair and every member of the Board. The Company also considers external candidates when filling executive roles.

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   75

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

The succession planning process includes the identification of successors for all executive roles on a temporary or urgent basis in the event of an unexpected vacancy. This helps to ensure that any impact on the Company’s operations is minimized until such time that a permanent successor is in place.

Emera is committed to developing leaders at all levels and has a comprehensive annual assessment process and framework to coordinate leadership development across the Company. This assessment process identifies areas of development for individuals and the leadership team related to identified core leadership capabilities. Personal development plans and overall Company leadership development programs are in place for both existing and potential leaders. The Company focuses on ensuring challenging work assignments are offered, secondments to operating companies are made where appropriate, regular leadership development training occurs and mentors are assigned, where beneficial.

Emera will continue these focused efforts to build leadership capacity throughout the organization in support of its long-term growth strategy.

Compensation Advisors

The MRCC retains the services of independent compensation advisors to assist in discharging its duties, including determining the compensation payable to the President and CEO and other senior officers.

Since 2007, the MRCC has engaged Hugessen as its principal advisor to provide independent advice, compensation analysis and other information for compensation recommendations. Hugessen provides advice on the competitiveness and appropriateness of compensation practices and comparator groups for Emera. In addition, Hugessen advises the MRCC on policy recommendations made by management and reviews and provides commentary on the Company’s Statement of Executive Compensation. As independent advisors to the MRCC, Hugessen does not provide any professional services to management.

The MRCC:

 

  •  

Annually reviews the advisor’s performance and fees.

 

  •  

With input from Company management and the advisor, annually, or as needed, determines the specific work the advisor is to undertake and the fees associated with this work.

 

  •  

Prior to undertaking any work, ensures the advisor provides an outline of the scope of work and related fees, and the MRCC Chair must provide written pre-approval.

 

  •  

Does not approve any work that, in its view, could compromise the advisor’s independence in serving the MRCC.

In addition to the MRCC’s compensation advisor, management engaged the services of Mercer and TELUS Health in 2024 to assist in executive compensation matters.

In making its decisions on the compensation program, the MRCC reviews information and recommendations provided by Hugessen, Mercer and TELUS Health, but all decisions remain the responsibility of the MRCC and the Board.

The table below summarizes the fees paid to all external compensation advisors in 2023 and 2024.

 

Advisor

    2024      2023  
   Executive
Compensation-
Related Fees ($)		      All Other Fees ($)      Executive
Compensation-
Related Fees ($)		      All Other Fees ($)  

Hugessen Consulting Inc. (1)

      273,202        Nil        143,193        Nil  

TELUS Health (2)

      Nil        98,974        Nil        109,102  

Mercer (Canada) Limited (3)

      3,468        137,754        38,131        212,876  

 

(1)

The increase in Hugessen Consulting Inc.’s fees was largely driven by a detailed review in 2024 of Emera’s executive compensation benchmarking peer group.

(2)

TELUS Health provides actuarial services for the Company’s registered and supplemental pension plans and provides support to management with the drafting of the Pension Plan Benefits section of this circular as well as the Black-Scholes calculation used to value stock options granted under the Stock Option Plan.

(3)

Mercer (Canada) Limited was retained by the Nominating and Corporate Governance Committee in 2024 and 2023 to review Directors’ compensation; the fees for that review are included in the amounts shown.

 

 
76   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Compensation Process

BENCHMARKING DATA

The MRCC is responsible for annually reviewing the composition and use of comparator groups to assist in determining the compensation recommendations for the Company’s senior officers, including the President and CEO and other NEOs. The recommendations are then brought to the Board for approval. The MRCC undertakes periodic reviews of compensation design and total compensation opportunities for the senior management team, which helps ensure the programs are current and that they are fair comparisons for particular roles, recognizing varying responsibility and scope of executive positions within Emera and its operating companies.

Emera management engages the services of Mercer to compile market information on senior management compensation relating to base salary and short- and long-term incentives. The MRCC also uses its independent compensation advisor, Hugessen, to assist in providing benchmarking data and advice when setting executive compensation levels and making changes to the Company’s compensation programs.

A complete benchmarking review takes place annually, and the scope of services includes competitive market studies of senior executive compensation levels, review and observations of current executive compensation philosophy, policies and practices, and a review of pay and performance comparators. A review of the Company’s benchmarking peer group was completed at the end of 2023 and no changes were made at that time.

The Company’s comparator group for senior executives consists of two subgroups: (1) a Canadian group of companies in the Canadian energy, utility and general industry sectors; and (2) a United States (“US”) group of US energy and utility companies. It consists of the following companies:

 

BENCHMARKING PEER GROUP MIX

   

Canadian comparators

   

US comparators

LOGO   

Energy & Utility Industry

Algonquin Power & Utilities Corp.

AltaGas Ltd.

ATCO Ltd.

Fortis Inc.

Hydro One Ltd.

Keyera Corp.

Northland Power

Pembina Pipeline Corp.

TC Energy Corp.

TransAlta Corp.

 

General Industry

Air Canada

Canadian Pacific Railway

Canadian Tire Corp. Ltd.

Loblaw Companies Ltd.

Nutrien Ltd.

Restaurant Brands International LP Rogers Communications Inc.

TELUS Corp.

   

Energy & Utility Industry

Alliant Energy Corp.

Ameren Corp.

Atmos Energy Corp.

Avangrid Inc.

Black Hills Corporation

CenterPoint Energy, Inc.

CMS Energy Corp.

DTE Energy Company

Evergy, Inc.

Eversource Energy

NiSource Inc.

OGE Energy Corp.

Pinnacle West Capital Corp.

Sempra Energy

UGI Corp.

WEC Energy Group, Inc.

The inclusion of US companies reflects that approximately 77 per cent of Emera’s assets are US-based and approximately 65 per cent of Emera’s revenues came from US operations in 2024. It also recognizes the talent market for the executive team and that most of Emera’s executives have significant oversight over US operations. While the benchmarking group assists in determining the appropriate compensation ranges for base salaries, target short-term incentives and target long-term incentives for the senior executive team, the Committee does not believe in a “one size fits all” approach and looks at the circumstances of each executive when determining whether to benchmark using the full comparator group or whether a different approach is warranted. The Committee considers the corporate and geographical scope of each executive’s responsibilities when setting benchmark comparator groups. When benchmarking executives who are paid in Canadian dollars against roles that are paid in US dollars, the Company uses the five-year average exchange rate between Canada and the US to smooth out the impact of currency fluctuations.

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   77

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

The following chart shows where Emera was positioned compared to the companies in both the Canadian and the US comparator groups based on selected key financial metrics – market capitalization, total enterprise value, assets, revenues and earnings before interest, taxes, depreciation and amortization (“EBITDA”).

EMERA VS. PAY BENCHMARKING COMPARATOR GROUPS

 

LOGO

 
(1)

As at date of analysis, February 22, 2024.

(2)

Last twelve months at December 31, 2023.

Note:

The above table was prepared by Hugessen Consulting Inc. using data from S&P Capital IQ.

In addition to using publicly disclosed compensation data from the companies in the comparator group, for additional comfort, the MRCC also considers executive compensation data from energy and services companies with similar revenues to Emera in Mercer’s Total Compensation Survey for the Energy Sector. In some cases, the MRCC may consider executive compensation data from general industry companies of similar size to Emera in Mercer’s Benchmark Database Survey.

With the assistance of Hugessen and Mercer, the Committee conducted a compensation benchmarking review of the executive team at the end of 2023 to set 2024 pay using the comparator group and survey data and undertook a review of the competitiveness and appropriateness of Emera’s compensation programs. More details on the results of the review are provided in the next section.

 

 
78   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Annual Compensation Review Process

 

Establish Compensation
Ranges

   

Performance Assessment by
the President and CEO

   

Recommendation for
Target Compensation

   

Board Evaluation of
President

and CEO

   

MRCC

Recommendations

Each executive position has a range for base salary, target short-term incentive and target long-term incentive established annually by using benchmarking data and other information on industry trends for similar positions in terms of scope and responsibility.   

The President and CEO conducts an annual performance assessment of each executive leader, including the NEOs.

 

The performance assessments help shape the recommendations for annual salary adjustments.

    Based on the performance assessments and benchmarking data, the President and CEO recommends the total target compensation for each senior leader, excluding themselves, to the MRCC for review and approval.   

The Board conducts an annual performance assessment of the President and CEO.

 

In consultation with Hugessen, the MRCC reviews benchmarking data and industry trends for positions similar in scope to that of the President and CEO.

    The MRCC makes recommendations for total target compensation for the senior management team, including the President and CEO and other NEOs, to the Board of Directors.

As part of the annual compensation review process, the MRCC reviews emerging best practices and risk considerations.

2024 COMPENSATION DECISIONS

At the end of 2023, both the Committee’s compensation advisor, Hugessen, and management’s compensation advisor, Mercer, provided the results of their benchmarking reviews, which assisted in setting the compensation levels for the NEOs for 2024 as described below.

Scott Balfour

President and CEO, Emera Inc.

 

     2024
Compensation Mix		     2023
Compensation Mix		     Year-Over-Year
Change		  

Base Salary

    $ 1,189,650     $ 1,133,000       5 % 

STIP Target

      100 %      100 %      0 % 

LTIP Target

      515 %      515 %      0 % 
  

 

 

    

 

 

    

 

 

  

Total Direct Compensation

    $ 8,505,998     $ 8,100,950       5 % 
  

 

 

    

 

 

    

 

 

  

2024 At-Risk Compensation

 

LOGO

Mr. Balfour received a 5 per cent increase to base salary, resulting in a 2024 total target compensation of $8.5 million. In keeping with the Company’s pay-for-performance approach, 86 per cent of Mr. Balfour’s compensation is allocated to his short- and long-term incentive targets, closely linking his compensation to the achievement of key objectives that advance Emera’s corporate strategy and performance metrics that measure long-term shareholder value.

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   79

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Greg Blunden

CFO, Emera Inc.

 

     2024
Compensation Mix		     2023
Compensation Mix		     Year-Over-Year
Change		  

Base Salary

    $ 675,000     $ 620,000       9 % 

STIP Target

      80 %      80 %      0 % 

LTIP Target

      220 %      220 %      0 % 
  

 

 

    

 

 

    

 

 

  

Total Direct Compensation

    $ 2,700,000     $ 2,480,000       9 % 
  

 

 

    

 

 

    

 

 

  

2024 At-Risk Compensation

 

LOGO

To reflect Mr. Blunden’s position against other CFOs and his continued growth and performance, he received a 9 per cent increase to base salary.

Archie Collins

President and Chief Executive Officer, Tampa Electric

 

     2024
Compensation Mix		     2023
Compensation Mix		     Year-Over-Year
Change		  

Base Salary

    $ 625,000     $ 600,000       4 % 

STIP Target

      80 %      80 %      0 % 

LTIP Target

      170 %      150 %      13 % 
  

 

 

    

 

 

    

 

 

  

Total Direct Compensation

    $ 2,187,500     $ 1,980,000       10 % 
  

 

 

    

 

 

    

 

 

  

2024 At-Risk Compensation

 

LOGO

In consideration of Mr. Collins’ strong performance and his peer group, he received an overall increase of 10 per cent, including an increase to base salary and LTIP target.

 

 
80   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Karen Hutt

Executive Vice President, Business Development and Strategy, Emera Inc.

 

     2024
Compensation Mix		     2023
Compensation Mix		     Year-Over-Year
Change		  

Base Salary

    $ 550,000     $ 535,000       3 % 

STIP Target

      70 %      70 %      0 % 

LTIP Target

      200 %      180 %      11 % 
  

 

 

    

 

 

    

 

 

  

Total Direct Compensation

    $ 2,035,000     $ 1,872,500       9 % 
  

 

 

    

 

 

    

 

 

  

2024 At-Risk Compensation

 

LOGO

To maintain Ms. Hutt’s relative positioning against market and in recognition of her performance, Ms. Hutt received an overall 9 per cent increase, including an increase to base salary and LTIP target.

Dan Muldoon

EVP, Project Development and Operations Support, Emera Inc.

 

     2024
Compensation Mix		     2023
Compensation Mix		     Year-Over-Year

Change

  

Base Salary

    $ 540,000     $ 535,000       1 % 

STIP Target

      70 %      70 %      0 % 

LTIP Target

      160 %      150 %      7 % 
  

 

 

    

 

 

    

 

 

  

Total Direct Compensation

    $ 1,782,000     $ 1,712,000       4 % 
  

 

 

    

 

 

    

 

 

  

2024 At-Risk Compensation

 

LOGO

Mr. Muldoon received a 4 per cent overall increase, including an increase to base salary and LTIP target.

As a result of the changes, the variable or at-risk component of the five NEOs’ compensation averaged 75 per cent in 2024. The changes made to the compensation of the respective NEOs in 2024 are also reflected in the NEO Summary Compensation Table.

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   81

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Elements of Compensation

BASE SALARY

While the MRCC focuses on total compensation, base salary remains an important part of the overall compensation package the Company offers its executives. Base salary provides stable and predictable income that reflects the individual’s skills, experience and the responsibilities of their role.

SHORT-TERM INCENTIVE PLAN

The compensation awarded under the STIP links a portion of an executive’s compensation to the achievement of predetermined levels of performance in support of corporate and business unit objectives. These objectives are designed to focus on short-term goals (typically on an annual basis) that are intended to deliver value to customers and contribute to increased shareholder value in the longer term. Emera has adopted the scorecard approach to translate corporate strategies into measurable incentive plan goals. Target payouts under the scorecards are generally set as a percentage of salary and are benchmarked against the median for positions with similar responsibilities in comparator companies.

On the recommendation of the MRCC, the Board of Directors of Emera approves scorecards that set forth corporate objectives and related threshold, target and stretch performance levels to be achieved each year. Short-term incentive payouts for senior management, including the NEOs, are based on scorecard results with potential payouts ranging from 0 to 200 per cent of target.

2024 SHORT-TERM INCENTIVE RESULTS

2024 EMERA CORPORATE SCORECARD

The scorecard for Emera (“Emera Corporate Scorecard”) was developed by management and approved by the Emera Board of Directors, on the recommendation of the MRCC, at the beginning of 2024. It was used to determine the short-term incentive payouts for our corporate-level NEOs, Mr. Balfour, Mr. Blunden, Ms. Hutt and Mr. Muldoon. The short-term incentive payout for Mr. Collins was based on the Tampa Electric Corporate Scorecard discussed below.

The Emera Corporate Scorecard objectives were based on the Company’s Business Plan for the year and include threshold, target and stretch performance measures for each objective. To reach target level performance, all threshold and target measures must be achieved, and to reach stretch level performance, all threshold, target and stretch measures must be achieved.

The following shows the elements and results of the Emera Corporate Scorecard for 2024.

FINANCIAL MEASURES (1) – 70% TARGET WEIGHTING

 

 

COMPENSATION NET INCOME (2)

(50% TARGET WEIGHTING)

   

COMPENSATION CASH FLOW (2)

(20% TARGET WEIGHTING)

LOGO    LOGO
Payout: 44.6%    Payout: 32.8%
 
(1)

Percentage payouts, below or above target for financial measures, are interpolated on a scale between each level of performance (50 per cent for threshold, 100 per cent for target and capped at 200 per cent for stretch).

(2)

Adjusted net income attributable to common shareholders for compensation purposes (“compensation net income”) and cash flow from operations for compensation purposes (“compensation cash flow”) are non-GAAP financial measures and do not have a standardized meaning as prescribed by USGAAP. Calculation of these measures and reconciliation to the nearest GAAP measures are discussed on page 84.

 

 
82   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

SAFETY, ENVIRONMENT AND PEOPLE – 30% TARGET WEIGHTING SAFETY (10% TARGET WEIGHTING)

 

Threshold Measures

   

Target Measures

   

Stretch Measures

•  90% of Emera Inc. employees develop and share Personal Safety Plans, which will include one action relating to psychological safety.

 

•  Develop and implement a New Worker Orientation Program.

   

•  Consolidated Lost Time Injury (LTI) Frequency Rate <= to the five-year average (0.32).

 

•  80% of Emera Inc. Senior Management Team (SMT) (director and above roles) to participate in 1 high-risk review or 1 safety engagement every six months.

   

•  25% reduction in Emera Consolidated High Energy Serious Injury or Fatality (HSIF) events (internal employees plus contractors).

Safety Result: Threshold

Payout: 5%

      

ENVIRONMENT (10% TARGET WEIGHTING)

 

Threshold Measures

   

Target Measures

   

Stretch Measures

•  Implement the Cority Compliance Obligation module at Emera Inc.

   

•  No Significant Environmental Incidents.

 

•  Implement the Scope 3 emission inventory roadmap developed in Phase 1 of the initiative in 2023.

 

•  Year-end emission forecasts and updated climate transition plan to demonstrate that Emera is on track to fully achieve its 2025 Climate Commitment Goal.(1)

   

•  100% of all level 2 environmental audit findings are closed within 6 months.

 

•  Percentage achievement of a Moderate Environmental Incidents (MEI) reduction target of 25% from the 5-year (2019–2023) average (43%). The stretch percentage achievement is to be pro-rated based on an MEI target reduction from the 5-year average.

Environment Result: Stretch

Payout: 20%

      

PEOPLE (10% TARGET WEIGHTING)

 

Threshold Measures

   

Target Measures

   

Stretch Measures

•  Conduct a workshop for Emera Inc. employees on psychological safety. All functional leaders will submit a team action plan beginning in 2024.

 

•  95% of Emera employees and contractors will complete cyber security training.

   

•  Ensure external postings have qualified shortlists including at least one person from an underrepresented group, 75% of the time.

 

•  Achieve phishing “test click rate” results of 4.5% or lower at the end of the year (after removing best and worst month results and roll up of all businesses).

   

•  90% of employees attend a change management elearning or workshop and each VP presents a change plan to their Corporate Leadership Team member or peer panel for supporting a change within their team.

 

•  Achieve phishing “test click rate” results of 3.5% or lower at the end of the year (after removing best and worst month results and roll up of all businesses).

People Result: Stretch

Payout: 20%

      
Total 2024 Emera Corporate Scorecard Result: 122.4%   

The financial targets reflected in the scorecard are linked to per share outcomes but are set at absolute levels to avoid the risk of incentive impacts influencing the timing of financing decisions within the year.

 

(1)

The Emera Board has granted stretch considering external factors that influenced our ability to meet all requirements and was satisfied that management completed all Company- controlled initiatives.

 

 

  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   83

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

The compensation cash flow and compensation net income figures that are shown in the Emera corporate scorecard are adjusted for incentive purposes from the Company’s reported figures. The Company considers the following general principles when determining whether it should adjust financial results for incentive plan purposes:

 

  •  

The Company adjusts the reported figures for specific items the Company believes are significant, but not reflective of underlying operations in the period.

 

  •  

Incentive compensation should be directly linked to the performance of the core business and delivering on the plan of record. Meaningful accounting gains or losses are generally the result of strategically or financially driven transactions in which there has been direct involvement and support of the Board; therefore, the impacts of the transactions should typically be excluded from incentive compensation, except as noted below. The Company does not want its strategically or financially driven decisions to be influenced by compensation impacts.

 

  •  

The Company should, however, consider including all or some portion of the gain (positive impact) or loss (negative impact) if such gain or loss appropriately reflects the value creation or value destruction and overall performance of management in the decision or execution of the transaction leading to such gain or loss.

 

  •  

Alignment of performance and compensation requires judgement at times. Therefore, the Board reserves the right to adjust incentive payouts in either direction to satisfy itself that there is close alignment between performance and compensation.

For the 2024 Financial portion of the Emera Corporate Scorecard, the Board adjusted the Compensation Cash Flow results. The timing of fuel and storm cost recoveries had significant impacts on the Company’s Compensation Cash Flow metric in the Emera corporate scorecard. These unexpected costs will ultimately be recovered in subsequent years following established regulatory processes and incorporated into respective future budgets and targets. As such, the Board adjusted the 2024 Compensation Cash Flow to neutralize the impact of timing differences between when the fuel and storm costs are incurred and when they will be recovered. Additionally, the Board adjusted compensation net income to neutralize the impact to earnings from the strategic asset sale of LIL. In recognition of Management’s efforts in successfully completing the timely sale of LIL as well as the improvements to the Company’s balance sheet, the Committee has applied discretion to positively adjust earnings by $18M. The table that follows shows the reconciliation between the reported and adjusted figures used in the Emera Corporate Scorecard. Adjustments in respect of the 2022 PSU grant are disclosed on page 90.

 

Compensation net income reconciliation (in millions $)

    2024  

Reported net income attributable to common shareholders

      494  

Less: Gain on sale of LIL, after-tax (1)

      (129 ) 

Less: Financing structure wind-up

      (58 ) 

Add: Charges related to wind-down costs and certain asset impairments, after-tax (2)

      26  

Add: Charges related to the pending sale of NMGC, after-tax (3)(4)

      225  

Add: Mark-to-market (“MTM”) loss, after tax (5)

      291  

Less: Adjustment to translate USD earnings to budgeted foreign exchange rate

      (2 ) 

Add: Earnings impact from sale of LIL

      20  

Add: Discretionary adjustment to reflect strong management performance and strong financial momentum achieved during the year

      18  
  

 

 

  

Compensation net income

      885  
  

 

 

  

Compensation cash flow reconciliation (in millions $)

    2024  

Reported operating cash flow

      2,646  

Less: Changes in non-cash working capital

      (452 ) 

Less: Adjustment to translate USD earnings to budgeted foreign exchange rate

      (1 ) 

Add: Pre-working capital impact from sale of LIL

      28  

Add: Transaction costs related to sale of LIL and NMGC

      17  

Add: Adjustment for extraordinary fuel costs to be recovered in subsequent years

      6  

Add: Adjustment for extraordinary storm costs to be recovered in subsequent years (6)

      536  
  

 

 

  

Compensation cash flow

      2,780  
  

 

 

  

 

(1)

Net of income tax expense of $53 million.

 

(2)

Net of income tax recovery of $6 million.

 

(3)

Represents (i) $206 million in non-cash goodwill and other impairment charges, after-tax and (ii) $19 million in transaction costs, after-tax.

 

(4)

Net of income tax recovery of $21 million.

 

(5)

Net of income tax recovery of $117 million.

 

(6)

Includes costs related to Hurricane Debby, Hurricane Helene and Hurricane Milton.

 

 
84   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

2024 TAMPA ELECTRIC CORPORATE SCORECARD

The scorecard for Tampa Electric Company (“Tampa Electric Corporate Scorecard”) was developed by management and approved by the Tampa Electric Company Board of Directors. It was used to determine the short-term incentive payout for Mr. Collins.

FINANCIAL MEASURES(1) – 35% TARGET WEIGHTING

 

TE COMPENSATION NET INCOME (2)(3)

(30% TARGET WEIGHTING)

   

TE COMPENSATION CASH FLOW (2)(3)

(5% TARGET WEIGHTING)

LOGO    LOGO
Payout: 20.26%    Payout: 4.11%

SAFETY, PEOPLE, CUSTOMER, ASSET MANAGEMENT – 65% TARGET WEIGHTING SAFETY (20% TARGET WEIGHTING)

 

Measures Included:

   

Highlights

•  Proactive Incident Rate (“PAIR”) > 250 and > 90% of the Operational Performance Coaches complete > 4 Compliance Checks and include this goal in their Personal Safety Plan.

 

•  High-risk reviews.

 

•  No HSIF for the year.

 

•  All HSIF, Low-Energy Serious Injury or Fatality (“LSIF”) and Potential Serious Injury or Fatality (“PSIF”) incidents undergo an executive review.

 

•  Achieve an OSHA Lost Time Injury Rate that is >20% better than the 2019–2023 five-year average.

 

•  The number of energized primary wire downs is reduced >5% compared to the 2021–2023 three-year average.

   

•  All threshold and target measures were achieved.

Safety Result: Target

Payout: 20%

   

PEOPLE (15% TARGET WEIGHTING)

 

Measures Included:

   

Highlights

•  Each function will provide a quarterly update on Functional Engagement Survey action planning.

 

•  Reduce the overall time-to-hire for external hires in Q2–Q4 by 5%, measured against the time to hire Q1 baseline.

 

•  Complete the job architecture project.

 

•  Achieve employee retention objectives.

   

•  All threshold, target and stretch measures have been achieved.

People Result: Stretch

Payout: 30%

   
 
(1)

The financial figures for Tampa Electric are shown in USD.

(2)

Adjusted Tampa Electric net income for compensation purposes (“TE compensation net income”) and Tampa Electric cash flow from operations for compensation purposes (“TE compensation cash flow”) are non-GAAP financial measures and do not have a standardized meaning as prescribed by USGAAP. Calculation of these measures and reconciliation to the nearest GAAP measures are discussed on page 86.

(3)

Percentage payouts, below or above target for financial measures, are interpolated on a scale between each level of performance (50 per cent for threshold, 100 per cent for target and capped at 200 per cent for stretch).

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   85

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

CUSTOMER (15% TARGET WEIGHTING)

 

Measures Included:

   

Highlights

•  Decrease the total handle time in our contact center by a minimum of 5%.

 

•  Achieve ≥73% of Power, Quality and Reliability (PQR) Index.

 

•  Develop at least 5 customer asset management plans, assign an Operations Manager as the owner and establish centralized documentation.

 

•  Decrease the total handle time in our contact center by a minimum of 7%. Achieve a Composite Reliability Score that is >1% better than the 2021–2023 three-year average.

 

•  Achieve ≥73% of the Customer Partnership Index.

 

•  Decrease the total handle time in our contact center by a minimum of 10%.

   

•  All threshold and target measures were achieved. Stretch measures were partially met.

Customer Result: Target

Payout: 22.5%

   

ASSET MANAGEMENT (15% TARGET WEIGHTING)

 

Measures Included:

   

Highlights

•  Completion of the CCS/H2 business model evaluation work.

 

•  Annual cybersecurity training completion rate of ≥95%. Achieve an average monthly Cyber Security phish rate of <4.5% following the removal of the best and worst month.

 

•  Manage our 2024 budgeted sustaining and non-AFUDC capital spend ($470.7M) within +/– 3%.

 

•  Successful completion of the 2024 milestones associated with the CSF Cybersecurity System Project for corporate critical assets by year-end, resulting in an improved security culture for resilience and digital trust.

 

•  Achieve an average monthly Cyber Security phish rate of <3.0% following the removal of the best and worst month.

 

•  Annual system fleet efficiency is >0.5% better than the 2024 budget.

 

•  Generate >$3 million in incremental OOR (Other Operating Revenue) compared to 2023 final results.

   

•  All threshold and target measures were achieved.

Asset Management Result: Target

Payout: 15%

   
Total 2024 Tampa Electric Scorecard Result: 111.87%   

 

TE compensation net income reconciliation (in millions $)

    2024  

Reported net income

      468  

Add: Charges related to wind-down costs and certain asset impairments, after-tax (1)

      2  
  

 

 

  

TE compensation net income

      470  
  

 

 

  

 

(1)

Net of income tax recovery of $1 million.

 

TE compensation cash flow reconciliation (in millions $)

    2024  

Reported operating cash flow

      1,164  

Less: changes in non-cash working capital

      (373 ) 

Add: Adjustment for extraordinary storm costs to be recovered in subsequent years, after-tax (1)

      294  
  

 

 

  

TE compensation cash flow

      1,085  
  

 

 

  

 

(1)

Net of income tax recovery of $100 million.

 

 
86   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

LONG-TERM INCENTIVE PROGRAM

In 2024, there were three primary components of long-term incentive compensation for senior management, including the NEOs: the Performance Share Unit Plan (the “PSU Plan”), the Restricted Share Unit Plan (the “RSUs Plan”) and the Senior Management Stock Option Plan (the “Stock Option Plan”). The MRCC is responsible for granting PSUs, RSUs and stock options. The 2024 LTIP mix is shown below.

 

     PSU    RSU    Stock Options
Term    Three years    Three years    10 years
Description    Notional share units with performance criteria    Notional share units    Option to purchase Emera shares at an exercise price determined by the fair market value at the time of the grant
Grant Price    50-day average closing Emera share price before grant date    50-day average closing Emera share price before grant date    Exercise price is the closing share price on the trading day immediately preceding the grant date
Frequency of Grants    Granted annually    Granted annually    Granted annually

 

Performance Criteria

    Earnings per Share Growth (75% weighted)    No performance criteria    Appreciation of share price from grant date to exercise date
  

 

Relative Total Shareholder Return (25% weighted)

Dividends    Dividends are re-invested on a compounded basis    Dividends are re-invested on a compounded basis    Not eligible for dividends
Vesting    Three-year cliff vesting    Three-year cliff vesting    20% per year over five years, starting on the first anniversary of the grant date
Payout    Paid out in cash after vesting, subject to the achievement of the performance criteria    Paid out in cash after vesting.    Optionee has 10 years from the grant date to exercise vested options

This mix is aligned with market practice and provides for a balance between Company performance and retention, while maintaining the Company’s pay-for-performance strategy by closely linking a significant portion of the executive’s compensation to that of the shareholder experience.

The number of PSUs, RSUs and stock options granted to senior management is determined after considering competitive benchmarking data and the individual’s level of responsibility within the Company. Grants are calculated each year based on each executive’s long-term incentive target percentage and base salary and, generally, the grant amount increases with the level of responsibility. The values of PSUs, RSUs and stock options increase or decrease over the term of a particular grant based on increases or decreases in Emera’s common share price.

The MRCC considers previous grants and looks at a history of total compensation each year before approving any new PSU, RSU or stock option grants for senior management (including the NEOs). This helps to ensure grants remain reasonable in light of market data, the performance of the Company and the performance of the individual.

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   87

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

The table below provides a summary of the 2024 long-term incentive grants awarded to the NEOs.

 

     Options granted
(#)		      Options grant
value ($)(1)		      PSUs granted
(#)		      PSUs grant
value ($)(2)		      RSUs granted
(#)		      RSUs grant
value ($)(2)		      Total LTIP value
($)		  

Scott Balfour

      325,900        1,531,730        63,700        3,063,333        31,849        1,531,618        6,126,681  

Greg Blunden

      79,000        371,300        15,440        742,510        7,719        371,207        1,485,017  

Archie Collins

      56,500        265,550        11,047        531,250        5,525        265,697        1,062,497  

Karen Hutt

      58,500        274,950        11,437        550,005        5,719        275,027        1,099,982  

Dan Muldoon

      46,000        216,200        8,983        431,992        4,488        215,828        864,020  

 

(1)

Stock options are granted based on the Black-Scholes methodology. Please see the Senior Management Stock Option Plan section on page 91 for details on the Black-Scholes results and the Company’s use of a floor value ratio.

(2)

PSU and RSU grant values were calculated using the 50-day average closing share price of an Emera common share for the last 50 trading days of 2023, which was $48.09.

More details about the PSU Plan, the RSU Plan and the Stock Option Plan are set forth below.

PERFORMANCE SHARE UNIT PLAN

The PSU Plan is designed to retain and incentivize employee participants by allowing senior management and key employees in specific roles to participate in the long-term success of the Company. A PSU is a notional share unit that is based on the value of an Emera common share – the value of a PSU changes directly in correlation to the value of an Emera share. PSUs also earn dividends like Emera shares; when a dividend is paid on Emera’s common shares, each participant is allocated additional PSUs based on the dividend paid on an equivalent number of Emera common shares.

Each year, designated senior leaders are awarded PSUs based on a pre-determined target of their base salary and the average 50-trading-day Emera common share price immediately preceding the effective grant date (the average is used to smooth out any short- term fluctuations in the share price). Each PSU grant has a three-year performance period. In addition to being affected by fluctuations in the Emera share price, the value of a PSU is also dependent on the achievement of financial objectives that help measure the increase in shareholder value. The MRCC establishes these financial objectives at the beginning of the performance period. By linking the value of the PSUs to Emera’s financial performance over the three-year vesting period, the plan aligns the interests of senior leaders with the interests of Emera’s shareholders and helps ensure that payouts are consistent with Company performance and shareholder experience. All PSU grants and payouts must be approved by the MRCC.

At the end of the performance period, a performance factor is applied to the PSU grant based on the achievement of the financial objectives. If the Company fails to meet the performance objectives for a particular PSU grant, the Plan may pay out at less than target or may not pay out any amounts at all. Even if targets are exceeded, the maximum performance factor is 200 per cent.

Accordingly, the amount payable to participants, including NEOs, at the end of the three-year performance period is determined by:

 

LOGO

The payout is based on the average 50-trading-day closing price for Emera common shares at the end of the three-year performance period to smooth out short-term price fluctuations. Payments are made in cash.

2024 PSU GRANT PERFORMANCE METRICS

The Company’s long-term focus continues to be on EPS growth and long-term shareholder value creation. Accordingly, the Company used the following two weighted metrics for the 2024 PSU grant:

 

1.

Compensation EPS (1) growth, which continues to be a fundamental measure of the increase in profitability of the Company; and

 

2.

Relative TSR, a key measure of Emera’s relative performance against a Canadian custom peer group.

 

 
(1) 

Adjusted EPS for compensation purposes (“Compensation EPS”) is a non-GAAP financial measure that does not have a standardized meaning under USGAAP. Calculation of this measure and reconciliation to the nearest GAAP measure is discussed on page 90.

 

 
88   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

The Relative TSR metric measures Emera’s TSR against the average of the below Canadian custom peer group, which is comprised of close industry peers who Emera competes with for capital. The Committee recognizes that the composition of a suitable peer group is challenging given the limited investor-owned utilities in Canada.

RELATIVE TOTAL SHAREHOLDER RETURN CANADIAN CUSTOM PEER GROUP

 

Company name

   

Industry classification

Fortis Inc.

Hydro One Limited

Algonquin Power & Utilities Corp.

Canadian Utilities Limited

AltaGas Ltd.

Enbridge Inc.

TC Energy Corporation

   

Electric Utilities

Electric Utilities

Multi-Utilities

Multi-Utilities

Gas Utilities

Oil, Gas and Consumable Fuels

Oil, Gas and Consumable Fuels

The combination of the two metrics effectively measures management’s contributions to the creation of long-term value for shareholders.

The performance period for PSUs granted in 2024 is from January 1, 2024 to December 31, 2026 and the table below shows the performance factor levels:

 

Metrics

   

Weighting

   

Threshold (50%)

   

Target (100%)

   

Stretch (200%)

Compensation EPS: three-year compound annual growth rate

    75%    3%    6%    9%

Relative Total Shareholder Return

    25%    Equal to –25% (i.e., 2,500 bps) of Peer Group Average    Equal to Peer Group Average   

Greater than or equal to +25%

(i.e., 2,500 bps) of Peer Group Average

The threshold, target and stretch levels of performance are consistent with those for previous grants and are calibrated against a combination of the Company’s five-year business plan projections, dividend growth rate, actual and forecasted performance levels of peers and overall assessment of the expectations of shareholders.

The performance targets for the PSU awards are used for compensation purposes only and are not suitable for any other purpose. There is no assurance that any performance level will be met. The targets may also constitute forward-looking information. Forward-looking statements are based upon a number of assumptions and are subject to a number of known and unknown risks and uncertainties, any of which are beyond Emera’s control, which could cause actual results to differ materially from the performance targets. Please see the cautionary statement in Emera’s 2024 Annual Report with respect to risks and assumptions relevant to Emera’s determination of performance targets for compensation purposes.

PERFORMANCE SHARE UNIT PLAN RESULTS

The 2022 PSU grant had a performance period of January 1, 2022 to December 31, 2024 and was subject to two performance metrics:

 

  •  

Compensation EPS growth weighted at 75 per cent, which is a fundamental measure of the increase in profitability of the Company; and

 

  •  

Relative TSR weighted at 25 per cent, which measures the Company’s performance against a custom peer group comprised of Canadian companies.

The performance factor could range from 0 per cent to 200 per cent and is capped at 200 per cent. If the performance metric results multiplied by the TSR modifier exceed 200 per cent, the performance factor would be capped at 200 per cent.

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   89

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

The threshold, target and stretch levels and results are shown in the table below:

 

Metrics

    Weighting  

Threshold (50%)

   

Target (100%)

   

Stretch (200%)

Compensation EPS: three-year compound annual growth rate

    75%   3%    6%    9%

Relative Total Shareholder Return

    25%   Equal to –25% (i.e., 2,500 bps) of Peer Group Average    Equal to Peer Group Average   

Greater than or equal to +25%

(i.e., 2,500 bps) of Peer Group Average

The results were as follows:

 

2022 Metric

    Weighting     Threshold
(50%)		     Target (100%)     Stretch (200%)     2021      2024      Actual result     Weighted
performance
result		  

Compensation EPS

      75 %      3 %      6 %      9 %    $ 2.81      $ 3.07        3.0 %      37.5 % 
                  

Relative TSR

      25 %      –3.2 %      21.8 %      46.8 %      —         —         –0.40 %      13.9 % 
                  

 

 

  

Performance Factor:

 

     51.4 % 
                  

 

 

  

The Compensation EPS figures shown in the preceding table are adjusted from the Company’s reported figures as reconciled below. Like the approach used for determining the corporate scorecard results, and similar to previous PSU grant results, the Company has removed the dilution impact to earnings and related transaction costs due to the mid-year timing of the strategic sale of Labrador-Island Link. In addition, the Committee has followed the same approach as applied to the 2024 Emera balanced scorecard result and applied discretion to positively adjust earnings by $18M to reflect management’s performance with the sale of LIL and strong financial momentum achieved in 2024. This adjustment translates to $0.06 per share.

 

EPS (Basic) Reconciliation ($)

    2021      2024  

EPS (Basic)

      1.98        1.71  

Less: Gain on sale of LIL, after-tax

      —         (0.45 ) 

Less: Financing structure wind-up

      —         (0.20 ) 

Add: Charges related to wind-down costs and certain asset impairments, after-tax

      —         0.09  

Add: Charges related to the pending sale of NMGC, after-tax

      —         0.78  

Add: MTM loss, after-tax

      0.83        1.01  

Adjusted EPS (basic) (1)

      2.81        2.94  

Add: Remove the dilution impact from sale of LIL

      —         0.07  

Add: Discretionary adjustment to reflect strong management performance

      —         0.06  

Compensation EPS

      2.81        3.07  

 

(1)

Adjusted EPS (basic) is a non-GAAP financial ratio that does not have standardized meanings under USGAAP. A reconciliation of adjusted net income to reported net income and the resulting calculation of adjusted EPS (basic) for 2021 and 2024 are included in the “Non-GAAP Financial Measures” section of Emera’s Management’s Discussion and Analysis as at February 14, 2022 and the “Non-GAAP Financial Measures and Ratios” section of Emera’s Management’s Discussion and Analysis as at February 21, 2025, respectively. These sections are incorporated by reference herein and as filed on the Company website at www.emera.com and on SEDAR+ at www.sedarplus.ca.

The Committee applied the principles laid out in the 2024 Emera Corporate Scorecard in determining the adjustments to the reported figures.

The resulting overall performance factor applied to the 2022 PSU grant was 51.4 per cent (or 0.514), based on both Emera’s Compensation EPS growth rate and Relative TSR below target performance.

The total payout for all PSU Plan participants in respect of the 2022 PSU grant was approximately $7.0 million. The payout for each participant was 53 per cent of the original grant value, which factors in share price, notional dividend reinvestment and the performance factor.

 

 
90   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

RESTRICTED SHARE UNIT PLAN

The RSU Plan is designed to achieve more balance between risk and leverage in Emera’s long-term incentive programs, while remaining consistent with our pay-for-performance philosophy.

An RSU is a notional share unit that is based on the value of an Emera common share – the value of an RSU changes directly in correlation to the value of an Emera share. RSUs also earn dividends similar to Emera shares; when a dividend is paid on Emera’s common shares, each participant is allocated additional RSUs based on the dividend paid on an equivalent number of Emera common shares.

Similar to PSUs, designated senior leaders or key employees are awarded RSUs annually based on a pre-determined target of their base salary and the average 50-trading-day Emera common share price immediately preceding the effective grant date (the average is used to smooth out any short-term fluctuations in the share price). Each RSU grant has a three-year vesting period.

At the end of the three-year period, RSUs are valued and paid out in cash calculated by multiplying the original number of RSUs granted and all additional notional dividends by the average 50-trading-day closing price for Emera common shares at the end of the three-year period. The calculation is as follows:

 

LOGO

RESTRICTED SHARE UNIT PLAN RESULTS

The 2022 RSU grant had a vesting period of January 1, 2022 to December 31, 2024.

The total payout for all RSU Plan participants in respect of the 2022 RSU grant was approximately $10.3 million. The payout for each participant was 104 per cent of the original grant value (other than participants whose payouts were prorated due to retirement or leave of absence), which factors in share price and notional dividend reinvestment.

SENIOR MANAGEMENT STOCK OPTION PLAN

The Board of Directors has delegated the administration of the Stock Option Plan to the MRCC. The MRCC is responsible for approving, based on management’s recommendation, which employees of the Company and its operating companies will be eligible to participate in the Stock Option Plan.

Stock options are designed to deliver a percentage of the long-term incentive opportunity for senior management, including the NEOs, and are an important component of competitive executive compensation. Grants are calculated each year based on each executive’s long-term incentive target percentage and base salary and, generally, the grant amount increases with the level of responsibility. The Company considers stock options to be in alignment with long-term shareholder interests and the MRCC continues to review the use of options annually. All NEOs participate in the Stock Option Plan and have received stock options in 2024 as part of their long-term incentive.

The Company has historically valued stock options based on the Black-Scholes valuation methodology. However, the Committee adopted a floor value ratio of 10 per cent in 2015, following a review of market practices on valuation methodologies. If the Black-Scholes methodology leads to a value ratio that is less than 10 per cent, the floor of 10 per cent will apply. All other factors being equal, the use of a higher value ratio leads to fewer options. The Committee considers the application of a 10 per cent floor to be a prudent step to maintaining stock options as a part of the Long-term Incentive Program, while reflecting prevailing market conditions. The exercise price for stock options is the closing price of an Emera common share on the day immediately preceding the effective grant date. Options have a 10-year term and must be exercised before the expiry date and any unexercised options are forfeited upon expiry.

For the 2024 stock option grant, the Black-Scholes valuation resulted in a value ratio ranging from 6.0 per cent to 10.4 per cent. The range was dependent on the number of months over which the volatility calculation was measured, from 12 to 120 months. Because the valuation was 6.0 per cent over a 36-month period, the floor value ratio of 10 per cent was applied. Accordingly, the value of each option granted in 2024 was $4.70, which was 10.0 per cent of the closing Emera common share price of $46.97 on February 27, 2024, the trading day immediately preceding the grant date.

Stock options vest in 20 per cent increments on the first, second, third, fourth and fifth anniversaries of the grant date.

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   91

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Departure Scenario

   

Details

Termination With Cause or Resignation    Vested options must be exercised by the earlier of (1) 6 months from the termination date or (2) the expiry date. Unvested options held as of the termination date are forfeited.
Early Retirement    Vested options remain exercisable until the option expiry date. Unvested options expire. Executive must adhere to non- compete/non-solicit covenants (18 months for option holders and 24 months for CEO, or a shorter period if the MRCC considers it appropriate). Failure to comply with the restrictive covenants results in vested and unvested options expiring as of the date of breach.
Normal Retirement    Unvested options continue to vest in full and remain exercisable until the expiry date. Executive must adhere to non-compete/ non-solicit covenants (18 months for option holders and 24 months for CEO, or a shorter period if the MRCC considers it appropriate). Failure to comply with the restrictive covenants results in vested and unvested options expiring as of the date of breach.
Death of Optionee    Vested options must be exercised by beneficiary/legal representative by the earlier of (1) 6 months from the date of death or (2) the expiry date. Unvested options vest immediately if within 12 months of death; unvested options that do not vest within 12 months of death will expire.
Change of Control   

If a change of control occurs and an executive is terminated within 24 months of the change of control and for “good reason” (as defined in the plan text and this Circular under Termination and Change of Control Benefits), then unvested options held at the time of termination vest immediately and must be exercised by the earlier of 6 months from the termination date or the expiry date of the option. Continued compliance with the executive’s employment terms is required, including non-compete and non-solicit covenants in favor of the Company.

 

In the event of a change of control, the Board may, without the consent of the option holder:

 

•  Convert or exchange any outstanding options for rights or other securities of substantially equal value in any entity involved in or resulting from the change of control.

 

•  Accelerate the vesting of options or terminate options upon or immediately prior to the change of control.

 

•  Substitute shares of the entity resulting from the change of control for shares of the Company.

 

•  Terminate options in exchange for cash and/or property equal to the value of the shares underlying the options, less the exercise price, as of the date of the change of control.

 

•  If the Board determines, in good faith, that the options would have no value upon exercise, the Board may terminate the options without payment.

 

Please see Termination and Change of Control Benefits for the NEOs’ entitlements on departure.

 

The maximum percentage of shares under all security-based compensation arrangements (including the Stock Option Plan and the ECSPP) issuable to insiders of the Company at any time is 10 per cent of the issued and outstanding shares of the Company. The maximum number of shares to be optioned to any one person under the Stock Option Plan is 5 per cent of the issued and outstanding shares of the Company at the date of the grant of the option. The number of shares issued to insiders, within any one-year period, under all security- based compensation arrangements, will not exceed 10 per cent of the issued and outstanding shares of the Company.

Under the Stock Option Plan, options may be granted in respect of authorized and unissued common shares of the Company to a maximum of 14.7 million shares, or approximately 4.97 per cent of the total issued and outstanding common shares of the Company as of December 31, 2024.

There have been 8,930,025 common shares issued under the Stock Option Plan since its inception, which represents approximately 3.02 per cent of the total issued and outstanding common shares of the Company as of December 31, 2024, leaving 5,769,975 common shares reserved for issuance under the Option Plan, representing 1.95 per cent of the total issued and outstanding common shares as at December 31, 2024. There are 3,796,040 common shares issuable under actual grants of options, which represent approximately 1.28 per cent of the total issued and outstanding common shares of the Company as of December 31, 2024 and, of that amount, 2,188,550 are vested and 1,607,490 are unvested.

 

 
92   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

The Board of Directors of the Company may amend or discontinue the Stock Option Plan by resolution at any time and may, without shareholder approval, make amendments such as changes to vesting provisions and other minor changes of a housekeeping nature; however, shareholder approval is required for any amendment that:

 

  •  

Increases the number of common shares reserved for issuance, except an increase made in proportion to an increase in the number of common shares outstanding due to a stock dividend, stock split, amalgamation, reorganization, merger or similar event;

 

  •  

Extends eligibility to participate to non-employee Directors;

 

  •  

Permits rights under the Stock Option Plan to be transferred other than for normal estate settlement purposes;

 

  •  

Permits awards to be granted under the Stock Option Plan in addition to options;

 

  •  

Increases either of the 10 per cent insider participation limits;

 

  •  

Reduces the option price of an option except for the purpose of maintaining option value in connection with a change of control or pursuant to the provisions in the Stock Option Plan, which permit equitable adjustments to be made to the option price in connection with a stock dividend, stock split, share reclassification, amalgamation, reorganization, merger or similar event;

 

  •  

Permits the expiry of a stock option to be beyond 10 years from its date of grant (except in the case of the automatic extension of the expiry date of an option as a result of the expiry date falling within a blackout period or within five business days of the blackout period being lifted); or

 

  •  

Deletes or reduces the range of amendments that require shareholder approval under this paragraph.

The table below summarizes certain ratios regarding the Stock Option Plan, namely dilution, burn rate and overhang as defined in the table.

 

     2024 (%)      2023 (%)      2022 (%)  

Dilution

(number of options outstanding, divided by the weighted average total issued and outstanding common shares for the applicable fiscal year)

      1.31        1.13        1.08  

Burn rate

(number of options granted in an applicable fiscal year, divided by the weighted average total issued and outstanding common shares for the applicable fiscal year)

      0.27        0.18        0.18  

Overhang

(shares available for issuance, plus options outstanding, divided by the weighted average total issued and outstanding common shares for the applicable fiscal year)

      2.00        2.14        2.26  

The stock options issued under the Stock Option Plan are non-assignable, though the Plan permits transfers from the estate of a deceased option holder to the ultimate beneficiaries. The option can then be exercised by such beneficiaries.

The Company does not provide financial assistance to participants to facilitate the purchase of shares through the Stock Option Plan.

OTHER EXECUTIVE BENEFITS

The Company provides executives with additional benefits in accordance with the compensation program objectives. As part of their compensation and consistent with market practice, executives, including the NEOs, are eligible to receive an annual perquisite allowance, which is paid in equal bi-weekly cash instalments over the course of the year and is reviewed on an annual basis. In 2024, Mr. Balfour received an annual perquisite allowance of $30,000 and the other NEOs received an annual perquisite allowance of $20,000. The annual perquisite allowance is designed to cover additional benefits, such as:

 

  •  

Monthly car allowance plus mileage, as applicable; and

 

  •  

Annual wellness/fitness allowance.

These benefits, including Company paid parking, are considered taxable benefits and are reported in the Summary Compensation Table for the NEOs.

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   93

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Executive Share Ownership Requirements and Anti-Hedging Policy

To align the interests of senior management with the interests of shareholders, the Company established share ownership guidelines in 2003 that require designated executives to meet the required ownership level within five years of becoming subject to the guidelines. Mr. Balfour is required to hold shares equal to at least five times (5x) his base salary, and all other NEOs are required to hold shares equal to at least three times (3x) their respective base salaries. Beginning in 2023, RSUs no longer contribute to ownership levels. In consideration of this change, impacted executives were granted an additional two years to obtain their ownership requirement.

All NEOs are also subject to a one-year post-retirement hold period, which requires the NEOs to maintain a material financial stake in the Company after retirement by holding at least the minimum ownership level of Emera shares for one year after they retire from the Company. This helps maintain a focus on long-term sustainable value and prevents executives from timing their departure to maximize the cash-out value of their equity stake in the Company.

Share ownership is calculated based on: (1) the number of Emera shares an executive owns; and (2) the number of DSUs acquired pursuant to the DSU Plan, which are considered share equivalents.

PSUs, RSUs and stock options do not count for purposes of the share ownership guidelines. Executives have five years to reach the required ownership level and are required to allocate at least 25 per cent of their short-term incentive payout into DSUs in the first year, and at least 50 per cent every year following, until they meet their target share ownership. If an executive does not meet their ownership target within the required time, the MRCC has the ability to allocate some or all of the executive’s short-term incentive payout to DSUs until the ownership target is met.

Since the purpose of the share ownership requirements is to strengthen the alignment between the interests of senior management and shareholders, the Company has established a robust policy restricting executives from taking any steps that break or otherwise interfere with that alignment. All executives are subject to the Company’s anti-hedging policy, which prohibits them from hedging, pledging, monetizing or otherwise reducing or limiting their economic risk with respect to any Emera securities they hold, directly or indirectly, including DSUs, RSUs, PSUs and stock options. These prohibited transactions include short-selling, options, puts and calls, as well as derivatives such as forward contracts, equity swaps, collars and futures, or entering into limited recourse loans secured by securities of Emera.

The share ownership levels for the NEOs are set out below. The values shown are based on the closing price of Emera’s common shares on December 31, 2024 of $53.73 (units have been rounded). The table does not include the DSUs that will be allocated as part of the 2024 short-term incentive payout, as described in 2024 DSU Plan Allocations.

 

Name

    Required
ownership
level as a
multiple of
base salary		      Required
ownership
level ($)		      DSUs held
(#)		      Value of
DSUs held
($)		      Common
shares held
(#)		      Value of
common
shares held
($)		      Total share and
share equivalent
ownership
($)		      Multiple
of base
salary(1)		      Status of share
ownership
requirements		      Outstanding
RSU ($)		      Total Value of
DSUs, Common
Shares and
Outstanding
RSUs ($)		  

Scott Balfour

      5        5,948,250        162,696        8,741,664        115,454        6,203,317        14,944,981        12.6        Met        3,510,776        18,455,757  

Greg Blunden

      3        2,025,000        73,393        3,943,419        3,675        197,472        4,140,891        6.1        Met        835,981        4,976,872  

Archie Collins

      3        1,875,000        6,581        353,596        12,868        691,405        1,045,001        1.7        On Track        576,494        1,621,495  

Karen Hutt

      3        1,650,000        21,805        1,171,583        2,950        158,506        1,330,090        2.4        On Track        606,166        1,936,256  

Dan Muldoon

      3        1,620,000        111,618        5,997,237        8,685        466,671        6,463,908        12.0        Met        488,637        6,952,545  

 

(1)

Based on executive’s respective base salary as of December 31, 2024.

As shown in the above table, Mr. Balfour holds fully vested shares or share equivalents equal to 2.5 times his annual Total Direct Compensation (“TDC”). Three of the five NEOs have met their required ownership levels. Considering the changes to the share ownership calculations to exclude unvested RSUs as their ultimate value is not yet determined, Mr. Collins and Ms. Hutt have been granted a two-year extension to reach their ownership requirement.

While RSUs no longer contribute to required ownership levels, the Committee recognizes that they do continue to provide a significant linkage between senior management and shareholder interests. As such, we have included the value of unvested RSU holdings for the NEOs as of December 31, 2024 in the preceding table. The total value of outstanding DSUs, common shares and outstanding RSUs shown is based on the closing share price of Emera’s common shares on December 31, 2024 of $53.73 (units have been rounded).

 

 
94   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

3.3

Performance Graph

The following performance graph compares Emera’s cumulative TSR (assuming an investment of $100 and reinvestment of dividends) for its common shares with that of the S&P/TSX Capped Utilities Index and the S&P/TSX Composite Index. It also compares TSR to the trend in the company’s TDC paid to executive officers as reported in the Summary Compensation Table during the same period.

Cumulative Total Return on $100 Investment – December 31, 2019 to December 31, 2024

TOTAL SHAREHOLDER RETURN

 

LOGO

 

As at December 31

    2019 ($)      2020 ($)      2021 ($)      2022 ($)      2023 ($)      2024 ($)  

Emera Inc.

      100.00        101.35        123.97        106.25        108.93        123.44  

S&P/TSX Capped Utilities Total Return

      100.00        115.28        128.71        115.11        115.33        131.18  

S&P/TSX Composite Total Return

      100.00        105.60        132.10        124.38        138.99        169.09  

TDC ($ thousands)

      13,540        15,608        15,263        15,360        16,639        17,937  

Emera’s cumulative TSR for the five-year period from December 31, 2019 to December 31, 2024 was 23 per cent, compared to the 31 per cent return of the S&P/TSX Capped Utilities Index and 69 per cent return of the S&P/TSX Composite Index. Emera’s TSR increased 13 per cent over the one-year period from 2023 to 2024. The above graph also shows total compensation for our NEOs over the past six years, which includes annual base salary, long-term incentive grant value and annual short-term incentive payouts, demonstrating alignment between our TSR and NEO compensation. NEO TDC remained relatively flat from 2020 to 2022 and increased in 2023 and 2024, as did our TSR.

Total Shareholder Return and President and CEO Compensation

As noted in the Message from the Management Resources and Compensation Committee to Our Shareholders, a fundamental principle of Emera’s compensation philosophy is to align pay with performance, by linking a significant portion of the compensation the Company pays its executives to the achievement of objectives measuring whether shareholders are experiencing strong value for their investment.

Considering this principle, at the end of 2024 the Company undertook its annual analysis of the alignment between the President and CEO’s compensation and the experience of shareholders. The analysis reviewed the compensation of the President and CEO over the past five years and compared the results to the shareholder experience, as measured by TSR, over the same periods. The review included both realized pay (which consists of amounts paid out for a particular performance year) and realizable pay (which consists of the value of any outstanding equity-based awards).

The analysis looked at the shareholders’ experience using five different measurement periods, recognizing that shareholders have acquired their shares at different times. Each period had the same end point (December 31, 2024) but started at a different beginning period, from January 1, 2020 to January 1, 2024. The analysis measured the dollar return per $100 of investment over each period as compared to the President and CEO’s economic experience, measured by the dollars realized and realizable per $100 of target compensation awarded over the same periods.

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   95

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

The following lookback table shows the results of the review:

 

    

Pay year

       
    

2020

   

2021

   

2022

   

2023

   

2024

    Average  

Target total direct compensation

(in CAD ’000)(1)(2)

    7,000    7,700    7,865    8,101    8,506   

Total realized/realizable value at Dec. 31, 2024

(in CAD ’000)(3)

    7,711    7,316    5,284    7,655    10,293   

Measurement period

   

Jan. 1, 2020–

Dec. 31, 2024

   

Jan. 1, 2021–

Dec. 31, 2024

   

Jan. 1, 2022–

Dec. 31, 2024

   

Jan. 1, 2023–

Dec. 31, 2024

   

Jan. 1, 2024–

Dec. 31, 2024

   

Realized/realizable value of

$100 target pay awarded to CEO

($)(3)

    110    95    67    94    121      97  

Value of $100 shareholder investment as of Dec. 31, 2024 ($)(4)

    123    122    99    116    113      115  

Difference

($)

    13    27    32    22    (8)      17  

 

(1)

The lookback table shows the compensation of the President and CEO, Scott Balfour, for 2020 through 2024.

(2)

Includes salary, short-term incentive at target and the grant value of long-term incentives.

(3)

Factors in salary, short-term incentive payout, PSU and RSU payouts, value realized from exercised stock options and the market value of any outstanding PSUs, RSUs and DSUs and in-the-money unexercised stock options as of December 31, 2024.

(4)

Represents the cumulative value of a $100 investment in Emera common shares made on the first day of the period indicated, assuming dividends are reinvested.

The analysis concluded that Emera’s compensation framework provided appropriate alignment between the President and CEO’s compensation and the shareholder experience over the long term. This analysis also assists the MRCC in considering various compensation outcomes when assessing compensation changes for the President and CEO each year.

In keeping with Emera’s compensation philosophy, a significant component of NEO compensation consists of long-term incentives (PSUs, RSUs and stock options), which are designed to focus executives on the long-term success of the Company. These long-term incentives are directly affected by changes in Emera’s common share price and TSR. This helps create a direct correlation between the shareholder experience and the compensation the Company pays its senior executives.

As described in Performance Share Unit Plan, each PSU grant is subject to the achievement of financial objectives and, at the end of the performance period, a performance factor is applied, which is determined based on the extent to which the Company has met those objectives. The performance factors for the PSU Plan, expressed in terms of a percentage, for the past five years were 112 per cent for the period ended in 2020, 74 per cent for the period ended in 2021, 140 per cent for the period ended in 2022, 100 per cent for the period ended in 2023 and 51.4 per cent for the period ended in 2024.

The total annual salary, short-term and long-term incentive payouts earned in 2024 for the five NEOs totalled $12.1 million, which represents 2.7 per cent of the Company’s net earnings attributable to common shareholders of $494 million. The MRCC is comfortable that the payout totals for 2024 are reasonable based on the Company’s performance and demonstrate that the Company’s compensation programs are aligned with the interests of our shareholders.

 

 
96   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

3.4

NEO Summary Compensation Table

The table below shows the compensation awarded to the Company’s NEOs for the last three fiscal years.

 

                                 Non-equity
incentive plan
compensation		                      

Name and principal position

    Year      Salary ($)(1)      Share-based
awards
($)(2)		      Option-based
awards ($)(3)		      Annual
incentive plans
($)(4)		      Pension value
($)		     All other
compensation
($)(5)		      Total
compensation
($)		  

Scott Balfour

President and CEO

      2024        1,188,343        4,594,951        1,531,730        1,456,132        329,713       37,806        9,138,675  
     2023        1,132,238        4,376,325        1,458,645        1,308,615        261,305       35,656        8,572,784  
     2022        1,100,000        4,248,511        1,416,492        1,085,700        361,651       35,656        8,248,010  

Greg Blunden

CFO

      2024        673,731        1,113,716        371,300        660,960        116,550       27,806        2,964,063  
     2023        619,538        1,022,765        341,220        572,880        97,795       25,656        2,679,854  
     2022        599,654        990,150        329,868        473,760        105,847       25,656        2,524,935  

Archie Collins

President and CEO, Tampa Electric Company

      2024        624,423        796,947        265,550        559,350        194,824       339,737        2,780,831  
     2023        598,500        675,093        224,895        520,944        356,511       333,589        2,709,532  
     2022        534,192        561,898        187,110        602,838        341,502       274,413        2,501,953  

Karen Hutt

EVP, Business Development & Strategy

      2024        549,654        825,032        274,950        471,240        59,777       24,526        2,205,179  
     2023        534,423        722,620        240,405        432,548        55,611       22,376        2,007,983  
     2022        508,846        688,610        229,383        352,359        52,748       22,376        1,854,322  

Dan Muldoon

EVP, Project Development and Operations Support

      2024        539,885        647,820        216,200        462,672        (50,501 )      27,806        1,843,882  
     2023        534,615        601,581        200,925        432,548        21,944       24,000        1,815,612  
     2022        524,192        492,027        164,241        362,723        292,024       24,000        1,859,207  

 

(1)

The figure shown represents the actual base earnings paid each year.

(2)

The figure shown is the value of PSU and RSU grants as of the effective grant date. The grant value of PSUs and RSUs granted in 2024 was based on the average 50-trading-day closing share price up to December 31, 2023 ($48.09). The 50-day share price average is used for PSU and RSU grants to smooth out any short-term fluctuations in share price immediately preceding the grant date. The value of PSUs on payout is subject to the achievement of specific performance objectives over the respective three-year performance period. If those objectives are not met, payouts may be less than the initial value of the grant noted in this column, and if performance objectives are exceeded, payouts may be higher than the amount noted in this column.

(3)

The grant date value of each stock option granted to the NEOs in 2024 was determined to be equal to 10 per cent of the February 27, 2024 closing share price of $46.97 or $4.70 per option. The Company has adopted a value ratio floor of 10 per cent; if the Black-Scholes methodology leads to a value ratio that is less than 10 per cent, the floor of 10 per cent will apply. For purposes of the Black-Scholes calculation, volatility is measured from 12 to 120 months. Because the Black-Scholes valuation was below 10 per cent when calculated over a 36-month period, using an estimated dividend yield of 5.7 per cent, a risk-free interest rate of 3.06 per cent, and an expected volatility factor of 15.8 per cent, the 10 per cent floor was used. The accounting fair value per option was $4.66, a difference of $0.04, based on the following assumptions: an expected option term of five years, a risk-free interest rate of 3.56 per cent, an expected dividend yield of 6.11 per cent, and an expected volatility factor of 20.67 per cent.

(4)

In 2024, all NEOs, except Mr. Collins, participated in the Emera Corporate Scorecard, which had a result of 122.4 per cent. Mr. Collins participated in the Tampa Electric Company scorecard, which had a result of 111.87 per cent. The Short-term Incentive Plans and the 2024 results are described in greater detail in Short-term Incentive Plan. The figures shown reflect amounts earned in the 2024 performance year and paid in 2025. Mr. Muldoon elected to receive 100 per cent of his payout in the form of DSUs. Mr. Balfour, Mr. Blunden, Mr. Collins and Ms. Hutt elected to receive 50 per cent of their payout in the form of DSUs.

(5)

All other compensation in 2024 consists of: for Mr. Balfour, a cash perquisite allowance of $30,000 and other taxable benefits, including a $4,000 Company match for participation in the ECSPP; and for Mr. Blunden, Ms. Hutt and Mr. Muldoon, a cash perquisite allowance of $20,000 and other taxable benefits, including a $4,000 Company match for participation in the ECSPP. Mr. Collins was required to relocate from Nova Scotia to Tampa, Florida as President and CEO of Tampa Electric. Mr. Collins’ amount consists of a cash perquisite allowance of $20,000, a $4,000 Company match for participation in the ECSPP, a housing allowance of $185,298, a cost-of-living allowance of $84,811 and a family travel allowance of $43,478. The assignment-related allowances are tax protected under the Company’s Tax Equalization Policy. Mr. Collins continues to be paid in Canadian dollars (“CAD”) and all amounts shown above with respect to Mr. Collins are in CAD.

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   97

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Outstanding Share-based Awards and Option-based Awards

The following table describes all option-based and share-based awards outstanding as of December 31, 2024 for each NEO:

 

     Option-based awards (1)
(stock options)		      Share-based awards
(PSUs, RSUs and DSUs)		  

Name

    Number of
securities underlying
unexercised option
(#)		      Option
exercise price
($)		      Option
expiration date		      Value of unexercised
in-the-money options
($)(2)		      Number of shares
or unit of shares that
have not vested
(#)(3)		      Market or payout
value of share-based
awards that have not
vested ($)(4)		      Market or payout
value of vested
share-based awards
that have  not
been paid out
($)(5)		  

Scott Balfour

      40,400        42.71        2/11/2025        445,208        196,022        10,365,644        8,603,372  
     52,100        46.19        2/17/2026        392,834           
     66,300        45.16        2/14/2027        568,191           
     175,400        39.93        2/13/2028        2,420,520           
     210,100        46.39        2/20/2029        1,542,134           
     208,300        60.03        2/19/2030        –            
     269,100        51.12        2/17/2031        702,351           
     204,400        58.26        2/15/2032        –            
     206,900        54.64        2/26/2033        –            
     325,900        46.97        2/27/2034        2,203,084           

Greg Blunden

      9,325        45.16        2/14/2027        79,915        46,690        2,468,972        3,881,035  
     23,500        39.93        2/13/2028        324,300           
     36,675        46.39        2/20/2029        269,195           
     42,000        60.03        2/19/2030        –            
     63,000        51.12        2/17/2031        164,430           
     47,600        58.26        2/15/2032        –            
     48,400        54.64        2/26/2033        –            
     79,000        46.97        2/27/2034        534,040           

Archie Collins

      30,600        51.12        2/17/2031        79,866        32,182        1,701,776        348,002  
     27,000        58.26        2/15/2032        –            
     31,900        54.64        2/26/2033        –            
     56,500        46.97        2/27/2034        381,940           

Karen Hutt

      8,500        46.19        2/17/2026        64,090        33,830        1,788,907        1,153,049  
     11,900        45.16        2/14/2027        101,983           
     13,875        39.93        2/13/2028        191,475           
     19,400        46.39        2/20/2029        142,396           
     20,400        60.03        2/19/2030        –            
     36,000        51.12        2/17/2031        93,960           
     33,100        58.26        2/15/2032        –            
     34,100        54.64        2/26/2033        –            
     58,500        46.97        2/27/2034        395,460           

Daniel Muldoon

      33,300        39.93        2/13/2028        459,540        27,303        1,443,763        5,902,361  
     29,600        46.39        2/20/2029        217,264           
     24,000        60.03        2/19/2030        –            
     30,000        51.12        2/17/2031        78,300           
     23,700        58.26        2/15/2032        –            
     28,500        54.64        2/26/2033        –            
     46,000        46.97        2/27/2034        310,960           

 

(1)

Option-based awards include both vested and unvested options.

(2)

The value of all unexercised option-based awards was calculated using a December 31, 2024 closing share price of $53.73.

(3)

Unvested share-based awards include PSUs, RSUs and any additional PSUs and RSUs from dividend reinvestment relating to such grants as of December 31, 2024.

(4)

The market or payout value of share-based awards was calculated based on an assumed performance factor of 1.0 and the average closing share price for the last 50 trading days of 2024 of $52.88.

(5)

These figures represent only vested DSUs, as PSUs and RSUs are paid out upon vesting, and are based on the average closing share price for the last 50 trading days of 2024 of $52.88.

 

 
98   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Incentive Plan Awards – Value Vested or Earned During the Year

The following table describes all option-based awards, share-based awards and non-equity incentives that vested, or were earned, during 2024 for each NEO:

 

Name

    Option-based awards
value vested during
2024
($)(1)		      Share-based awards
(PSUs and RSUs)
value vested during 2024
($)(2)		      Non-equity incentive
plan compensation –value
earned during the year
($)(3)		  

Scott Balfour

      0        2,973,806        1,456,132  

Greg Blunden

      0        693,148        660,960  

Archie Collins

      0        393,359        559,350  

Karen Hutt

      0        482,066        471,240  

Dan Muldoon

      0        344,350        462,672  

 

(1)

Represents the aggregate dollar value that would have been realized if stock options had been exercised on the applicable vesting (eligibility) date in 2024.

(2)

The value of PSUs and RSUs vested in 2024 is based on the 2022 PSU and RSU grants, which both had three-year vesting periods from January 1, 2022 to December 31, 2024. The payout is calculated based on the original grant with accumulated dividends, multiplied by the performance factor (only applied to PSUs), multiplied by the average closing share price for the last 50 trading days of 2024 of $52.88. More details on the PSU Plan and results can be found in the section Performance Share Unit Plan.

(3)

This amount represents the 2024 annual incentive payouts as disclosed in the NEO Summary Compensation Table and includes any amounts that were deferred into DSUs.

Aggregate Option Exercise During 2024 and 2024 Option Values

The following table summarizes the number of common shares, if any, each NEO acquired pursuant to the exercise of stock options in 2024, the aggregate value realized upon exercise and the number of common shares covered by unexercised options under the Stock Option Plan as of December 31, 2024. The aggregate value realized upon exercise is the difference between the fair market value of the common shares on the exercise date and the exercise price of the option. The value of unexercised in-the-money options at year-end is the difference between the exercise price of the options and the fair market value of the common shares on December 31, 2024, which was $53.73.

 

     Unexercised options at December 31, 2024      Value of unexercised
in-the-money options at
December 31, 2024		  

Name

    Securities acquired
on exercise
(#)		      Aggregate
value realized
($)		      Exercisable
(#)		      Unexercisable
(#)		      Exercisable
($)		      Unexercisable
($)		  

Scott Balfour

      34,800        508,776        1,077,565        681,335        5,895,650        2,378,672  

Greg Blunden

      –         –         187,470        162,030        796,732        575,148  

Archie Collins

      –         –         40,130        105,870        59,900        401,907  

Karen Hutt

      –         –         121,135        114,640        570,414        418,950  

Dan Muldoon

      –         –         124,580        90,520        735,529        330,535  

Pension Plan Benefits

The Company has adopted a pension governance framework that sets out the structure and processes for overseeing the management and administration of all pension plans sponsored or administered by Emera and its affiliates to ensure that the liabilities associated with such pension plans are being appropriately managed.

The NEOs are members of the Canadian corporate pension plan (“Pension Plan”) and participate on either a defined benefit basis or a defined contribution basis. For 2024, four NEOs participated in the defined benefit component of the Pension Plan and two NEOs participated in the defined contribution component of the Pension Plan.

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   99

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Defined Benefit

The following table shows years of credited service, estimated pension amounts and changes to accrued obligations from January 1, 2024 to December 31, 2024 for the NEOs who participated in the Pension Plan on a defined benefit basis.

 

Name

    Number of years
credited service
(#)		      Annual benefits payable      Accrued
obligation at the
start of the year
($)		      Compensatory
change ($)(2)		      Non-compensatory
change ($)(2)		      Accrued
obligation  at
year-end
($)(3)		  
     At year-end
($)(1)		      At age 65
($)		  

Scott Balfour

      12.7        410,632        560,076        5,006,278        329,713        359,032        5,695,023  

Greg Blunden (5)

      1.3        21,615        21,615        637,702        22,187        38,705        698,593  

Dan Muldoon

      35.0        460,014        460,014        8,142,099        (50,501 )       265,024        8,356,621  

Archie Collins (4)

      34.6        373,008        377,539        6,779,614        194,824        460,500        7,434,937  

 

(1)

All NEOs were eligible for an immediate pension at year end. The amount shown is the accrued pension starting at the NEO’s unreduced retirement date if the NEO terminated employment at December 31, 2024.

(2)

The compensatory and non-compensatory changes are described in more detail below.

(3)

The accrued pension obligation is calculated following the method prescribed under USGAAP (section 715 of the standards of the Financial Accounting Standards Board) and by the Canadian Institute of Chartered Accountants and is based on management’s best estimate of future events that affect the cost of pensions, including assumptions about future salary adjustments and short-term incentive awards.

(4)

Credited service shown represents the total service accrued under the supplemental employee retirement plan (“Supplementary Retirement Plan”); however, Mr. Collins reached the cap imposed by the Income Tax Act (Canada) for credited service under the registered pension plan in January 2023. Thus, credited service is frozen at 32.7 years under the registered pension plan and credited service accruing after January 2023 is accrued under the Supplementary Retirement Plan.

(5)

Mr. Blunden accrues future benefits under the defined contribution component of the Pension Plan and has frozen service as of June 30, 2001 under the defined benefit component of the Pension Plan.

The accrued obligation of a pension entitlement is the present value of the expected future annual benefits payable taking into account service accrued to date and the expected salaries used to determine the annual benefit payable at retirement. Each year, the value of the accrued obligation changes as a result of compensatory changes and non-compensatory changes, which are shown in the table above.

Compensatory changes are caused by changes in the annual benefit payable and result primarily from three factors: (i) new accrued service (the employer current service cost); (ii) the impact of salary increases greater than expected on past benefits (estimated increases are already built into the accrued benefit obligation); and (iii) plan changes impacting, for example, accrued service or when benefits are payable. There were no Pension Plan changes that materially affected the above figures in 2024.

Non-compensatory changes are caused by interest on the accrued obligation and current service cost, employee required contributions and changes in the assumptions used to calculate the present value of the future annual benefit payment stream. These assumptions include the mortality table, salary scale, retirement assumption and the inflation assumption used for calculating indexing and the discount rate. The non-compensatory changes in 2024 were driven largely by changes in actuarial assumptions as well as interest on the accrued obligation and current service cost. The assumption changes from December 31, 2023 to December 31, 2024 were a change in the discount rate from 4.63 per cent to 4.64 per cent for the Pension Plan, 4.61 per cent to 4.13 per cent for the retirement award, and the Supplementary Retirement Plan remained stable at 4.63 per cent. In addition, the salary increase assumption was updated to reflect a salary experience study conducted in 2024. The net effect of the assumption changes is an increase in obligations.

The defined benefit component of the Pension Plan entitles members to pension benefits based on two per cent of the average of the member’s five highest years of pensionable earnings, multiplied by each year of credited service to a maximum of 35 years credited service. For the NEOs, pensionable earnings include base salary plus up to 50 per cent of their target short-term incentive. Upon a member reaching age 65, pension benefits under the Pension Plan are reduced by an amount approximately equal to the amount payable under the Canada Pension Plan. For members who retire from active service, the pension is payable on an unreduced basis upon the earlier of age 60 or age 55, provided that age and years of service add to at least 85. For members who joined the Pension Plan on or after July 1, 2004, the age 60 unreduced retirement age condition is replaced by age 62 with 15 years of service. A member may also retire on a reduced formula if the member has attained age 55, but does not qualify for an unreduced pension. Spousal benefits are paid on the death of a member at the rate of 60 per cent of regular pension benefits. Pensions are indexed to the consumer price index, subject to certain limits.

Under the terms of Mr. Balfour’s employment agreement, his average five highest years of pensionable earnings is capped at $1.75 million for purposes of calculating his pension.

For 2024, members of the defined benefit component of the plan contributed 7.4 per cent of eligible earnings up to the year’s maximum pensionable earnings (“YMPE”) under the Canada Pension Plan and 9.5 per cent of earnings between the YMPE and the amount on which pension benefits may be earned under a registered pension plan as permitted by the Income Tax Act (Canada).

 

 
100   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Due to Canada Revenue Agency limitations on the maximum pension benefit that may be paid under the Pension Plan, a portion of the pension the NEOs earned after January 1, 1992 is provided under the terms of the Supplementary Retirement Plan, which is unfunded but secured by a letter of credit deposited in a retirement compensation trust. The Supplementary Retirement Plan is non-contributory. The Supplementary Retirement Plan generally mirrors the terms of the Pension Plan, with the exception that benefits earned on service in the Supplementary Retirement Plan after December 31, 2017 are not indexed on retirement. The Company does not grant additional years of credited service to NEOs under the Pension Plan or Supplementary Retirement Plan.

The defined benefit component of the Pension Plan was closed to new non-union employees hired after January 8, 2013 and to new union employees hired after October 31, 2014. The defined benefit component of the Supplementary Retirement Plan was closed to new entrants as of December 31, 2017. Any employees who become eligible to participate in the Supplementary Retirement Plan after December 31, 2017 will participate in the defined contribution component.

The compensatory and non-compensatory change figures for Mr. Blunden, Mr. Muldoon and Mr. Collins include the increase in value of a potential retirement award. Certain employees of the Company hired before August 1, 2007 are eligible for a retirement award if they continue working with the Company until their unreduced retirement date. The retirement award is calculated by multiplying the employee’s weekly base salary immediately preceding retirement by the employee’s number of years of service at retirement, to a maximum of 26 weeks of salary, and is payable as a lump sum on retirement. If the employee terminates employment with the Company prior to his or her unreduced retirement date, no retirement award is payable. Mr. Blunden, Mr. Muldoon and Mr. Collins are entitled to the retirement award as they have met their respective unreduced retirement dates. Mr. Balfour is not eligible for a retirement award.

Defined Contribution

The following table shows the changes to accumulated value from January 1, 2024 to December 31, 2024 for the NEOs who participated in the Pension Plan on a defined contribution basis.

 

Name

    Accumulated value
at start of year
($)		      Compensatory
change ($)(1)		      Non-compensatory
change ($)(2)		      Accumulated value
at end of year
($)		  

Greg Blunden (3)

      1,587,614        94,363        373,843        2,055,819  

Karen Hutt (4)

      1,185,351        59,777        167,083        1,412,210  

 

(1)

The compensatory change is the value of Company contributions made based on the defined contribution component of the Pension Plan.

(2)

The non-compensatory change is the value of employee contributions to the Pension Plan, along with investment earnings.

(3)

Mr. Blunden accrues future benefits under the defined contribution component of the Pension Plan and has frozen service under the defined benefit component of the Pension Plan.

(4)

The compensatory and non-compensatory change figures for Ms. Hutt include the increase in value of a potential retirement award, as described in the section above this table. Ms. Hutt will be entitled to the retirement award if she continues working for an Emera company until her unreduced retirement date. The accumulated values at the start and end of the year also include this potential retirement award.

Under the defined contribution component of the Pension Plan, the Company contributes a base amount of three per cent of the participant’s eligible earnings into the participant’s account each pay period. Plan participants can also make contributions of up to six per cent of their eligible earnings to the defined contribution component, with the Company matching half of these contributions. Accordingly, the maximum Company contribution to each participant’s defined contribution account, factoring in the base amount and the matching contribution, is six per cent of the participant’s eligible earnings. Canada Revenue Agency limits apply to the total contribution that can be made under the defined contribution component and, as with the defined benefit component, a portion of the pension an NEO earns in the defined contribution component may be provided under the terms of a Supplementary Retirement Plan.

Mr. Blunden and Ms. Hutt participated in the defined contribution component of the Pension Plan in 2024. They and the Company each contributed six per cent of their base salary into the Pension Plan up to the total amount permitted under the Income Tax Act (Canada), which equated to $16,245 each in 2024. In addition, the Company maintains an account for any contributions that would be made in the absence of the Income Tax Act (Canada) limits, through the Supplementary Retirement Plan. For 2024, the additional Company contribution for Mr. Blunden was $78,118 and for Ms. Hutt was $33,468.

Upon ending active employment with the Company at any age between 55 and 65, plan participants in the defined contribution component of the Pension Plan may start receiving retirement income through the purchase of a life annuity or by converting their account to a life income fund.

The defined contribution component of the Pension Plan is administered on behalf of the Company by a major Canadian insurance company, which acts in accordance with the provisions of the defined contribution component of the Pension Plan, the Income Tax Act (Canada) and the Nova Scotia Pension Benefits Act.

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   101

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Deferred Share Unit Plan

The Deferred Share Unit (“DSU”) Plan is another component of Emera’s Long-term Incentive Program for senior leaders. A DSU is a notional share unit that is based on the value of an Emera common share – the value of a DSU changes directly in correlation to an Emera share and earns dividend equivalents in the form of additional DSUs. When a dividend is paid on Emera’s common shares, each participant’s DSU account is allocated additional DSUs based on the dividend paid on an equivalent number of Emera common shares. DSUs are not paid out until such time as the participant is no longer employed by the Company or any of its operating companies. When redeemed, the value of a participant’s DSUs is equivalent to the fair market value of an equal number of common shares of the Company.

The DSU Plan is intended to facilitate achievement of share ownership guidelines (discussed in Executive Share Ownership Requirements) without diluting the shareholder base. Prior to the start of each performance year, each plan participant may elect to defer some, or all, of the short-term incentive payout associated with that performance year in the form of DSUs. When the short-term incentive is paid to the NEOs, the portion elected is allocated to DSUs rather than paid in cash. Since DSUs are principally an income deferral mechanism, there are no performance metrics attributable to DSUs.

Following a participant’s departure from the Company, on a date selected by the participant not later than December 15 of the next calendar year after departure, the value of the participant’s DSUs is calculated by multiplying the number of DSUs in the participant’s account by the average closing Emera common share price for the 50 trading days preceding the payout date (the 50-day average is used to smooth out any short-term price fluctuations). The after-tax amount is paid to the participant. If a participant is a US taxpayer, payment is made six months following the termination date.

In addition, special DSU awards may be made from time to time by the MRCC to selected executives and senior management to recognize singular achievements or the achievement of certain corporate objectives. The MRCC made no such awards to the NEOs in 2024.

2024 DSU Plan Allocations

The table below identifies how much of the short-term incentive for 2024 that each NEO elected to allocate to DSUs:

 

Name

    Percentage of 2024 annual incentive
elected to deferred share units
(%)		      Dollar amount of 2024 annual incentive
elected to deferred share units
($)(1)		  

Scott Balfour

      50        728,066  

Greg Blunden

      50        330,480  

Archie Collins

      50        279,675  

Karen Hutt

      50        235,620  

Dan Muldoon

      100        462,672  

 

(1)

The DSU allocations are rounded to the nearest whole unit, so the value of DSUs may vary slightly from the amount of short-term incentive payout allocated.

Employee Common Share Purchase Plan

Executives are also eligible to participate in the Employee Common Share Purchase Plan, which allows employees of Emera and its operating companies to purchase Emera common shares through regular payroll deductions or lump-sum payments. Participants can contribute up to $20,000 CAD/$15,000 USD per year, and the Company will match 20 per cent on employee contributions up to the contribution limit. The purchase price of the common shares under the Plan is the average of the daily high and low board lot trading price on the TSX for the five trading days prior to the purchase date. At Emera’s option, shares may be purchased instead on the market at prevailing market prices. All common shares purchased under the Plan are immediately vested. Executives participate on the same terms as all other eligible employees.

A maximum of 7,000,000 shares may be issued from treasury under the Employee Common Share Purchase Plan, or approximately 2.37 per cent of the total issued and outstanding common shares of the Company as of December 31, 2024. A total of 5,273,503 common shares have been issued from treasury pursuant to the Employee Common Share Purchase Plan, which represents approximately 1.78 per cent of the weighted average total issued and outstanding common shares of the Company in 2024. There are 1,726,497 common shares that remain available for issuance under the Employee Common Share Purchase Plan, which represents approximately 0.60 per cent of the weighted average total issued and outstanding common shares of the Company in 2024.

 

 
102   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

The table below shows the burn rate ratio for the Employee Common Share Purchase Plan, as defined in the table and measured as a percentage of the weighted average number of shares outstanding for the respective year.

 

     2024
(%)		      2023
(%)		      2022
(%)		  

Burn rate

         

(number of common shares granted in a fiscal year, divided by the weighted average total number of shares outstanding)

      0.18        0.18        0.15  

The Board may, from time to time, without notice and without shareholder approval, amend, modify, change, suspend or terminate the Employee Common Share Purchase Plan as it, in its absolute discretion, determines appropriate; however, shareholder approval shall be required for any amendment, modification or change that:

 

  •  

Increases the number of common shares reserved for issuance, except an increase made in proportion to an increase in the number of common shares outstanding due to a stock dividend, stock split, amalgamation, reorganization, merger or similar event;

 

  •  

Extends eligibility to participate to non-employee Directors;

 

  •  

Permits rights under the Employee Common Share Purchase Plan to be transferred other than for normal estate settlement purposes;

 

  •  

Permits awards to be granted under the Employee Common Share Purchase Plan in addition to the purchase of common shares using contributions from participants and the Company;

 

  •  

Increases either of the 10 per cent insider participation limits; or

 

  •  

Deletes or reduces the range of amendments that require shareholder approval under this paragraph.

The maximum number of shares issuable to insiders of the Company under all security-based compensation arrangements (including the Stock Option Plan and the Plan) at any time is 10 per cent of the issued and outstanding shares of the Company. The maximum number of shares issued to insiders, within any one-year period, under all security-based compensation arrangements, will not exceed 10 per cent of the issued and outstanding shares of the Company.

The benefits under the Plan are not assignable, and if a Plan participant ceases to be an employee of an Emera Company, their eligibility to participate in the Plan ceases.

AMENDMENTS TO THE EMPLOYEE COMMON SHARE PURCHASE PLAN

In 2024, the Committee approved amendments to the ECSPP (the “Plan”) in order to align with updates to the online platform used by the administrative agent for the Plan (“Administrative Agent”). Specifically, the Plan was amended to i) make account statements only available from the Administrative Agent through their online platform; ii) reflect that share certificates may be issuable by calling the Administrative Agent’s contact center; iii) clarify that the Participant’s statement of account and tax statements are among the documents for which procedures may be established for electronic delivery; and iv) reflect the effective date of the proposed amendments and make minor administrative edits including clarification as to where participants of the plan may find account and tax statements and the process for obtaining share certificates. These changes were administrative in nature and did not necessitate shareholder approval under the terms of the Plan.

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   103

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Termination and Change of Control Benefits

The following table provides the estimated amounts of incremental payments, payables and benefits to which each NEO would be entitled based on differing departure scenarios – resignation, termination for cause, termination without cause, separation from the Company in circumstances of a change of control, and retirement, assuming the triggering event took place on December 31, 2024. Incremental benefits in connection with a change of control are realized only in the event of a termination of employment following a change of control and no incremental benefit is realized solely on a change of control.

 

Name

   

Departure scenario
(1)

    Cash
severance
($)		      Short-term
incentive
($)		      Performance
share units
(“PSUs”)
($)(2)		      Restricted
share units
(“RSUs”)
($)(2)		      Stock
options
($)(3)		      Continuation
of benefits
(present value)
($)(4)		      Total
($)		  

Scott Balfour

    Resignation      –         –         –         –         –         –         –   
   Termination for cause      –         –         –         –         –         –         –   
   Termination without cause      2,379,300        2,379,300        –         –         –         7,114        4,765,714  
   Control change      2,379,300        2,379,300        6,910,407        3,455,236        2,378,672        7,114        17,510,029  
   Retirement      –         –         –         –         –         –         –   

Greg Blunden

    Resignation      –         –         –         –         –         –         –   
   Termination for cause      –         –         –         –         –         –         –   
   Termination without cause      1,012,500        810,000        –         –         –         6,040        1,828,540  
   Control change      1,012,500        810,000        1,646,215        822,756        575,148        6,040        4,872,659  
   Retirement      –         –         –         –         –         –         –   

Archie Collins

    Resignation      –         –         –         –         –         –         –   
   Termination for cause      –         –         –         –         –         –         –   
   Termination without cause      937,500        750,000        –         –         –         3,368        1,690,868  
   Control change      937,500        750,000        1,134,402        567,374        401,907        3,368        3,794,551  
   Retirement      –         –         –         –         –         –         –   

Karen Hutt

    Resignation      –         –         –         –         –         –         –   
   Termination for cause      –         –         –         –         –         –         –   
   Termination without cause      825,000        577,500        –         –         –         2,661        1,405,161  
   Control change      825,000        577,500        1,192,330        596,577        418,950        2,661        3,613,018  
   Retirement      –         –         –         –         –         –         –   

Dan Muldoon

    Resignation      –         –         –         –         –         –         –   
   Termination for cause      –         –         –         –         –         –         –   
   Termination without cause      810,000        567,000        –         –         –         6,873        1,383,873  
   Control change      810,000        567,000        962,856        480,907        330,535        6,873        3,158,171  
   Retirement      –         –         –         –         –         –         –   

 

(1)

Please see the tables following for a description of the entitlements of each NEO under the various departure scenarios.

 

(2)

Payouts for PSUs assume a performance factor of 1.0 and both PSUs and RSUs are valued using the average closing share price for the last 50 trading days of 2024 of $52.88.

 

(3)

Stock options are valued using the closing share price on December 31, 2024 of $53.73.

 

(4)

Continuation of benefits may reflect amounts for health and dental benefits and insurance benefits, pursuant to the terms of the NEOs’ employment contracts, as applicable.

 

 
104   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

The following is a summary of each NEO’s entitlements on departure, based on his or her employment contract or the applicable plans as of December 31, 2024.

 

Scott Balfour   
Resignation    All unvested PSUs, RSUs and stock options are forfeited.
Terminated for cause    All unvested PSUs, RSUs and stock options are forfeited.
Terminated without cause    Entitled to a lump sum equal to 24 months’ compensation based upon annual salary and short-term incentive at target. Health, dental and other such benefits will be continued for up to 12 months. Unvested PSUs and RSUs are prorated to the date of termination and paid out at the end of the respective performance period, subject to the achievement of the applicable performance criteria. Unvested stock options are forfeited.
Change of control    If there is a change of control of the ownership of the Company, such that any one party acquires 50 per cent or more of voting securities, Mr. Balfour may elect to terminate employment for “good reason”(1) within 24 months of the change of control, and receive 24 months’ compensation based upon annual salary and short-term incentive at target. Health, dental and other such benefits will be continued for up to 12 months. Unvested PSUs and RSUs that were granted prior to the change of control are deemed to vest on the termination date and are paid out assuming a performance factor of 1.0. Unvested stock options that were granted prior to the change of control are deemed to vest on the termination date and must be exercised by the earlier of: (a) six months from the termination date; and (b) 10 years from the original grant date.
Retirement    Mr. Balfour becomes eligible to retire with an unreduced pension as of April 30, 2027. Information regarding pension entitlement is contained in Pension Plan Benefits. PSUs and RSUs continue to be eligible to vest in full following retirement and PSUs remain subject to the applicable performance criteria. Unvested stock options will continue to vest in full and in normal course past retirement and remain exercisable for the entire term of the option.

 

(1)

“Good reason” is described as any of the following events occurring without the NEO’s consent:

 

  •  

the Company materially diminishes the NEO’s position, authority, duties or responsibilities;

 

  •  

the Company requires the NEO to be based at a location more than 50 km from his or her current work location or to travel to a significantly greater extent; or the Company materially reduces the NEO’s annual base salary or their target incentive awards.

 

Greg Blunden   
Resignation    All unvested PSUs, RSUs and stock options are forfeited.
Terminated for cause    All unvested PSUs, RSUs and stock options are forfeited.
Terminated without cause    Entitled to a lump sum equal to 18 months’ compensation based upon annual salary and short-term incentive at target. Health, dental and other such benefits will be continued for up to 18 months. Unvested PSUs and RSUs are prorated to the date of termination and paid out at the end of the respective performance period, subject to the achievement of the applicable performance criteria. Unvested stock options are forfeited.
Change of control    If there is a change of control of the ownership of the Company, such that any one party acquires 50 per cent or more of voting securities, Mr. Blunden may elect to terminate employment for “good reason,” as defined below, within 24 months of such changes and receive 18 months’ compensation based upon annual salary and short-term incentive at target. Health, dental and other such benefits will be continued for up to 18 months. Unvested PSUs and RSUs that were granted prior to the change of control are deemed to vest on the termination date and are paid out assuming a performance factor of 1.0. Unvested stock options that were granted prior to the change of control are deemed to vest on the termination date and must be exercised by the earlier of: (a) six months from the termination date; and (b) 10 years from the original grant date.
Retirement    Mr. Blunden became eligible to retire with an unreduced pension as of December 31, 2024. Information regarding pension entitlement is contained in Pension Plan Benefits. PSUs and RSUs continue to be eligible to vest in full following retirement and PSUs remain subject to the applicable performance criteria. Unvested stock options will continue to vest in full and in normal course past retirement and remain exercisable for the entire term of the option.

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   105

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Archie Collins   
Resignation    All unvested PSUs, RSUs and stock options are forfeited.
Terminated for cause    All unvested PSUs, RSUs and stock options are forfeited.
Terminated without cause    Entitled to a lump sum equal to 18 months’ compensation based upon annual salary and short-term incentive at target. Health, dental and other such benefits will be continued for up to 18 months. Unvested PSUs and RSUs are forfeited in accordance with the applicable plan texts. Unvested stock options are forfeited.
Change of control    If there is a change of control of the ownership of the Company, such that any one party acquires 50 per cent or more of voting securities, Mr. Collins may elect to terminate employment for “good reason,” as defined below, within 24 months of such changes and receive 18 months’ compensation based upon annual salary and short-term incentive at target. Health, dental and other such benefits will be continued for up to 18 months. Unvested PSUs and RSUs that were granted prior to the change of control are deemed to vest on the termination date. The Committee has discretion to apply any performance- based requirements on PSUs. Unvested stock options that were granted prior to the change of control are deemed to vest on the termination date and must be exercised by the earlier of: (a) six months from the termination date; and (b) 10 years from the original grant date.
Retirement    Mr. Collins became eligible to retire with an unreduced pension as of September 30, 2021. Information regarding pension entitlement is contained in Pension Plan Benefits. PSUs and RSUs continue to be eligible to vest in full following retirement and PSUs remain subject to the applicable performance criteria. Unvested stock options will continue to vest in full and in normal course past retirement and remain exercisable for the entire term of the option.

 

Karen Hutt   
Resignation    All unvested PSUs, RSUs and stock options are forfeited.
Terminated for cause    All unvested PSUs, RSUs and stock options are forfeited.
Terminated without cause    Entitled to a lump sum equal to 18 months’ compensation based upon annual salary and short-term incentive at target. Health, dental and other such benefits will be continued for up to 12 months. Unvested PSUs and RSUs are prorated to the date of termination and paid out at the end of the respective performance period, subject to the achievement of the applicable performance criteria. Unvested stock options are forfeited.
Change of control    If there is a change of control of the ownership of the Company and Ms. Hutt’s employment is terminated without cause or Ms. Hutt terminates her employment for “good reason,” as defined in her employment agreement and below, within 24 months of the change of control, Ms. Hutt is entitled to receive 18 months’ compensation based upon annual salary and short-term incentive at target. Health, dental and other such benefits will be continued for up to 12 months. Unvested PSUs and RSUs that were granted prior to the change of control are deemed to vest on the termination date and are paid out assuming a performance factor of 1.0. Unvested stock options that were granted prior to the change of control are deemed to vest on the termination date and must be exercised by the earlier of: (a) six months from the termination date; and (b) 10 years from the original grant date.
Retirement    Ms. Hutt participates in the Defined Contribution pension plan and became eligible to retire as of November 30, 2021. Information regarding pension entitlement is contained in Pension Plan Benefits. PSUs and RSUs continue to be eligible to vest in full following retirement and PSUs remain subject to the applicable performance criteria. Unvested stock options will continue to vest in full and in normal course past retirement and remain exercisable for the entire term of the option.

 

 
106   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Dan Muldoon   
Resignation    All unvested PSUs, RSUs and stock options are forfeited.
Terminated for cause    All unvested PSUs, RSUs and stock options are forfeited.
Terminated without cause    Entitled to a lump sum equal to 18 months’ compensation based upon annual salary and short-term incentive at target. Health, dental and other such benefits will be continued for up to 12 months. Unvested PSUs and RSUs are prorated to the date of termination and paid out at the end of the respective performance period, subject to the achievement of the applicable performance criteria. Unvested stock options are forfeited.
Change of control    If there is a change of control of the ownership of the Company, such that any one party acquires 50 per cent or more of voting securities, Mr. Muldoon may elect to terminate employment for “good reason,” as defined below, within 24 months of such changes and receive 18 months’ compensation based upon annual salary and short-term incentive at target. Health, dental and other such benefits will be continued for up to 12 months. Unvested PSUs and RSUs that were granted prior to the change of control are deemed to vest on the termination date and are paid out assuming a performance factor of 1.0. Unvested stock options that were granted prior to the change of control are deemed to vest on the termination date and must be exercised by the earlier of: (a) six months from the termination date; and (b) 10 years from the original grant date.
Retirement    Mr. Muldoon became eligible to retire with an unreduced pension as of March 31, 2019. Information regarding pension entitlement is contained in Pension Plan Benefits. PSUs and RSUs continue to be eligible to vest in full following retirement and PSUs remain subject to the applicable performance criteria. Unvested stock options will continue to vest in full and in normal course past retirement and remain exercisable for the entire term of the option.

Shares Authorized for Issuance Under Equity-based Compensation Plans

The following table shows shares authorized for issuance under the Stock Option Plan and the ECSPP as of December 31, 2024. There are no equity-based compensation plans that were not approved by shareholders.

 

     (A)      (B)      (C)  
Plan category    Number of shares to be
issued upon exercise of
outstanding options		     

Weighted average exercise
price of outstanding options

($)

      Number of shares available
for future issuance under
equity compensation plans
(excluding column (A))		  

Equity-based compensation plans approved by shareholders

 

•Senior Management Stock Option Plan

      3,796,040        50.53        1,973,935  

•ECSPP

      N/A        N/A        1,726,497  
  

 

 

     

 

 

     

 

 

  

Total

      3,796,040        50.53        3,700,432  
  

 

 

     

 

 

     

 

 

  

Loans to Directors and Officers

No current or former Directors, officers or employees of Emera, or any of its subsidiaries, had any loans with Emera or any of its subsidiaries since the beginning of the most recently completed financial year, other than routine indebtedness as defined under Canadian securities laws.

Material Transactions

During the most recently completed financial year, insiders of the Company and its affiliates, including Directors, executive officers, proposed Director Nominees or their associates or corporations they controlled, did not have any material interest, direct or indirect, in any transaction or in any proposed transaction that has materially affected or will materially affect the Company.

Management Contracts

There are no functions of management that are performed by a person or company other than the Directors, executive officers or other employees of the Company.

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   107

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Audit Committee Information

For information regarding Emera’s Audit Committee, including its Charter, composition, relevant education and experience of its members, Audit Committee oversight, policies and procedures for the approval of non-audit services and Auditors’ service fees, please refer to the “Audit Committee” section and to “Appendix ‘D’ – Emera Incorporated Audit Committee Charter” of Emera’s Annual Information Form, for the year ended December 31, 2024, available under Emera’s profile on SEDAR+ at www.sedarplus.ca or by contacting the Corporate Secretary of the Company.

 

 
108   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Appendix

In This Section

 

 

Appendix A – Board of Directors Charter

      110  

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   109

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

Appendix A

Emera Incorporated Board of Directors Charter

The fundamental responsibility of the Board of Directors (the “Board”) is to provide stewardship and governance to Emera Incorporated (“Emera”) for the long term success of the Company by overseeing management of the business.

In addition to the powers set out in Emera’s Articles of Association, the Board shall have the following duties and responsibilities.

STRATEGIC PLANNING

The Board shall provide oversight and guidance on the strategic issues facing Emera.

The Board shall oversee a strategic planning process resulting in a strategic plan, which shall be approved on an annual basis and will take into account, among other things, the opportunities and risks of the business.

The Board shall regularly consider Emera’s strategy, evaluate progress made in pursuing that strategy and consider any adjustments to the strategy that may be required from time to time.

The Board shall review and approve the Company’s financial objectives, plans and actions, including significant capital allocations and expenditures.

The Board shall review and approve all material acquisitions, dispositions, projects, business plans and budgets.

SUSTAINABILITY AND INTEGRITY

The Board shall oversee management’s approach to addressing Emera’s Environmental, Social and Governance (ESG) impacts, risks and opportunities that are most important to its business performance and to key stakeholders.

The Board shall be comprised of a majority of “independent directors” as defined from time to time under applicable legislation and the rules of any stock exchange on which Emera’s securities are listed for trading.

The Chair shall be an “independent director” as defined above.

The Board shall review and approve the Emera Group of Companies Code of Conduct for employees, officers and directors of Emera and its subsidiaries and affiliates and a procedure for monitoring compliance with such code throughout the Company.

The Board shall satisfy itself as to the integrity of the Chief Executive Officer and executive officers and management’s creation of an integrity-based culture throughout the Company.

RISK RESPONSIBILITY

The Board shall oversee the implementation by management of appropriate systems to identify, report and manage the principal risks of Emera’s business. The Board will consider Emera’s risk profile and oversee Emera’s risk management by reviewing:

 

(a)

the regular identification and assessment of the principal risks of Emera;

 

(b)

the process for ongoing monitoring and reporting of the principal risks of Emera;

 

(c)

the effectiveness of Emera’s mitigation response to its principal risks;

 

(d)

the alignment of risk management with Emera’s risk profile, its strategy and its organizational objectives, including capital and resources allocation.

The Board shall also review Emera’s annual insurance program and uninsured exposure and Emera’s business continuity and disaster recovery plans.

The Board shall receive regular updates on the status of risk management activities and initiatives.

The Board shall review management’s processes that provide reasonable assurance of compliance with applicable legal and regulatory requirements.

 

 
110   EMERA 2025 MANAGEMENT INFORMATION CIRCULAR  

Notice of Annual Meeting of Common Shareholders and Management Information Circular

 

LEADERSHIP AND SUCCESSION

The Board shall oversee policies and practices to enable the Company to attract, develop and retain the human resources required by the Company to meet its business objectives.

The Board shall appoint executive officers and delegate the necessary authority for the conduct of the business.

The Board shall establish annual performance expectations and corporate goals and objectives for the Chief Executive Officer and monitor progress against those expectations.

The Board shall evaluate the performance and, following a review of recommendations from the Management Resources and Compensation Committee, approve compensation for executive officers.

The Board shall oversee the succession planning program for the Chief Executive Officer and other key executive positions from time to time.

FINANCIAL

The Board shall oversee the financial reporting and disclosure obligations imposed on the Company by laws, regulations, rules, policies and other applicable requirements.

The Board will review the financial performance of the Company and declare dividends as appropriate.

The Board shall approve for release to the public as necessary the Company’s financial statements, management’s discussion and analysis (MD&A) and earnings releases prepared by management and oversee the Company’s compliance with applicable audit, accounting and reporting requirements.

The Board shall review the quality and integrity of Emera’s internal controls and management information systems.

CORPORATE COMMUNICATIONS AND PUBLIC DISCLOSURE

The Board shall review and approve a formal corporate disclosure policy and oversee policies and processes for accurate, timely and appropriate public disclosure.

The Board shall oversee systems for receiving feedback from stakeholders and review such feedback received by the Company.

GOVERNANCE RESPONSIBILITY

The Board is responsible for overseeing the Company’s corporate governance policies and practices and shall maintain a set of corporate governance practices that are specifically appropriate to the Company.

Pursuant to the Articles, the directors shall appoint one of the directors as Chair of the Board and such director shall not be an employee of Emera or any of its affiliates or subsidiaries.

The Board shall establish appropriate structures and procedures to allow the Board to function independently of management and in the interests of the Company and its shareholders.

The Board, in carrying out its mandate, shall appoint committees of the Board and delegate certain functions to those committees, each of which shall have its own written charter. Notwithstanding such delegation, the Board retains its oversight function and ultimate responsibility for these delegated functions.

The Board shall oversee a process for the selection of qualified individuals for board nomination, and shall approve selection criteria for identifying director candidates taking into account the competencies and skills the Board as a whole should possess.

The Board shall undertake regular evaluation of the Board, the Chair of the Board, the Board committees and individual Directors.

The Board shall undertake regular evaluation of Directors’ compensation.

The Board shall review this Charter annually to ensure it appropriately reflects the Board’s stewardship responsibilities.

 

 

 
  EMERA 2025 MANAGEMENT INFORMATION CIRCULAR   111

LOGO

LOGO

Exhibit 99.6

 

LOGO

2024 Annual Report

LOGO

Emera at a Glance Data is as of December 31, 2024, unless otherwise indicated.1 Emera is a leading North American provider of energy services headquartered in Halifax, Nova Scotia. Emera delivers safe, reliable and cleaner energy to customers through investments in regulated electric and natural gas utilities, and related businesses and assets. HIGHLIGHTS $43B total assets $7.2B revenue 7,600 employees 2.6M customers 6 electric and natural gas utilities ADJUSTED NET INCOME2 Excluding Corporate costs BY GEOGRAPHY 68% Florida 22% Canada 10% Other OUR COMPANIES Tampa Electric New Mexico Gas3 Emera Energy Nova Scotia Power Emera Caribbean Emera New Brunswick Peoples Gas Emera Newfoundland SeaCoast Gas Transmission & Labrador 1 this report contains forward-looking information and should be read in conjunction with, and is qualified by, the cautionary statement set out on page 12 documents and websites referenced herein are not incorporated by reference into this report unless explicitly stated otherwise. All references in this report to websites are intended to be inactive textual references only. 2 Based on 2024 adjusted net income attributable to common shareholders (“adjusted net income”), excluding corporate costs of $360 million, adjusted net income is a non- GAAP measure, which does not have a standardized meaning under United States Generally Accepted Accounting Principles (“USGAAP” or “GAAP”). For more information and a reconciliation to the nearest GAAP measure, refer to “Non-GAAP Financial Measures and Ratios” in Emera’s Q4 2024 MD&A. 3 In August 2024, Emera entered into an agreement to sell New Mexico Gas. This transaction is expected to close later in 2025.

LOGO

Why Invest in Emera Emera is at the forefront of a transformative era in energy with robust opportunities to invest on behalf of customers across the portfolio. Our proven strategy and operational excellence ensure we can capitalize on these opportunities and deliver earnings, cash flow and dividend growth for investors. PREMIUM PORTFOLIO OF REGULATED VISIBLE GROWTH PLAN UTILITIES FOCUSED IN FLORIDA ~70% $20B capital investment plan through 2029, focused on grid of adjusted net income,1 excluding Corporate costs, reliability, resiliency & modernization, system expansion to comes from our Florida operations meet customer growth, renewable integration, technology and customer facing solutions ~80% 7% to 8% of capital plan through 2029 is being invested in Florida, annualized, forecasted rate-base growth through 2029 supporting strong customer growth at Tampa Electric and Peoples Gas CONSTRUCTIVE REGULATORY ENVIRONMENTS RELIABLE EARNINGS AND DIVIDEND GROWTH Highly rated 18 years regulatory environments of consecutive dividend growth 1-2% 98% annual dividend growth target of adjusted net income,1 excluding Corporate costs, derived from our regulated utilities 5-7% average adjusted EPS2 growth target through 20273 1 Based on 2024 adjusted net income, excluding Corporate costs of $360 million. Adjusted net income is a non-GAAP measure which does not have standardized meaning under USGAAP. For more information and reconciliation to the nearest GAAP measure, refer to “Non-GAAP Financial Measures and Ratios” in Emera’s Q4 2024 MD&A. 2 Adjusted earnings per share (“EPS”) is a non-GAAP ratio, which does not have standardized meaning under USGAAP. For more information, refer to “Non-GAAP Financial Measures and Ratios” in Emera’s Q4 2024 MD&A. 3 Adjusted EPS growth forecast uses 2024 as base year.

LOGO

EMERA 2024 ANNUAL REPORT 1 2024 Financial Highlights Unless otherwise indicated, data is as of December 31, 2024 and currency is in Canadian dollars. $2.94 annual adjusted EPS1 ~70% of adjusted net income,2 excluding Corporate costs, comes from our Florida operations $3.2B capital invested in 2024, leading to an 8% annual increase in rate base 5.4% dividend yield3 2024 Adjusted Net Income2 Excluding Corporate costs 1 Adjusted EPS is a non-GAAP ratio, which does not have standardized meaning under USGAAP. For more information, refer to “Non-GAAP Financial Measures and Ratios” in Emera’s Q4 2024 MD&A. 2 Based on 2024 adjusted net income, excluding Corporate costs of $360 million. Adjusted net income is a non-GAAP measure, which does not have a standardized meaning under USGAAP. For more information and a reconciliation to the nearest GAAP measure, refer to “Non-GAAP Financial Measures and Ratios” in Emera’s Q4 2024 MD&A. 3 Based on December 31, 2024, share price of $53.73. 2 EMERA 2024 ANNUAL REPORT

LOGO

OUR STRATEGY We seek reliable, growing, forward-thinking utility investment opportunities, focused on premium operations in high-growth jurisdictions, a robust capital investment strategy, and a thoughtful approach to risk management, all of which drive value and steady growth for our shareholders. OUR PURPOSE Energizing modern life and delivering a cleaner energy future for all. OUR VISION To be the energy provider of choice for our customers, the employer of choice for our people and a preferred choice for investors. OUR VALUES Our core values shape our culture and guide our work every day. We put safety above all else. We put customers at the centre of everything we do. We value candour, respect and collaboration. We care for each other, the environment and our communities. We set a high bar and take on big things. CLIMATE PROGRESS Building on more than two decades of cost-effective investment, we’re proud of our track record with system enhancements and reductions in CO2 emissions that have addressed government requirements along a path to net zero by 2050.1 1 Achieving our vision on this timeline is subject to external factors beyond our control and dependent upon decisions of, and/or support from, others including government, regulators, independent system operators, independent power producers, interconnected utilities, partners, investors, customers and Indigenous communities. It is also reliant on the development and/or commercialization of new and emerging technologies and/or the use of offsets. Shifts in government and regulatory policies/programs may impact our projects and progress. We will only proceed with forward-looking investments where we can demonstrate to the satisfaction of regulators that such investments are prudent and the most cost-effective solution for customers within the applicable legislative and regulatory regimes. 2 Includes provincial procurement programs and independent power purchase agreements. 3 Our reductions in CO2 emissions, coal used in generation (GWh), and our net-zero vision are compared to 2005 levels and include CO2 Scope 1 generation emissions for Tampa Electric and Nova Scotia Power only. These values are still undergoing review and verification. We have previously shared an internal 2025 target to achieve a 55% reduction in CO2 emissions compared to 2005 levels. 4 90% of our 2025-2029 capital plan is focused on cost-effective investments in grid reliability and modernization, renewable integration and technological innovation. 5. Where required by legislation or otherwise proven to be cost effective for customers. EMERA 2024 ANNUAL REPORT 3

Letter from the Chair and the CEO

 

 

Karen Sheriff

Chair, Emera Inc. Board of Directors

 

Scott Balfour

President and Chief Executive Officer, Emera Inc.

    LOGO    LOGO
                                         
Fellow Shareholders,    It’s a transformative era for the energy sector as economic, social, political, technological and environmental trends are shaping a future where energy is a cornerstone of progress. This is being amplified by advancements made toward the energy transition — where we’re experiencing a fundamental shift in how energy is generated, delivered and consumed.
   Our sector saw numerous challenges, and opportunities throughout the year including evolving customer expectations, customer affordability challenges, unprecedented weather events, supply chain constraints, evolving government and energy policy and ongoing global economic and geopolitical impacts.
   Our operating companies rose to these challenges and seized opportunities, staying focused on reliably and cost effectively delivering for customers today, while working to ensure we can continue to meet their needs in the future. This commitment to customers and operational excellence enables Emera to stay focused on providing sustainable, long- term value to shareholders.
   Our operating teams’ commitment to customers was exemplified in 2024 by the response to two record-breaking storms that impacted our Florida utilities. Hurricane Helene hit in late September, followed less than two weeks later by Hurricane Milton — the strongest storm to hit Tampa Bay in a century. After Milton, more than 6,000 workers, including teams from Nova Scotia Power and across the continent, worked nonstop to restore service to hundreds of thousands of Tampa Electric customers within a week, logging over 900,000 work hours in tough conditions with no serious safety incidents.
   In recognition of this outstanding work, the Tampa Electric team was awarded the Edison Electric Institute Emergency Response Award for 2024. We’re incredibly proud of our team’s dedication to customers despite the challenging circumstances.
   The Peoples Gas system fared very well, with fewer than 1,500 of its more than 500,000 customers experiencing service interruptions during the hurricanes. As electric utilities focused on safely restoring power, Peoples Gas provided critical emergency backup energy for homes, businesses, shelters and healthcare facilities, demonstrating the resilience and

 

     
4    EMERA 2024 ANNUAL REPORT

LOGO

reliability of natural gas and its essential role in Florida’s energy system. The team also took steps to protect the system from damage during the restoration, launching a targeted damage prevention campaign to reinforce the importance of safe-digging practices in affected areas. This exceptional level of dedication to customers is shared by every member of the team across Emera — and it’s reinforced by our unwavering commitment to operational excellence and to delivering increasing value to shareholders. As a result, we accomplished a lot together, for customers and shareholders, throughout the year. 2024 Highlights We achieved a number of significant milestones in 2024 as we continued to focus our efforts on driving growth and enhancing shareholder value. We successfully executed our strategic plan to strengthen our balance sheet, create flexibility in our capital funding program and optimize our portfolio for future growth. This included the sale of our interest in the Labrador-Island Link, which closed in June, and the sale of New Mexico Gas, expected to close later this year. Once complete, these will generate combined proceeds that exceed our $1.3 billion target by more than double. We completed a $500 million issuance of hybrid securities, primarily used to repay long-term holding company debt. We moderated our dividend growth rate to provide more flexibility in financing the robust capital profile we have in front of us, while also continuing to deliver growing dividends for investors. EMERA 2024 ANNUAL REPORT 5

Letter from the Chair and the CEO

 

                                      

Our ambitious plan positions us well to seize growth opportunities ahead

 

 

 

$3.2B

capital plan for 2024 completed

   

In Nova Scotia, we worked with the federal and provincial governments, to securitize more than $600 million of under-recovered fuel costs and deferred fuel costs at Nova Scotia Power, reducing debt and decreasing the impact from the recovery of these costs from customers through rates.

 

  

Executing on our ambitious plan supports our premium portfolio of high-quality assets across North America and positions us well to seize the growth opportunities ahead.

 

 

 

49%

reduction in CO2 emissions since 2005

   

We successfully completed our $3.2 billion capital plan for the year — our largest annual program to date — as we continued to invest in reliability and resiliency, system expansion to meet customer growth, as well as renewables and renewable integration investments largely to meet legislated decarbonization requirements in some of our jurisdictions. As a result, we made significant achievements across the Company in 2024, including:

 

  

•  At the end of 2024, we achieved a 49 per cent reduction in CO2 emissions and reduced our use of coal in generation by 80 per cent, both compared to 2005 levels.1

 

  

•  Tampa Electric continued to expand its solar fleet in 2024. Two new projects totaling 100 MW were brought into service, bringing total solar capacity to 1,350 MW. Another 745 MW is planned to be added by the end of 2028. In addition to supporting reliability, solar generation has saved Tampa Electric customers $321 million USD in fuel costs since 2017.

  

•  Peoples Gas constructed pipelines to two renewable natural gas (RNG) producers to connect additional RNG into Florida’s natural gas supply. In addition to the three RNG facilities already connected, the team is building pipelines to connect the Polk County municipal landfill and Southern Cross Dairy facilities to the intrastate transmission pipeline. The dairy connection will be bidirectional, allowing the facility to access natural gas as a reliable backup during a power outage. Both connections are expected to be in service this year.

  

•  After receiving regulatory approval in 2024, Nova Scotia Power started construction of its 150 MW grid-scale battery storage project, an equity partnership with Nova Scotia’s 13 Mi’kmaq communities. The project includes three 50 MW battery storage sites that will enable more renewable energy and enhance reliability for customers. Two sites are expected to be operational this year, with the third to be complete in 2026.

  

•  The Maritime Link performed well in 2024, once again achieving over 99.9 per cent availability. The Link delivered nearly two million megawatts of clean hydroelectricity to Nova Scotia, serving approximately 19 per cent of Nova Scotia Power’s energy requirements and resulting in $100M in savings for Nova Scotians over the course of the year.

 

1

Reductions are still undergoing verification. CO2 emissions reduction includes Scope 1 generation emissions for Tampa Electric and Nova Scotia Power only.

 

     
6    EMERA 2024 ANNUAL REPORT

LOGO

Letter from the Chair and the CEO Safety is our first priority in everything we do across Emera. We continue to reinforce our strong safety culture and have made significant progress in reducing serious injuries and fatalities across our operations. Grand Bahama Power has solar energy in its mix for the first time with agreements to purchase a total of 14.5 MW from three independent solar sites, two of which were commissioned in 2024. The team is also working to launch its own 5 MW solar site later this year. Once complete, solar energy at GBPC will total 19.5 MW, or approximately 14.5 per cent of the island’s energy needs. In addition to reducing CO2 emissions, solar is helping to reduce the impact of volatile fuel prices and stabilize energy costs for customers. New rates came into effect for two of our utilities in 2024 — at Peoples Gas early in January, and at New Mexico Gas in October. In December, the Florida Public Service Commission approved essentially all of Tampa Electric’s capital plan based upon a midpoint return on equity of 10.5%, with an allowed range of 9.5% to 11.5%. New rates went into effect in January 2025. In December, we announced our five-year capital investment plan — the largest in our history at $20 billion through 2029. In addition to delivering exceptional value to customers, our $20B capital plan will drive top-tier rate base growth and support our targeted annual adjusted EPS growth of five to seven per cent through 2027.1, 2 five-year capital investment plan 1 Adjusted EPS is a non-GAAP ratio, which does not have standardized meaning under USGAAP. For more information, refer to “Non-GAAP Financial Measures and Ratios” in Emera’s Q4 2024 MD&A. 2 Adjusted EPS growth forecast uses 2024 as base year. EMERA 2024 ANNUAL REPORT 7

Letter from the Chair and the CEO

 

                                      

Emera is well-positioned to capitalize on opportunities to deliver for our customers and our shareholders.

 

   Safety
   Safety is a top priority in everything we do across Emera. We continue working to reinforce our strong safety culture and remain relentlessly focused on reducing serious injuries and fatalities across our operations.
   Our commitment to safety is strengthened by visible safety leadership, and we continually work to build on this. Throughout 2024, members of the leadership team conducted safety engagements across the business. This included participating in a wide range of activities such as risk assessments, compliance checks, inspections and safety conversations. We believe these engagements allow leaders to underpin our commitment with frontline employees, further reinforcing our robust safety culture.
   Despite remaining well under the industry average, our key safety metrics for 2024 were disappointing. We saw a 30 per cent increase in our year-over-year total recordable injury rate, placing us 24 per cent higher than our five-year average. Our lost time injury (LTI) frequency rate for the year increased by 40 per cent over 2023, three per cent higher than our five-year average.
   We’re committed to learning from all incidents as we stay focused on safety first and continue working to build an Emera where no one gets hurt.

 

    Financial Results

$849M

annual adjusted net income1

  

We reported annual adjusted net income1 for 2024 of $849 million and adjusted EPS1 of $2.94. These results were in line with $2.96 in 2023 and the benchmark for our adjusted EPS growth guidance.

 

   Our regulated utilities, particularly those in Florida, continue to drive our earnings growth with a six per cent increase in adjusted earnings1 contributions in 2024. Adjusted earnings1 growth across our regulated utilities was offset by lower earnings from equity investments as a result of the Labrador Island Link transaction in Q2 2024 and lower contributions from Emera Energy due to less favourable market conditions.
   We remained focused on delivering value to our shareholders. In 2024, our Board of Directors approved an increase in our quarterly dividend of $0.03 per common share, marking our 18th consecutive year of dividend increases. This increase was in line with our adjusted dividend growth targetannounced as partofour strategic update in June. We also announced our three-year average adjusted EPS1 growth target of five to seven per cent through 2027,2 reflecting our confidence in our continued growth and strong performance. Emera shareholders can continue to expect dependable and growing dividends, underpinned by our prudent financial management and disciplined capital allocation.

 

1

Adjusted net income and adjusted EPS are a non-GAAP measure and a non-GAAP ratio, respectively, which do not have standardized meaning under USGAAP. For more information and a reconciliation to the nearest GAAP measure, refer to “Non-GAAP Financial Measures and Ratios” in Emera’s Q4 2024 MD&A.

2

Adjusted EPS growth forecast uses 2024 as base year.

 

     
8    EMERA 2024 ANNUAL REPORT

Letter from the Chair and the CEO

 

We saw a positive response to the strategic update we provided to the market mid-year. We saw strong share price performance in the second half of the year, both on an absolute and relative basis. We outperformed our closest peers on both the Canadian and US utility indices, as well as on the broader market.   
With key trends converging to drive an unprecedented increase in demand for reliable energy, our growth drivers remain strong, evidenced by our forecasted seven to eight per cent rate-base growth CAGR over the next five years, as we invest to meet customer needs. We’re confident that as we make these customer-focused investments, we will also deliver long-term value for Emera shareholders.   
Board Changes   
After more than 10 years of service, Jackie Sheppard stepped down as Chair of the Emera Board in February 2025. Jackie’s leadership and her expertise in strategic planning, public markets, legal and corporate governance were critical in guiding Emera through a period of significant growth and expansion, including the 2016 acquisition of TECO and the successful completion of the Maritime Link project. We will continue to benefit from her expertise as she stays on as a Director through 2025. On behalf of the entire Board and management team, thank you Jackie for your invaluable commitment to Emera.   
Karen Sheriff has been appointed the new Chair of the Board. Since joining as a Director in 2021, Karen’s leadership experience in public and private companies, as well as in regulated environments, has made her a strong addition to the Board and will be instrumental in guiding Emera’s next phase of growth.   
We welcomed Carla Tully to the Board in June 2024. Carla is the former Chief Executive Officer and Co-Founder of Earthrise Energy. Her profound experience in the energy and infrastructure sectors in North America and Europe, combined with her track record in leading and growing businesses, have made her a strong addition to our Board.   
                                                
It’s been a busy year of progress. With a stronger balance sheet, a disciplined capital investment plan, and a premium portfolio of assets located in high-quality jurisdictions across North America, Emera is well-positioned to capitalize on opportunities to deliver for our customers and our shareholders.    Thank You
This a direct result of the hard work and talent of the teams across our business that drive our success.   
To the Board of Directors and the entire Emera team, thank you for your relentless focus on customers and continued commitment to shareholders. Together, we’ve made great progress, and our business is well-placed for future growth.   
To our valued shareholders, thank you for your confidence in Emera.   

 

LOGO    LOGO   
Karen Sheriff    Scott Balfour   
Chair, Board of Directors,    President and Chief Executive Officer,   
Emera Inc.    Emera Inc.   

 

     
EMERA 2024 ANNUAL REPORT    9

Financial Review

 

                                                        

 

12

    Forward-looking Information

12

    Introduction and Strategic Overview

13

    Non-GAAP Financial Measures and Ratios

15

    Consolidated Financial Review

15

   

Significant Items Affecting Earnings

16

   

Consolidated Financial Highlights

18

   

Consolidated Income Statement Highlights

20

    Business Overview and Outlook

20

   

Florida Electric Utility

21

   

Canadian Electric Utilities

23

   

Gas Utilities and Infrastructure

24

   

Other Electric Utilities

25

   

Other

26

    Consolidated Balance Sheet Highlights

27

    Other Developments

29

   Financial Highlights

29

  

Florida Electric Utility

30

  

Canadian Electric Utilities

32

  

Gas Utilities and Infrastructure

34

  

Other Electric Utilities

36

  

Other

38

   Liquidity and Capital Resources

39

  

Consolidated Cash Flow Highlights

40

  

Working Capital

40

  

Contractual Obligations

41

  

Forecasted Consolidated

 

Capital Expenditures

41

  

Debt Management

43

  

Credit Ratings

43

  

Guaranteed Debt

44

  

Outstanding Stock Data

45

   Pension Funding

45

   Off-Balance Sheet Arrangements

46

   Dividend Payout Ratio

46

   Transactions with Related Parties

46

   Enterprise Risk and Risk Management

54

   Risk Management including Financial Instruments

56

   Disclosure and Internal Controls

56

   Critical Accounting Estimates

60

   Changes in Accounting Policies and Practices

60

  

Future Accounting Pronouncements

61

   Summary of Quarterly Results

63

   Management Report

64

   Independent Auditor’s Report

68

   Report of Independent Registered Public Accounting Firm

71

   Consolidated Financial Statements

77

   Notes to the Consolidated Financial Statements

137

   Emera Leadership and Board

138

   Shareholder Information
 

 

     
10    EMERA 2024 ANNUAL REPORT

Management’s Discussion and Analysis

 

Management’s Discussion & Analysis

As at February 21, 2025

Management’s Discussion & Analysis (“MD&A”) provides a review of the results of operations of Emera Incorporated and its consolidated subsidiaries and investments (collectively referred to as “Emera” or the “Company”) during the fourth quarter of, and for the full year of, 2024 relative to the same periods in 2023 and selected financial information for 2022; and its financial position as at December 31, 2024 relative to December 31, 2023. The Company’s activities are carried out through five reportable segments: Florida Electric Utility, Canadian Electric Utilities, Gas Utilities and Infrastructure, Other Electric Utilities, and Other.

This MD&A should be read in conjunction with the Emera annual audited consolidated financial statements and supporting notes as at and for the year ended December 31, 2024. Emera follows United States Generally Accepted Accounting Principles (“USGAAP” or “GAAP”). Additional information related to Emera, including the Company’s Annual Information Form, can be found on Sedar+ at www.sedarplus.ca.

The accounting policies used by Emera’s rate-regulated entities may differ from those used by Emera’s non-rate-regulated businesses with respect to the timing of recognition of certain assets, liabilities, revenues and expenses. At December 31, 2024, Emera’s rate-regulated subsidiaries and investments include:

 

Rate-Regulated Subsidiary or Equity Investment

   

Accounting Policies Approved/Examined By

Subsidiary   
Tampa Electric Company (“TEC”)   

Florida Public Service Commission (“FPSC”) and

the Federal Energy Regulatory Commission (“FERC”)

Nova Scotia Power Inc. (“NSPI”)    Nova Scotia Utility and Review Board (“UARB”)
Peoples Gas System, Inc. (“PGS”)    FPSC
New Mexico Gas Company, Inc. (“NMGC”)    New Mexico Public Regulation Commission (“NMPRC”)
SeaCoast Gas Transmission, LLC (“SeaCoast”)    FPSC
Emera Brunswick Pipeline Company Limited (“Brunswick Pipeline”)    Canadian Energy Regulator (“CER”)
Barbados Light & Power Company Limited (“BLPC”)    Fair Trading Commission, Barbados (“FTC”)
Grand Bahama Power Company Limited (“GBPC”)    The Grand Bahama Port Authority (“GBPA”)
Equity Investments   
NSP Maritime Link Inc. (“NSPML”)    UARB
Maritimes & Northeast Pipeline Limited Partnership and Maritimes & Northeast Pipeline, LLC (“M&NP”)    CER and FERC
St. Lucia Electricity Services Limited (“Lucelec”)    National Utility Regulatory Commission

All amounts are in Canadian dollars (“CAD”), except for the Florida Electric Utility, Gas Utilities and Infrastructure, and Other Electric Utilities sections of the MD&A, which are reported in United States dollars (“USD”) unless otherwise stated.

 

     
EMERA 2024 ANNUAL REPORT   11

Management’s Discussion and Analysis

 

Forward-looking Information

This MD&A contains “forward-looking information” (“FLI”) and statements which reflect the current view with respect to the Company’s expectations regarding future growth, results of operations, performance, the expected timing and outcome of the pending sale of NMGC, business prospects and opportunities, and may not be appropriate for other purposes within the meaning of applicable Canadian securities laws. All such information and statements are made pursuant to safe harbour provisions contained in applicable securities legislation. The words “anticipates”, “believes”, “budget”, “could”, “estimates”, “expects”, “forecast”, “intends”, “may”, “might”, “plans”, “projects”, “schedule”, “should”, “targets”, “will”, “would” and similar expressions are often intended to identify FLI, although not all FLI contains these identifying words. The FLI reflects management’s current beliefs and is based on information currently available to Emera’s management and should not be read as guarantees of future events, performance or results, and will not necessarily be accurate indications of whether, or the time at which, such events, performance or results will be achieved.

FLI is based on reasonable assumptions and is subject to risks, uncertainties and other factors that could cause actual results to differ materially from historical results or results anticipated by the FLI. Factors that could cause results or events to differ from current expectations include, without limitation: regulatory and political risk; change in law risk; operating and maintenance risks; changes in economic conditions; commodity price and availability risk; liquidity and capital markets risk; changes in credit ratings; future dividend growth, rate base growth, and adjusted earnings per common share (“EPS”) growth; timing and costs associated with certain capital investments; expected impacts on Emera of challenges in the global economy; estimated energy consumption rates; maintenance of adequate insurance coverage; changes in customer energy usage patterns; developments in technology that could reduce demand for electricity; climate change risk; weather risk, including higher frequency and severity of weather events; risk of wildfires; unanticipated maintenance and other expenditures; system operating and maintenance risk; derivative financial instruments and hedging; interest rate risk; inflation risk; counterparty risk; disruption of fuel supply; country risks; supply chain risk; environmental risks; foreign exchange (“FX”); regulatory and government decisions, including changes to environmental legislation, financial reporting and tax legislation; risks associated with pension plan performance and funding requirements; loss of service area; risk of failure of information technology (“IT”) infrastructure and cybersecurity risks; uncertainties associated with infectious diseases, pandemics and similar public health threats; market energy sales prices; labour relations; and availability of labour and management resources.

Readers are cautioned not to place undue reliance on FLI, as actual results could differ materially from the plans, expectations, estimates or intentions and statements expressed in the FLI. All FLI in this MD&A is qualified in its entirety by the above cautionary statements and, except as required by law, Emera undertakes no obligation to revise or update any FLI as a result of new information, future events or otherwise.

Introduction and Strategic Overview

Emera (TSX: EMA) is a North American provider of energy services, owning and operating a portfolio of cost-of-service, rate- regulated electric and gas utilities. Its largest operations are in Florida, with additional operations in Atlantic Canada, New Mexico, and the Caribbean. Emera is headquartered in Halifax, Nova Scotia.

Emera’s business strategy is centered on continued investment in its regulated utilities, combined with a focus on operational excellence and efficiency, to safely and reliably deliver energy to its 2.6 million customers. Effective execution of these priorities supports predictable and growing earnings, cash flow and dividends for shareholders.

Earnings opportunities in regulated utilities are a function of the magnitude of net investment in the utility (known as “rate base”), the amount of equity in the capital structure, and the targeted return on that equity (“ROE”), all as established and approved through regulation. Earnings are also affected by sales volumes and operating expenses. In 2024, Emera’s regulated cost-of-service utilities in Florida accounted for 65 per cent of average consolidated rate base, with Atlantic Canada comprising 27 per cent, and the Caribbean and New Mexico at 4 per cent each.

Emera’s capital investment plan is forecasted to be approximately $20 billion from 2025 through 2029 and is focused on delivering value for customers through prudent investments in reliability and system resiliency, infrastructure modernization, expansion to address customer growth, integration of renewables, and technological innovations to deliver better customer experiences. It is anticipated that approximately 80 per cent of this capital investment will be made in Emera’s Florida utilities, necessitated by customer growth and system requirements at both TEC and PGS.

 

     
12   EMERA 2024 ANNUAL REPORT

Management’s Discussion and Analysis

 

As at

millions of dollars

    2025      2026      2027      2028      2029      Total  

Capital investment plan

    $ 3,420      $ 3,990      $ 4,050      $ 4,380      $ 4,590      $ 20,430  

Average consolidated rate base

                  

US operations

    $ 21,520      $ 23,340      $ 25,140      $ 27,050      $ 29,400     

Canadian operations

      7,630        8,000        8,370        8,590        8,870     
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

Total

    $ 29,150      $ 31,340      $ 33,510      $ 35,640      $ 38,270     
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

*

Capital investment plan and average consolidated rate base exclude NMGC. Refer to “Other Developments” for more information on the pending sale of NMGC.

Emera’s capital investment plan will be funded primarily through internally generated cash flows, debt raised at the operating company level consistent with regulated capital structures, equity issuances, and the anticipated sale of NMGC. Generally, Emera’s equity requirements are expected to be funded through the issuance of preferred equity, and the issuance of common equity through Emera’s dividend reinvestment plan (“DRIP”) and its at-the-market program (“ATM program”). Maintaining investment-grade credit ratings is a core strategic priority of the Company.

Emera has increased dividends per common share paid for 18 consecutive years and has provided forward annual dividend growth guidance of one to two per cent. Emera’s anticipates adjusted EPS average growth of five to seven per cent through 2027 which will support reduction in the ratio of dividend payout to adjusted net income. For further information on the non- GAAP ratios “Adjusted EPS” and “Dividend Payout Ratio of Adjusted Net Income”, refer to the “Non-GAAP Financial Measures and Ratios” section.

Non-GAAP Financial Measures and Ratios

Emera uses financial measures and ratios that do not have standardized meaning under USGAAP and are calculated by adjusting certain GAAP measures for specific items. They may not be comparable to similar measures presented by other entities. These measures and ratios are discussed and reconciled below.

ADJUSTED NET INCOME, ADJUSTED EPS – BASIC, AND DIVIDEND PAYOUT RATIO OF ADJUSTED NET INCOME

Emera calculates an adjusted net income attributable to common shareholders (“adjusted net income”) measure by excluding items below from net income attributable to common shareholders. Management believes excluding these items better distinguishes ongoing operations of the business and allows investors to better understand and evaluate the business.

Emera calculates adjusted net income for the Florida Electric Utility, Canadian Electric Utilities, Gas Utilities and Infrastructure, Other Electric Utilities, and Other segments. Reconciliation to the nearest GAAP measure is included in each segment. For more information refer to the Financial Highlights section for each of Florida Electric Utility, Gas Utilities and Infrastructure, Other Electric Utilities, and Other.

Adjusted EPS – basic and dividend payout ratio of adjusted net income are non-GAAP ratios which are calculated using adjusted net income, as described above. For further details on dividend payout ratio of adjusted net income, refer to the “Dividend Payout Ratio” section.

ADJUSTING ITEM IMPACTING ALL PERIODS:

Mark-to-market (“MTM”) Adjustments:

Management believes excluding from net income the effect of MTM valuations and changes thereto, until settlement, better aligns the intent and financial effect of these contracts with the underlying cash flows, and therefore excludes MTM adjustments for evaluation of performance and incentive compensation. The MTM adjustments are related to the following:

 

  •  

held-for-trading (“HFT”) commodity derivative instruments, including adjustments related to the price differential between the point where natural gas is sourced and where it is delivered, and the related amortization of transportation capacity recognized as a result of certain Emera Energy marketing and trading transactions;

 

  •  

the business activities of Bear Swamp Power Company LLC (“Bear Swamp”) included in Emera’s equity income;

 

  •  

equity securities held in BLPC and Emera Energy; and FX hedges entered into to hedge USD denominated operating unit earnings exposure.

 

     
EMERA 2024 ANNUAL REPORT   13

Management’s Discussion and Analysis

 

ADJUSTING ITEMS IMPACTING 2024:

Gain on Sale of Emera’s Indirect Minority Interest in the LIL (“Gain on sale of LIL”):

In Q2 2024, Emera recognized a $107 million gain, after tax and transaction costs, on the sale of LIL. In Q4 2024, Emera recognized a $22 million tax benefit related to the reversal of a prior year valuation allowance. A portion of the taxable capital gain on sale of LIL was offset by prior year loss carryforwards, of which the tax benefit was subject to a valuation allowance as at December 31, 2023. For further details refer to the “Significant Items Affecting Earnings” and “Other Developments” sections.

Financing Structure Wind-Up:

In Q4 2024, Emera recognized a $58 million tax benefit related to denied interest and financing expenses and the wind- up of a specific financing structure. For further details refer to the “Significant Items Affecting Earnings” and “Other Developments” sections.

Charges Related to Wind-Down Costs and Certain Asset Impairments:

In Q4 2024, the Company recognized $26 million, after-tax, in wind-down costs and certain asset impairments, primarily at Block Energy LLC (“Block Energy”). For further details, refer to the “Significant Items Affecting Earnings” section.

Charges Related to the Pending Sale of NMGC:

On August 5, 2024, Emera entered into an agreement to sell NMGC. In Q3 2024, the Company recognized $206 million in non-cash goodwill and other impairment charges, after-tax, and an additional loss of $19 million in estimated transaction costs, after-tax, related to the pending sale. For further details, refer to the “Significant Items Affecting Earnings” and “Other Developments” sections.

ADJUSTING ITEMS IMPACTING 2022:

GBPC Impairment Charge:

In Q4 2022, the Company recognized a $73 million non-cash goodwill impairment charge related to GBPC due to a decline in the fair value (“FV”) of the reporting unit.

NSPML Unrecoverable Costs:

In Q1 2022, the UARB issued a decision to disallow recovery of $9 million in costs ($7 million after-tax) included in NSPML’s final capital cost application.

RECONCILIATION OF NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS TO ADJUSTED NET INCOME:

 

For the    Three months ended
December 31		      Year ended
December 31		  

millions of dollars (except per share amounts)

    2024     2023      2024     2023      2022  

Net income attributable to common shareholders

    $ 154     $ 289      $ 494     $ 978      $ 945  

Gain on sale of LIL, after-tax (1)

      22       —         129       —         —   

Financing structure wind-up

      58       —         58       —         —   

Charges related to wind-down costs and certain asset impairments, after-tax (2)

      (26 )      —         (26 )      —         —   

Charges related to the pending sale of NMGC, after-tax (3)(4)

      —        —         (225 )      —         —   

MTM (loss) gain, after-tax (5)

      (146 )      114        (291 )      169        175  

GBPC impairment charge

      —        —         —        —         (73 ) 

NSPML unrecoverable costs

      —        —         —        —         (7 ) 

Adjusted net income

    $ 246     $ 175      $ 849     $ 809      $ 850  

EPS – basic

    $ 0.52     $ 1.04      $ 1.71     $ 3.57      $ 3.56  

Adjusted EPS – basic

    $ 0.84     $ 0.63      $ 2.94     $ 2.96      $ 3.20  

 

(1)

Includes an income tax recovery of $22 million for the three months ended December 31, 2024 and net of income tax expense of $53 million for the year ended December 31, 2024 (2023 – nil).

(2)

Net of income tax recovery of $6 million for the three months and year ended December 31, 2024 (2023 – nil).

(3)

Represents (i) $206 million in non-cash goodwill and other impairment charges, after-tax and (ii) $19 million in transaction costs, after-tax for the year ended December 31, 2024 (2023 – nil).

(4)

Net of income tax recovery of $21 million for the year ended December 31, 2024 (2023 – nil).

(5)

Net of income tax recovery of $57 million for the three months ended December 31, 2024 (2023 – $44 million expense) and $117 million recovery for the year ended December 31, 2024 (2023 – $68 million expense) (2022 – $73 million expense).

 

     
14   EMERA 2024 ANNUAL REPORT

Management’s Discussion and Analysis

 

EBITDA AND ADJUSTED EBITDA

Earnings before interest, income taxes, depreciation and amortization (“EBITDA”) and adjusted EBITDA are non-GAAP financial measures used by Emera. These financial measures are used by numerous investors and lenders to better understand cash flows and credit quality. EBITDA is useful to assess Emera’s operating performance and indicates the Company’s ability to service or incur debt, invest in capital, and finance working capital requirements.

Adjusted EBITDA represents EBITDA excluding the income effect of the gain on sale of LIL, charges related to wind-down costs and certain asset impairments, charges related to the pending sale of NMGC, MTM adjustments, the 2022 GBPC impairment charge, and the 2022 NSPML unrecoverable costs.

RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA:

 

For the    Three months ended
December 31		      Year ended
December 31		  

millions of dollars

    2024     2023      2024     2023      2022  

Net income (1)

    $ 173     $ 307      $ 568     $ 1,045      $ 1,009  

Interest expense, net

      248       241        973       925        709  

Income tax (recovery) expense

      (199 )      51        (159 )      128        185  

Depreciation and amortization

      296       264        1,162       1,049        952  

EBITDA

    $ 518     $ 863      $ 2,544     $ 3,147      $ 2,855  

Gain on sale of LIL, excluding income tax

      —        —         182       —         —   

Charges related to wind-down costs and certain asset impairments, excluding income tax

      (32 )      —         (32 )      —         —   

Charges related to the pending sale of NMGC, excluding income tax

      —        —         (246 )      —         —   

MTM (loss) gain, excluding income tax

      (203 )      158        (408 )      237        248  

GBPC impairment charge

      —        —         —        —         (73 ) 

NSPML unrecoverable costs

      —        —         —        —         (7 ) 

Adjusted EBITDA

    $ 753     $ 705      $ 3,048     $ 2,910      $ 2,687  

 

(1)

Net income is before Non-controlling interest in subsidiaries and Preferred stock dividends.

Consolidated Financial Review

Significant Items Affecting Earnings

The items detailed below have had a significant impact on Net Income Attributable to Common Shareholders but have been excluded from Adjusted Net Income as described in the section entitled “Non-GAAP Financial Measures and Ratios”.

FINANCING STRUCTURE WIND-UP

During 2024, the Company incurred $185 million of interest and financing expenses in connection with a specific financing structure. The current and future interest and financing expenses are expected to be denied under the recently enacted Excessive Interest and Financing Expenses Limitation (“EIFEL”) legislation and, as a result, the financing structure has been wound up. It was determined that Emera is more likely than not to realize the benefit of the current denied interest and financing expenses in future periods and therefore a $54 million deferred income tax asset and related income tax benefit ($0.19 per common share) was recorded during Q4 2024. In addition, Emera recognized a $4 million income tax benefit ($0.01 per common share) related to the reversal of a deferred income tax liability on the wind-up of the financing structure. The total tax benefit of $58 million was recorded in “Income Tax (Recovery) Expense” on the Consolidated Statements of Income and included in the Other segment. For further details on the EIFEL legislation, refer to the “Other Developments” section.

CHARGES RELATED TO WIND-DOWN COSTS AND CERTAIN ASSET IMPAIRMENTS

In Q4 2024, Emera recognized $32 million ($26 million after-tax, or $0.09 per common share) in wind-down costs and certain asset impairments, primarily at Block Energy. These were recorded in “Other Income, net” and “Impairment Charges” on the Consolidated Statements of Income and included mainly in the Other segment.

 

     
EMERA 2024 ANNUAL REPORT   15

Management’s Discussion and Analysis

 

GAIN ON SALE OF LIL

On June 4, 2024, Emera completed the sale of its LIL equity interest. A gain on sale of $182 million after transaction costs ($107 million, after tax and transaction costs, or $0.37 per common share), was recognized in “Other Income, net” on the Consolidated Statements of Income in Q2 2024 and included in the Other segment. In Q4 2024, Emera recognized a $22 million ($0.08 per common share) tax benefit related to the reversal of a prior year valuation allowance. A portion of the taxable capital gain on the sale of the LIL equity interest was offset by prior year loss carryforwards, of which the tax benefit had been subject to a valuation allowance as at December 31, 2023. This tax benefit was recorded in “Income Tax (Recovery) Expense” on the Consolidated Statements of Income in Q4 2024 and included in the Other segment. For further details on the transaction, refer to the “Other Developments” section.

CHARGES RELATED TO THE PENDING SALE OF NMGC

In Q3 2024, Emera recognized non-cash goodwill and other impairment charges of $221 million ($206 after-tax, or $0.72 per common share) related to the NMGC reporting unit. These charges were recorded in “Impairment charges” on the Consolidated Statements of Income and included in the Other and Gas Utilities and Infrastructure segments, respectively. For further details on the pending sale of NMGC, refer to the “Other Developments” section. For further details on the non-cash goodwill impairment charge, refer to note 23 in the consolidated financial statements.

Additionally, in Q3 2024, Emera recorded a loss of $25 million ($19 million after-tax, or $0.06 per common share) in estimated transaction costs related to the pending sale of NMGC. These transaction costs were recorded in “Other Income, net” on the Consolidated Statement of Income and included in the Other segment. For further details, refer to the “Other Developments” section.

EARNINGS IMPACT OF MTM LOSS, AFTER-TAX

Quarter-to-date the 2023 MTM gain, after-tax, of $114 million decreased $260 million to a $146 million MTM loss, after-tax, for the same period in 2024. For the year ended, the 2023 MTM gain, after-tax, of $169 million decreased $460 million to a $291 million MTM loss, after-tax, for the same period in 2024. These decreases were primarily due to changes in existing positions, partially offset by lower amortization of gas transportation at Emera Energy Services (“EES”).

Consolidated Financial Highlights

 

For the

millions of dollars

    Three months ended
December 31		     Year ended
December 31		  

Adjusted net income

    2024     2023     2024     2023     2022  

Florida Electric Utility

    $ 120     $ 115     $ 644     $ 627     $ 596  

Canadian Electric Utilities

      77       68       232       247       222  

Gas Utilities and Infrastructure

      87       59       267       214       221  

Other Electric Utilities

      21       4       48       35       29  

Other

      (59 )      (71 )      (342 )      (314 )      (218 ) 

Adjusted net income

    $ 246     $ 175     $ 849     $ 809     $ 850  

Gain on sale of LIL, after-tax

      22       —        129       —        —   

Financing structure wind-up

      58       —        58       —        —   

Charges related to wind-down costs and certain asset impairments, after-tax

      (26 )      —        (26 )      —        —   

Charges related to the pending sale of NMGC, after-tax

      —        —        (225 )      —        —   

MTM (loss) gain, after-tax

      (146 )      114       (291 )      169       175  

GBPC impairment charge

      —        —        —        —        (73 ) 

NSPML unrecoverable costs

      —        —        —        —        (7 ) 

Net income attributable to common shareholders

    $ 154     $ 289     $ 494     $ 978     $ 945  

 

     
16   EMERA 2024 ANNUAL REPORT

Management’s Discussion and Analysis

 

The following table highlights significant changes in adjusted net income from 2023 to 2024:

 

For the

millions of dollars

    Three months ended
December 31		      Year ended
December 31		  

Adjusted net income – 2023

    $ 175    $ 809  

Operating Unit Performance

      

Increased earnings at NSPI due to increased income tax recovery, partially offset by higher operating, maintenance and general expenses (“OM&G”) due primarily to a lower storm cost deferral

      31        19  

Increased earnings quarter-over-quarter at Other Electric Utilities primarily due to the timing of recovery of fuel costs and lower OM&G. Year-over-year increased primarily due to higher sales volumes, partially offset by higher OM&G

      17        13  

Increased earnings quarter-over-quarter at NMGC due to higher revenue from new base rates, partially offset by higher income tax expense. Decreased earnings year-over-year due to lower asset optimization revenue, partially offset by higher revenue from new base rates

      14        (4 ) 

Increased earnings at PGS due to higher revenue from new base rates and customer growth, partially offset by increased interest expense, depreciation, OM&G, and income tax expense

      11        58  

Increased earnings at TEC due to higher revenues from customer growth and new base rates, and the impact of a weaker CAD, partially offset by higher OM&G, and depreciation. Year-over-year increased earnings also due to lower income tax expense and lower interest expense, partially offset by unfavourable weather

      5        17  

Decreased earnings year-over-year at EES due to favourable hedging opportunities in Q1 2023 and less favourable market conditions in 2024

      (3 )       (16 ) 

Decreased earnings at Bear Swamp primarily due to the recognition of investment tax credits in 2023

      (13 )       (20 ) 

Decreased income from equity investments due to the sale of LIL equity interest

      (16 )       (32 ) 

Corporate

      

Decreased deferred income tax asset valuation allowance due to utilization of tax loss carryforwards

      36        39  

Increased income tax recovery due to increased loss before provision for income taxes

      15        20  

Increased interest expense due to the impact of a weaker CAD on USD interest expense, increased total Corporate debt and increased interest rates

      (9 )       (38 ) 

Increased OM&G quarter-over-quarter primarily due to the timing difference in the valuation of long-term incentive expense and related hedges

      (16 )       (1 ) 

Other Variances

      (1 )       (15 ) 
  

 

 

     

 

 

  

Adjusted net income – 2024

    $ 246      $ 849  
  

 

 

     

 

 

  

 

For the    Year ended
December 31		  

millions of dollars

    2024      2023      2022  

Operating cash flow before changes in working capital

    $ 2,194      $ 2,336      $ 1,147  

Change in working capital

      452        (95 )       (234 ) 

Operating cash flow

    $ 2,646      $ 2,241      $ 913  

Investing cash flow

    $ (2,218 )     $ (2,917 )     $ (2,569 ) 

Financing cash flow

    $ (818 )     $ 939      $ 1,555  

For further discussion of cash flow, refer to the “Consolidated Cash Flow Highlights” section.

 

As at    December 31  

millions of dollars

    2024      2023      2022  

Total assets

    $ 42,951      $ 39,480      $ 39,742  
  

 

 

     

 

 

     

 

 

  

Total long-term debt (including current portion) (1)

    $ 18,407      $ 18,365      $ 16,318  
  

 

 

     

 

 

     

 

 

  

 

(1)

On August 5, 2024, Emera announced an agreement to sell NMGC. As at December 31, 2024, NMGC’s assets and liabilities were classified as held for sale and are excluded from this table. For further details, refer to the “Other Developments” section and note 4 in the consolidated financial statements.

 

     
EMERA 2024 ANNUAL REPORT   17

Management’s Discussion and Analysis

 

Consolidated Income Statement Highlights

 

For the

millions of dollars

    Three months ended
December 31		     Year ended
December 31		     Year ended
December 31		  

(except per share amounts)

    2024     2023      Variance     2024     2023      Variance     2022  

Operating revenues

    $ 1,763     $ 1,972      $ (209 )    $ 7,200     $ 7,563      $ (363 )    $ 7,588  

Operating expenses

      1,524       1,467        (57 )      6,120       5,769        (351 )      5,959  

Income from operations

    $ 239     $ 505      $ (266 )    $ 1,080     $ 1,794      $ (714 )    $ 1,629  

Other (expense) income, net

    $ (29 )    $ 51      $ (80 )    $ 203     $ 158      $ 45     $ 145  

Interest expense, net

    $ 248     $ 241      $ (7 )    $ 973     $ 925      $ (48 )    $ 709  

Income tax (recovery) expense

    $ (199 )    $ 51      $ 250     $ (159 )    $ 128      $ 287     $ 185  

Net income attributable to common shareholders

    $ 154     $ 289      $ (135 )    $ 494     $ 978      $ (484 )    $ 945  

Adjusted net income

    $ 246     $ 175      $ 71     $ 849     $ 809      $ 40     $ 850  

Weighted average shares of common stock outstanding (in millions)

      294.1       277.7        16.4       289.1       273.6        15.5       265.5  

EPS – basic

    $ 0.52     $ 1.04      $ (0.52 )    $ 1.71     $ 3.57      $ (1.86 )    $ 3.56  

EPS – diluted

    $ 0.52     $ 1.04      $ (0.52 )    $ 1.71     $ 3.57      $ (1.86 )    $ 3.55  

Adjusted EPS – basic

    $ 0.84     $ 0.63      $ 0.21     $ 2.94     $ 2.96      $ (0.02 )    $ 3.20  

Adjusted EBITDA

    $ 753     $ 705      $ 48     $ 3,048     $ 2,910      $ 138     $ 2,687  

Dividends per common share declared

    $ 0.7250     $ 0.7175      $ 0.0075     $ 2.8775     $ 2.7875      $ 0.0900     $ 2.6775  

Dividends per first preferred shares declared:

                 

Series A

           $ 0.5456     $ 0.5456      $ —      $ 0.5456  

Series B

           $ 1.6966     $ 1.5583      $ 0.1383     $ 0.6869  

Series C

           $ 1.6085     $ 1.2873      $ 0.3212     $ 1.1802  

Series E

           $ 1.1250     $ 1.1250      $ —      $ 1.1250  

Series F

           $ 1.0505     $ 1.0505      $ —      $ 1.0505  

Series H

           $ 1.5810     $ 1.3140      $ 0.2670     $ 1.2250  

Series J

           $ 1.0625     $ 1.0625      $ —      $ 1.0625  

Series L

           $ 1.1500     $ 1.1500      $ —      $ 1.1500  

OPERATING REVENUES

For Q4 2024, operating revenues decreased $209 million compared to Q4 2023 and, excluding decreased MTM gain of $291 million, increased $82 million. For the year ended December 31, 2024, operating revenues decreased $363 million compared to 2023 and, excluding decreased MTM gain of $559 million, increased $196 million. The increases were due to new rates at PGS, NSPI, TEC and NMGC; the impact of a weaker CAD; and increased customer growth at TEC and PGS. The increases were partially offset by lower fuel recovery clause and storm surcharge revenue (offset in OM&G) at TEC; and lower fuel revenue at NMGC. Year-over-year increase was also due to a change in the fuel cost recovery methodology for an industrial customer in 2023 at NSPI (offset in fuel for generation and purchased power).

OPERATING EXPENSES

For Q4 2024, operating expenses increased $57 million compared to Q4 2023, and, excluding charges related to wind-down costs and certain asset impairments of $4 million, increased $53 million. For the year ended December 31, 2024, operating expenses increased $351 million compared to 2023, and excluding the goodwill and other impairment charges primarily related to the pending sale of NMGC of $225 million, increased $126 million due to higher depreciation at TEC and PGS; the impact of a weaker CAD; higher OM&G due to timing of deferred clause recoveries at PGS and TEC; lower storm cost deferral and higher demand side management program costs at NSPI; and higher labour costs at PGS. This was partially offset by lower natural gas prices at NMGC, PGS and TEC and lower storm cost recognition at TEC (offset in revenue). Year-over-year increase was also due to a change in fuel cost recovery for an industrial customer in 2023 at NSPI (offset in revenue).

 

     
18   EMERA 2024 ANNUAL REPORT

Management’s Discussion and Analysis

 

OTHER INCOME, NET

For Q4 2024, other income, net decreased $80 million compared to Q4 2024 due to charges related to wind-down costs and certain asset impairments and higher FX losses.

For the year ended December 31, 2024, other income, net increased $45 million compared to the same period in 2023 due to the gain on sale of LIL, after transaction costs, partially offset by higher FX losses, charges related wind-down costs and certain asset impairments, transaction costs related to the pending sale of NMGC, and lower interest income.

INTEREST EXPENSE, NET

For Q4 2024, interest expense, net increased $7 million and for the year ended December 31,2024, increased $48 million compared to the same periods in 2023 due to the impact of a weaker CAD on USD interest expense, increased borrowings to support ongoing operations and higher interest rates.

INCOME TAX (RECOVERY) EXPENSE

For Q4 2024, income tax recovery increased $250 million compared to Q4 2023 due to decreased income before provision for income taxes, decreased deferred income tax asset valuation allowance and recognition of tax benefits associated with denied interest and financing expenses.

For the year ended December 31, 2024, income tax recovery increased $287 million compared to 2023 due to decreased income before provision for income taxes (excluding the gain on sale of LIL and charges related to the pending sale of NMGC), decreased deferred income tax asset valuation allowance and recognition of tax benefits associated with denied interest and financing expenses. This increased recovery was partially offset by the net tax impact of the gain on sale of LIL and charges related to the pending sale of NMGC.

NET INCOME AND ADJUSTED NET INCOME

For Q4 2024, net income attributable to common shareholders compared to Q4 2023, was favourably impacted by the $58 million tax benefit related to a specific financing structure and its wind-up and the $22 million valuation allowance reversal related to the gain on sale of LIL, and unfavourably impacted by the $26 million charges related to wind-down costs and certain asset impairments, and the $260 million decrease in MTM gains. Excluding these impacts, adjusted net income increased $71 million, primarily due to increased earnings at NSPI, Other Electric Utilities, NMGC, PGS, and TEC, and increased Corporate income tax recovery. This was partially offset by lower equity earnings from LIL; increased Corporate OM&G due to timing of long-term incentive expenses and related hedges; increased Corporate interest expense; and decreased earnings at Emera Energy.

For the year ended December 31, 2024, net income attributable to common shareholders, compared to the same period in 2023, was favourably impacted by the $129 million gain on sale of LIL, and the $58 million tax benefit related to a specific financing structure and its wind-up and unfavourably impacted by the $26 million in charges related to wind-down costs and certain asset impairments, $225 million in charges related to the pending sale of NMGC, and the $460 million decrease in MTM gains. Excluding these changes, adjusted net income increased $40 million. The increase was primarily due to increased earnings at PGS, NSPI, TEC, and Other Electric Utilities, and increased Corporate income tax recovery. This was partially offset by increased Corporate interest expense; lower equity earnings from LIL; and decreased earnings at Emera Energy.

EPS – BASIC AND ADJUSTED EPS – BASIC

For Q4 2024, EPS – basic was lower than in Q4 2023 due to the impact of decreased earnings, as discussed above, and an increase in weighted average shares outstanding. Adjusted EPS – basic was higher in Q4 2024, compared to Q4 2023, due to increased adjusted earnings as discussed above, partially offset by an increase in weighted average shares outstanding.

For the year ended December 31, 2024, EPS – basic was lower than in 2023 due to the impact of an increase in weighted average shares outstanding and decreased earnings, as discussed above. Adjusted EPS – basic was lower in 2024, compared to 2023, due to the impact of an increase in weighted average shares outstanding, partially offset by increased adjusted earnings, as discussed above.

EFFECT OF FOREIGN CURRENCY TRANSLATION

Emera operates in the United States (“US”), Canada and various Caribbean countries and, as such, generates revenues and incurs expenses denominated in local currencies which are translated into CAD for financial reporting. Changes in translation rates, particularly in the value of the USD against the CAD, can positively or adversely affect results.

 

     
EMERA 2024 ANNUAL REPORT   19

Management’s Discussion and Analysis

 

Results of foreign operations are translated at the weighted average rate of exchange, and assets and liabilities of foreign operations are translated at period end rates. The relevant CAD/USD exchange rates on net income attributable to common shareholders for 2024 and 2023 are as follows:

 

     Three months ended
December 31		      Year ended
December 31		  
     2024      2023      2024      2023  

Weighted average CAD/USD

    $ 1.37      $ 1.36      $ 1.36      $ 1.35  

Period end CAD/USD exchange rate

    $ 1.44      $ 1.32      $ 1.44      $ 1.32  

The table below includes Emera’s significant segments whose contributions to adjusted net income are recorded in USD currency:

 

For the

    Three months ended
December 31		      Year ended
December 31		  

millions of USD

    2024      2023      2024      2023  

Florida Electric Utility (1)

    $ 85      $ 85      $ 470      $ 466  

Gas Utilities and Infrastructure (2)(3)

      56        41        178        142  

Other Electric Utilities

      15        3        35        26  

Other segment (4)(5)

      (33 )       (18 )       (131 )       (95 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Total (1)(3)(5)

    $ 123      $ 111      $ 552      $ 539  
  

 

 

     

 

 

     

 

 

     

 

 

  

 

(1)

Excludes $2 million USD, after-tax, in other impairment charges for the three months and year ended December 31, 2024.

(2)

Includes USD net income from PGS, NMGC, SeaCoast and M&NP.

(3)

Excludes $6 million USD, after-tax, in other impairment charges associated with the pending sale of NMGC for the year ended December 31, 2024.

(4)

Includes Emera Energy’s USD adjusted net income from EES, Bear Swamp and interest expense on Emera Inc.’s USD denominated debt.

(5)

Excludes $84 million USD in MTM losses, after-tax, for the three months ended December 31, 2024 (2023 – $73 million USD MTM gain, after-tax) and $189 million in USD MTM losses, after-tax, for the year ended December 31, 2024 (2023 – $116 million USD MTM gain, after-tax).

Weakening of the CAD increased adjusted net income by $2 million in Q4 2024 and $5 million for the year ended December 31, 2024, compared to the same periods in 2023. Impacts of the changes in the translation of the CAD include the impacts of Corporate FX hedges used to mitigate translation risk of USD earnings in the Other segment.

The translation impact of a weaker CAD on USD earnings was more than offset by the realized and unrealized losses on FX hedges used to mitigate translation risk of USD earnings, resulting in a $29 million decrease to net income in Q4 2024 and $35 million decrease to net income for the year ended December 31, 2024, compared to the same periods in 2023.

Business Overview and Outlook

Florida Electric Utility

The Florida Electric Utility segment consists of TEC, a vertically integrated regulated electric utility engaged in the generation, transmission and distribution of electricity, serving customers in West Central Florida. TEC has $13 billion USD of assets and approximately 855,000 customers at December 31, 2024. TEC owns 6,620 megawatts (“MW”) of generating capacity, of which 73 per cent is natural gas fired, 20 per cent is solar and 7 per cent is coal. TEC also owns 2,192 kilometres of transmission facilities and 20,693 kilometres of distribution facilities. TEC meets the planning criteria for reserve capacity established by the FPSC, which is a 20 per cent reserve margin over firm peak demand.

Beginning in 2025, TEC’s approved regulated ROE range is 9.50 per cent to 11.50 per cent (2024 – 9.25 per cent to 11.25 per cent) based on an allowed equity capital structure of 54 per cent (2024 – 54 per cent). An ROE of 10.50 per cent (2024 – 10.20 per cent) is used for the calculation of the return on investments for clauses.

TEC anticipates earning within its ROE range in 2025. As a result of new base rates effective January 1, 2025, TEC’s 2025 USD earnings are expected to be higher than in 2024. Normalizing 2024 for weather, TEC’s sales volumes in 2025 are projected to be higher than in 2024 due to customer growth. TEC expects customer growth rates in 2025 to be comparable to 2024, reflective of the expected economic growth in Florida.

 

     
20   EMERA 2024 ANNUAL REPORT

Management’s Discussion and Analysis

 

On April 2, 2024, TEC filed a rate case with the FPSC for new base rates. On December 3, 2024, the FPSC rendered a decision which includes annual base rate increases of $185 million USD in 2025 and adjustments of $87 million USD and $9 million USD in 2026 and 2027, respectively. The rates include recovery of solar generation projects, energy storage capacity, a more resilient and modernized energy control center, and other resiliency and reliability projects. The allowed equity in the capital structure will continue to be 54 per cent from investor sources of capital and the allowed regulatory ROE range is 9.50 per cent to 11.50 per cent with a 10.50 per cent midpoint. On February 3, 2025, the FPSC issued the final order approving the decision, effective January 1, 2025. On February 18, 2025, a motion for reconsideration on certain aspects of the rate case order was filed with the FPSC. TEC will respond to this motion in February 2025. TEC expects the FPSC to reach a final decision on the motion in Q2 2025.

On September 26, 2024, Hurricane Helene passed 100 miles west of Tampa and made landfall approximately 200 miles north of Tampa, in Taylor County, as a Category 4 hurricane. TEC’s service territory was impacted by the tropical storm force winds and storm surge which resulted in a peak number of customers out of 100,000. As of December 31, 2024, TEC deferred $49 million USD to the storm reserve for future recovery.

On October 9, 2024, Hurricane Milton made landfall approximately 50 miles south of Tampa, near Sarasota, and was the worst weather event to impact the area in over 100 years. The Category 3 hurricane had a significant impact on TEC’s service territory which resulted in a peak number of customers out of 600,000. As of December 31, 2024, TEC deferred $340 million USD to the storm reserve for future recovery.

As at December 31, 2024, total restoration costs charged to the storm reserve account have exceeded the storm reserve balance (for additional details on the storm reserve, refer to note 7 in Emera’s consolidated financial statements) and therefore $377 million USD has been deferred as a regulatory asset for future recovery. On February 4, 2025, the FPSC approved TEC’s petition filed on December 27, 2024 for the recovery of $466 million USD for costs associated with Hurricane Idalia, Hurricane Debby, Hurricane Helene and Hurricane Milton and the associated interest to replenish the storm reserve over an 18-month recovery period beginning in March 2025. The amount of cost-recovery is subject to a true-up mechanism with the FPSC.

On April 2, 2024, TEC requested a mid-course adjustment to its fuel and capacity charges, reflecting a $138 million USD reduction over 12 months, from June 2024 through May 2025. The requested reduction was due to a decrease in actual and projected 2024 natural gas prices since TEC submitted its projected 2024 costs in the fall of 2023. On May 7, 2024, the FPSC approved the mid-course adjustment.

In 2025, capital investment in the Florida Electric Utility segment is expected to be $1.7 billion USD (2024 – $1.4 billion USD), including allowance for funds used during construction (“AFUDC”). Capital projects include solar investments, grid modernization, storm hardening investments, building resilience and energy storage.

Canadian Electric Utilities

The Canadian Electric Utilities segment includes NSPI and NSPML. NSPI is a vertically integrated regulated electric utility engaged in the generation, transmission and distribution of electricity and the primary electricity supplier to customers in Nova Scotia. NSPML is a 100 per cent equity interest in the Maritime Link Project (“Maritime Link”), a transmission project between the island of Newfoundland and Nova Scotia.

On June 4, 2024, Emera completed the sale of its LIL equity interest. For further information, refer to the “Significant Items Affecting Earnings” and “Other Developments” sections.

NSPI

With $7.1 billion of assets and approximately 557,000 customers at December 31, 2024, NSPI owns 2,422 MW of generating capacity, of which 44 per cent is coal and/or oil-fired; 28 per cent is natural gas and/or oil; 19 per cent is hydro, wind, or solar; 7 per cent is petroleum coke (“petcoke”) and 2 per cent is biomass-fueled generation. In addition, NSPI has contracts to purchase renewable energy from independent power producers (“IPPs”) and community feed-in tariff (“COMFIT”) participants, which own 533 MW of capacity. NSPI also has rights to 153 MW of Maritime Link capacity, representing Newfoundland and Labrador Hydro’s (“NLH”) Nova Scotia Block (“NS Block”) delivery obligations, as discussed below. NSPI owns approximately 5,000 kilometres of transmission facilities and 28,000 kilometres of distribution facilities.

NLH is obligated to provide NSPI with approximately 900 Gigawatt hours (“GWh”) of energy annually over 35 years. In addition, for the first five years of the NS Block, NLH is obligated to provide approximately 240 GWh of additional energy from the Supplemental Energy Block transmitted through the Maritime Link. NSPI has the option of purchasing additional market-priced energy from NLH through the Energy Access Agreement. The Energy Access Agreement enables NSPI to access a market-priced bid from NLH for up to 1.8 Terawatt hours (“TWh”) of energy in any given year and, on average, 1.2 TWh of energy per year through August 31, 2041.

 

     
EMERA 2024 ANNUAL REPORT   21

Management’s Discussion and Analysis

 

NSPI’s approved regulated ROE range is 8.75 per cent to 9.25 per cent, based on an actual five-quarter average regulated common equity component of up to 40 per cent of approved rate base.

NSPI anticipates earning below its allowed ROE range in 2025. NSPI expects earnings in 2025 to be consistent with 2024. Sales volumes are expected to be higher in 2025 than 2024.

On September 24, 2024, the Government of Canada finalized an agreement with NSPI, NSPML and the Province of Nova Scotia (the “Province”) on terms and conditions for a federal loan guarantee (“FLG”) of $500 million in debt to be issued by NSPML to help Nova Scotia customers manage unrecovered costs of the replacement energy that was required during the several years of delay in the Muskrat Falls hydroelectricity project. On September 25, 2024, NSPI and NSPML filed applications with the UARB related to the FLG. On November 29, 2024, the UARB approved NSPML’s application to issue the debt, transfer the proceeds to NSPI as a refund of a portion of previous NSPML assessment payments (“NSPML Refund”), and to increase its annual assessment charge to NSPI to recover the refund and related financing costs over a 28-year period. On December 16, 2024, the net proceeds of the NSPML debt issuance were transferred to NSPI and applied against the FAM regulatory asset balance. On February 18, 2025, the UARB approved NSPI’s application to increase 2025 fuel rates to service the incremental NSPML debt.

On December 2, 2024, the UARB approved the recovery of $24 million of major storm restoration and incremental financing costs deferred to NSPI’s storm rider in 2023 to be recovered over a 12-month period beginning on January 1, 2025.

On June 27, 2024, the UARB approved the deferred recognition of $25 million in incremental operating costs incurred during the Hurricane Fiona storm restoration efforts in September 2022. Following UARB approval, the $25 million was reclassified to “Regulatory assets” from “Other long-term assets”. The UARB also directed NSPI to reclassify $10 million of undepreciated costs related to assets retired because of Hurricane Fiona to “Regulatory assets” from “PP&E” on the Consolidated Balance Sheets. NSPI began amortizing both of these regulatory assets over a 10-year period beginning July 1, 2024.

On June 13, 2024, the UARB approved $238 million of capital investment, including AFUDC, for the Battery Energy Storage System Project. The project is comprised of three 50 MW, four-hour battery facilities. Two facilities are anticipated to be in- service in late 2025 and the third facility in 2026.

On April 17, 2024, the UARB approved the sale of $117 million of the FAM regulatory asset to Invest Nova Scotia, a provincial Crown corporation. On April 30, 2024, the transaction closed and the $117 million was remitted to NSPI, which resulted in a corresponding decrease of the FAM regulatory asset. NSPI is collecting the amortization and financing costs related to the $117 million from customers on behalf of Invest Nova Scotia over a 10-year period, which began in Q2 2024, and is remitting those amounts to Invest Nova Scotia quarterly.

In 2025, capital investment, including AFUDC, is expected to be $480 million (2024 – $487 million). NSPI is primarily investing in capital projects required to support power system reliability and reliable service for customers.

ENVIRONMENTAL LEGISLATION AND REGULATIONS

NSPI is subject to environmental laws and regulations set by both the Government of Canada and the Province. NSPI continues to work with both levels of government to comply with these laws and regulations to maximize efficiency of emission control measures and minimize customer cost. NSPI anticipates that costs prudently incurred to achieve legislated compliance will be recoverable under NSPI’s regulatory framework. NSPI faces risks associated with achieving climate-related and environmental legislative requirements, including the risk of non-compliance, which could adversely affect NSPI’s operations and financial performance. For further discussion on these risks and environmental legislation and regulations, refer to the “Enterprise Risk and Risk Management” section. Recent developments related to provincial and federal environmental laws and regulations are outlined below.

Clean Electricity Regulations (“CER”):

On December 17, 2024, Environment and Climate Change Canada released a finalized version of the CER. The CER establish performance standards to further limit greenhouse gas (“GHG”) emissions from fossil fuel-generated electricity starting in 2035 and help facilitate the Government of Canada’s intention of achieving a net-zero electricity grid by 2050. Compliance with the finalized version of the CER is not anticipated to require significant capital investment incremental to achieve the 2030 targets as NSPI’s planned capital investment during this period is driven by the Province’s goals to transition off coal and reach 80 per cent renewable electricity sales by 2030.

 

     
22   EMERA 2024 ANNUAL REPORT

Management’s Discussion and Analysis

 

Nova Scotia Energy Reform Act:

On April 5, 2024, the Province enacted Bill 404 – Energy Reform (2024) Act. The legislation enacted the Energy and Regulatory Board Act, which established the Nova Scotia Energy Board (“NSEB”). The NSEB is a new board which will regulate energy and utility entities in Nova Scotia, with a mandate of increased focus on meeting energy transition demands. The legislation also enacts the More Access to Energy Act, which provides for the establishment of and phased transition to the Nova Scotia Independent Energy System Operator. NSPI is fully engaged in supporting the Province on these initiatives.

RER:

On May 26, 2023, NSPI initiated an appeal, through a proceeding with the UARB, of the $10 million penalty levied on NSPI by the Province for non-compliance with the RER compliance period ending in 2022. The hearing for the matter is currently scheduled for June 2025.

NSPML

Equity earnings from the Maritime Link are dependent on the approved ROE and operational performance of NSPML. NSPML’s approved regulated ROE range is 8.75 per cent to 9.25 per cent, based on an actual five-quarter average regulated common equity component of up to 30 per cent.

Equity earnings from NSPML in 2025 are expected to consistent with 2024. The NSPML investment is recorded as “Investments subject to significant influence” on Emera’s Consolidated Balance Sheets.

The Maritime Link assets entered service on January 15, 2018, enabling the transmission of energy between Newfoundland and Nova Scotia, improved reliability and ancillary benefits, supporting the efficiency and reliability of energy in both provinces. NLH’s NS Block delivery obligations commenced on August 15, 2021, and the NS Block will be delivered over the next 35 years pursuant to the project agreements.

On September 24, 2024, the Government of Canada finalized an agreement with NSPI, NSPML, and the Province on terms and conditions for a FLG of $500 million in debt to be issued by NSPML. For further information, refer to the NSPI section above.

On November 29, 2024, NSPML received approval from the UARB to collect up to $197 million in 2025 from NSPI; which includes $158 million for the recovery of costs associated with the Maritime Link, and $39 million associated with the additional FLG debt and financing costs discussed in the NSPI section above. Payments from NSPI are subject to a holdback of up to $4 million per month. There was no holdback recorded for the year ended December 31, 2024. NSPML expects to file an application to terminate the holdback mechanism in early 2025.

NSPML does not anticipate any significant capital investment in 2025.

Gas Utilities and Infrastructure

The Gas Utilities and Infrastructure segment includes PGS, NMGC, SeaCoast, Brunswick Pipeline and Emera’s equity investment in M&NP. PGS is a regulated gas distribution utility engaged in the purchase, distribution and sale of natural gas serving customers in Florida. NMGC is an intrastate regulated gas distribution utility engaged in the purchase, transmission, distribution and sale of natural gas serving customers in New Mexico. SeaCoast is a regulated intrastate natural gas transmission company offering services in Florida. Brunswick Pipeline is a regulated 145-kilometre pipeline delivering re-gasified liquefied natural gas from Saint John, New Brunswick, to markets in the northeastern US.

On August 5, 2024, Emera announced an agreement to sell NMGC. The transaction is expected to close in late 2025, subject to certain approvals, including approval by the NMPRC. As a result of the pending sale, NMGC’s assets and liabilities were classified as held for sale as of Q3 2024. For more information on the pending transaction, refer to the “Other Developments” section.

PGS

With $3.1 billion USD of assets and approximately 508,000 customers, the PGS system includes 25,240 kilometres of natural gas mains and 14,530 kilometres of service lines. Natural gas throughput (the amount of gas delivered to its customers, including transportation-only service) was 2 billion therms in 2024.

The approved ROE range for PGS is 9.15 per cent to 11.15 per cent based on an allowed equity capital structure of 54.7 per cent. An ROE of 10.15 per cent is used for the calculation of return on investments for clauses.

PGS anticipates earning near the bottom of its allowed ROE range in 2025 as a result of the continued investments across Florida to maintain reliability and service new customers. Capital investments are expected to outpace revenue growth. USD arnings for 2025 are expected to be consistent with 2024 primarily due to higher operating costs and depreciation driven by ongoing capital investments to support customer demand and system needs.

 

     
EMERA 2024 ANNUAL REPORT   23

Management’s Discussion and Analysis

 

On January 30, 2025, PGS notified the FPSC of its intent to seek a base rate increase effective January 2026, reflecting a revenue requirement of approximately $90 to $110 million USD and subsequent year adjustment for 2027 of approximately

$25 to $40 million USD. PGS’ proposed rates support on-going growth in Florida and a continued commitment to delivering safe and reliable service to PGS customers. The filing range amounts are estimates until PGS files its detailed case in March 2025. The FPSC is scheduled to hear the case in Q3 2025 with a decision expected by the end of 2025.

In 2025, capital investment, including AFUDC, is expected to be approximately $360 million USD (2024 – $323 million USD). PGS will make investments to maintain the reliability of their systems and support customer growth.

NMGC

With $1.5 billion USD of assets and approximately 550,000 customers, NMGC’s system includes approximately 2,405 kilometres of transmission pipelines and 17,810 kilometres of distribution pipelines. Annual natural gas throughput was approximately 1 billion therms in 2024.

The approved ROE for NMGC is 9.375 per cent, on an allowed equity capital structure of 52 per cent.

NMGC’s USD earnings contributions to Emera in 2025 are expected to be lower than in 2024 as a result of the pending sale of NMGC that is currently expected to close in October 2025.

On September 14, 2023, NMGC filed a rate case with the NMPRC for new base rates. On March 1, 2024, NMGC filed with the NMPRC a settlement with the support of all parties in the case for an increase of $30 million USD in annual base revenues and maintaining NMGC’s ROE at 9.375 per cent. The rates reflect the recovery of increased operating costs and capital investments in pipeline projects and related infrastructure, as well as a new customer information and billing system. NMGC also agreed to withdraw, and to not reassert in a future rate case application, its request for a regulatory asset for costs associated with its 2022 application for a certificate of public convenience and necessity for a liquefied natural gas storage facility in New Mexico. The NMPRC approved the rate case settlement on July 25, 2024. New rates became effective October 1, 2024.

Other Electric Utilities

Other Electric Utilities includes Emera (Caribbean) Incorporated (“ECI”), a holding company with regulated electric utilities. ECI’s regulated utilities include vertically integrated regulated electric utilities of BLPC on the island of Barbados, GBPC on Grand Bahama Island, and an equity investment in Lucelec on the island of St. Lucia.

Other Electric Utilities’ USD earnings in 2025 are expected to be consistent with the prior year.

In 2025, capital investment in the Other Electric Utilities segment is expected to be approximately $140 million USD, including AFUDC (2024 – $59 million USD), primarily in more efficient and cleaner sources of generation, including renewables and battery storage.

BLPC

With $538 million USD of assets and approximately 135,000 customers, BLPC owns 243 MW of generating capacity, of which 96 per cent is oil-fired and 4 per cent is solar. BLPC owns approximately 188 kilometres of transmission facilities and 3,989 kilometres of distribution facilities. BLPC’s approved regulated return on rate base is 10 per cent.

On May 24, 2024, the Government of Barbados signed the Income Tax (Amendment and Validation) Act into law. The legislation, effective January 1, 2024, implemented a corporate income tax rate of 9 per cent, requiring BLPC to remeasure its deferred income tax liabilities. On July 18, 2024, BLPC requested the deferred recovery of the $5 million USD remeasurement. BLPC is seeking amortization of the costs over a period to be approved by the FTC during a future rate setting process.

In 2021, BLPC submitted a general rate review application to the FTC. In September 2022, the FTC granted BLPC interim rate relief, allowing an increase in base rates of approximately $1 million USD per month. On February 15, 2023, the FTC issued a decision on the application which included the following significant items: an allowed regulatory ROE of 11.75 per cent, an equity capital structure of 55 per cent, a directive to update the major components of rate base to September 16, 2022, and a directive to establish regulatory liabilities totalling approximately $71 million USD. On March 7, 2023, BLPC filed a Motion for Review and Variation (the “Motion”) and applied for a stay of the FTC’s decision, which was subsequently granted. On November 20, 2023, the FTC issued their decision dismissing the Motion. Interim rates continue to be in effect through to a date to be determined in a final decision and order.

 

     
24   EMERA 2024 ANNUAL REPORT

Management’s Discussion and Analysis

 

On December 1, 2023, BLPC appealed certain aspects of the FTC’s February 15 and November 20, 2023 decisions to the Supreme Court of Barbados in the High Court of Justice (the “Court”) and requested that they be stayed. On December 11, 2023, the Court granted the stay. BLPC’s position is that the FTC made errors of law and jurisdiction in their decisions and believes the success of the appeal is probable, and as a result, the adjustments to BLPC’s final rates and rate base, including any adjustments to regulatory assets and liabilities, have not been recorded at this time. The appeal is currently scheduled to be heard in 2025.

BLPC currently operates pursuant to a single integrated license to generate, transmit and distribute electricity on the island of Barbados until 2028. In 2019, the Government of Barbados passed legislation requiring multiple licenses for the supply of electricity. In 2021, BLPC reached commercial agreement with the Government of Barbados for each of the license types, subject to the passage of implementing legislation. The timing of the final enactment is unknown at this time, but BLPC will work towards the implementation of the licenses once enacted.

GBPC

With $340 million USD of assets and approximately 19,500 customers, GBPC owns 98 MW of oil-fired generation, approximately 90 kilometres of transmission facilities and 994 kilometres of distribution facilities. GBPC’s approved regulatory return on rate base is 8.52 per cent.

On August 1, 2024, as required by the GBPA Operating Protocol and Regulatory Framework Agreement, GBPC filed a rate plan proposal. Review of the rate application is expected to be completed in 2025.

On June 1, 2024, the Electricity Act, 2024 took effect. The legislation purports to remove the jurisdiction of the GBPA over GBPC and to have the Utilities Regulation and Competition Authority, another Bahamian regulator, regulate GBPC. The GBPA has opposed the legislated removal of its regulatory authority over GBPC, citing conflict with the Hawksbill Creek Agreement, the 1955 agreement with the Bahamian government that provided for the development and administration of the Freeport area. Management expects the matter of regulatory jurisdiction over GBPC to be the subject of legal proceedings, however, does not foresee that the legislation or the outcome of such proceedings will have a material impact to Emera.

Other

The Other segment includes business operations that in a normal year are below the required threshold for reporting as separate segments; and corporate expense and revenue items that are not directly allocated to the operations of Emera’s subsidiaries and investments.

Business operations in the Other segment include Corporate; Emera Energy Services (EES), a physical energy marketing and trading business; a 50 per cent joint venture interest in Bear Swamp, a 660 MW pumped storage hydroelectric facility in northwestern Massachusetts; and Block Energy. In Q4 2024, Block Energy initiated the process to wind-up operations.

Corporate items included are certain corporate-wide functions including executive management, strategic planning, treasury services, legal, financial reporting, tax planning, corporate business development, corporate governance, investor relations, risk management, insurance, acquisition and disposition related costs, gains or losses on select assets sales, and corporate human resource activities. It includes interest revenue on intercompany financings and interest expense on corporate debt in both Canada and the US. It also includes costs associated with corporate activities that are not directly allocated to the operations of Emera’s subsidiaries and investments.

Earnings from EES are generally dependent on market conditions. In particular, volatility in natural gas and electricity markets, which can be influenced by weather, local supply constraints and other supply and demand factors, can provide higher levels of margin opportunity. The business is seasonal, with Q1 and Q4 usually providing the greatest opportunity for earnings. EES is generally expected to deliver annual adjusted net income of $15 to $30 million USD.

The adjusted net loss from the Other segment is expected to be lower in 2025 than 2024, due primarily to the wind-up of Block Energy in 2024.

The Other segment does not anticipate any significant capital investment in 2025.

 

     
EMERA 2024 ANNUAL REPORT   25

Management’s Discussion and Analysis

 

Consolidated Balance Sheet Highlights

Significant changes in the Consolidated Balance Sheets between December 31, 2023 and December 31, 2024 include:

 

millions of dollars

    Total Increase
(Decrease)		     Increase
(Decrease) due
to held for sale
classification (1)		     Other Increase
(Decrease)		    

Explanation of Other Increase (Decrease)

Assets

         

Cash and cash equivalents

    $ (371 )    $ (8 )    $ (363 )    Decreased due to investment in PP&E, net repayments on committed credit facilities at Corporate and NSPI, repayment of short-term debt at TEC, retirement of long-term debt at Emera, TEC and New Mexico Gas Intermediate, Inc (“NMGI”), and dividends paid on Emera common stock. These were partially offset by cash from operations, proceeds from debt issuances at TEC and EUSHI Finance, Inc. (“EUSHI Finance”), proceeds received on the sale of the LIL equity interest and proceeds from common shares issued

Derivative instruments (current and long-term)

      (74 )      (1 )      (73 )    Decreased due to reversal of 2023 contracts at EES, partially offset by higher commodity prices at NSPI

Regulatory assets (current and long-term)

      322       (34 )      356     Increased due to higher storm costs recovery clause assets at TEC and NSPI, the effect of FX translation of Emera’s non- Canadian affiliates, and reclassification of early retired plant from PP&E to a regulatory asset at TEC. These were partially offset by decreased FAM balance at NSPI due to the NSPML refund, and decreased fuel clause recovery balance at TEC due to higher over-recoveries

Receivables and other assets (current and long-term)

      70       (150 )      220     Increased due to higher cash collateral positions on derivative instruments and increased trade receivables as a result of higher commodity prices at EES, and the effect of FX translation of Emera’s non-Canadian affiliates. These were partially offset by lower gas transportation assets at EES and lower trade receivables at TEC

Assets held for sale (current and long- term), net of liabilities

      973       973       —     

PP&E, net of accumulated depreciation and amortization

      1,792       (1,828 )      3,620     Increased due to capital additions in excess of depreciation and the effect of FX translation of Emera’s non-Canadian affiliates, partially offset by a reclassification of early retired plant to TEC capital cost recovery regulatory asset

Investments subject to significant influence

      (748 )      —        (748 )    Decreased primarily due to sale of LIL equity interest

Goodwill

      (13 )      (303 )      290     Increased due to the effect of FX translation of Emera’s non-Canadian affiliates, partially offset by the non-cash impairment charge recognized primarily related to NMGC

 

(1)

On August 5, 2024, Emera announced the sale of NMGC. As at December 31, 2024 NMGC’s assets and liabilities were classified as held for sale. For further details, refer to the “Other Developments” section and note 3 in the consolidated financial statements.

 

     
26   EMERA 2024 ANNUAL REPORT

Management’s Discussion and Analysis

 

millions of dollars

    Total Increase
(Decrease)		     Increase
(Decrease) due
to held for sale
classification (1)		     Other Increase
(Decrease)		    

Explanation of Other Increase (Decrease)

Liabilities and Equity

         

Short-term debt and long- term debt (including current portion)

    $ 9     $ (742 )    $ 751     Increased due the effect of FX translation of Emera’s non-Canadian affiliates, proceeds from long-term debt issuance at TEC, and issuance of junior subordinated notes at EUSHI Finance. These were partially offset by repayment of Emera’s committed credit facilities using the LIL transaction proceeds, repayment of short-term debt at TEC and NSPI, and retirement of long-term debt at Corporate, TEC, and NMGI

Accounts payable

      538       (131 )      669     Increased due to storm cost payable at TEC, the effect of FX translation of Emera’s non-Canadian affiliates, and increased commodity prices at EES

Deferred income tax liabilities, net of deferred income tax assets

      (205 )      (167 )      (38 )    No significant change after removing impact of held for sale classification

Derivative instruments (current and long-term)

      113       (1 )      114     Increased due to new contracts in 2024 and changes in existing positions at EES, higher FX forward liability at Corporate due to changes in the FX hedges, partially offset by higher commodity prices and settlements of derivative instruments at NSPI

Regulatory liabilities (current and long-term)

      108       (284 )      392     Increased due to effect of FX translation of Emera’s non- Canadian affiliates and recognition of fuel cost recovery liabilities at TEC and NSPI due to over-recovery of fuel costs

Other liabilities (current and long-term)

      152       (34 )      186     Increased due the effect of FX translation of Emera’s non-Canadian affiliates and higher accrued interest on long-term debt at NSPI

Common stock

      580       —        580     Increased due to shares issued

Accumulated other comprehensive income

      956       —        956     Increased due to the effect of FX translation of Emera’s non-Canadian affiliates

Retained earnings

      (335 )      —        (335 )    Decreased due to dividends paid in excess of net income

 

(1)

On August 5, 2024, Emera announced the sale of NMGC. As at December 31, 2024 NMGC’s assets and liabilities were classified as held for sale. For further details, refer to the “Other Developments” section and note 3 in the consolidated financial statements.

Other Developments

CANADIAN TAX LEGISLATION CHANGES

On June 20, 2024, Bill C-59, an Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023, and certain provisions of the budget tabled in Parliament on March 28, 2023, was enacted. Bill C-59 includes the EIFEL regime, which is effective January 1, 2024. EIFEL applies to limit a company’s net interest and financing expense deduction to no more than 30 per cent of EBITDA for tax purposes. Any denied interest and financing expenses under the EIFEL regime can be carried forward indefinitely. During 2024, the Company incurred $185 million of interest and financing expenses in connection with a specific financing structure. The interest and financing expenses related to the financing structure as well as $88 million of other interest and financing expenses are expected to be denied under the EIFEL regime. It was determined that the Company is more likely than not to realize the tax benefit of the denied interest and financing expenses in future periods and therefore a $79 million deferred income tax asset has been recorded as at December 31, 2024.

PENDING SALE OF NMGC

On August 5, 2024, Emera entered into an agreement to sell its indirect wholly owned subsidiary NMGC for a total enterprise value of approximately $1.3 billion USD, consisting of cash proceeds and the transfer of debt and customary closing adjustments. The transaction is expected to close in late 2025, subject to certain approvals, including approval by the NMPRC. As a result of the pending sale, NMGC’s assets and liabilities are classified as held for sale.

 

     
EMERA 2024 ANNUAL REPORT   27

Management’s Discussion and Analysis

 

As the transaction proceeds will be lower than the carrying amount of the assets and liabilities being sold, Emera assessed the NMGC reporting unit for goodwill impairment by comparing the FV of expected transaction proceeds to the carrying value of net assets, including goodwill of $366 million USD (“NMGC carrying amount”). The goodwill of the reporting unit was determined to be impaired and a non-cash goodwill impairment charge of $210 million ($198 million, after-tax) or $155 million USD ($146 million USD, after-tax) was recorded in “Impairment Charges” on the Consolidated Statements of Income in Q3 2024.

Following the goodwill impairment assessment, the held for sale assets and liabilities were measured at the lower of their carrying amount or fair value less costs to sell. The measurement resulted in an additional loss for the estimated future transaction costs of $16 million ($12 million after-tax), in addition to incurred transaction costs of $9 million ($7 million after- tax) recorded in “Other Income, net” on the Consolidated Statements of Income in Q3 2024.

The Company will continue to record depreciation on the NMGC assets through the transaction closing date, as the depreciation continues to be reflected in customer rates and will be reflected in the carryover basis of the assets when sold. Depreciation and amortization of $26 million ($19 million USD) was recorded on these assets from August 5, 2024, the date they were classified as held for sale, through December 31, 2024.

INCREASE IN COMMON DIVIDEND

On September 18, 2024, the Emera Board of Directors approved an increase in the annual common share dividend rate to $2.90 from $2.87 per common share. The first payment was effective November 15, 2024.

SALE OF LIL EQUITY INTEREST

On June 4, 2024, Emera completed the sale of its 31.1 per cent LIL equity interest for a total transaction value of $1.2 billion, including cash proceeds of $957 million and $235 million for assuming Emera’s contractual obligation to fund the remaining initial capital investment, which represents additional LIL equity interest for the acquirer. Cash proceeds from the sale in the amount of $30 million is held in escrow pending finalization of certain agreements with the LIL general partner. The escrow proceeds receivable is held at FV and included in the gain on sale, after transaction costs. As of December 31, 2024, the estimated FV of the escrow proceeds receivable is $25 million. In Q2 2024, a gain on sale, after tax and transaction costs, of $107 million, was included in the Other segment (the gain on sale, net of transaction costs of $182 million was recognized in “Other Income, net” on the Consolidated Statements of Income). In Q4 2024, Emera recognized a $22 million tax benefit due to the reversal of a prior year valuation allowance related to loss carryforwards applied against a portion of the taxable capital gain on the sale of LIL. This tax benefit was recorded in “Income Tax (Recovery) Expense” on the Consolidated Statements of Income in Q4 2024 and included in the Other segment. Proceeds from the sale were used to reduce corporate debt and fund investment in the Company’s regulated utility businesses.

APPOINTMENTS

BOARD OF DIRECTORS

Effective February 21, 2025, Karen Sheriff was appointed Chair of the Emera Board of Directors, succeeding Jackie Sheppard. Ms. Sheriff joined the Emera Board of Directors in February 2021 and since that time has served as a member of the Management Resources and Compensation Committee, the Risk and Sustainability Committee as well as Chair of the Nominating and Corporate Governance Committee.

Effective June 26, 2024, Carla Tully joined the Emera Board of Directors. Ms. Tully is the former Chief Executive Officer and Co-Founder of Earthrise Energy, PBC, an energy transition company. She also previously served as Executive Vice President and Managing Director of Renewable Energy at MAP Energy and held various senior leadership roles with AES Corporation.

Effective March 6, 2024, Brian J. Porter joined the Emera Board of Directors. Mr. Porter is the former President and Chief Executive Officer of The Bank of Nova Scotia (Scotiabank), a global bank operating in Canada and the Americas.

 

     
28   EMERA 2024 ANNUAL REPORT

Management’s Discussion and Analysis

 

Financial Highlights

Florida Electric Utility

 

For the    Three months ended
December 31		      Year ended
December 31		  

millions of USD (except as indicated)

    2024      2023      2024      2023  

Operating revenues – regulated electric

    $ 582      $ 613      $ 2,526      $ 2,637  

Regulated fuel for generation and purchased power

    $ 151      $ 162      $ 622      $ 682  

Contribution to consolidated adjusted net income

    $ 85      $ 85      $ 470      $ 466  

Contribution to consolidated adjusted net income – CAD

    $ 120      $ 115      $ 644      $ 627  

Charges related to wind-down costs and certain asset impairments, after-tax (1)

    $ (2 )     $ —       $ (2 )     $ —   

Contribution to consolidated net income

    $ 83      $ 85      $ 468      $ 466  

Contribution to consolidated net income – CAD

    $ 117      $ 115      $ 641      $ 627  

Average fuel costs in dollars per MWh

    $ 31      $ 34      $ 28      $ 31  

 

(1)

Net of income tax recovery of $1 million for the three months and year ended December 31, 2024.

The impact of the change in the FX rate increased CAD earnings and adjusted earnings for the three months and year ended December 31, 2024, by $3 million and $10 million, respectively.

NET INCOME

Highlights of net income changes are summarized in the following table:

 

For the

millions of USD

    Three months ended
December 31		      Year ended
December 31		  

Contribution to consolidated net income – 2023

    $ 85      $ 466  

Decreased operating revenues primarily due to decreased fuel recovery clause revenue, lower storm surcharge revenue (offset in OM&G), and the unfavourable load impact of Hurricane Milton, partially offset by customer growth and new base rates. Revenues were also impacted by favourable weather of $10 million quarter-over-quarter, and unfavourable weather of $10 million year-over-year

      (31 )       (111 ) 

Decreased fuel for generation and purchased power due to lower natural gas prices

      11        60  

Decreased OM&G due to lower storm cost recognition (offset in revenue), partially offset by the timing of deferred clause recoveries and higher solar operations, labour, and software maintenance costs

      16        47  

Increased depreciation and amortization due to additions to facilities and generation projects placed in service

      (9 )       (32 ) 

Decreased interest expense year-over-year due to lower borrowings

      —         7  

Decreased state and municipal taxes due to lower retail sales tax, partially offset by higher property taxes

      4        14  

Decreased income tax expense year-over-year due to increased production tax credits related to solar facilities

      —         18  

Other

      7        (1 ) 
  

 

 

     

 

 

  

Contribution to consolidated net income – 2024

    $ 83      $ 468  
  

 

 

     

 

 

  

 

     
EMERA 2024 ANNUAL REPORT   29

Management’s Discussion and Analysis

 

OPERATING REVENUES – REGULATED ELECTRIC

Annual electric revenues and sales volumes are summarized in the following table by customer class:

 

     Electric Revenues
(millions of USD)		      Electric Sales Volumes
(Gigawatt hours (“GWh”))		  
     2024      2023      2024      2023  

Residential

    $ 1,507      $ 1,711        10,269        10,307  

Commercial

      686        803        6,481        6,462  

Industrial

      162        203        2,019        2,082  

Other (1)

      171        (80 )       2,276        2,194  
  

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 2,526      $ 2,637        21,045        21,045  
  

 

 

     

 

 

     

 

 

     

 

 

  

 

(1)

Other includes regulatory deferrals related to clauses, sales to public authorities, off-system sales to other utilities.

REGULATED FUEL FOR GENERATION AND PURCHASED POWER

Annual production volumes are summarized in the following table:

 

     Production Volumes (GWh)  
     2024      2023  

Natural gas

      18,027        17,843  

Solar

      2,250        1,748  

Purchased power

      1,569        1,443  

Coal

      32        744  
  

 

 

     

 

 

  

Total

      21,878        21,778  
  

 

 

     

 

 

  

TEC’s fuel costs are affected by commodity prices and generation mix that is largely dependent on economic dispatch of the generating fleet, bringing the lowest cost options on first (renewable energy from solar or battery storage), such that the incremental cost of production increases as sales volumes increase. Generation mix may also be affected by plant outages, plant performance, availability of lower priced short-term purchased power, availability of renewable solar generation, and compliance with environmental standards and regulations.

REGULATORY ENVIRONMENT

TEC is regulated by the FPSC and is also subject to regulation by the FERC. The FPSC sets rates at a level that allows utilities such as TEC to collect total revenues or revenue requirements equal to their cost of providing service, plus an appropriate return on invested capital. Base rates are determined in FPSC rate setting hearings which can occur at the initiative of TEC, the FPSC, or other interested parties. For further details on TEC’s regulatory environment, base rates and recovery mechanisms, refer to note 7 in the consolidated financial statements.

Canadian Electric Utilities

On June 4, 2024, Emera completed the sale of its LIL equity interest. For further details on the transaction, refer to the “Other Developments” section.

 

For the    Three months ended
December 31		      Year ended
December 31		  

millions of dollars (except as indicated)

    2024      2023      2024      2023  

Operating revenues – regulated electric

    $ 479      $ 439      $ 1,855      $ 1,671  

Regulated fuel for generation and purchased power (1)

    $ (216 )     $ 234      $ 509      $ 777  

Contribution to consolidated net income

    $ 77      $ 68      $ 232      $ 247  

Average fuel costs in dollars per MWh (2)

    $ (73 )     $ 81      $ 45      $ 70  

 

(1)

Regulated fuel for generation and purchased power includes NSPI’s FAM deferral on the Consolidated Statements of Income, however, it is excluded in the segment overview.

(2)

2024 Average fuel costs include the $486 million NSPML Refund which decreased average fuel costs by $164 per MWh and $43 per MWh for the three months and year ended December 31, 2024, respectively. Average fuel costs for the year ended December 31, 2023 include reversal of the $166 million of the Nova Scotia Cap-and-Trade Program provision which decreased average fuel costs by $15 per MWh. For more information the NSPML Refund and the Nova Scotia Cap-and-Trade Program provision reversal, refer to note 7 in the consolidated financial statements.

 

     
30   EMERA 2024 ANNUAL REPORT

Management’s Discussion and Analysis

 

Canadian Electric Utilities’ contribution to consolidated net income is summarized in the following table:

 

For the    Three months ended
December 31		      Year ended
December 31		  

millions of dollars

    2024      2023      2024      2023  

NSPI

    $ 71      $ 40      $ 160      $ 141  

Equity investment in NSPML

      6        12        44        46  

Equity investment in LIL

      —         16        28        60  
  

 

 

     

 

 

     

 

 

     

 

 

  

Contribution to consolidated net income

    $ 77      $ 68      $ 232      $ 247  
  

 

 

     

 

 

     

 

 

     

 

 

  

NET INCOME

Highlights of net income changes are summarized in the following table:

 

For the

millions of dollars

    Three months ended
December 31		      Year ended
December 31		  

Contribution to consolidated net income – 2023

    $ 68      $ 247  

Increased operating revenues at NSPI due to new rates. Year-over-year also due to changes in fuel cost recovery methodology for an industrial customer in 2023 (1)

      40        184  

Decreased regulated fuel for generation and purchased power at NSPI due to the NSPML Refund (1) and decreased commodity prices, partially offset by change in generation mix and increased sales volumes. Year-over-year decrease was partially offset by the reversal of the Nova Scotia Cap-and-Trade Program provision (1) in 2023

      450        268  

Increased FAM deferral at NSPI primarily due to the NSPML Refund.(1) Year-over-year increase also due to changes in the fuel cost recovery methodology for an industrial customer in 2023 and under-recovery of fuel costs in 2023, partially offset by the reversal of the Nova Scotia Cap-and- Trade Program provision (1) in 2023

      (484 )       (428 ) 

Increased OM&G due to a lower storm cost deferral, and higher demand side management program costs at NSPI

      (8 )       (24 ) 

Decreased income from equity investments due to the sale of LIL

      (16 )       (34 ) 

Increased income tax recovery at NSPI due to the utilization of tax loss carryforwards offset to a regulatory deferred income tax liability, partially offset by decreased tax deductions in excess of accounting depreciation related to property, plant and equipment

      40        32  

Other

      (13 )       (13 ) 
  

 

 

     

 

 

  

Contribution to consolidated net income – 2024

    $ 77      $ 232  
  

 

 

     

 

 

  

 

(1)

For more information on the changes in fuel cost recovery methodology for an industrial customer in 2023, the $486 million NSPML Refund, and the $166 million reversal of the Nova Scotia Cap-and-Trade Program provision, refer to note 7 in the consolidated financial statements.

NSPI

OPERATING REVENUES – REGULATED ELECTRIC

Annual electric revenues and sales volumes are summarized in the following tables by customer class:

 

     Electric Revenues
(millions of dollars)		      Electric Sales Volumes
(GWh)		  
     2024      2023      2024      2023  

Residential

    $ 997      $ 910        5,096        4,986  

Commercial

      499        463        3,046        3,053  

Industrial

      276        219        2,217        2,164  

Other

      41        41        222        239  
  

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 1,813      $ 1,633        10,581        10,442  
  

 

 

     

 

 

     

 

 

     

 

 

  

 

     
EMERA 2024 ANNUAL REPORT   31

Management’s Discussion and Analysis

 

REGULATED FUEL FOR GENERATION AND PURCHASED POWER

Annual production volumes are summarized in the following table:

 

     Production Volumes
(GWh)		  
     2024      2023  

Coal

      3,347        3,086  

Natural gas

      2,317        1,946  

Purchased power

      620        881  

Petcoke

      374        553  

Oil

      132        145  
  

 

 

     

 

 

  

Total non-renewables

      6,790        6,611  
  

 

 

     

 

 

  

Purchased power – IPP, COMFIT and imports

      3,464        3,251  

Wind, hydro and solar

      932        1,149  

Biomass

      140        128  
  

 

 

     

 

 

  

Total renewables

      4,536        4,528  
  

 

 

     

 

 

  

Total production volumes

      11,326        11,139  
  

 

 

     

 

 

  

NSPI’s fuel costs are affected by commodity prices and generation mix, which is largely dependent on economic dispatch of the generating fleet. NSPI brings the lowest cost options on stream first after renewable energy from IPPs including COMFIT participants, for which NSPI has power purchase agreements in place, and the NS Block of energy, including the Supplemental Energy Block, which carries no additional fuel cost outside of the UARB approved annual assessments paid to NSPML for the use of the Maritime Link.

Generation mix may also be affected by plant outages, carbon pricing programs, including the Nova Scotia Output-Based Pricing System, availability of renewable generation, availability of energy from the NS Block, plant performance, and compliance with environmental regulations.

REGULATORY ENVIRONMENT – NSPI

NSPI is a public utility as defined in the Public Utilities Act and is subject to regulation under the Public Utilities Act by the UARB. The Public Utilities Act gives the UARB supervisory powers over NSPI’s operations and expenditures. Electricity rates for NSPI’s customers are subject to UARB approval. NSPI is not subject to a general annual rate review process, but rather participates in hearings held from time to time at NSPI’s or the UARB’s request. For further details on NSPI’s regulatory environment and recovery mechanisms, refer to note 7 in the consolidated financial statements.

Gas Utilities and Infrastructure

On August 5, 2024, Emera announced an agreement to sell NMGC. The transaction is expected to close in late 2025, subject to certain approvals, including regulatory approval by the NMPRC. For more information on the pending transaction, refer to the “Other Developments” section.

 

For the    Three months ended
December 31		      Year ended
December 31		  

millions of USD (except as indicated)

    2024      2023      2024      2023  

Operating revenues – regulated gas (1)

    $ 317      $ 290      $ 1,160      $ 1,114  

Operating revenues – non-regulated

      3        3        15        15  
  

 

 

     

 

 

     

 

 

     

 

 

  

Total operating revenue

    $ 320      $ 293      $ 1,175      $ 1,129  
  

 

 

     

 

 

     

 

 

     

 

 

  

Regulated cost of natural gas

    $ 81      $ 99      $ 289      $ 391  

Contribution to consolidated adjusted net income

    $ 61      $ 43      $ 194      $ 158  

Contribution to consolidated adjusted net income – CAD

    $ 87      $ 59      $ 267      $ 214  

Charges related to the pending sale of NMGC, after-tax (2)

    $ —       $ —       $ (6 )     $ —   

Contribution to consolidated net income

    $ 61      $ 43      $ 188      $ 158  

Contribution to consolidated net income – CAD

    $ 87      $ 59      $ 259      $ 214  

 

(1)

Operating revenues – regulated gas includes $12 million of finance income from Brunswick Pipeline (2023 – $11 million) for the three months ended December 31, 2024 and $46 million (2023 – $46 million) for the year ended December 31 2024; however, it is excluded from the gas revenues and cost of natural gas analysis below.

(2)

Includes an other impairment charge, net of income tax recovery of nil and $2 million for the three months and the year ended December 31, 2024, respectively.

 

     
32   EMERA 2024 ANNUAL REPORT

Management’s Discussion and Analysis

 

Gas Utilities and Infrastructure’s contribution to consolidated adjusted net income is summarized in the following table:

 

For the    Three months ended
December 31		      Year ended
December 31		  

millions of USD

    2024      2023      2024      2023  

PGS

    $ 28      $ 21      $ 120      $ 79  

NMGC

      23        14        39        43  

Other

      10        8        35        36  
  

 

 

     

 

 

     

 

 

     

 

 

  

Contribution to consolidated adjusted net income

    $ 61      $ 43      $ 194      $ 158  
  

 

 

     

 

 

     

 

 

     

 

 

  

Impact of the change in the FX rate increased CAD earnings and adjusted earnings for the three months and year ended December 31, 2024, by $3 million and $4 million respectively.

NET INCOME

Highlights of net income changes are summarized in the following table:

 

For the

millions of USD

    Three months ended
December 31		      Year ended
December 31		  

Contribution to consolidated net income – 2023

    $ 43      $ 158  

Increased gas revenues due to new base rates at PGS and NMGC, and customer growth at PGS, partially offset by lower fuel revenues at NMGC

      27        54  

Decreased asset optimization revenues at NMGC

      —         (8 ) 

Decreased cost of natural gas due to lower natural gas prices primarily at NMGC

      18        102  

Increased OM&G primarily due to the timing of deferred clause recoveries and higher labour cost at PGS

      (5 )       (31 ) 

Increased depreciation primarily due to asset growth at PGS and the effect of reversal of accumulated depreciation in 2023 as a result of the 2021 rate case settlement at PGS

      (13 )       (39 ) 

Increased interest expense, net year-over-year, primarily due to higher interest rates and increased borrowings to support ongoing operations and capital investments primarily at PGS

      1        (15 ) 

Increased income tax expense primarily due to increased income before provision for income taxes at PGS. Quarter-over-quarter increase also due to increased income before provision for income taxes at NMGC

      (13 )       (21 ) 

Charges related to the pending sale of NMGC, after-tax

      —         (6 ) 

Other

      3        (6 ) 
  

 

 

     

 

 

  

Contribution to consolidated net income – 2024

    $ 61      $ 188  
  

 

 

     

 

 

  

OPERATING REVENUES – REGULATED GAS

Annual gas revenues and sales volumes are summarized in the following tables by customer class:

 

     Gas Revenues
(millions of USD)		      Gas Volumes
(millions of Therms)		  
     2024      2023      2024      2023  

Residential

    $ 520      $ 537        410        414  

Commercial

      362        315        824        839  

Industrial (1)

      69        69        1,620        1,615  

Other (2)

      163        147        278        266  
  

 

 

     

 

 

     

 

 

     

 

 

  

Total (3)

    $ 1,114      $ 1,068        3,132        3,134  
  

 

 

     

 

 

     

 

 

     

 

 

  

 

(1)

Industrial gas revenue includes sales to power generation customers.

(2)

Other gas revenue includes off-system sales to other utilities and various other items.

(3)

Total gas revenue excludes $46 million of finance income from Brunswick Pipeline (2023 – $46 million).

 

     
EMERA 2024 ANNUAL REPORT   33

Management’s Discussion and Analysis

 

REGULATED COST OF NATURAL GAS

PGS and NMGC purchase gas from various suppliers depending on the needs of their customers. In Florida, gas is delivered to the PGS distribution system through interstate pipelines on which PGS has firm transportation capacity for delivery by PGS to its customers. NMGC’s natural gas is transported on major interstate pipelines and NMGC’s intrastate transmission and distribution system for delivery to customers.

In Florida, natural gas service is unbundled for non-residential customers and residential customers who use more than 1,999 therms annually and elect the option. In New Mexico, NMGC is required, if requested, to provide transportation-only services for all customer classes. The commodity portion of bundled sales is included in operating revenues, at the cost of the gas on a pass-through basis, therefore no net earnings effect when a customer shifts to transportation-only sales.

Annual gas sales by type are summarized in the following table:

 

     Gas Volumes by Type
(millions of Therms)		  
     2024      2023  

Transportation

      2,434        2,461  

System supply

      698        673  
  

 

 

     

 

 

  

Total

      3,132        3,134  
  

 

 

     

 

 

  

REGULATORY ENVIRONMENTS

PGS is regulated by the FPSC. The FPSC sets rates at a level that allows utilities such as PGS to collect total revenues or revenue requirements equal to their cost of providing service, plus an appropriate return on invested capital.

NMGC is subject to regulation by the NMPRC. The NMPRC sets rates at a level that allows NMGC to collect total revenues equal to its cost of providing service, plus an appropriate return on invested capital.

For further information on PGS’s and NMGC’s regulatory environment and recovery mechanisms, refer to note 7 in the consolidated financial statements.

Other Electric Utilities

 

For the    Three months ended
December 31		      Year ended
December 31		  

millions of USD (except as indicated)

    2024      2023      2024      2023  

Operating revenues – regulated electric

    $ 107      $ 104      $ 413      $ 390  

Regulated fuel for generation and purchased power

    $ 55      $ 57      $ 215      $ 204  

Contribution to consolidated adjusted net income

    $ 15      $ 3      $ 35      $ 26  

Contribution to consolidated adjusted net income – CAD

    $ 21      $ 4      $ 48      $ 35  

Equity securities MTM (loss) gain

    $ (1 )     $ 2      $ —       $ 2  

Contribution to consolidated net income

    $ 14      $ 5      $ 35      $ 28  

Contribution to consolidated net income – CAD

    $ 19      $ 6      $ 48      $ 37  

Electric sales volumes (GWh)

      323        323        1,307        1,260  

Electric production volumes (GWh)

      347        345        1,403        1,362  

Average fuel cost in dollars per MWh

    $ 159      $ 165      $ 153      $ 150  

The impact of the change in the FX rate increased CAD earnings and adjusted earnings by $1 million for the three months and year ended December 31, 2024.

 

     
34   EMERA 2024 ANNUAL REPORT

Management’s Discussion and Analysis

 

Other Electric Utilities’ contribution to consolidated adjusted net income is summarized in the following table:

 

For the    Three months ended
December 31		      Year ended
December 31		  

millions of USD

    2024      2023      2024      2023  

BLPC

    $ 13      $ 4      $ 27      $ 18  

GBPC

      3        —         11        11  

Other

      (1 )       (1 )       (3 )       (3 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Contribution to consolidated adjusted net income

    $ 15      $ 3      $ 35      $ 26  
  

 

 

     

 

 

     

 

 

     

 

 

  

NET INCOME

Highlights of net income changes are summarized in the following table:

 

For the

millions of USD

    Three months ended
December 31		      Year ended
December 31		  

Contribution to consolidated net income – 2023

    $ 5      $ 28  

Increased operating revenues quarter-over-quarter due to the timing of recovery of fuels costs Year-over-year increased primarily due to higher sales volumes

      3        23  

Increased fuel for generation and purchased power year-over-year due to higher sales volumes at BLPC

      2        (11 ) 

Increased OM&G, year-over-year due to higher insurance premiums and increased generation maintenance costs at GBPC and BLPC

      1        (8 ) 

Other

      3        3  
  

 

 

     

 

 

  

Contribution to consolidated net income – 2024

    $ 14      $ 35  
  

 

 

     

 

 

  

REGULATORY ENVIRONMENTS

BLPC is regulated by the FTC. Rates are set to recover prudently incurred costs of providing electricity service to customers plus an appropriate return on capital invested.

GBPC is regulated by the GBPA. Rates are set to recover prudently incurred costs of providing electricity service to customers plus an appropriate return on rate base.

For further details on BLPC and GBPC’s regulatory environments and recovery mechanisms, refer to note 7 in the consolidated financial statements.

 

     
EMERA 2024 ANNUAL REPORT   35

Management’s Discussion and Analysis

 

Other

 

For the    Three months ended
December 31		      Year ended
December 31		  

millions of dollars

    2024      2023      2024      2023  

Marketing and trading margin (1)(2)

    $ 35      $ 35      $ 77      $ 96  

Other non-regulated operating revenue

      10        5        32        27  
  

 

 

     

 

 

     

 

 

     

 

 

  

Total operating revenues – non-regulated

    $ 45      $ 40      $ 109      $ 123  
  

 

 

     

 

 

     

 

 

     

 

 

  

Contribution to consolidated adjusted net (loss) income

    $ (59 )     $ (71 )     $ (342 )     $ (314 ) 

Gain on sale of LIL, after-tax (3)(4)

      22        —         129        —   

Financing structure wind-up

      58        —         58        —   

Charges related to wind-down costs and certain asset impairments, after-tax (5)

      (23 )       —         (23 )       —   

Charges related to the pending sale of NMGC, after-tax (6)

      —         —         (217 )       —   

MTM (loss) gain, after-tax (7)

      (144 )       112        (291 )       167  
  

 

 

     

 

 

     

 

 

     

 

 

  

Contribution to consolidated net (loss) income

    $ (146 )     $ 41      $ (686 )     $ (147 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

 

(1)

Marketing and trading margin represents EES’s purchases and sales of natural gas and electricity, pipeline and storage capacity costs and energy asset management services’ revenues.

(2)

Marketing and trading margin excludes a MTM loss, pre-tax of $159 million in Q4 2024 (2023 – $131 million gain) and a MTM loss, pre-tax of $357 million for the year ended December 31, 2024 (2023 – $216 million gain).

(3)

On June 4, 2024, Emera completed the sale of its LIL equity interest. For further details on the transaction, refer to the “Significant Items Affecting Earnings” and “Other Developments” sections.

(4)

Includes an income tax recovery of $22 million for the three months ended December 31, 2024 and net income tax expense of $53 million for the year ended December 31, 2024 (2023 – nil).

(5)

Primarily relates to Block Energy, net of income tax recovery of $6 million for the year ended December 31, 2024 (2023 – nil).

(6)

Includes a goodwill impairment charge of $210 million ($198 million after-tax) and transaction costs of $25 million ($19 million after-tax) for the year ended December 31, 2024 (2023 – nil).

(7)

Net of income tax recovery of $57 million for the three months ended December 31, 2024 (2023 – $44 million expense) and $117 million recovery for the year ended December 31, 2024 (2023 – $68 million expense).

Other’s contribution to consolidated adjusted net (loss) income is summarized in the following table:

 

For the    Three months ended
December 31		      Year ended
December 31		  

millions of dollars

    2024      2023      2024      2023  

Emera Energy:

            

EES

    $ 16      $ 19      $ 30      $ 46  

Other

      (2 )       6        2        18  

Corporate – see breakdown of adjusted contribution below

      (73 )       (91 )       (360 )       (356 ) 

Block Energy

      —         (4 )       (13 )       (18 ) 

Other

      —         (1 )       (1 )       (4 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Contribution to consolidated adjusted net (loss) income

    $ (59 )     $ (71 )     $ (342 )     $ (314 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

 

     
36   EMERA 2024 ANNUAL REPORT

Management’s Discussion and Analysis

 

NET INCOME

Highlights of net income changes are summarized in the following table:

 

For the

millions of dollars

    Three months ended
December 31		      Year ended
December 31		  

Contribution to consolidated net (loss) income – 2023

    $ 41      $ (147 ) 

Decreased marketing and trading margin year-over-year due to favourable hedging opportunities in Q1 2023 and less favourable market conditions in 2024, specifically lower natural gas prices and volatility

      —         (19 ) 

Increased OM&G quarter-over-quarter primarily due to the timing difference in the valuation of long-term incentive expense and related hedges

      (18 )       (2 ) 

Increased interest expense due to the impact of a weaker CAD on USD interest expense, increased total debt and increased interest rates

      (9 )       (38 ) 

Corporate FX losses on the translation of USD short-term debt balances

      (5 )       (9 ) 

Decreased deferred income tax asset valuation allowance due to the utilization of tax loss carryforwards

      36        39  

Increased income tax recovery due to increased loss before provision for income taxes, partially offset by the recognition of investment tax credits related to Bear Swamp facility upgrades in 2023

      3        4  

Gain on sale of LIL, after-tax

      22        129  

Financing structure wind-up

      58        58  

Charges related to wind-down costs and certain asset impairments, after-tax

      (23 )       (23 ) 

Charges related to the pending sale of NMGC, after-tax

      —         (217 ) 

The 2023 MTM gain, after-tax, decreased to a loss for the same periods in 2024 due to changes in existing positions, partially offset by lower amortization of gas transportation assets at EES

      (254 )       (457 ) 

Other

      3        (4 ) 
  

 

 

     

 

 

  

Contribution to consolidated net (loss) income – 2024

    $ (146 )     $ (686 ) 
  

 

 

     

 

 

  

EMERA ENERGY

EES derives revenue and earnings from wholesale marketing and trading of natural gas and electricity within the Company’s risk tolerances, including those related to value-at-risk (“VaR”) and credit exposure. EES purchases and sells physical natural gas and electricity, the related transportation and transmission capacity rights, and provides energy asset management services. The primary market area for the natural gas and power marketing and trading business is northeastern North America, including the Marcellus and Utica shale supply areas. EES also participates in the US Southeast, Gulf Coast and Midwest, and Central Canadian and Alberta natural gas markets. Its counterparties include electric and gas utilities, natural gas producers, electricity generators and other marketing and trading entities. EES operates in a competitive environment, and the business relies on knowledge of the region’s energy markets, understanding of pipeline and transmission infrastructure, a network of counterparty relationships and a focus on customer service. EES manages its commodity risk by limiting open positions, utilizing financial products to hedge purchases and sales, and investing in transportation capacity rights to enable movement across its portfolio.

EES’ contribution to consolidated adjusted net income was $16 million in Q4 2024, compared to $19 million in Q4 2023; and $30 million ($21 million USD) for the year ended December 31, 2024, compared to $46 million ($33 million USD) for the same period in 2023. Market conditions in 2024 were less favourable compared to 2023 due to lower natural gas prices and volatility.

MTM ADJUSTMENTS

Emera Energy’s “Marketing and trading margin”, “Non-regulated fuel for generation and purchased power”, “Income from equity investments” and “Income tax (recovery) expense” are affected by MTM adjustments. Variance explanations of the MTM changes for this quarter and for the year are explained in the table above.

Emera Energy has a number of asset management agreements (“AMA”) with counterparties, including local gas distribution utilities, power utilities and natural gas producers in North America. The AMAs involve Emera Energy buying or selling gas for a specific term, and the corresponding release of the counterparties’ gas transportation/storage capacity to Emera Energy. MTM adjustments on these AMAs arise on the price differential between the point where gas is sourced and where it is delivered. At inception, the MTM adjustment is offset fully by the value of the corresponding gas transportation asset, which is amortized over the term of the AMA contract.

 

     
EMERA 2024 ANNUAL REPORT   37

Management’s Discussion and Analysis

 

Subsequent changes in gas price differentials, to the extent they are not offset by the accounting amortization of the gas transportation asset, will result in MTM gains or losses recorded in income. MTM adjustments may be substantial during the term of the contract, especially in the winter months of a contract when delivered volumes and market pricing are usually at peak levels. As a contract is realized, and volumes reduce, MTM volatility is expected to decrease. Ultimately, the gas transportation asset and the MTM adjustment reduce to zero at the end of the contract term. As the business grows, and AMA volumes increase, MTM volatility resulting in gains and losses may also increase.

Emera Corporate has FX forwards to manage the cash flow risk of forecasted USD cash inflows. Fluctuations in the FX rate result in MTM gains or losses are recorded in “Other income, net” on the Consolidated Statements of Income.

CORPORATE

Corporate’s adjusted loss is summarized in the following table:

 

For the    Three months ended
December 31		      Year ended
December 31		  

millions of dollars

    2024      2023      2024      2023  

Operating expenses (1)

    $ (23 )     $ (7 )     $ (74 )     $ (73 ) 

Interest expense

      (97 )       (88 )       (367 )       (329 ) 

Income tax recovery

      76        25        170        111  

Preferred dividends

      (19 )       (18 )       (73 )       (66 ) 

Other (2)(3)

      (10 )       (3 )       (16 )       1  
  

 

 

     

 

 

     

 

 

     

 

 

  

Corporate adjusted net loss (4)(5)(6)(7)

    $ (73 )     $ (91 )     $ (360 )     $ (356 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

 

(1)

Operating expenses include OM&G and depreciation.

(2)

Other includes realized gains and losses on FX hedges entered into to hedge USD denominated operating unit earnings exposure.

(3)

Includes a realized net loss, pre-tax of $5 million ($4 million after-tax) for the three months ended December 31, 2024 (2023 – $4 million net loss, pre-tax and $3 million loss, after-tax) and a $12 million net loss, pre-tax ($9 million after-tax) for the year ended December 31, 2024 (2023 – $11 million net loss, pre-tax and $8 million loss after-tax) on FX hedges, as discussed above.

(4)

Excludes a MTM loss, after-tax of $25 million for the three months ended December 31, 2024 (2023 – $15 million gain, after-tax) and a MTM loss, after-tax of $31 million for the year ended December 31, 2024 (2023 – $20 million gain, after-tax).

(5)

Excludes a gain on sale of LIL, after-tax, of $107 million for the year ended December 31, 2024 (2023 – nil).

(6)

Excludes certain charges related to the pending sale of NMGC of $234 million ($217 million after-tax) for the year ended December 31, 2024 (2023 – nil).

(7)

Excludes the tax recovery of $58 million related to a specific financing structure and its wind-up and $22 million on reversal of a prior year valuation allowance related to the sale of LIL for the three months and year ended December 31, 2024 (2023 – nil).

Liquidity and Capital Resources

The Company generates internally sourced cash from its various regulated and non-regulated energy investments. Utility customer bases are diversified by both sales volumes and revenues among customer classes. Emera’s non-regulated businesses provide diverse revenue streams and counterparties to the business. Circumstances that could affect the Company’s ability to generate cash include changes to global macro-economic conditions, downturns in markets served by Emera, impact of fuel commodity price changes on collateral requirements and timely recoveries of fuel and storm costs from customers, the loss of one or more large customers, regulatory decisions affecting customer rates and the recovery of regulatory assets, and changes in environmental legislation. Emera’s subsidiaries are generally in a financial position to contribute cash dividends to Emera provided they do not breach their debt covenants, where applicable, after giving effect to the dividend payment, and that they maintain their credit metrics.

Emera’s future liquidity and capital needs will be predominately for working capital requirements, ongoing rate base investment, business acquisitions, greenfield development, dividends and debt servicing. Emera has an approximate $20 billion capital investment plan over the 2025 through 2029 period and supports ongoing growth. Capital investments at Emera’s regulated utilities are subject to regulatory approval.

Emera currently has a strong liquidity position and ability to service debt obligations as they come due to meet any near-term capital investment requirements as currently planned. Emera plans to use cash from operations, debt raised at the utilities, Corporate equity, and proceeds from the pending sale of NMGC to support normal operations, repayment of existing debt, and capital requirements. Debt raised at certain of the Company’s utilities is subject to applicable regulatory approvals. Generally, Corporate equity requirements in support of the Company’s capital investment plan are expected to be funded through issuance of preferred equity and issuance of common equity through Emera’s DRIP and ATM programs.

 

     
38   EMERA 2024 ANNUAL REPORT

Management’s Discussion and Analysis

 

Emera has total committed credit facilities with varying maturities that cumulatively provide $2.3 billion CAD and $1.6 billion USD of credit, with approximately $1.1 billion CAD and $593 million USD undrawn and available at December 31, 2024. The Company was holding a cash balance of $204 million, which includes $8 million classified as assets held for sale, related to the pending sale of NMGC, at December 31, 2024. For further discussion, refer to the “Debt Management” section below.

Consolidated Cash Flow Highlights

Significant changes in the Consolidated Statements of Cash Flows between the years ended December 31, 2024 and 2023 include:

 

millions of dollars

    2024      2023      $ Change  

Cash, cash equivalents and restricted cash, beginning of period

    $ 588      $ 332      $ 256  

Provided by (used in):

         

Operating cash flow before changes in working capital

      2,194        2,336        (142 ) 

Change in working capital

      452        (95 )       547  

Operating activities

    $ 2,646      $ 2,241      $ 405  

Investing activities

      (2,218 )       (2,917 )       699  

Financing activities

      (818 )       939        (1,757 ) 

Effect of exchange rate changes on cash, cash equivalents, restricted cash, and cash associated with assets held for sale

      23        (7 )       30  

Cash, cash equivalents, restricted cash, and cash associated with assets held for sale, end of period

    $ 221      $ 588      $ (367 ) 

CASH FLOW FROM OPERATING ACTIVITIES

Net cash provided by operating activities increased $405 million to $2,646 million for the year ended December 31, 2024, compared to $2,241 million in 2023.

Cash from operations before changes in working capital decreased $142 million for the year ended December 31, 2024. This decrease was due to increased storm cost recovery regulatory asset related to Hurricane Helene and Hurricane Milton at TEC, lower fuel clause recoveries at TEC, and the reversal of the Nova Scotia Cap-and-Trade Program provision in Q1 2023 at NSPI. These were partially offset by the NSPML Refund, favourable change in regulatory liabilities due to the 2023 gas hedge settlements at NMGC, increased electric revenue at NSPI, proceeds from the FAM asset sale to Invest Nova Scotia at NSPI, and increased earnings and the recovery of the conservation clause expense at PGS.

Changes in working capital increased operating cash flows by $547 million for the year ended December 31, 2024. This increase was due to increased accounts payable at TEC due to Hurricane Helene and Hurricane Milton storm cost accruals, favourable changes in cash collateral positions at NSPI, lower accounts receivable at TEC, reversal of the Nova Scotia Cap-and- Trade Program provision in Q1 2023 at NSPI, favourable changes in fuel inventory at NSPI and TEC, and favourable changes in accounts payable at NSPI, NMGC, and PGS. These were partially offset by unfavourable changes in cash collateral positions at EES, unfavourable changes in accounts receivable at NMGC due to the receipt of the 2023 gas hedge settlement, unfavourable changes in natural gas inventory at EES, and unfavourable changes in accounts receivable at NSPI.

CASH FLOW USED IN INVESTING ACTIVITIES

Net cash used in investing activities decreased $699 million to $2,218 million for the year ended December 31, 2024, compared to $2,917 million in 2023. The decrease was primarily due to the proceeds of $927 million received on the sale of Emera’s LIL equity interest, partially offset by higher capital investment in 2024.

Capital expenditures for the year ended December 31, 2024, including AFUDC, were $3,206 million compared to $2,976 million in 2023. Details of 2024 capital spending by segment are shown below:

 

  •  

$1,998 million – Florida Electric Utility (2023 – $1,771 million);

 

  •  

$494 million – Canadian Electric Utilities (2023 – $461 million);

 

  •  

$626 million – Gas Utilities and Infrastructure (2023 – $673 million);

 

  •  

$81 million – Other Electric Utilities (2023 – $63 million); and

 

  •  

$7 million – Other (2023 – $8 million).

 

     
EMERA 2024 ANNUAL REPORT   39

Management’s Discussion and Analysis

 

CASH FLOW FROM FINANCING ACTIVITIES

Net cash used in financing activities decreased $1,757 million to $818 million for the year ended December 31, 2024, compared to net cash provided by financing activities of $939 million in 2023. This decrease was due to lower issuance of long-term debt at PGS, NSPI, and NMGC, higher repayment of Emera’s committed credit facilities using the LIL transaction proceeds, retirement of long-term debt at Emera, TEC and NMGC, and higher net repayments under committed credit facilities at NSPI. These were partially offset by proceeds from the fixed-to-fixed reset rate junior subordinated notes issuance by EUSHI Finance Inc., lower short-term debt repayments at TEC, and issuance of long-term debt at TEC.

Working Capital

As at December 31, 2024, Emera’s cash and cash equivalents were $196 million (2023 – $567 million) and Emera’s investment in non-cash working capital was $224 million (2023 – $831 million). Of the cash and cash equivalents held at December 31, 2024, $185 million was held by Emera’s foreign subsidiaries (2023 – $482 million). A portion of these funds are invested in countries that have certain exchange controls, approvals, and processes for repatriation. Such funds are available to fund local operating and capital requirements unless repatriated.

Contractual Obligations

As at December 31, 2024, contractual commitments for each of the next five years and in aggregate thereafter consisted of the following:

 

millions of dollars

    2025      2026      2027      2028      2029      Thereafter      Total  

Long-term debt principal (1)

    $ 234      $ 3,279      $ 120      $ 651      $ 1,764      $ 13,192      $ 19,240  

Interest payment obligations (2)(3)

      884        799        712        705        636        8,210        11,946  

Purchased power (4)

      307        277        368        368        369        4,487        6,176  

Transportation (5)(6)

      742        545        544        454        412        3,228        5,925  

Capital projects

      604        287        24        —         —         —         915  

Fuel, gas supply and storage (7)

      591        94        21        5        —         —         711  

Pension and post-retirement obligations (8)

      31        32        68        72        73        224        500  

Asset retirement obligations

      9        1        1        2        1        422        436  

Other

      160        95        80        59        59        264        717  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
   $ 3,562      $ 5,409      $ 1,938      $ 2,316      $ 3,314      $ 30,027      $ 46,566  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

As detailed below, contractual obligations at December 31, 2024 includes those related to NMGC. On completion of the sale of NMGC, all remaining future contractual obligations will be transferred to the buyer. For further details on the pending transaction, refer to the “Other Developments” section.

 

(1)

Includes $696 million related to NMGC (2026: $100 million, and $576 million thereafter).

(2)

Future interest payments are calculated based on the assumption that all debt is outstanding until maturity. For debt instruments with variable rates, interest is calculated for all future periods using the rates in effect at December 31, 2024, including any expected required payment under associated swap agreements.

(3)

Includes $353 million related to NMGC (2025: $26 million, 2026: $26 million, 2027: $23 million, 2028: $23 million, 2029: $23 million, and $232 million thereafter).

(4)

Annual requirement to purchase electricity from IPPs or other utilities over varying contract lengths.

(5)

Purchasing commitments for transportation of fuel and transportation capacity on various pipelines. Includes a commitment of $135 million related to a gas transportation contract between PGS and SeaCoast through 2040.

(6)

Includes $86 million related to NMGC (2025: $30 million, 2026: $24 million, 2027: $16 million, 2028: $12 million, and 2029: $4 million).

(7)

Includes $177 million related to NMGC (2025: $109 million, 2026: $52 million, 2027: $13 million, and 2028: $3 million).

(8)

Includes the estimated contractual obligation, which is calculated as the current legislatively required contributions to the registered funded pension plans, plus the estimated costs of further benefit accruals contracted under NSPI’s Collective Bargaining Agreement and estimated benefit payments related to other unfunded benefit plans.

NSPI has a contractual obligation to pay NSPML for use of the Maritime Link over approximately 38 years from its January 15, 2018 in-service date. In November 2024, the UARB approved the collection of up to $197 million from NSPI for the recovery of Maritime Link costs in 2025. The timing and amounts payable to NSPML for the remainder of the 38-year commitment period are subject to UARB approval.

Emera has committed to obtain certain transmission rights in New Brunswick during summer periods (April through October, inclusive) for NLH’s use, if requested, effective August 15, 2021 and continuing for 50 years. As transmission rights are contracted, the obligations are included within “Other” in the above table.

 

     
40   EMERA 2024 ANNUAL REPORT

Management’s Discussion and Analysis

 

Forecasted Consolidated Capital Investments

The 2025 forecasted consolidated capital investments, including AFUDC, are as follows:

 

millions of dollars

    Florida
Electric Utility		      Canadian
Electric Utilities		      Gas Utilities and
Infrastructure		      Other Electric
Utilities		      Other      Total  

Generation

    $ 358      $ 117      $ —       $ 32      $ —       $ 507  

New renewable generation

      567        —         —         81        —         648  

Electric transmission

      169        188        —         53        —         410  

Electric distribution

      614        140        —         —         —         754  

Gas transmission and distribution

      —         —         481        —         —         481  

Facilities, equipment, vehicles, and other

      547        40        5        23        5        620  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
   $ 2,255      $ 485      $ 486      $ 189      $ 5      $ 3,420  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Debt Management

In addition to funds generated from operations, Emera and its subsidiaries have, in aggregate, access to unsecured committed syndicated revolving and non-revolving bank lines of credit in either CAD or USD per the table below.

 

millions of dollars in currency as noted below

    Maturity      Credit
Facilities		      Utilized      Undrawn and
Available		  

In CAD:

            

Emera – committed revolving credit facility

      June 2029      $ 1,300      $ 792      $ 508  

NSPI – committed revolving credit facility

      June 2029        800        189        611  

Emera – non-revolving facility

      February 2026        200        200        —   

In USD:

            

TEC – committed revolving credit facility

      December 2028        800        637        163  

TECO Finance – committed revolving credit facility

      December 2028        400        184        216  

PGS – revolving facility

      December 2028        250        138        112  

NMGC – revolving credit facility

      December 2026        125        34        91  

Other – committed revolving credit facilities

      Various        24        13        11  

Emera and its subsidiaries have certain financial and other covenants associated with their debt and credit facilities. Covenants are tested regularly, and the Company is in compliance with covenant requirements as at December 31, 2024. Emera’s significant covenant is listed below:

 

    

Financial Covenant

   

Requirement

    As at
December 31, 2024		  

Emera

         

Syndicated credit facilities

    Debt to capital ratio    Less than or equal to 0.70 to 1      0.55 : 1  

Recent significant financing activity for Emera and its subsidiaries are discussed below by segment:

FLORIDA ELECTRIC UTILITIES

On July 12, 2024, TEC repaid a $300 million USD note upon maturity. This note was repaid with proceeds from commercial paper.

On April 1, 2024, TEC amended its $800 million USD unsecured committed revolving credit facility to extend the maturity date from December 17, 2026 to December 1, 2028. There were no other changes in commercial terms from the prior agreement.

On January 30, 2024, TEC issued $500 million USD of senior unsecured bonds that bear interest at 4.90 per cent with a maturity date of March 1, 2029. Proceeds from the issuance were primarily used for the repayment of short-term borrowings outstanding under the 5-year credit facility.

 

     
EMERA 2024 ANNUAL REPORT   41

Management’s Discussion and Analysis

 

CANADIAN ELECTRIC UTILITIES

On June 24, 2024, NSPI amended its unsecured non-revolving credit facility to extend the maturity date from July 15, 2024 to June 24, 2025 and reduce the facility from $400 million to $300 million. On December 16, 2024, NSPI repaid the $300 million unsecured non-revolving credit facility using the net proceeds from the NSPML debt issuance transferred to NSPI as approved by the UARB. For more information on the FLG, refer to the “Business Overview and Outlook – Canadian Electric Utilities” section.

On June 24, 2024, NSPI amended its unsecured committed revolving credit facility to extend the maturity date from December 16, 2027 to June 24, 2029. There were no other material changes in commercial terms from the prior agreement.

On June 13, 2024, NSPI entered a non-revolving credit facility to finance the Battery Energy Storage Project. NSPI can request funds under the facility quarterly for amounts related to incurred project costs up to the total commitment of the lessor of $120 million and 45.06 per cent of the total eligible project costs over the term of the agreement. The facility will be available until 6 months after completion of the project, not to exceed May 21, 2027, and matures 20 years following the end of the period. As at December 31, 2024, NSPI had utilized $19 million from the facility, which bears interest at 2.51 per cent.

GAS UTILITIES AND INFRASTRUCTURE

On December 10, 2024, Brunswick Pipeline amended its non-revolving loan agreement. The maturity date was extended to December 2028 and now includes annual principal repayments.

On July 30, 2024, NMGI repaid its $150 million USD fixed rate notes upon maturity.

OTHER ELECTRIC UTILITIES

On May 2, 2024, BLPC amended its $92 million Barbadian dollar ($46 million USD) loan facility to extend the maturity date from February 19, 2025 to July 19, 2028. There were no other material changes in commercial terms from the prior agreement.

OTHER

On June 24, 2024, Emera amended its unsecured committed revolving credit facility increasing the facility from $900 million to $1,300 million. Emera also extended the maturity date from June 24, 2027 to June 24, 2029. There were no other material changes in commercial terms from the prior agreement.

On June 24, 2024, Emera repaid its $400 million unsecured non-revolving credit facility set to mature in August 2024.

On June 18, 2024, EUSHI Finance completed an issuance of $500 million USD fixed-to-fixed reset rate junior subordinated notes. The notes initially bear interest at a rate of 7.625 per cent, and will reset on December 15, 2029, and every five years thereafter, to a rate per annum equal to the five-year U.S. treasury rate plus 3.136 per cent. The notes mature on December 15, 2054. EUSHI Finance, at its option, may redeem the notes, in whole or in part, 90 days prior to the first interest reset date, and any semi-annual interest payment date thereafter, at a redemption price equal to the principal amount.

Proceeds from the $500 million USD note issuance discussed above were used to repay an Emera US Finance LP $300 million USD senior note upon maturity in June 2024, and to repay an NMGI $150 million USD fixed rate notes upon maturity in July 2024. The remaining proceeds were used for general corporate purposes.

On June 17, 2024, Emera repaid $200 million on the December 2024 unsecured non-revolving facility, decreasing the facility from $400 million to $200 million. In December 2024, Emera repaid the $200 million upon maturity.

On April 1, 2024, TECO Finance amended its $400 million USD unsecured committed revolving credit facility to extend the maturity date from December 17, 2026 to December 1, 2028. There were no other changes in commercial terms from the prior agreement.

On February 16, 2024, Emera amended its $400 million unsecured non-revolving facility to extend the maturity date from February 19, 2024 to February 19, 2025. There were no other changes in commercial terms from the prior agreement. On July 19, 2024, Emera reduced the amount of the facility from $400 million to $200 million. On February 20, 2025, Emera extended the agreement for an additional year to February 2026 with no other changes in terms. This facility was classified as long-term debt at December 31, 2024.

 

     
42   EMERA 2024 ANNUAL REPORT

Management’s Discussion and Analysis

 

Credit Ratings

Emera and its subsidiaries have been assigned the following senior unsecured debt ratings:

 

     Fitch      S&P      Moody’s      DBRS  

Emera (1)

      BBB (Negative)        BBB- (Stable)        Baa3 (Negative)        N/A  

TEC (1)

      A (Negative)        BBB+ (Stable)        A3 (Negative)        N/A  

PGS

      A (Negative)        N/A        N/A        N/A  

NMGC (2)

      BBB+ (Stable)        N/A        N/A        N/A  

NSPI (1)

      N/A      BBB- (Stable)        N/A        BBB (high)(stable)  

 

(1)

On January 22, 2025, Standard and Poor’s (“S&P”) revised its outlook on Emera and its subsidiaries to stable from negative with no change to existing ratings.

(2)

On May 30, 2024, Fitch Ratings (“Fitch”) revised NMGC’s outlook to stable from negative.

Guaranteed Debt

As of December 31, 2024, the Company had $2.95 billion USD (2023 – $2.75 billion USD) senior unsecured notes and junior subordinated notes (collectively referred to as the “US Notes”) outstanding.

The US Notes are fully and unconditionally guaranteed, on a joint and several basis, and in the case of the fixed-to-fixed reset rate junior subordinated notes due 2054 only, on a joint, several and subordinated basis, by Emera and Emera US Holdings Inc. (“EUSHI”) (in such capacity, the “Guarantor Subsidiaries”). Emera owns, directly or indirectly, all of the limited and general partnership interests in Emera US Finance LP. EUSHI Finance is owned indirectly by Emera through EUSHI.

Other subsidiaries of the Company do not guarantee the US Notes (such subsidiaries are referred to as the “Non-Guarantor Subsidiaries”); however, Emera has unrestricted access to the assets of consolidated entities.

In compliance with Rule 13-01 of Regulation S-X, the Company is including summarized financial information for Emera, EUSHI, Emera US Finance LP and EUSHI Finance (together, the “Obligor Group”), on a combined basis after transactions and balances between the combined entities have been eliminated. Investments in and equity earnings of the Non-Guarantor Subsidiaries have been excluded from the summarized financial information.

The Obligor Group was not determined using geographic, service line or other similar criteria and, as a result, the summarized financial information includes portions of Emera’s domestic and international operations. Accordingly, this basis of presentation is not intended to present Emera’s financial condition or results of operations for any purpose other than to comply with the specific requirements for guarantor reporting.

SUMMARIZED STATEMENT OF INCOME (LOSS)

The Company recognized income related to guaranteed debt under the following categories:

 

For the    Year ended December 31  
millions of dollars    2024      2023  

Loss from operations

    $ (279 )     $ (62 ) 

Net gains (1)

    $ 442      $ 394  

 

(1)

Includes $1,352 million (2023 – $962 million) in interest and dividend income, net, from non-guarantor subsidiaries.

 

     
EMERA 2024 ANNUAL REPORT   43

Management’s Discussion and Analysis

 

SUMMARIZED BALANCE SHEET

The Company has the following categories on the balance sheet related to guaranteed debt:

 

As at    December 31  

millions of dollars

    2024      2023  

Current assets (1)

    $ 391      $ 272  

Goodwill

      5,858        5,871  

Other assets (2)

      6,474        6,263  
  

 

 

     

 

 

  

Total assets (3)

    $ 12,723      $ 12,406  
  

 

 

     

 

 

  

Current liabilities (4)

    $ 611      $ 1,264  

Long-term liabilities (5)

      13,129        11,956  
  

 

 

     

 

 

  

Total liabilities

    $ 13,740      $ 13,220  
  

 

 

     

 

 

  

 

(1)

Includes $217 million (2023 – $178 million) in amounts due from non-guarantor subsidiaries.

(2)

Includes $5,937 million (2023 – $5,906 million) in amounts due from non-guarantor subsidiaries.

(3)

Excludes investments in non-guarantor subsidiaries. Consolidated Emera total assets are $42,951 million (2023 – $39,480 million).

(4)

Includes $184 million (2023 – $167 million) due to non-guarantor subsidiaries.

(5)

Includes $5,980 million (2023 – $5,854 million) due to non-guarantor subsidiaries.

Outstanding Stock Data

COMMON STOCK

 

Issued and outstanding:

    millions of
shares		      millions of
dollars		  

Balance, December 31, 2023

      284.12      $ 8,462  

Issuance of common stock under ATM program (1)

      5.12        261  

Issued under the DRIP, net of discounts

      6.10        291  

Senior management stock options exercised and Employee Share Purchase Plan

      0.60        28  
  

 

 

     

 

 

  

Balance, December 31, 2024

      295.94      $ 9,042  
  

 

 

     

 

 

  

 

(1)

For the year ended December 31, 2024, a total of 5,117,273 common shares were issued under Emera’s ATM program at an average price of $51.52 per share for gross proceeds of $264 million ($261 million, net of after-tax issuance costs). As at December 31, 2024, an aggregate gross sales limit of $336 million remained available for issuance under the ATM program.

As at February 14, 2025, the amount of issued and outstanding common shares was 297.7 million.

If all outstanding stock options were converted as at February 14, 2025, an additional 3.8 million common shares would be issued and outstanding.

ATM EQUITY PROGRAM

On November 18, 2024, Emera increased the size of the ATM Program to allow the Company to issue up to $1 billion of common shares from treasury to the public from time to time, at the Company’s discretion, at the prevailing market price. The ATM Program was increased by an amendment dated November 18, 2024 to its prospectus supplement dated November 14, 2023 and an amendment dated November 13, 2024 to its short form base shelf prospectus dated October 3, 2023.

PREFERRED STOCK

As at February 19, 2025, Emera had the following preferred shares issued and outstanding: Series A – 4.9 million; Series B – 1.1 million; Series C – 10.0 million; Series E – 5.0 million; Series F – 8.0 million; Series H – 12.0 million; Series J – 8.0 million, and Series L – 9.0 million. Emera’s preferred shares do not have voting rights unless the Company fails to pay, in aggregate, eight quarterly dividends.

On January 8, 2025, Emera announced that it would not redeem the outstanding Series F preferred shares on February 15, 2025. During the conversion period between January 15, 2025 and January 31, 2025, subject to certain conditions, the holders of Series F shares had the right, at their option, to convert all or any of their Series F shares, on a one-for-one basis into Cumulative Floating Rate First Preferred Shares, Series G on February 15, 2025.

On January 16, 2025, Emera announced that the annual fixed dividend per share for Series F shares will be reset from $1.0505 to $1.4372 for the five-year period from and including February 15, 2025.

 

     
44   EMERA 2024 ANNUAL REPORT

Management’s Discussion and Analysis

 

On February 6, 2025, Emera announced after having taken into account all conversion notices received from holders none of the Series F preferred shares were converted to Series G preferred shares.

Pension Funding

For funding purposes, Emera determines required contributions to its largest defined benefit (“DB”) pension plans based on smoothed asset values. This reduces volatility in the cash funding requirement as the impact of investment gains and losses are recognized over a multi-year period. Expected cash flow for DB pension plans is $41 million in 2025 (2024 – $36 million). All pension plan contributions are tax deductible and will be funded with cash from operations.

Emera’s DB pension plans employ a long-term strategic approach with respect to asset allocation, real return and risk. The underlying objective is to earn an appropriate return, given the Company’s goal of preserving capital with an acceptable level of risk for the pension fund investments.

To achieve the overall long-term asset allocation, pension assets are managed by external investment managers per each pension plan’s investment policy and governance framework. The asset allocation includes investments in the assets of domestic and global equities, domestic and global bonds and short-term investments. The Company reviews investment manager performance on a regular basis and adjusts the plans’ asset mixes as needed in accordance with the pension plans’ investment policy.

Emera’s projected contributions to defined contribution pension plans are $56 million for 2025 (2024 – $51 million).

DEFINED BENEFIT PENSION PLAN SUMMARY

 

in millions of dollars                            

Plans by region

    TECO Holdings      NSPI      Caribbean      Total  

Assets as at December 31, 2024

    $ 987      $ 1,495      $ 11      $ 2,493  

Accounting obligation at December 31, 2024

    $ 970      $ 1,380      $ 17      $ 2,367  

Accounting expense (income) during fiscal 2024

    $ 5      $ (11 )     $ 3      $ (3 ) 

Off-Balance Sheet Arrangements

DEFEASANCE

Upon privatization in 1992, NSPI became responsible for managing a portfolio of defeasance securities that provide principal and interest streams to match the related defeased debt, which at December 31, 2024 totalled $200 million (2023 – $200 million). The securities are held in trust for an affiliate of the Province of Nova Scotia. Approximately 66 per cent of the defeasance portfolio consists of investments in the related debt, eliminating all risk associated with this portion of the portfolio.

GUARANTEES AND LETTERS OF CREDIT

Emera has guarantees and letters of credit on behalf of third parties outstanding. The following significant guarantees and letters of credit were not included within the Consolidated Balance Sheets as at December 31, 2024:

TECO Holdings, Inc. (“TECO Holdings”) has a guarantee in connection with SeaCoast’s performance of obligations under a gas transportation precedent agreement. The guarantee is for a maximum potential amount of $45 million USD if SeaCoast fails to pay or perform under the contract. The guarantee expires five years after the gas transportation precedent agreement termination date, which was terminated on January 1, 2022. The counterparty has the right to require TECO Holdings to provide replacement credit support either in the form of a substitute guarantee from an affiliate with an investment grade credit rating or a letter of credit or cash deposit of $27 million USD.

TECO Holdings has a guarantee in connection with SeaCoast’s performance obligations under a firm service agreement, which expires December 31, 2055, subject to two extension terms at the option of the counterparty with a final expiration date of December 31, 2071. The guarantee is for a maximum potential amount of $13 million USD if SeaCoast fails to pay or perform under the firm service agreement. The counterparty has the right to require TECO Holdings to provide replacement credit support in the form of either a substitute guarantee from an affiliate with an investment grade credit rating or a letter of credit or cash deposit of $13 million USD.

Emera has a guarantee of $66 million USD relating to outstanding notes of ECI. This guarantee will automatically terminate on the date upon which the obligations have been repaid in full.

 

     
EMERA 2024 ANNUAL REPORT   45

Management’s Discussion and Analysis

 

NSPI has guarantees on behalf of its subsidiary, NS Power Energy Marketing Incorporated, in the amount of $104 million USD (2023 – $104 million USD) with terms of varying lengths.

The Company has standby letters of credit and surety bonds in the amount of $105 million USD (December 31, 2023 – $103 million USD) to third parties that have extended credit to Emera and its subsidiaries. These letters of credit and surety bonds typically have a one-year term and are renewed annually as required.

Emera, on behalf of NSPI, has a standby letter of credit to secure obligations under a supplementary retirement plan. The expiry date of this letter of credit was extended to June 2025. The amount committed as at December 31, 2024 was $58 million (December 31, 2023 – $56 million).

Emera has provided an indemnity to a counterparty in relation to certain future tax amounts that could arise from specific future changes in Canadian federal law, subject to certain conditions and limitations. No such changes in law have been proposed at this time. A reasonable estimate of the potential amount of future payments that could result from future claims under this indemnity cannot be calculated, but the risk of having to make any significant payments under this indemnity is considered to be remote.

Dividend Payout Ratio

Emera has provided annual dividend growth guidance of one to two per cent per year. On September 18, 2024, the Board approved an increase in the annual common share dividend rate to $2.9000 from $2.8700 per common share. The first quarterly dividend payment at the increased rate was paid on November 15, 2024.

Emera’s common share dividends paid in 2024 were $2.8775 ($0.7175 in Q1, Q2, and Q3 and $0.7250 in Q4) per common share and for 2023 were $2.7875 ($0.6900 in Q1, Q2, and Q3 and $0.7175 in Q4) per common share. This represents a dividend payout ratio of net income of 168 per cent in 2024 (2023 – 78 per cent) and a dividend payout ratio of adjusted net income of 98 per cent in 2024 (2023 – 94 per cent).

Transactions with Related Parties

In the ordinary course of business, Emera provides energy and other services and enters into transactions with its subsidiaries, associates and other related companies on terms similar to those offered to non-related parties. Intercompany balances and intercompany transactions have been eliminated on consolidation, except for the net profit on certain transactions between non-regulated and regulated entities in accordance with accounting standards for rate-regulated entities. All material amounts are under normal interest and credit terms.

Significant transactions between Emera and its associated companies are as follows:

 

  •  

Transactions between NSPI and NSPML related to the Maritime Link assessment are reported in the Consolidated Statements of Income. NSPI’s expense is reported in Regulated fuel for generation and purchased power, totalling a recovery of $324 million for the year ended December 31, 2024 (2023 – $163 million expense). NSPML is accounted for as an equity investment, and therefore corresponding earnings related to this revenue are reflected in Income from equity investments. For further details, refer to the “Business Overview and Outlook – Canadian Electric Utilities – NSPML” and “Contractual Obligations” sections.

 

  •  

Natural gas transportation capacity purchases from M&NP are reported in the Consolidated Statements of Income. Purchases from M&NP reported net in Operating revenues, Non-regulated, totalled $11 million for the year ended December 31, 2024 (2023 – $14 million).

There were no significant receivables or payables between Emera and its associated companies reported on Emera’s Consolidated Balance Sheets as at December 31, 2024 and at December 31, 2023.

Enterprise Risk and Risk Management

Emera has an enterprise-wide risk management process, overseen by its Enterprise Risk Management Committee (“ERMC”) and monitored by the Board, to ensure risks are appropriately identified, assessed, monitored and subject to appropriate controls. The Board has a Risk and Sustainability Committee (“RSC”) to assist the Board in carrying out its risk and sustainability oversight responsibilities. The RSC’s mandate includes oversight of the Company’s Enterprise Risk Management framework, including the identification, assessment, monitoring and management of enterprise risks.

 

     
46   EMERA 2024 ANNUAL REPORT

Management’s Discussion and Analysis

 

The significant business risks to Emera are described below, many of which are beyond the Company’s control, and could have a material adverse effect on Emera or its subsidiaries, or their business operations, liquidity or access to or cost of capital, financial position, prospects, and/or results of operations (herein considered a “Material Adverse Effect”). The nature of risk is such that no such list is comprehensive, and the actual effect of any of the risks discussed could be materially different from what is described below. Additionally, other risks not presently known may arise, risks not currently considered material may become material in the future, or two or more risks which are not themselves material, could together be material.

REGULATORY AND POLITICAL RISK

The Company’s rate-regulated subsidiaries and certain investments are subject to complex legislative and regulatory frameworks that cover material aspects of their businesses. These frameworks influence key factors such as rates and cost structures, revenue requirements, allowed ROEs, capital structures, rate base and capital investments, and the recovery of purchased electricity and fuel costs and other costs. Regulators also review the prudency of costs and make other decisions that can impact customer rates and the reliability of service. Emera’s cost-of-service utilities must obtain regulatory approvals for material aspects of their businesses, including changing or adding rates and/or riders. Such approvals often require public hearing proceedings involving numerous stakeholders, and there is no assurance in the outcomes or impact of any regulatory process or decision.

If Emera is unable to recover in a timely manner a material amount of costs or a return on invested capital through regulatory mechanisms or otherwise, is disallowed the recovery of certain costs, is subject to regulatory penalties, is not permitted to make certain capital investments, or is not permitted to invest in or divest certain utility assets, it could result in a Material Adverse Effect, including valuation impairments. Regulatory lag, the time between the incurrence of costs and the granting of the rates to recover those costs by regulators, may also result in a Material Adverse Effect.

Aspects of the acquisition, ownership, operations, siting, planning, construction, and decommissioning of electric generation, storage, transmission and distribution facilities and natural gas transportation and distribution systems are also subject to regulatory processes and approvals of regulators, government departments and agencies, and other third parties. The failure to obtain, maintain, and renew such approvals or significant changes in the terms and conditions thereof could have a Material Adverse Effect.

The regulatory framework, process and regulatory decisions may also be adversely affected by changes in government, shifts in government or public policy, legislative changes, regulatory decisions, geopolitical changes, changes in the economic environment, or other factors. Government interference in the regulatory process or regulatory decisions can undermine regulatory stability, predictability, and independence. Any such changes could have a Material Adverse Effect.

CHANGE IN LAW RISK

The Company is also exposed to changes in the political environment and leadership, changes in law or regulations, changes to governmental policies, trade disputes, and the imposition of tariffs, any of which may impact the Company’s businesses, the markets for energy and inputs thereto, or general economic conditions, and which may result in a Material Adverse Effect. This may include initiatives regarding deregulation or restructuring of the energy industry, which may result in increased competition, and increased or unrecovered costs. State and local policies in some US jurisdictions have sought to prevent or limit the ability of utilities to provide customers the choice to use natural gas while in other jurisdictions policies have been adopted to prevent limitations on the use of natural gas.

Emera cannot predict future legislative, policy, or regulatory changes, whether caused by economic, political or other factors, or the resulting operating or compliance costs or other impacts. It may be difficult for Emera to respond in an effective and timely manner to such future legislative, policy or regulatory changes.

ENVIRONMENTAL LEGISLATION:

Emera is subject to extensive regulation by federal, provincial, state, regional and local authorities regarding environmental matters, primarily related to its utility operations. This includes laws, regulations and policies relating to GHG emissions, renewable energy standards, climate change, air quality, water quality and usage, waste management, wastewater discharges, soil quality, aquatic and terrestrial habitats, hazardous waste, health, endangered species, and wildlife mortality.

In some jurisdictions where Emera operates, government legislation and policy has included timelines for mandated shutdowns of coal-fired generating facilities, has required a certain percentage of electricity be generated from renewables, carbon pricing, emissions limits and cap and trade mechanisms. Over the medium and long terms, these could potentially lead to a significant portion of hydrocarbon infrastructure assets being subject to additional regulation and limitations in respect of GHG emissions and operations.

 

     
EMERA 2024 ANNUAL REPORT   47

Management’s Discussion and Analysis

 

Both the Government of Nova Scotia and the Government of Canada have enacted or introduced legislation that includes goals of net-zero GHG emissions by 2050. The Province of Nova Scotia has established targets with respect to the percentage of renewable energy in NSPI’s generation mix and reductions in GHG emissions, as well as the goal to phase out coal-fired electricity generation by 2030. The Government of Canada has also enacted regulations imposing emissions standards on coal-fired generation that would effectively require the decommissioning of such facilities. While Nova Scotia is exempted from such regulations through 2029, there is no guarantee that such exemption will continue into the future. Failure to meet such goals by 2030 or comply with applicable legislation or regulation could result in a Material Adverse Effect.

Per- and polyfluoroalkyl substances (“PFAS”) are man-made chemicals that are widely used in consumer products and can persist and bio-accumulate in the environment. The Company does not manufacture PFAS but because these emerging contaminants of concern are so ubiquitous in products and the environment, it may impact Emera’s operations. Changes in environmental laws and regulations related to PFAS could result in new costs or obligations for investigation and cleanup and change the Company’s strategy for land acquisition for projects such as solar generation and could result in a Material Adverse Effect.

These and new or revised environmental laws, regulations, policies, or interpretations of those laws, regulations or policies could result in a Material Adverse Effect by, among other things, preventing or delaying the development of energy infrastructure projects, restricting the use or output of certain facilities, requiring the early retirement of certain generation facilities that could result in stranded costs, limiting the availability or use of certain fuels required for the production of electricity, requiring additional pollution control equipment, curtailing sales of natural gas to new customers, which could reduce future customer growth in Emera’s natural gas businesses, changing the nature and timing of capital investments, requiring significant capital investments, imposing operating or other costs associated with compliance including carbon taxes or emissions allowances, or by limiting or eliminating certain operations or rendering such operations uneconomical. Impacts could be more significant in the future as the result of new or revised laws or requirements or stricter or more expansive application of existing environmental laws, regulations and policies. Failure to recover environmental costs in a timely manner through rates may also result in a Material Adverse Effect.

In addition to imposing continuing compliance obligations, there are permit requirements, laws and regulations authorizing the imposition of penalties for non-compliance, exposing Emera to legal or regulatory proceedings, disputes, civil fines, injunctive relief, criminal penalties and other sanctions, which could result in a Material Adverse Effect.

WEATHER RISK

A Material Adverse Effect may arise from weather seasonal variations impacting energy consumption, as well as severe weather events, changing air temperatures, wildfires and other severe weather conditions that are expected to become more frequent and intense as a result of climate change. Refer to “Climate Change Risk”.

The temperature, seasonal variations, and other weather conditions significantly influence the availability and demand for electricity and natural gas by customers, the price of energy commodities, such as fuel used by the Company’s utilities, and the production of electricity at power generation facilities. For example, NSPI could see lower sales in winter months if temperatures are warmer than expected.

Severe weather events or conditions such as hurricanes, floods, storm surge, tornadoes, droughts, fires, extreme temperatures, snow or ice storms, and other natural disasters create a risk of physical damage to the Company’s assets and a risk of extended service outages or fuel supply disruptions. For example, high winds can cause widespread damage to transmission and distribution infrastructure, solar generation, and wind-powered generation. Substantially all of the Company’s fossil fueled generation assets are located at or near coastal sites and, as such, are exposed to the separate and combined effects of rising sea levels and increasing storm intensity, including storm surges and flooding.

Severe weather events or conditions could reduce revenues and require the Company to incur additional costs, such as repair and replacement costs, costs of replacement power and fuel, increased insurance costs, and the need to access additional financing sources. These could result in a Material Adverse Effect if not resolved or mitigated in a timely and efficient manner through insurance or regulatory cost recovery. This risk to transmission and distribution facilities is typically not insured, and as such the restoration cost is generally recovered through regulatory processes, either in advance through reserves, or after the fact through the establishment of regulatory assets. Recovery is not assured, is subject to prudency review, and may be subject to delay resulting in increased debt and debt servicing costs.

 

     
48   EMERA 2024 ANNUAL REPORT

Management’s Discussion and Analysis

 

Severe weather events or other catastrophic natural disasters could also result in long-term reductions in demand for electricity or natural gas or the slowing of customer growth in one or more of the Company’s service territories, which could have a Material Adverse Effect. The impact of extreme weather events would be amplified if the same events affect multiple utilities in the Company’s portfolio.

High winds and lack of precipitation also increase the risk of wildfires resulting from the Company’s infrastructure or for which the Company may otherwise have responsibility. If it is found to be responsible for such a fire, the Company could suffer material costs, losses and damages, all or some of which may not be recoverable through insurance, legal, regulatory cost recovery or other processes. If not recovered through these means or if recovery is delayed, they could result in a Material Adverse Effect. Resulting costs could include fire suppression costs, regeneration, timber value, increased insurance costs and costs arising from damages and losses incurred by third parties.

The Company purchases power from third-party owned hydroelectricity sources and operates hydroelectric generation in certain of its markets. Such generation depends on availability of water and the hydrological profile of water sources. Changes in precipitation patterns, water temperatures and air temperatures could adversely affect the availability of water and consequently the amount of electricity that may be produced from such facilities.

CLIMATE CHANGE RISK

PHYSICAL RISK:

Climate change may negatively impact the Company’s operations as a result of increased frequency and intensity of weather events and related physical risks, any of which could result in a Material Adverse Effect (for more information refer to “Weather Risk” and “System Operating and Maintenance Risks”). An increase in physical risk associated with climate change can also adversely impact the cost and availability of insurance, insurance deductibles and self-retention, as well as credit ratings, which could affect credit risk spreads on new long-term debt and credit facilities, as well as their availability (refer to “Liquidity and Capital Markets Risk”).

TRANSITION RISK:

As government policy and the economy transition toward decarbonization in many jurisdictions, the Company is exposed to risks arising from policy, legal, technology, and market changes, which could result in a Material Adverse Effect. The energy transition will require the Company to address changes to environmental policies, laws and regulations which are being proposed and adopted in many jurisdictions in response to concerns regarding the effects or impacts of climate change (refer to “Environmental Legislation”). The pace of such new initiatives is expected to accelerate in some jurisdictions.

The Company will be required to manage the impacts of these changes on customer demand and rates, while integrating increased amounts of intermittent renewable energy sources and new technologies, implementing and making the investments required to meet new resiliency and security standards, and adapting the Company’s infrastructure and generating capacity to meet changing customer demands and usage patterns. The energy transition and the ability of the Company to achieve mandated climate related targets and goals will require significant capital investment, effective engagement with policymakers, regulators and stakeholders, and depend upon many factors which are outside of the Company’s direct control. Depending on the regulatory response to government legislation and regulations, the Company may be exposed to the risk of reduced recovery through rates in respect of the affected assets.

Given concerns regarding carbon-emitting generation, assets and businesses may, over time, become difficult or uneconomic to insure in commercial insurance markets. Some insurance companies have begun to limit their exposure to coal-fired electricity generation and are evaluating the medium and long-term impacts of climate change which may result in less insurance capacity, more restrictive coverage and increased premiums. The Company could also face litigation or regulatory action related to environmental harms from GHG emissions or failure to substantiate certain environmental claims.

The failure to effectively respond to climate change transition risks could adversely affect the Company’s ability to deliver safe, reliable, and cost-effective service, the Company’s reputation with stakeholders, its ability to operate and grow, and the Company’s access to, and cost of, capital, each of which could result in a Material Adverse Effect.

CYBERSECURITY RISK

Emera is exposed to potential risks related to cyberattacks, data breaches, cyber-extortion, and unauthorized access that could result in a Material Adverse Effect. The Company relies on IT systems, cloud infrastructure, third-party service providers and the diligence of its team members to effectively manage and safely operate its assets. This includes controls for interconnected systems of generation, distribution and transmission as well as financial, billing and other enterprise systems.

 

     
EMERA 2024 ANNUAL REPORT   49

Management’s Discussion and Analysis

 

As the Company operates critical energy infrastructure, it may be at greater risk of cyberattacks, which could include those from nation-state cyber threat actors. Major emerging and ongoing global conflicts may also elevate this risk, by increasing the sophistication, magnitude, and frequency of cyberattacks.

Cyberattacks can reach the Company’s assets and information via their interfaces with third parties or the public internet and gain access to critical and non-critical infrastructures. Cyberattacks can also occur via personnel with access to critical assets or trusted networks. Methods used to attack critical assets could include generic or energy-sector-specific malware delivered via network transfer, removable media, attachments, links in e-mails or other communications, or social engineering. The methods used by attackers are continuously evolving and can be difficult to predict and detect and may become more sophisticated, frequent, severe, and difficult to stop to the extent that attackers are able to leverage evolving artificial intelligence models or tools.

Despite security measures in place, the Company’s systems, assets and information could experience security breaches that could cause system failures, disrupt energy supply and delivery, business operations, or adversely affect safety. Such breaches could compromise customer, employee-related or other information systems and could result in loss of service to customers, unavailability of critical assets, safety issues, compromise billing and customer-facing information, such as outage maps, disrupt internal control and financial processes, or result in the release, loss, corruption, destruction, and/or misuse of critical, sensitive, confidential or proprietary information, intellectual property, or personal information of customers or employees. These breaches could also delay delivery or result in contamination or degradation of hydrocarbon products the Company transports, stores or distributes.

Cyberattacks or unauthorized access may cause lost revenues, costs, losses, regulatory penalties and third-party damages all, or some of which may not be recoverable through insurance, legal, regulatory cost recovery or other processes. Resulting costs could include, amongst others, response, recovery and remediation costs, increased protection or insurance costs and costs arising from damages and losses incurred by third parties. This could result in a Material Adverse Effect and there is no assurance that cyberattacks or other security breaches can be adequately addressed in a timely manner.

The Company seeks to manage these risks by aligning to a common set of cybersecurity standards and policies derived, in part, on the National Institute of Standards and Technology’s Cyber Security Framework, periodic security testing, program maturity objectives, cybersecurity incident readiness program, and employee communication and training. With respect to certain of its assets, the Company is required to comply with rules and standards relating to cybersecurity and IT including, but not limited to, those mandated by bodies such as the North American Electric Reliability Corporation, Northeast Power Coordinating Council, and the United States Department of Homeland Security. The status of key elements of the Company’s cybersecurity program is reported to the RSC. The Board oversees risk and mitigation plans in relation to cybersecurity risks and receives a quarterly update in a risk dashboard at each regularly scheduled Board meeting.

ENERGY CONSUMPTION RISK

Emera’s rate-regulated utilities are affected by demand for energy based on changing customer patterns due to fluctuations in a number of factors including general economic conditions, weather events, customers’ focus on energy efficiency, changes in rates, and advancements in new technologies such as rooftop solar, electric vehicles, data centers, and battery storage. Government policies promoting energy efficiency, distributed generation, and new technology developments that enable those policies, have the potential to impact how electricity enters the system and how it is bought and sold. In addition, increases in distributed generation may impact demand resulting in lower load and revenues. These changes could negatively impact Emera’s operations, rate base, net earnings, and cash flows and result in a Material Adverse Effect.

FOREIGN EXCHANGE RISK

The Company is exposed to foreign currency exchange rate changes. Emera operates internationally, with a significant amount of the Company’s net income earned outside of Canada. As such, Emera is exposed to movements in exchange rates between the CAD and, particularly, the USD, which could positively or adversely affect results.

Emera manages currency risks through matching US denominated debt to finance its US operations and may use foreign currency derivative instruments to hedge specific transactions and earnings exposure. The Company may enter FX forward and swap contracts to limit exposure on certain foreign currency transactions such as fuel purchases, revenue streams and capital expenditures, and on net income earned outside of Canada. The regulatory framework for the Company’s rate- regulated subsidiaries permits the recovery of prudently incurred costs, including FX.

 

     
50   EMERA 2024 ANNUAL REPORT

Management’s Discussion and Analysis

 

The Company does not utilize derivative financial instruments for foreign currency trading or speculative purposes or to hedge the value of its investments in foreign subsidiaries. Exchange gains and losses on net investments in foreign subsidiaries do not impact net income as they are reported in Accumulated Other Comprehensive Income (Loss) (“AOCI”).

LIQUIDITY AND CAPITAL MARKETS RISK

Liquidity risk relates to Emera’s ability to ensure sufficient funds are available to meet its financial obligations. Emera’s access to capital and cost of borrowing is subject to several risk factors, including financial market conditions, market disruptions and ratings assigned by various market analysts, including credit rating agencies. Disruptions in capital markets could prevent Emera from issuing new securities or cause the Company to issue securities with less than preferred terms and conditions. Emera’s growth plan requires significant capital investments in PP&E and the risk associated with changes in interest rates could have an adverse effect on the cost of financing. The Company’s future access to capital and cost of borrowing may be impacted by various market disruptions. The inability to access cost-effective capital could have a material impact on Emera’s ability to fund its growth plan.

Emera is subject to financial risk associated with changes in its credit ratings. There are a number of factors that rating agencies evaluate to determine credit ratings, including the Company’s business, its regulatory framework and legislative environment, political interference in the regulatory process, the ability to recover costs and earn returns, diversification, leverage, liquidity and increased exposure to climate change-related impacts, including increased frequency and severity of hurricanes and other severe weather events. A decrease in a credit rating could result in higher interest rates in future financings, increased borrowing costs under certain existing credit facilities, limit access to the commercial paper market, or limit the availability of adequate credit support for subsidiary operations. For certain derivative instruments, if the credit ratings of the Company were reduced below investment grade, the full value of the net liability of these positions could be required to be posted as collateral.

The Company has exposure to its own common share price through the issuance of various forms of stock-based compensation, which affect earnings through revaluation of the outstanding units every period. The Company uses equity derivatives to reduce the earnings volatility derived from stock-based compensation.

GENERAL ECONOMIC RISK

The Company has exposure to the macro-economic conditions in North America and in other geographic regions in which Emera operates. Like most utilities, economic factors such as consumer income, employment and housing affect demand for electricity and natural gas and, in turn, the Company’s financial results. Adverse changes in general economic conditions and inflation may impact the ability of customers to afford rate increases arising from increases to fuel, operating, capital, environmental compliance, and other costs, and therefore could have a Material Adverse Effect. This may also result in higher credit and counterparty risk, adverse shifts in government policy and legislation, and/or increased risk to full and timely recovery of costs and regulatory assets.

INTEREST RATE RISK:

Emera utilizes a combination of fixed and floating rate debt financing for operations and capital expenditures, resulting in an exposure to interest rate risk.

For Emera’s regulated subsidiaries, the cost of debt is a component of rates and prudently incurred debt costs are recovered from customers. Regulatory ROE will generally follow the direction of interest rates, such that regulatory ROEs are likely to fall in times of reducing interest rates and rise in times of increasing interest rates, albeit not directly and generally with a lag period reflecting the regulatory process. Rising interest rates may also negatively affect the economic viability of project development and acquisition initiatives.

Interest rates could also be impacted by changes in credit ratings. For more information, refer to “Liquidity and Capital Markets Risk.”

As with most other utilities and other similar yield-returning investments, Emera’s share price may be affected by changes in interest rates and could underperform the market in an environment of rising interest rates.

INFLATION RISK:

The Company may be exposed to changes in inflation that may result in increased operating and maintenance costs, capital investment, and fuel costs compared to the revenues provided by customer rates.

 

     
EMERA 2024 ANNUAL REPORT   51

Management’s Discussion and Analysis

 

PUBLIC HEALTH CRISIS RISK

An outbreak of infectious disease, a pandemic or other public health threats, or a fear of any of the foregoing, could result in a Material Adverse Effect to Emera and its subsidiaries. This could include causing operating, supply chain and project development delays and disruptions, labour shortages and shutdowns (including as a result of government regulation and prevention measures), which could have a negative impact on the Company’s operations.

Any adverse changes in general economic and market conditions arising as a result of a public health threat could negatively impact demand for electricity and natural gas, revenue, operating costs, timing and extent of capital investments, capital market activities, and counterparty risk; which could result in a Material Adverse Effect.

HEALTH AND SAFETY

The Company’s operations inherently involve risk to the health and safety of employees, contractors and members of the public. Personal injury or loss of life resulting from failure to implement or observe appropriate health and safety procedures or comply with health and safety laws and regulations could result in adverse operational, reputational, legal, regulatory, or financial impacts, any of which could have a Material Adverse Effect.

PROJECT DEVELOPMENT AND LAND USE RIGHTS RISK

The Company’s capital plan includes significant investment in generation, infrastructure modernization, and customer- focused technologies. Any projects planned or currently in construction, particularly significant capital projects, may be subject to risks that could result in a Material Adverse Effect including, but not limited to, impact on costs from schedule delays, increased demand for renewable energy inputs, risk of cost overruns, ensuring compliance with operating and environmental requirements and other events within or beyond the Company’s control. The Company’s projects may also require approvals and permits at the federal, provincial, state, regional and local levels. There is no assurance that Emera will be able to obtain the necessary project approvals or applicable permits or receive regulatory approval to recover the costs in rates.

Some of the Company’s assets are located on land owned by third parties, including Indigenous Peoples, and may be subject to land claims. Present or future assets may be located on lands that have been used for traditional purposes and therefore subject to specific consultations, consents, or conditions for development or operation. If the Company’s rights to locate and operate its assets on any such lands are subject to expiry or become invalid, it may incur material costs to renew rights or obtain such rights. If reasonable terms for land-use rights cannot be negotiated, the Company may incur significant costs to remove and relocate its assets and restore the land. Additional costs incurred could cause projects to be uneconomical to proceed with.

COUNTERPARTY RISK

Emera is exposed to risk related to its reliance on certain key partners, suppliers, and customers, any of which may endure financial challenges resulting from commodity price and market volatility, economic instability or adversity, adverse political or regulatory changes and other causes which may cause or contribute to such parties’ insolvency, bankruptcy, restructuring or default on their contractual obligations to Emera. Emera is also exposed to potential losses related to amounts receivable from customers, energy marketing collateral deposits and derivative assets due to a counterparty’s non-performance under an agreement.

There is no assurance that management strategies will be effective, and significant counterparty defaults could result in a Material Adverse Effect.

SUPPLY CHAIN RISK

Emera’s ability to meet customer energy requirements, respond to storm-related disruptions and execute on the capital investment program in a cost-effective and timely manner are dependent on maintaining an efficient supply chain. Domestic and global supply chain issues may delay the delivery, increase the cost, or result in shortages of certain materials, fuel, equipment and other resources that are critical to the Company’s operations. These disruptions may be further exacerbated by inflationary pressures, labour shortages, more frequent and severe weather events, government incentives increasing demand for clean energy projects, changes in carbon-related costs, policies and regulations, and the impact of international conflicts. In addition, global supply chains and the financial condition and results of the business could be Materially Adversely Affected by the imposition of custom duties or other tariffs, or an increase in trade restrictions in the future. Failure to eliminate or manage supply chain constraints may impact the availability and cost of items and labour that are necessary to support operations and capital investment and could have a Material Adverse Effect.

 

     
52   EMERA 2024 ANNUAL REPORT

Management’s Discussion and Analysis

 

FUEL SUPPLY DISRUPTIONS:

Emera’s electric and natural gas utilities are also exposed to the risk of fuel supply chain disruptions, both within and outside their service territories, which may be caused by severe weather or natural disasters. This may also be caused by damage to, operational issues with, terrorist or cyberattacks on, third party fuel production, storage, pipeline, and distribution facilities. Significant unanticipated fuel supply disruptions could result in increased exposure to commodity price risk for Emera’s regulated electric and gas utilities and Emera Energy, and these could have a Material Adverse Effect.

COMMODITY PRICE RISK

The Company’s utility fuel supply and purchase of other commodities is subject to commodity price risk. In addition, Emera Energy is subject to commodity price risk through its portfolio of commodity contracts and arrangements.

REGULATED UTILITIES:

The Company’s utility fuel supply is exposed to broader global market conditions, which may include impacts on delivery reliability and price, despite contracted terms. Supply and demand dynamics in fuel markets can be affected by a wide range of factors which are difficult to predict and may change rapidly, including but not limited to, currency fluctuations, changes in global economic conditions, natural disasters, transportation or production disruptions, and geo-political risks, such as political instability, conflicts, changes to international trade agreements, tariffs, trade sanctions or embargos.

Prolonged and substantial increases in fuel prices could result in decreased rate affordability, increased risk of recovery of costs or regulatory assets, and/or negative impacts on customer consumption patterns and sales, any of which could result in a Material Adverse Effect.

EMERA ENERGY MARKETING AND TRADING:

The majority of Emera Energy’s portfolio of electricity and gas marketing and trading contracts and, in particular, its natural gas asset management arrangements, are contracted on a back-to-back basis, avoiding any material long or short commodity positions. However, the portfolio is subject to commodity price risk, particularly with respect to basis point differentials between relevant markets in the event of an operational issue, imposition of tariffs, or counterparty default. Changes in commodity prices can also result in increased collateral requirements associated with physical contracts and financial hedges, resulting in higher liquidity requirements and increased costs to the business.

FUTURE EMPLOYEE BENEFIT PLAN PERFORMANCE AND FUNDING RISK

Emera subsidiaries have both defined benefit and defined contribution employee pension plans that cover employees and retirees. All defined benefit plans are closed to new entrants, except for the TECO Holdings Group Retirement Plan and the Grand Bahama Power Company Limited Union Employees’ Pension Plan. The cost of providing these benefit plans varies depending on plan provisions, interest rates, inflation, investment performance and actuarial assumptions concerning the future. Actuarial assumptions include earnings on plan assets, discount rates (interest rates used to determine funding levels, contributions to the plans and the pension and post-retirement liabilities) and expectations around future salary growth, inflation and mortality. The three largest drivers of cost are investment performance, interest rates and inflation, which are affected by global financial and capital markets. Depending on future interest rates and future inflation and actual versus expected investment performance, Emera could be required to make larger contributions in the future to fund these plans, which could have a Material Adverse Effect.

LABOUR RISK

Emera’s ability to deliver service to its customers and to execute its growth plan depends on attracting, developing and retaining a skilled workforce. Utilities are faced with demographic challenges related to trades, technical staff and engineers with an increasing number of employees expected to retire over the next several years. Failure to attract, develop and retain an appropriately qualified workforce could have a Material Adverse Effect.

Approximately 30 per cent of Emera’s labour force is represented by unions and subject to collective labour agreements. The inability to maintain or negotiate future agreements on acceptable terms could result in higher labour costs and work disruptions, which could adversely affect service to customers and have a Material Adverse Effect.

 

     
EMERA 2024 ANNUAL REPORT   53

Management’s Discussion and Analysis

 

IT RISK

Emera relies on various IT systems to manage operations, including increasing reliance on IT solutions operated by third parties, such as software as a service and third-party cloud hosting. This subjects Emera to inherent costs and risks associated with maintaining, upgrading, replacing and changing these systems. This includes impairment of its IT, potential disruption of internal control systems, substantial capital expenditures, demands on management time and other risks of delays, difficulties in upgrading existing systems, transitioning to new systems or integrating new systems into its current systems. Emera’s digital transformation strategy, including investment in infrastructure modernization and customer focused technologies, is driving increased investment in IT solutions, resulting in increased project risks associated with the implementation of these solutions.

INCOME TAX RISK

The computation of the Company’s provision for income taxes is impacted by changes in tax legislation in Canada, the US and the Caribbean and any such changes could have a Material Adverse Effect. The value of Emera’s existing deferred income tax assets and liabilities are determined by existing tax laws and could be negatively impacted by changes in laws.

SYSTEM OPERATING AND MAINTENANCE RISKS

The safe and reliable operation of electric generation and electric and natural gas transmission and distribution systems is critical to Emera’s operations. There are a variety of hazards and operational risks inherent in operating electric utilities and natural gas transmission and distribution pipelines. Electric generation, transmission and distribution operations can be impacted by risks such as mechanical failures, supply chain issues impacting timely access to critical equipment, activities of third parties, terrorism, cyberattacks, human error, damage to facilities, and infrastructure caused by hurricanes, storms, falling trees, lightning strikes, floods, fires and other natural disasters. Natural gas pipeline operations can also be impacted by risks such as leaks, explosions, mechanical failures, activities of third parties, terrorism, cyberattacks, and damage to the pipeline facilities and equipment caused by hurricanes, storms, floods, fires and other natural disasters. Electric utility and natural gas transmission and distribution pipeline operation interruption could negatively affect customer and public confidence, and public safety and have a Material Adverse Effect.

Insurance, warranties, or recovery through regulatory mechanisms may not cover any or all these losses, which could have a Material Adverse Effect.

UNINSURED RISK

Emera and its subsidiaries maintain insurance to cover accidental loss suffered to its facilities and to provide indemnity in the event of liability to third parties. A significant portion of Emera’s electric utilities’ transmission and distribution assets and its gas utilities’ distribution assets are not insured, as is customary in the industry, as the cost of coverage is prohibitive. In addition, Emera accepts deductibles and self-insured retentions under its various insurance policies. Insurance is subject to coverage limits as well as time sensitive claims discovery and reporting provisions and there can be no assurance that the types of liabilities or losses that may be incurred will be covered by insurance.

The occurrence of significant uninsured claims, claims in excess of the insurance coverage limits, or claims that fall within a significant self-insured retention could have a Material Adverse Effect, if regulatory recovery is not available.

Risk Management Including Financial Instruments

The Company manages exposure to normal operating and market risks relating to commodity prices, FX, interest rates and share prices through contractual protections with counterparties where practicable, and by using financial instruments consisting mainly of FX forwards and swaps, interest rate options and swaps, equity derivatives, and coal, oil and gas futures, options, forwards and swaps. In addition, the Company has contracts for the physical purchase and sale of natural gas. These physical and financial contracts are classified as HFT. Collectively, these contracts and financial instruments are considered derivatives.

The Company recognizes the FV of all its derivatives on its balance sheet, except for non-financial derivatives that meet the normal purchases and normal sales (“NPNS”) exception. Physical contracts that meet the NPNS exception are not recognized on the balance sheet; these contracts are recognized in income when they settle. A physical contract generally qualifies for the NPNS exception if the transaction is reasonable in relation to the Company’s business needs, the counterparty owns or controls resources within the proximity to allow for physical delivery, the Company intends to receive physical delivery of the commodity, and the Company deems the counterparty creditworthy. The Company continually assesses contracts designated under the NPNS exception and will discontinue the treatment of these contracts under this exemption if the criteria are no longer met.

 

     
54   EMERA 2024 ANNUAL REPORT

Management’s Discussion and Analysis

 

Derivatives qualify for hedge accounting if they meet stringent documentation requirements and can be proven to effectively hedge identified risk both at the inception and over the term of the instrument. Specifically, for cash flow hedges, change in the FV of derivatives is deferred to AOCI and recognized in income in the same period the related hedged item is realized. Where documentation or effectiveness requirements are not met, the derivatives are recognized at FV with any changes in FV value recognized in net income in the reporting period, unless deferred as a result of regulatory accounting.

Derivatives entered into by NSPI, NMGC and GBPC that are documented as economic hedges or for which the NPNS exception has not been taken, are subject to regulatory accounting treatment. The change in FV of the derivatives is deferred to a regulatory asset or liability. The gain or loss is recognized in the hedged item when the hedged item is settled. Management believes any gains or losses resulting from settlement of these derivatives related to fuel for generation and purchased power will be refunded to or collected from customers in future rates. TEC and PGS have no derivatives related to hedging.

Derivatives that do not meet any of the above criteria are designated as HFT, with changes in FV normally recorded in net income of the period. The Company has not elected to designate any derivatives to be included in the HFT category where another accounting treatment would apply.

DERIVATIVE ASSETS AND LIABILITIES RECOGNIZED ON THE BALANCE SHEET

 

As at

millions of dollars

    December 31
2024		      December 31
2023		  

Regulatory Deferral:

      

Derivative instrument assets (1)

    $ 45      $ 16  

Derivative instrument liabilities (2)

      (40 )       (76 ) 

Regulatory assets (1)

      53        88  

Regulatory liabilities (2)

      (44 )       (17 ) 
  

 

 

     

 

 

  

Net asset

    $ 14      $ 11  
  

 

 

     

 

 

  

HFT Derivatives:

      

Derivative instrument assets (1)

    $ 122      $ 202  

Derivatives instruments liabilities (2)

      (542 )       (421 ) 
  

 

 

     

 

 

  

Net liability

    $ (420 )     $ (219 ) 
  

 

 

     

 

 

  

Other Derivatives:

      

Derivative instrument assets (1)

    $ —       $ 22  

Derivatives instruments liabilities (2)

      (36 )       (7 ) 
  

 

 

     

 

 

  

Net asset (liability)

    $ (36 )     $ 15  
  

 

 

     

 

 

  

 

(1)

Current, other and assets held for sale.

(2)

Current, long-term and liabilities associated with assets held for sale.

REALIZED AND UNREALIZED GAINS (LOSSES) RECOGNIZED IN NET INCOME

 

For the    Year ended December 31  

millions of dollars

    2024      2023  

Regulatory Deferral:

      

Regulated fuel for generation and purchased power (1)

    $ (44 )     $ 62  
  

 

 

     

 

 

  

HFT Derivatives:

      

Non-regulated operating revenues

    $ 207      $ 1,037  
  

 

 

     

 

 

  

Other Derivatives:

      

OM&G

    $ 14      $ (9 ) 

Other income, net

      (56 )       17  
  

 

 

     

 

 

  

Net gains (losses)

    $ (42 )     $ 8  
  

 

 

     

 

 

  

Total net gains

    $ 121      $ 1,107  
  

 

 

     

 

 

  

 

(1)

Realized gains (losses) on derivative instruments settled and consumed in the period, hedging relationships that have been terminated or the hedged transaction is no longer probable. Realized gains (losses) recorded in inventory will be recognized in “Regulated fuel for generation and purchased power” when the hedged item is consumed.

As of December 31, 2024, the unrealized gain in AOCI was $12 million, after-tax (December 31, 2023 – $14 million, after-tax). For the year ended December 31, 2024, unrealized gains of $2 million (2023 – $2 million) have been reclassified from AOCI into interest expense.

 

     
EMERA 2024 ANNUAL REPORT   55

Management’s Discussion and Analysis

 

Disclosure and Internal Controls

Management is responsible for establishing and maintaining adequate disclosure controls and procedures (“DC&P”) and internal control over financial reporting (“ICFR”), as defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings (“NI 52-109”). The Company’s internal control framework is based on criteria published in the Internal Control Integrated Framework (2013), a report issued by the Committee of Sponsoring Organizations (“COSO”) of the Treadway Commission. Management, including the Chief Executive Officer and Chief Financial Officer, evaluated the design and effectiveness of the Company’s DC&P and ICFR as at December 31, 2024 to provide reasonable assurance regarding the reliability of financial reporting in accordance with USGAAP.

Management recognizes the inherent limitations in internal control systems, no matter how well designed. Control systems determined to be appropriately designed can only provide reasonable assurance with respect to the reliability of financial reporting and may not prevent or detect all misstatements.

There were no changes in the Company’s ICFR, during the year ended December 31, 2024, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Critical Accounting Estimates

The preparation of consolidated financial statements in accordance with USGAAP requires management to make estimates and assumptions. These may affect reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting periods. Significant areas requiring use of management estimates relate to rate-regulated assets and liabilities, accumulated reserve for cost of removal, pension and post-retirement benefits, unbilled revenue, useful lives for depreciable assets, goodwill and long-lived assets impairment assessments, income taxes, asset retirement obligations (“ARO”), and valuation of financial instruments. Management evaluates the Company’s estimates on an ongoing basis based upon historical experience, current and expected conditions and assumptions believed to be reasonable at the time the assumption is made, with any adjustments recognized in income in the year they arise.

RATE REGULATION

The rate-regulated accounting policies of Emera’s rate-regulated subsidiaries and regulated equity investments are subject to examination and approval by their respective regulators and may differ from the accounting policies of non-rate-regulated companies. Differences occur when regulators render their decisions on rate applications or other matters, and generally involve a difference in the timing of revenue and expense recognition. The accounting for these items is based on expectations of the future actions of the regulators. Assumptions and judgments used by regulatory authorities continue to have an impact on recovery of costs, rates earned on invested capital, and the timing and amount of assets to be recovered. Application of regulatory accounting guidance is a critical accounting policy as a change in these assumptions may result in a material impact on reported assets, liabilities and the results of operations.

As at December 31, 2024, the Company had recorded $3,427 million (2023 – $3,105 million) of regulatory assets and $1,880 million (2023 – $1,772 million) of regulatory liabilities.

ACCUMULATED RESERVE – COST OF REMOVAL

TEC, PGS, NMGC and NSPI recognize non-ARO costs of removal (“COR”) as regulatory liabilities. The non-ARO COR represent estimated funds received from customers through depreciation rates to cover future COR of PP&E upon retirement that are not legally required. The companies accrue for COR over the life of the related assets based on depreciation studies approved by their respective regulators. Costs are estimated based on historical experience and future expectations, including expected timing and estimated future cash outlays. As at December 31, 2024, the balance of the Accumulated reserve – COR within regulatory liabilities was $733 million (2023 – $849 million).

PENSION AND OTHER POST-RETIREMENT EMPLOYEE BENEFITS

The Company provides post-retirement benefits to employees, including defined benefit pension plans. The cost of providing these benefits is dependent upon many factors that result from actual plan experience and assumptions of future expectations.

The accounting related to employee post-retirement benefits is a critical accounting estimate. Changes in the estimated benefit obligation, affected by employee demographics – including age, compensation levels, employment periods, contribution levels and earnings – could have a material impact on reported assets, liabilities, accumulated other comprehensive income and results of operations. Changes in key actuarial assumptions, including anticipated rates of return on plan assets and discount rates used in determining the accrued benefit obligation and benefit costs, could change annual funding requirements. This could have a significant impact on the Company’s annual earnings and cash requirements.

 

     
56   EMERA 2024 ANNUAL REPORT

Management’s Discussion and Analysis

 

Pension plan assets are comprised primarily of equity and fixed income investments. Fluctuations in actual equity market returns and changes in interest rates may result in changes to pension costs in future periods.

The Company’s accounting policy is to amortize the net actuarial gain or loss that exceeds 10 per cent of the greater of the projected benefit obligation/accumulated post-retirement benefit obligation (“PBO”) and the market-related value of assets, over active plan members’ average remaining service period. For the largest plans this is currently 8.2 years (8.4 years for 2024 benefit cost) for Canadian plans and a weighted average of 11.6 years for US plans. The Company’s use of smoothed asset values reduces volatility related to amortization of actuarial investment experience. As a result, the main cause of volatility in reported pension cost is the discount rate used to determine the PBO.

The discount rate used to determine benefit costs is based on the yield of high quality long-term corporate bonds in each operating entity’s country and is determined with reference to bonds which have the same duration as the PBO as at January 1 of the fiscal year. The following table shows the discount rate for benefit cost purposes and the expected return on plan assets for each plan:

 

     2024     2023  
   Discount rate
for benefit
cost purposes		     Expected return
on plan assets		     Discount rate
for benefit
cost purposes		     Expected return
on plan assets		  

TECO Holdings Group Retirement Plan

      5.27 %      7.05 %      5.55 %      7.05 % 

TECO Holdings Group Supplemental Executive Retirement Plan (1)

      5.15 %      N/A       5.45%/5.31 %      N/A  

TECO Holdings Group Benefit Restoration Plan (1)

      5.18 %      N/A       5.48/5.30/5.49 %      N/A  

TECO Holdings Post-retirement Health and Welfare Plan

      5.28 %      N/A       5.53%/6.14 %      N/A  

NMGC Retiree Medical Plan

      5.28 %      4.25 %      5.55 %      2.50 % 

NSPI

      4.63%, 4.62 %      6.00 %      5.17%, 5.19 %      6.25 % 

GBPC Salaried

      5.75 %      6.00 %      5.75 %      6.00 % 

GBPC Union

      5.75 %      5.35 %      5.75 %      5.35 % 

 

(1)

The discount rate for benefit cost purposes is updated throughout the year as special events occur, such as settlements and curtailments.

Based on management’s estimate, the reported benefit cost for defined benefit and defined contribution plans was $56 million in 2024 (2023 – $43 million). The reported benefit cost is impacted by numerous assumptions, including the discount rate and asset return assumptions. A 0.25 per cent change in the discount rate and asset return assumptions would have had +/- impact on the 2024 benefit cost of $0.5 million and $3.0 million, respectively (2023 – $0.5 million and $2.5 million).

UNBILLED REVENUE

Electric and gas revenues are billed on a systematic basis over a one or two-month period for NSPI and a one-month period for other Emera utilities. At the end of each month, the Company must make an estimate of energy delivered to customers since the date their meter was last read and determine related revenues earned but not yet billed. The unbilled revenue is estimated based on several factors, including current month’s generation, estimated customer usage by class, weather, line losses, inter-period changes to customer classes and applicable customer rates. Based on the extent of estimates included in determination of unbilled revenue, actual results may differ from the estimate. At December 31, 2024, unbilled revenues totalled $342 million (2023 – $363 million) on total regulated operating revenues of $7,447 million (2023 – $7,235 million).

PP&E

PP&E represents 61 per cent of total assets on the Company’s balance sheet and includes generation, transmission and distribution, and other assets of the Company.

Depreciation is determined by the straight-line method, based on the estimated remaining service lives of depreciable assets in each category. The service lives of regulated PP&E are determined based on depreciation studies and require appropriate regulatory approval. Due to the magnitude of the Company’s PP&E, changes in estimated depreciation rates can have a material impact on depreciation expense and accumulated depreciation.

Depreciation expense was $1,135 million for the year ended December 31, 2024 (2023 – $1,019 million).

 

     
EMERA 2024 ANNUAL REPORT   57

Management’s Discussion and Analysis

 

GOODWILL IMPAIRMENT ASSESSMENTS

Goodwill is calculated as the excess of the purchase price of an acquired entity over the estimated FV of identifiable assets acquired, and liabilities assumed at the acquisition date.

Goodwill is subject to assessment for impairment at the reporting unit level annually, or if an event or change in circumstances indicates that the FV of a reporting unit may be below its carrying value. Application of the goodwill impairment test requires management judgment on significant assumptions and estimates. When assessing goodwill for impairment, the Company has the option of first performing a qualitative assessment to determine whether a quantitative assessment is necessary. In performing a qualitative assessment, management considers, among other factors, macroeconomic conditions, industry and market considerations and overall financial performance.

If the Company performs a qualitative assessment and determines it is more likely than not that its FV is less than its carrying amount, or if the Company chooses to bypass the qualitative assessment, a quantitative test is performed. The quantitative test compares the FV of the reporting unit to its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its FV, an impairment loss is recorded. Significant assumptions used in estimating the FV of a reporting unit include discount and growth rates, rate case assumptions including future cost of capital, valuation of the reporting units’ net operating loss (“NOL”), and projected operating and capital cash flows. Adverse changes in these assumptions could result in a future material impairment of the goodwill assigned to Emera’s reporting units.

As of December 31, 2024, Emera’s goodwill represents the excess of the acquisition purchase price for TECO Energy, Inc. (TEC, PGS and NMGC reporting units) over the FV assigned to identifiable assets acquired and liabilities assumed. In Q3 2024, Emera entered into an agreement to sell NMGC. As a result, a quantitative goodwill impairment assessment was performed on the NMGC reporting unit and the Company recorded a goodwill impairment charge of $210 million ($198 million, after-tax) or $155 million USD ($146 million USD, after-tax). The reduced NMGC goodwill balance of $303 million is included in the NMGC disposal unit classified as held for sale. For further details, refer to note 23 in the consolidated financial statements.

In Q4 2024, a qualitative assessment was performed for TEC, given the significant excess of FV over carrying amounts calculated during the last quantitative test in Q4 2023. Management concluded it was more likely than not that the FV of this reporting unit exceeded its carrying amount, including goodwill. As such, no quantitative testing was required. Given the length of time passed since the last quantitative impairment test for the PGS reporting unit, Emera elected to bypass a qualitative assessment and performed a quantitative impairment assessment in Q4 2024 using a combination of the income and market approach. This assessment estimated that the FV of the PGS reporting unit exceeded its carrying amount, including goodwill, and as a result no impairment charges were recognized.

As of December 31, 2024, the Company had goodwill with a total carrying amount of $5,858 million (December 31, 2023 – $5,871 million). The change in the carrying value of goodwill from 2023 to 2024 was primarily a result of the impairment of the goodwill assigned to the NMGC reporting unit and NMGC goodwill included in disposal units classified as held for sale, partially offset by the effect of the FX translation of Emera’s foreign affiliates.

LONG-LIVED ASSETS IMPAIRMENT ASSESSMENTS

The Company assesses whether there has been an impairment of long-lived assets and intangibles when a triggering event occurs, such as a significant market disruption or the sale of a business. The assessment involves comparing undiscounted expected future cash flows, to the carrying value of the asset. When the undiscounted cash flow analysis indicates a long-lived asset is not recoverable, the amount of the impairment loss is determined by measuring the excess of the carrying amount of the long-lived asset over its estimated FV.

The Company believes accounting estimates related to asset impairments are critical estimates, as they are highly susceptible to change and the impact of an impairment on reported assets and earnings could be material. Management is required to make assumptions based on expectations regarding results of operations for significant/indefinite future periods and current and expected market conditions in such periods. Markets can experience significant uncertainties. Estimates based on the Company’s assumptions relating to future results of operations or other recoverable amounts are based on a combination of historical experience, fundamental economic analysis, observable market activity and independent market studies. The Company’s expectations regarding uses and holding periods of assets are based on internal long-term budgets and projections, which consider external factors and market forces, as of the end of each reporting period. Assumptions made by management are consistent with generally accepted industry approaches and assumptions used for valuation and pricing activities.

In 2024, impairment charges of $19 million ($14 million after-tax) were recognized on certain assets, $8 million of which was included in “Other income, net” with $11 million included in “Impairment Charges” on the Consolidated Income Statement. No impairment charges related to long-lived assets were recognized in 2023.

 

     
58   EMERA 2024 ANNUAL REPORT

Management’s Discussion and Analysis

 

INCOME TAXES

Income taxes are determined based on expected tax treatment of transactions recorded in the consolidated financial statements. In determining income taxes, tax legislation is interpreted in a variety of jurisdictions, the likelihood that deferred income tax assets will be recovered from future taxable income is assessed, and assumptions are made about expected timing of reversal of deferred income tax assets and liabilities. Uncertainty associated with application of tax statutes and regulations and outcomes of tax audits and appeals, requires that judgments and estimates be made in the accrual process and in calculation of effective tax rates. Only income tax benefits that meet the “more likely than not” threshold may be recognized or continue to be recognized. Unrecognized tax benefits are evaluated quarterly and changes are recorded based on new information, including issuance of relevant guidance by the courts or tax authorities and developments occurring in examinations of the Company’s tax returns.

The Company believes accounting estimates related to income taxes are critical estimates. Realization of deferred income tax assets depends on the generation of sufficient taxable income, both operating and capital, in future periods. A change in estimated valuation allowance could have a material impact on reported assets and results of operations. Administrative actions of tax authorities, changes in tax law or regulation, and uncertainty associated with the application of tax statutes and regulations, could change the Company’s estimate of income taxes, including the potential for elimination or reduction of the Company’s ability to realize tax benefits and to utilize deferred income tax assets.

ASSET RETIREMENT OBLIGATIONS

Measurement of the FV of AROs requires the Company to make reasonable estimates concerning the method and timing of settlement associated with legally obligated costs. There are uncertainties in estimating future asset-retirement costs due to potential events, such as changing legislation or regulations, and advances in remediation technologies. Emera has AROs associated with remediation of generation, transmission, distribution and pipeline assets.

An ARO represents the FV of estimated cash flows necessary to discharge the future obligation using the Company’s credit-adjusted risk-free rate. The amounts are reduced by actual expenditures incurred. Estimated future cash flows are based on completed depreciation studies, remediation reports, prior experience, estimated useful lives, and governmental regulatory requirements. The present value of the liability is recorded and the carrying amount of the related long-lived asset is correspondingly increased. The amount capitalized at inception is depreciated in the same manner as the related long-lived asset. Over time, the liability is accreted to its estimated future value. Accretion expense is included as part of “Depreciation and amortization expense”. Any accretion expense not yet approved by the regulator is recorded in “PP&E” and included in the next depreciation study. Accordingly, changes to the ARO or cost recognition attributable to changes in the factors discussed above, should not impact the results of operations of the Company.

Some of the Company’s transmission and distribution assets may have conditional AROs that are not recognized in the consolidated financial statements as the FV of these obligations could not be reasonably estimated given insufficient information to do so. A conditional ARO refers to a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement are conditional on a future event that may or may not be within the control of the entity. Management monitors these obligations and a liability is recognized at FV when an amount can be determined.

As at December 31, 2024, AROs recorded on the balance sheet were $217 million (2023 – $192 million). The Company estimates the undiscounted amount of cash flow required to settle the obligations is approximately $453 million (2023 – $426 million), which will be incurred between 2025 and 2061. The majority of these costs will be incurred between 2028 and 2050.

FINANCIAL INSTRUMENTS

The Company is required to determine the FV of all derivatives except those that qualify for the NPNS exception. FV is the price that would be received for the sale of an asset or paid to transfer a liability in an orderly arms-length transaction between market participants at the measurement date. FV measurements are required to reflect assumptions that market participants would use in pricing an asset or liability based on the best available information, including the risks inherent in a particular valuation technique, such as a pricing model, and the risks inherent in the inputs to the model.

LEVEL DETERMINATIONS AND CLASSIFICATIONS

The Company uses Level 1, 2, and 3 classifications in the FV hierarchy. The FV measurement of a financial instrument is included in only one of the three levels and is based on the lowest level input significant to the derivation of the FV. FV is determined, directly or indirectly, using inputs that are observable for the asset or liability. Only in limited circumstances does the Company enter into commodity transactions involving non-standard features where market observable data is not available or have contract terms that extend beyond five years.

 

     
EMERA 2024 ANNUAL REPORT   59

Management’s Discussion and Analysis

 

Changes in Accounting Policies and Practices

The new USGAAP accounting policy that is applicable to, and adopted by the Company in 2024, is described as follows:

IMPROVEMENTS TO REPORTABLE SEGMENT DISCLOSURES

The Company adopted Accounting Standard Update (“ASU”) 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures. The change in the standard improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The changes improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses. The guidance was effective for annual reporting periods beginning after December 15, 2023, and for interim periods beginning after December 15, 2024. Adoption of the standard resulted in additional qualitative disclosures provided in note 5.

Future Accounting Pronouncements

The Company considers the applicability and impact of all ASUs issued by the Financial Accounting Standards Board (“FASB”). The following updates have been issued by the FASB, but as allowed, have not yet been adopted by Emera. Any ASUs not included below were assessed and determined to be either not applicable to the Company or to have an insignificant impact on the consolidated financial statements.

DISAGGREGATION OF INCOME STATEMENT EXPENSES

In November 2024, the FASB issued ASU 2024-03, Income Statement Reporting – Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The standard update improves the disclosures about a public business entity’s expenses by requiring more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation and amortization) included within income statement expense captions. The guidance will be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The standard updates are to be applied prospectively with the option for retrospective application. The Company is currently evaluating the impact of adoption of the standard update on its consolidated financial statements disclosures.

IMPROVEMENTS TO INCOME TAX DISCLOSURES

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The standard enhances the transparency, decision usefulness and effectiveness of income tax disclosures by requiring consistent categories and greater disaggregation of information in the reconciliation of income taxes computed using the enacted statutory income tax rate to the actual income tax provision and effective income tax rate, as well as the disaggregation of income taxes paid (refunded) by jurisdiction. The standard also requires disclosure of income (loss) before provision for income taxes and income tax expense (recovery) in accordance with U.S. Securities and Exchange Commission Regulation S-X 210.4-08(h), Rules of General Application – General Notes to Financial Statements: Income Tax Expense, and the removal of disclosures no longer considered cost beneficial or relevant. The guidance will be effective for annual reporting periods beginning after December 15, 2024. Early adoption is permitted. The standard will be applied on a prospective basis, with retrospective application permitted. The Company is currently evaluating the impact of adoption of the standard on its consolidated financial statements disclosures.

 

     
60   EMERA 2024 ANNUAL REPORT

Management’s Discussion and Analysis

 

Summary of Quarterly Results

 

For the quarter ended  

millions of dollars

(except per share amounts)

    Q4
2024		      Q3
2024		      Q2
2024		      Q1
2024		      Q4
2023		      Q3
2023		      Q2
2023		      Q1
2023		  

Operating revenues

    $ 1,763      $ 1,802      $ 1,617      $ 2,018      $ 1,972      $ 1,740      $ 1,418      $ 2,433  

Net income attributable to common shareholders

    $ 154      $ 4      $ 129      $ 207      $ 289      $ 101      $ 28      $ 560  

EPS – basic

    $ 0.52      $ 0.01      $ 0.45      $ 0.73      $ 1.04      $ 0.37      $ 0.10      $ 2.07  

EPS – diluted

    $ 0.52      $ 0.01      $ 0.45      $ 0.73      $ 1.04      $ 0.37      $ 0.10      $ 2.07  

Quarterly operating revenues and adjusted net income are affected by seasonality. The first quarter provides strong earnings contributions due to a significant portion of the Company’s operations being in northeastern North America, where winter is the peak electricity usage season. The third quarter provides strong earnings contributions due to summer being the heaviest electric consumption season in Florida. Seasonal and other weather patterns, as well as the number and severity of storms, can affect demand for energy and the cost of service. Quarterly results could also be affected by items outlined in the “Significant Items Affecting Earnings” section. Quarter-over-quarter variances are discussed further below.

Q4 2024 COMPARED TO Q4 2023

For explanation of variances, refer to the “Consolidated Income Statement Highlights” section.

Q3 2024 COMPARED TO Q3 2023

Q3 2024 net income attributable to common shareholders decreased by $97 million and EPS – basic and diluted decreased by $0.36 compared to Q3 2023. The decreases were primarily due to charges related to the pending sale of NMGC; decreased earnings at Emera Energy; lower equity earnings from LIL; lower Corporate income tax recovery due to decreased losses before provision for income taxes; increased Corporate interest expense due to increased interest rates and increased total debt; and increased Corporate preferred share dividends. These changes were partially offset by decreased MTM losses; increased earnings at TEC, PGS, NSPI and NMGC; and lower Corporate OM&G due to the timing difference in the valuation of long-term incentive expense and related hedges. The change in EPS was also impacted by an increase in weighted average shares outstanding.

Q2 2024 COMPARED TO Q2 2023

Q2 2024 net income attributable to common shareholders increased by $101 million and EPS – basic and diluted increased by $0.35 compared to Q2 2023. The increases were primarily due to the gain on sale of LIL, after transaction costs; increased earnings at PGS and TEC; increased Corporate income tax recovery due to increased losses before provision for income taxes; and decreased MTM losses. These changes were partially offset by decreased earnings at NMGC and NSPI; higher Corporate interest expense due to increased interest rates and increased total average debt; and FX losses on the translation of USD short-term debt balances in Corporate. The change in EPS was also impacted by an increase in weighted average shares outstanding.

Q1 2024 COMPARED TO Q1 2023

Q1 2024 net income attributable to common shareholders decreased by $353 million and EPS – basic and diluted decreased by $1.34 compared to Q1 2023. The decreases were primarily due to increased MTM losses; lower earnings at TEC, NMGC, NSPI and EES; increased Corporate OM&G due to the timing difference in the valuation of long-term incentive expense and related hedges; and increased Corporate interest expense due to increased total debt. These changes were partially offset by higher earnings at PGS and NSPML; and higher income tax recovery at Corporate. The change in EPS was also impacted by an increase in weighted average shares outstanding.

 

     
EMERA 2024 ANNUAL REPORT   61

LOGO

Consolidated Financial Statements

 

62

EMERA 2024 ANNUAL REPORT

 

Management Report

MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING

The accompanying consolidated financial statements of Emera Incorporated and the information in this annual report are the responsibility of management and have been approved by the Board of Directors (“Board”).

The consolidated financial statements have been prepared by management in accordance with United States Generally Accepted Accounting Principles. When alternative accounting methods exist, management has chosen those it considers most appropriate in the circumstances. In preparation of these consolidated financial statements, estimates are sometimes necessary when transactions affecting the current accounting period cannot be finalized with certainty until future periods. Management represents that such estimates, which have been properly reflected in the accompanying consolidated financial statements, are based on careful judgments and are within reasonable limits of materiality. Management has determined such amounts on a reasonable basis in order to ensure that the consolidated financial statements are presented fairly in all material respects. Management has prepared the financial information presented elsewhere in the annual report and has ensured that it is consistent with that in the consolidated financial statements.

Emera Incorporated maintains effective systems of internal accounting and administrative controls, consistent with reasonable cost. Such systems are designed to provide reasonable assurance that the financial information is reliable and accurate, and that Emera Incorporated’s assets are appropriately accounted for and adequately safeguarded.

The Board is responsible for ensuring that management fulfils its responsibilities for financial reporting and is ultimately responsible for reviewing and approving the consolidated financial statements. The Board carries out this responsibility principally through its Audit Committee.

The Audit Committee is appointed by the Board, and its members are directors who are not officers or employees of Emera Incorporated. The Audit Committee meets periodically with management, as well as with the internal auditors and with the external auditors, to discuss internal controls over the financial reporting process, auditing matters and financial reporting issues, to satisfy itself that each party is properly discharging its responsibilities, and to review the annual report, the consolidated financial statements and the external auditors’ report. The Audit Committee reports its findings to the Board for consideration when approving the consolidated financial statements for issuance to the shareholders. The Audit Committee also considers, for review by the Board and approval by the shareholders, the appointment of the external auditors.

The consolidated financial statements have been audited by Ernst & Young LLP, the external auditors, in accordance with Canadian Generally Accepted Auditing Standards and with the standards of the Public Company Accounting Oversight Board. Ernst & Young LLP has full and free access to the Audit Committee.

February 21, 2025

 

LOGO    LOGO
“Scott Balfour”    “Gregory Blunden”
President and Chief Executive Officer    Chief Financial Officer

 

     
EMERA 2024 ANNUAL REPORT    63

Independent Auditor’s Report

To the Shareholders and the Board of Directors of Emera Incorporated

OPINION

We have audited the consolidated financial statements of Emera Incorporated (the “Company”), which comprise the Consolidated Balance Sheets as at December 31, 2024 and 2023, and the Consolidated Statements of Income, Consolidated Statements of Comprehensive Income, Consolidated Statements of Changes in Equity and Consolidated Statements of Cash Flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as at December 31, 2024 and 2023, and the consolidated results of its operations and its consolidated cash flows for the years then ended in accordance with United States generally accepted accounting principles (“USGAAP”).

BASIS FOR OPINION

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

KEY AUDIT MATTERS

Key audit matters are those matters that, in our professional judgment, were of most significance in the audit of the consolidated financial statements of the current period. These matters were addressed in the context of the audit of the consolidated financial statements as a whole, and in forming the auditor’s opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the consolidated financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the consolidated financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying consolidated financial statements.

 

   Accounting for the effects of rate regulation
Key Audit Matter    As disclosed in note 7 of the consolidated financial statements, the Company has $3.4 billion in regulatory assets and $1.9 billion in regulatory liabilities. The Company’s rate-regulated subsidiaries are subject to regulation by various federal, state and provincial regulatory authorities in the geographic regions in which they operate. The regulatory rates are designed to recover the prudently incurred costs of providing the regulated products or services and provide a reasonable return on the equity invested or assets, as applicable. In addition to regulatory assets and liabilities, rate regulation impacts multiple financial statement line items, including, but not limited to, property, plant and equipment (“PP&E”), operating revenues and expenses, income taxes, and depreciation expense.
   Auditing the impact of rate regulation on the Company’s financial statements is complex and highly judgmental due to the significant judgments made by the Company to support its accounting and disclosure for regulatory matters when final regulatory decisions or orders have not yet been obtained or when regulatory formulas are complex. There is also subjectivity involved in assessing the potential impact of future regulatory decisions on the financial statements. Although the Company expects to recover costs from customers through rates, there is a risk that the regulator will not approve full recovery of the costs incurred. The Company’s judgments include making an assessment of the probability of recovery of and return on costs incurred, of the potential disallowance of part of the cost incurred, or of the probable refund to customers of gains or amounts previously collected from customers through future rates.

 

     
64    EMERA 2024 ANNUAL REPORT

Independent Auditor’s Report

 

How Our Audit Addressed the Key Audit Matter    We performed audit procedures that included, amongst others, assessing the Company’s evaluation of the probability of future recovery for regulatory assets, PP&E, and refund of regulatory liabilities by obtaining and reviewing relevant regulatory orders, filings, testimony, hearings and correspondence, and other publicly available information. For regulatory matters for which regulatory decisions or orders have not yet been obtained, we inspected the rate-regulated subsidiaries’ filings for any evidence that might contradict the Company’s assertions, and reviewed other regulatory orders, filings and correspondence for other entities within the same or similar jurisdictions to assess the likelihood of recovery or refund in future rates based on the regulator’s treatment of similar costs under similar circumstances. We obtained and evaluated an analysis from the Company and corroborated that analysis with letters from legal counsel, when appropriate, regarding cost recoveries, gains or amounts previously collected from customers or future changes in rates. We also assessed the methodology, accuracy and completeness of the Company’s calculations of regulatory asset and liability balances based on provisions and formulas outlined in rate orders and other correspondence with the regulators. We evaluated the Company’s disclosures related to the impacts of rate regulation.
   Fair value (“FV”) measurement of derivative financial instruments
Key Audit Matter   

Held-for-trading (“HFT”) derivative assets of $270 million and liabilities of $690 million, disclosed in note 16 to the consolidated financial statements, are measured at FV. The Company recognized $207 million in realized and unrealized gains during the year with respect to HFT derivatives.

 

Auditing the Company’s valuation of HFT derivatives is complex and highly judgmental due to the complexity of the contract terms and valuation models, and the significant estimation required in determining the FV of the contracts. In determining the FV of HFT derivatives, significant assumptions about future economic and market assumptions with uncertain outcomes are used, including third- party sourced forward commodity pricing curves based on illiquid markets, internally developed correlation factors and basis differentials. These assumptions have a significant impact on the FV of the HFT derivatives.

How Our Audit Addressed the Key Audit Matter    We performed audit procedures that included, amongst others, reviewing executed contracts and agreements for the identification of inputs and assumptions impacting the valuation of derivatives. With the support of our valuation specialists, we assessed the methodology and mathematical accuracy of the Company’s valuation models and compared the commodity pricing curves used by the Company to current market and economic data. For the forward commodity pricing curves, we compared the Company’s pricing curves to independently sourced pricing curves. We also assessed the methodology and mathematical accuracy of the Company’s calculations to develop correlation factors and basis differentials. In addition, we assessed whether the FV hierarchy disclosures in note 17 to the consolidated financial statements were consistent with the source of the significant inputs and assumptions used in determining the FV of derivatives.

OTHER INFORMATION

Management is responsible for the other information. The other information comprises:

 

  •  

Management’s Discussion and Analysis

 

  •  

The information, other than the consolidated financial statements and our auditor’s reports thereon, in the Annual Report

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information, and in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

 

     
EMERA 2024 ANNUAL REPORT    65

Independent Auditor’s Report

 

We obtained Management’s Discussion & Analysis prior to the date of this auditor’s report. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

The Annual Report is expected to be made available to us after the date of the auditor’s report. If based on the work we will perform on this other information, we conclude there is a material misstatement of other information, we are required to report that fact to those charged with governance.

RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE CONSOLIDATED FINANCIAL STATEMENTS

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with USGAAP, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

 

  •  

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

 

  •  

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

 

  •  

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

 

  •  

Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

 

  •  

Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

 

  •  

Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the Company as a basis for forming an opinion on the consolidated financial statements. We are responsible for the direction, supervision and review of the work performed for the purposes of the group audit. We remain solely responsible for our audit opinion.

 

     
66    EMERA 2024 ANNUAL REPORT

Independent Auditor’s Report

 

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditor’s report is Tracy Brennan.

 

LOGO

 

Chartered Professional Accountants
Halifax, Canada
February 21, 2025

 

     
EMERA 2024 ANNUAL REPORT    67

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Emera Incorporated

OPINION ON THE CONSOLIDATED FINANCIAL STATEMENTS

We have audited the accompanying Consolidated Balance Sheets of Emera Incorporated (the “Company”) as of December 31, 2024 and 2023, the related Consolidated Statements of Income, Consolidated Statements of Comprehensive Income, Consolidated Statements of Changes in Equity and Consolidated Statements of Cash Flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2024 and 2023, and the consolidated results of its operations and its consolidated cash flows for each of the two years in the period ended December 31, 2024, in conformity with United States generally accepted accounting principles.

BASIS FOR OPINION

These consolidated financial statements are the responsibility of the Company‘s management. Our responsibility is to express an opinion on the Company‘s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

CRITICAL AUDIT MATTERS

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

 

     
68    EMERA 2024 ANNUAL REPORT

Report of Independent Registered Public Accounting Firm

 

   Accounting for the effects of rate regulation
Description of the Matter   

As disclosed in note 7 of the consolidated financial statements, the Company has $3.4 billion in regulatory assets and $1.9 billion in regulatory liabilities. The Company’s rate-regulated subsidiaries are subject to regulation by various federal, state and provincial regulatory authorities in the geographic regions in which they operate. The regulatory rates are designed to recover the prudently incurred costs of providing the regulated products or services and provide a reasonable return on the equity invested or assets, as applicable. In addition to regulatory assets and liabilities, rate regulation impacts multiple financial statement line items, including, but not limited to, property, plant and equipment (“PP&E”), operating revenues and expenses, income taxes, and depreciation expense.

 

Auditing the impact of rate regulation on the Company’s financial statements is complex and highly judgmental due to the significant judgments made by the Company to support its accounting and disclosure for regulatory matters when final regulatory decisions or orders have not yet been obtained or when regulatory formulas are complex. There is also subjectivity involved in assessing the potential impact of future regulatory decisions on the financial statements. Although the Company expects to recover costs from customers through rates, there is a risk that the regulator will not approve full recovery of the costs incurred. The Company’s judgments include making an assessment of the probability of recovery of and return on costs incurred, of the potential disallowance of part of the cost incurred, or of the probable refund of gains or amounts previously collected from customers through future rates.

How We Addressed the Matter in Our Audit    We performed audit procedures that included, amongst others, assessing the Company’s evaluation of the probability of future recovery for regulatory assets, PP&E, and refund of regulatory liabilities by obtaining and reviewing relevant regulatory orders, filings, testimony, hearings and correspondence, and other publicly available information. For regulatory matters for which regulatory decisions or orders have not yet been obtained, we inspected the rate-regulated subsidiaries’ filings for any evidence that might contradict the Company’s assertions, and reviewed other regulatory orders, filings and correspondence for other entities within the same or similar jurisdictions to assess the likelihood of recovery or refund in future rates based on the regulator’s treatment of similar costs under similar circumstances. We obtained and evaluated an analysis from the Company and corroborated that analysis with letters from legal counsel, when appropriate, regarding cost recoveries, gains or amounts previously collected from customers or future changes in rates. We also assessed the methodology, accuracy and completeness of the Company’s calculations of regulatory asset and liability balances based on provisions and formulas outlined in rate orders and other correspondence with the regulators. We evaluated the Company’s disclosures related to the impacts of rate regulation.
   FV measurement of derivative financial instruments
Description of the Matter   

Held-for-trading (“HFT”) derivative assets of $270 million and liabilities of $690 million, disclosed in note 16 to the consolidated financial statements, are measured at FV. The Company recognized $207 million in realized and unrealized gains during the year with respect to HFT derivatives.

 

Auditing the Company’s valuation of HFT derivatives is complex and highly judgmental due to the complexity of the contract terms and valuation models, and the significant estimation required in determining the FV of the contracts. In determining the FV of HFT derivatives, significant assumptions about future economic and market assumptions with uncertain outcomes are used, including third- party sourced forward commodity pricing curves based on illiquid markets, internally developed correlation factors and basis differentials. These assumptions have a significant impact on the FV of the HFT derivatives.

 

     
EMERA 2024 ANNUAL REPORT    69

Report of Independent Registered Public Accounting Firm

 

How We Addressed the Matter in Our Audit   

We performed audit procedures that included, amongst others, reviewing executed contracts and agreements for the identification of inputs and assumptions impacting the valuation of derivatives. With the support of our valuation specialists, we assessed the methodology and mathematical accuracy of the Company’s valuation models and compared the commodity pricing curves used by the Company to current market and economic data. For the forward commodity pricing curves, we compared the Company’s pricing curves to independently sourced pricing curves. We also assessed the methodology and mathematical accuracy of the Company’s calculations to develop correlation factors and basis differentials. In addition, we assessed whether the FV hierarchy disclosures in note 17 to the consolidated financial statements were consistent with the source of the significant inputs and assumptions used in

determining the FV of derivatives.

 

LOGO

Chartered Professional Accountants
We have served as the Company‘s auditor since 1998.
Halifax, Canada
February 21, 2025

 

     
70    EMERA 2024 ANNUAL REPORT

Emera Incorporated

Consolidated Statements of Income

 

For the    Year ended December 31  

millions of dollars (except per share amounts)

    2024     2023  

Operating revenues

     

Regulated electric

    $ 5,872     $ 5,746  

Regulated gas

      1,575       1,489  

Non-regulated

      (247 )      328  
  

 

 

    

 

 

  

Total operating revenues (note 6)

      7,200       7,563  
  

 

 

    

 

 

  

Operating expenses

     

Regulated fuel for generation and purchased power

      1,992       1,881  

Regulated cost of natural gas

      396       527  

Operating, maintenance and general expenses (“OM&G”)

      1,918       1,879  

Provincial, state, and municipal taxes

      427       433  

Depreciation and amortization

      1,162       1,049  

Impairment charges (note 23)

      225       —   
  

 

 

    

 

 

  

Total operating expenses

      6,120       5,769  
  

 

 

    

 

 

  

Income from operations

      1,080       1,794  
  

 

 

    

 

 

  

Income from equity investments (note 8)

      99       146  

Other income, net (note 9)

      203       158  

Interest expense, net (note 10)

      973       925  
  

 

 

    

 

 

  

Income before provision for income taxes

      409       1,173  
  

 

 

    

 

 

  

Income tax (recovery) expense (note 11)

      (159 )      128  
  

 

 

    

 

 

  

Net income

      568       1,045  
  

 

 

    

 

 

  

Non-controlling interest in subsidiaries (“NCI”)

      1       1  

Preferred stock dividends

      73       66  
  

 

 

    

 

 

  

Net income attributable to common shareholders

    $ 494     $ 978  
  

 

 

    

 

 

  

Weighted average shares of common stock outstanding (in millions) (note 13)

     

Basic

      289       274  

Diluted

      289       274  
  

 

 

    

 

 

  

Earnings per common share (note 13)

     

Basic

    $ 1.71     $ 3.57  

Diluted

    $ 1.71     $ 3.57  
  

 

 

    

 

 

  

Dividends per common share declared

    $ 2.8775     $ 2.7875  
  

 

 

    

 

 

  

The accompanying notes are an integral part of these consolidated financial statements.

 

     
EMERA 2024 ANNUAL REPORT    71

Emera Incorporated

Consolidated Statements of Comprehensive Income

 

For the    Year ended December 31  

millions of dollars

    2024     2023  

Net income

    $ 568     $ 1,045  
  

 

 

    

 

 

  

Other comprehensive income (loss) (“OCI”), net of tax

     

Foreign currency translation adjustment (1)

      1,027       (270 ) 

Unrealized (losses) gains on net investment hedges (2)

      (139 )      38  

Cash flow hedges – reclassification adjustment for gains included in income

      (2 )      (2 ) 

Unrealized gains on available-for-sale investment

      2       —   

Net change in unrecognized pension and post-retirement benefit obligation (3)

      68       (39 ) 
  

 

 

    

 

 

  

OCI (4)

      956       (273 ) 
  

 

 

    

 

 

  

Comprehensive income

      1,524       772  
  

 

 

    

 

 

  

Comprehensive income attributable to NCI

      1       1  
  

 

 

    

 

 

  

Comprehensive Income of Emera Incorporated

    $ 1,523     $ 771  
  

 

 

    

 

 

  

The accompanying notes are an integral part of these consolidated financial statements.

 

(1)

Net of tax expense of $10 million for the year ended December 31, 2024 (2023 – $7 million recovery).

(2)

The Company has designated $1.2 billion United States dollar (USD) denominated Hybrid Notes as a hedge of the foreign currency exposure of its net investment in USD denominated operations.

(3)

Net of tax expense of nil for the year ended December 31, 2024 (2023 – $1 million expense).

(4)

Net of tax expense of $10 million for the year ended December 31, 2024 (2023 – $6 million recovery).

 

     
72    EMERA 2024 ANNUAL REPORT

Emera Incorporated

Consolidated Balance Sheets

 

As at

millions of dollars

    December 31
2024		      December 31
2023		  

Assets

      

Current assets

      

Cash and cash equivalents

    $ 196      $ 567  

Restricted cash

      17        21  

Inventory (note 15)

      781        790  

Derivative instruments (notes 16 and 17)

      115        174  

Regulatory assets (note 7)

      595        339  

Receivables and other current assets (note 19)

      1,811        1,817  

Assets held for sale (note 4)

      173        —   
  

 

 

     

 

 

  
     3,688        3,708  
  

 

 

     

 

 

  

Property, plant and equipment (“PP&E”), net of accumulated depreciation and amortization of $10,442 and $9,994, respectively (note 21)

      26,168        24,376  
  

 

 

     

 

 

  

Other assets

      

Deferred income taxes (note 11)

      392        208  

Derivative instruments (notes 16 and 17)

      51        66  

Regulatory assets (note 7)

      2,832        2,766  

Net investment in direct finance and sales type leases (note 20)

      610        621  

Investments subject to significant influence (note 8)

      654        1,402  

Goodwill (note 23)

      5,858        5,871  

Other long-term assets (note 33)

      538        462  

Assets held for sale (note 4)

      2,160        —   
  

 

 

     

 

 

  
     13,095        11,396  
  

 

 

     

 

 

  

Total assets

    $ 42,951      $ 39,480  
  

 

 

     

 

 

  

The accompanying notes are an integral part of these consolidated financial statements.

 

     
EMERA 2024 ANNUAL REPORT    73

Emera Incorporated

Consolidated Balance Sheets (continued)

 

As at

millions of dollars

    December 31
2024		      December 31
2023		  

Liabilities and Equity

      

Current liabilities

      

Short-term debt (note 24)

    $ 1,400      $ 1,433  

Current portion of long-term debt (note 26)

      234        676  

Accounts payable

      1,992        1,454  

Derivative instruments (notes 16 and 17)

      526        386  

Regulatory liabilities (note 7)

      262        168  

Other current liabilities (note 25)

      489        427  

Liabilities associated with assets held for sale (note 4)

      212        —   
  

 

 

     

 

 

  
     5,115        4,544  
  

 

 

     

 

 

  

Long-term liabilities

      

Long-term debt (note 26)

      18,173        17,689  

Deferred income taxes (note 11)

      2,331        2,352  

Derivative instruments (notes 16 and 17)

      91        118  

Regulatory liabilities (note 7)

      1,618        1,604  

Pension and post-retirement liabilities (note 22)

      274        265  

Other long-term liabilities (note 8 and 27)

      910        820  

Liabilities associated with assets held for sale (note 4)

      1,148        —   
  

 

 

     

 

 

  
     24,545        22,848  
  

 

 

     

 

 

  

Equity

      

Common stock (note 12)

      9,042        8,462  

Cumulative preferred stock (note 29)

      1,422        1,422  

Contributed surplus

      84        82  

Accumulated other comprehensive income (“AOCI”) (note 14)

      1,261        305  

Retained earnings

      1,468        1,803  
  

 

 

     

 

 

  

Total Emera Incorporated equity

      13,277        12,074  

NCI (note 30)

      14        14  
  

 

 

     

 

 

  

Total equity

      13,291        12,088  
  

 

 

     

 

 

  

Total liabilities and equity

    $ 42,951      $ 39,480  
  

 

 

     

 

 

  

Commitments and contingencies (note 28)

The accompanying notes are an integral part of these consolidated financial statements.

Approved on behalf of the Board of Directors

 

LOGO    LOGO   
“Karen Sheriff”    “Scott Balfour”   
Chair of the Board    President and Chief Executive Officer   

 

     
74    EMERA 2024 ANNUAL REPORT

Emera Incorporated

Consolidated Statements of Cash Flows

 

For the    Year ended December 31  

millions of dollars

    2024     2023  

Operating activities

     

Net income

    $ 568     $ 1,045  

Adjustments to reconcile net income to net cash provided by operating activities:

     

Depreciation and amortization

      1,165       1,060  

Income from equity investments, net of dividends

      (8 )      (22 ) 

Allowance for funds used during construction (“AFUDC”) – equity

      (53 )      (38 ) 

Deferred income taxes, net

      (191 )      97  

Net change in pension and post-retirement liabilities

      (46 )      (68 ) 

NSPI fuel adjustment mechanism (“FAM”)

      451       (88 ) 

Net change in fair value (“FV”) of derivative instruments

      228       (666 ) 

Net change in regulatory assets and liabilities

      (226 )      554  

Net change in capitalized transportation capacity

      175       434  

Goodwill impairment charge

      214       —   

Gain on sale of LIL, excluding transaction costs

      (191 )      —   

Other operating activities, net

      108       28  

Changes in non-cash working capital (note 31)

      452       (95 ) 
  

 

 

    

 

 

  

Net cash provided by operating activities

      2,646       2,241  
  

 

 

    

 

 

  

Investing activities

     

Additions to PP&E

      (3,151 )      (2,937 ) 

Proceeds from disposal of investment subject to significant influence

      927       —   

Other investing activities

      6       20  
  

 

 

    

 

 

  

Net cash used in investing activities

      (2,218 )      (2,917 ) 
  

 

 

    

 

 

  

Financing activities

     

Change in short-term debt, net

      56       (66 ) 

Proceeds from short-term debt with maturities greater than 90 days

      —        548  

Repayment of short-term debt with maturities greater than 90 days

      —        (1,086 ) 

Proceeds from long-term debt, net of issuance costs

      1,361       1,932  

Retirement of long-term debt

      (1,086 )      (151 ) 

Net repayments under committed credit facilities

      (825 )      (96 ) 

Issuance of common stock, net of issuance costs

      284       424  

Dividends on common stock

      (538 )      (488 ) 

Dividends on preferred stock

      (73 )      (66 ) 

Other financing activities

      3       (12 ) 
  

 

 

    

 

 

  

Net cash (used in) provided by financing activities

      (818 )      939  
  

 

 

    

 

 

  

Effect of exchange rate changes on cash, cash equivalents, restricted cash and cash associated with assets held for sale

      23       (7 ) 
  

 

 

    

 

 

  

Net (decrease) increase in cash, cash equivalents, restricted cash and cash associated with assets held for sale

      (367 )      256  

Cash, cash equivalents, and restricted cash, beginning of year

      588       332  
  

 

 

    

 

 

  

Cash, cash equivalents, restricted cash, and cash associated with assets held for sale, end of year

    $ 221     $ 588  
  

 

 

    

 

 

  

Cash, cash equivalents, restricted cash and cash associated with assets held for sale consists of:

     

Cash

    $ 191     $ 559  

Short-term investments

      5       8  

Restricted cash

      17       21  

Assets held for sale

      8       —   
  

 

 

    

 

 

  

Cash, cash equivalents, restricted cash and cash associated with assets held for sale

    $ 221     $ 588  
  

 

 

    

 

 

  

Supplementary Information to Consolidated Statements of Cash Flows (note 31)

The accompanying notes are an integral part of these consolidated financial statements.

 

     
EMERA 2024 ANNUAL REPORT    75

Emera Incorporated

Consolidated Statements of Changes in Equity

 

millions of dollars

    Common
Stock		      Preferred
Stock		      Contributed
Surplus		      AOCI     Retained
Earnings		     NCI     Total
Equity		  

Balance, December 31, 2023

    $ 8,462      $ 1,422      $ 82      $ 305     $ 1,803     $ 14     $ 12,088  

Net income of Emera Inc.

      —         —         —         —        567       1       568  

Other comprehensive income, net of tax expense of $10 million

      —         —         —         956       —        —        956  

Dividends declared on preferred stock (note 29)

      —         —         —         —        (73 )      —        (73 ) 

Dividends declared on common stock ($2.8775/share)

      —         —         —         —        (829 )      —        (829 ) 

Issued under the at-the-market program (“ATM”), net of after-tax issuance costs

      261        —         —         —        —        —        261  

Issued under the Dividend Reinvestment Program (“DRIP”), net of discount

      291        —         —         —        —        —        291  

Senior management stock options exercised and Employee Common Share Purchase Plan (“ECSPP”)

      28        —         2        —        —        —        30  

Other

      —         —         —         —        —        (1 )      (1 ) 
  

 

 

     

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Balance, December 31, 2024

    $ 9,042      $ 1,422      $ 84      $ 1,261     $ 1,468     $ 14     $ 13,291  
  

 

 

     

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Balance, December 31, 2022

    $ 7,762      $ 1,422      $ 81      $ 578     $ 1,584     $ 14     $ 11,441  

Net income of Emera Inc.

      —         —         —         —        1,044       1       1,045  

Other comprehensive loss, net of tax recovery of $6 million

      —         —         —         (273 )      —        —        (273 ) 

Dividends declared on preferred stock (note 29)

      —         —         —         —        (66 )      —        (66 ) 

Dividends declared on common stock ($2.7875/share)

      —         —         —         —        (759 )      —        (759 ) 

Issued under the ATM, net of after-tax issuance costs

      397        —         —         —        —        —        397  

Issued under the DRIP, net of discount

      272        —         —         —        —        —        272  

Senior management stock options exercised and ECSPP

      31        —         1        —        —        —        32  

Other

      —         —         —         —        —        (1 )      (1 ) 
  

 

 

     

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Balance, December 31, 2023

    $ 8,462      $ 1,422      $ 82      $ 305     $ 1,803     $ 14     $ 12,088  
  

 

 

     

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

The accompanying notes are an integral part of these consolidated financial statements.

 

     
76    EMERA 2024 ANNUAL REPORT

Emera Incorporated

 

Notes to the Consolidated Financial Statements

As at December 31, 2024 and 2023

 

1.

Summary of Significant Accounting Policies

NATURE OF OPERATIONS

Emera Incorporated (“Emera” or the “Company”) is an energy and services company that invests in electricity generation, transmission and distribution, and gas transmission and distribution.

At December 31, 2024, Emera’s reportable segments include the following:

 

  •  

Florida Electric Utility, which consists of Tampa Electric (“TEC”), a vertically integrated regulated electric utility, serving approximately 855,000 customers in West Central Florida;

 

  •  

Canadian Electric Utilities, which includes:

 

  •  

Nova Scotia Power Inc. (“NSPI”), a vertically integrated regulated electric utility and the primary electricity supplier in Nova Scotia, serving approximately 557,000 customers; and

 

  •  

a 100 per cent equity interest in NSP Maritime Link Inc. (“NSPML”), which developed the Maritime Link Project, a $1.8 billion, including AFUDC, transmission project between the island of Newfoundland and Nova Scotia.

On June 4, 2024, Emera completed the sale of its 31.1 per cent indirect minority equity interest in the Labrador Island Link Partnership (“LIL”), which was previously included in the Canadian Electric Utilities segment. For further details, refer to note 4.

 

  •  

Gas Utilities and Infrastructure, which includes:

 

  •  

Peoples Gas System Inc. (“PGS”), a regulated gas distribution utility, serving approximately 508,000 customers across Florida;

 

  •  

New Mexico Gas Company, Inc. (“NMGC”), a regulated gas distribution utility, serving approximately 550,000 customers in New Mexico. On August 5, 2024, Emera announced an agreement to sell NMGC. The transaction is expected to close in late 2025, subject to certain approvals, including approval by the New Mexico Public Regulation Commission (“NMPRC”). For further details, refer to note 4.

 

  •  

Emera Brunswick Pipeline Company Limited (“Brunswick Pipeline”), a 145-kilometre pipeline delivering re-gasified liquefied natural gas from Saint John, New Brunswick to the United States (“US”) border under a 25-year firm service agreement with Repsol Energy North America Canada Partnership (“Repsol Energy Canada”), which expires in 2034;

 

  •  

SeaCoast Gas Transmission, LLC (“SeaCoast”), a regulated intrastate natural gas transmission company offering services in Florida; and

 

  •  

a 12.9 per cent equity interest in Maritimes & Northeast Pipeline (“M&NP”), a 1,400-kilometre pipeline that transports natural gas throughout markets in Atlantic Canada and the northeastern US.

 

  •  

Other Electric Utilities, which includes Emera (Caribbean) Incorporated (“ECI”), a holding company with regulated electric utilities that include:

 

  •  

The Barbados Light & Power Company Limited (“BLPC”), a vertically integrated regulated electric utility on the island of Barbados, serving approximately 135,000 customers;

 

  •  

Grand Bahama Power Company Limited (“GBPC”), a vertically integrated regulated electric utility on Grand Bahama Island, serving approximately 19,500 customers; and

 

  •  

a 19.5 per cent equity interest in St. Lucia Electricity Services Limited (“Lucelec”), a vertically integrated regulated electric utility on the island of St. Lucia.

 

     
EMERA 2024 ANNUAL REPORT    77

Notes to the Consolidated Financial Statements

 

  •  

Emera’s other segment includes investments in energy-related non-regulated companies that are below the required threshold for reporting as separate segments and corporate expense and revenue items that are not directly allocated to the operations of Emera’s subsidiaries and investments. This includes:

 

  •  

Emera Energy, which consists of:

 

  •  

Emera Energy Services (“EES”), a physical energy business that purchases and sells natural gas and electricity and provides related energy asset management services;

 

  •  

Brooklyn Power Corporation (“Brooklyn Energy”), a 30 MW biomass co-generation electricity facility in Brooklyn, Nova Scotia; and

 

  •  

a 50.0 per cent joint venture interest in Bear Swamp Power Company LLC (“Bear Swamp”), a 660 MW pumped storage hydroelectric facility in northwestern Massachusetts.

 

  •  

Emera US Finance LP (“Emera Finance”), EUSHI Finance, Inc. and TECO Finance, Inc. (“TECO Finance”), financing subsidiaries of Emera;

 

  •  

Emera US Holdings Inc., a wholly owned holding company for certain of Emera’s assets located in the US; and

 

  •  

Other investments.

BASIS OF PRESENTATION

These consolidated financial statements are prepared and presented in accordance with United States Generally Accepted Accounting Principles (“USGAAP”) and, in the opinion of management, include all adjustments that are of a recurring nature and necessary to fairly state the financial position of Emera.

All dollar amounts are presented in Canadian dollars (“CAD”), unless otherwise indicated.

PRINCIPLES OF CONSOLIDATION

These consolidated financial statements include the accounts of Emera Incorporated, its majority-owned subsidiaries, and a variable interest entity (“VIE”) in which Emera is the primary beneficiary. Emera uses the equity method of accounting to record investments in which the Company has the ability to exercise significant influence, and for VIEs in which Emera is not the primary beneficiary.

The Company performs ongoing analysis to assess whether it holds any VIEs or whether any reconsideration events have arisen with respect to existing VIEs. To identify potential VIEs, management reviews contractual and ownership arrangements such as leases, long-term purchase power agreements, tolling contracts, guarantees, jointly owned facilities and equity investments. VIEs of which the Company is deemed the primary beneficiary must be consolidated. The primary beneficiary of a VIE has both the power to direct the activities of the VIE that most significantly impacts its economic performance and the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. In circumstances where Emera has an investment in a VIE but is not deemed the primary beneficiary, the VIE is accounted for using the equity method. For further details on VIEs, refer to note 33.

Intercompany balances and transactions have been eliminated on consolidation, except for the net profit on certain transactions between certain non-regulated and regulated entities in accordance with accounting standards for rate-regulated entities. The net profit on these transactions, which would be eliminated in the absence of the accounting standards for rate- regulated entities, is recorded in non-regulated operating revenues. An offset is recorded to PP&E, regulatory assets, regulated fuel for generation and purchased power, or OM&G, depending on the nature of the transaction.

USE OF MANAGEMENT ESTIMATES

The preparation of consolidated financial statements in accordance with USGAAP requires management to make estimates and assumptions. These may affect reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting periods. Significant areas requiring use of management estimates relate to rate-regulated assets and liabilities, accumulated reserve for cost of removal, pension and post-retirement benefits, unbilled revenue, useful lives for depreciable assets, goodwill and long-lived assets impairment assessments, income taxes, asset retirement obligations (“ARO”), and valuation of financial instruments. Management evaluates the Company’s estimates on an ongoing basis based upon historical experience, current and expected conditions and assumptions believed to be reasonable at the time the assumption is made, with any adjustments recognized in income in the year they arise.

 

     
78    EMERA 2024 ANNUAL REPORT

Notes to the Consolidated Financial Statements

 

REGULATORY MATTERS

Regulatory accounting applies where rates are established by, or subject to approval by, an independent third-party regulator. Rates are designed to recover prudently incurred costs of providing regulated products or services and provide an opportunity for a reasonable rate of return on invested capital, as applicable. For further detail, refer to note 7.

FOREIGN CURRENCY TRANSLATION

Monetary assets and liabilities denominated in foreign currencies are converted to CAD at the rates of exchange prevailing at the balance sheet date. The resulting differences between the translation at the original transaction date and the balance sheet date are included in income.

Assets and liabilities of foreign operations whose functional currency is not the Canadian dollar are translated using exchange rates in effect at the balance sheet date and the results of operations at the average exchange rate in effect for the period. The resulting exchange gains and losses on the assets and liabilities are deferred on the balance sheet in AOCI.

The Company designates certain USD denominated debt held in CAD functional currency companies as hedges of net investments in USD denominated foreign operations. The change in the carrying amount of these investments, measured at exchange rates in effect at the balance sheet date, is recorded in OCI.

REVENUE RECOGNITION

REGULATED ELECTRIC AND GAS REVENUE:

Electric and gas revenues, including energy charges, demand charges, basic facilities charges and clauses and riders, are recognized when obligations under the terms of a contract are satisfied, which is when electricity and gas are delivered to customers over time as the customer simultaneously receives and consumes the benefits. Electric and gas revenues are recognized on an accrual basis and include billed and unbilled revenues. Revenues related to the sale of electricity and gas are recognized at rates approved by the respective regulators and recorded based on metered usage, which occurs on a periodic, systematic basis, generally monthly or bi-monthly. At the end of each reporting period, electricity and gas delivered to customers, but not billed, is estimated and corresponding unbilled revenue is recognized. The Company’s estimate of unbilled revenue at the end of the reporting period is calculated by estimating the megawatt hours (“MWh”) or therms delivered to customers at the established rates expected to prevail in the upcoming billing cycle. This estimate includes assumptions as to the pattern of energy demand, weather, line losses and inter-period changes to customer classes.

NON-REGULATED REVENUE:

Marketing and trading margins are comprised of Emera Energy’s corresponding purchases and sales of natural gas and electricity, pipeline capacity costs and energy asset management revenues. Revenues are recorded when obligations under terms of the contract are satisfied and are presented on a net basis reflecting the nature of contractual relationships with customers and suppliers.

Energy sales are recognized when obligations under the terms of the contracts are satisfied, which is when electricity is delivered to customers over time.

Other non-regulated revenues are recorded when obligations under the terms of the contract are satisfied.

OTHER:

Sales, value add, and other taxes, except for gross receipts taxes discussed below, collected by the Company concurrent with revenue-producing activities are excluded from revenue.

FRANCHISE FEES AND GROSS RECEIPTS

TEC and PGS recover from customers certain costs incurred, on a dollar-for-dollar basis, through prices approved by the Florida Public Service Commission (“FPSC”). The amounts included in customers’ bills for franchise fees and gross receipt taxes are included as “Regulated electric” and “Regulated gas” revenues in the Consolidated Statements of Income. Franchise fees and gross receipt taxes payable by TEC and PGS are included as an expense on the Consolidated Statements of Income in “Provincial, state and municipal taxes”.

NMGC is an agent in the collection and payment of franchise fees and gross receipt taxes and is not required by a tariff to present the amounts on a gross basis. Therefore, NMGC’s franchise fees and gross receipt taxes are presented net with no line item impact on the Consolidated Statements of Income.

 

     
EMERA 2024 ANNUAL REPORT    79

Notes to the Consolidated Financial Statements

 

PP&E

PP&E is recorded at original cost, including AFUDC or capitalized interest, net of contributions received in aid of construction.

The cost of additions, including betterments and replacements of units, are included in “PP&E” on the Consolidated Balance Sheets. When units of regulated PP&E are replaced, renewed or retired, their cost, plus removal or disposal costs, less salvage proceeds, is charged to accumulated depreciation, with no gain or loss reflected in income. Where a disposition of non- regulated PP&E occurs, gains and losses are included in income as the dispositions occur.

The cost of PP&E represents the original cost of materials, contracted services, direct labour, AFUDC for regulated property or interest for non-regulated property, ARO, and overhead attributable to the capital project. Overhead includes corporate costs such as finance, information technology and labour costs, along with other costs related to support functions, employee benefits, insurance, procurement, and fleet operating and maintenance. Expenditures for project development are capitalized if they are expected to have a future economic benefit.

Normal maintenance projects and major maintenance projects that do not increase overall life of the related assets are expensed as incurred. When a major maintenance project increases the life or value of the underlying asset, the cost is capitalized.

Depreciation is determined by the straight-line method, based on the estimated remaining service lives of the depreciable assets in each functional class of depreciable property. For some of Emera’s rate-regulated subsidiaries, depreciation is calculated using the group remaining life method, which is applied to the average investment, adjusted for anticipated costs of removal less salvage, in functional classes of depreciable property. The service lives of regulated assets require regulatory approval.

Intangible assets, which are included in “PP&E” on the Consolidated Balance Sheets, consist primarily of computer software and land rights. Amortization is determined by the straight-line method, based on the estimated remaining service lives of the asset in each category. For some of Emera’s rate-regulated subsidiaries, amortization is calculated using the amortizable life method which is applied to the net book value to date over the remaining life of those assets. The service lives of regulated intangible assets require regulatory approval.

GOODWILL

Goodwill is calculated as the excess of the purchase price of an acquired entity over the estimated FV of identifiable assets acquired and liabilities assumed at the acquisition date. Goodwill is carried at initial cost less any write-down for impairment and is adjusted for the impact of foreign exchange (“FX”). Goodwill is subject to assessment for impairment at the reporting unit level annually, or if an event or change in circumstances indicates that the FV of a reporting unit may be below its carrying value. When assessing goodwill for impairment, the Company has the option of first performing a qualitative assessment to determine whether a quantitative assessment is necessary. In performing a qualitative assessment management considers, among other factors, macroeconomic conditions, industry and market considerations and overall financial performance.

If the Company performs a qualitative assessment and determines it is more likely than not that its FV is less than its carrying amount, or if the Company chooses to bypass the qualitative assessment, a quantitative test is performed. The quantitative test compares the FV of the reporting unit to its carrying value, including goodwill (“carrying amount”). If the carrying amount of the reporting unit exceeds its FV, an impairment loss is recorded. Management estimates the FV of the reporting unit by using the income approach, or a combination of the income and market approach. The income approach uses a discounted cash flow analysis which relies on management’s best estimate of the reporting unit’s projected cash flows. The analysis includes an estimate of terminal values based on these expected cash flows using a methodology which derives a valuation using an assumed perpetual annuity based on the reporting unit’s residual cash flows. The discount rate used is a market participant rate based on a peer group of publicly traded comparable companies and represents the weighted average cost of capital of comparable companies. For the market approach, management estimates FV based on comparable companies and transactions within comparable industries, or in the case of the NMGC quantitative assessment in 2024, transactions involving the reporting unit. Significant assumptions used in estimating the FV of a reporting unit using an income approach include discount and growth rates, rate case assumptions including future cost of capital, valuation of the reporting unit’s net operating loss (“NOL”) and projected operating and capital cash flows. Adverse changes in these assumptions could result in a future material impairment of the goodwill assigned to Emera’s reporting units.

 

     
80    EMERA 2024 ANNUAL REPORT

Notes to the Consolidated Financial Statements

 

As of December 31, 2024, Emera’s goodwill represented the excess of the acquisition purchase price for TECO Energy, Inc. (TEC, PGS and NMGC reporting units) over the FV assigned to identifiable assets acquired and liabilities assumed. In Q3 2024, Emera entered into an agreement to sell NMGC. As a result, a quantitative goodwill impairment assessment was performed on the NMGC reporting unit and the Company recorded a goodwill impairment charge of $210 million ($198 million, after-tax) or $155 million USD ($146 million USD, after-tax). The reduced NMGC goodwill balance of $303 million is included in the NMGC disposal unit classified as held for sale. For further details, refer to note 23.

In Q4 2024, a qualitative assessment was performed for TEC given the significant excess of FV over carrying amounts calculated during the last quantitative test in Q4 2023. Management concluded it was more likely than not that the FV of this reporting unit exceeded its carrying amount, including goodwill. As such, no quantitative testing was required. Given the length of time passed since the last quantitative impairment test for the PGS reporting unit, Emera elected to bypass a qualitative assessment and performed a quantitative impairment assessment in Q4 2024 using a combination of the income and market approach. This assessment estimated that the FV of the PGS reporting unit exceeded its carrying amount, including goodwill, and as a result, no impairment charges were recognized.

INCOME TAXES AND INVESTMENT TAX CREDITS

Emera recognizes deferred income tax assets and liabilities for the future tax consequences of events that have been included in financial statements or income tax returns. Deferred income tax assets and liabilities are determined based on the difference between the carrying value of assets and liabilities on the Consolidated Balance Sheets, and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in income tax rates on deferred income tax assets and liabilities is recognized in earnings in the period when the change is enacted, unless required to be offset to a regulatory asset or liability by law or by order of the regulator. Emera recognizes the effect of income tax positions only when it is more likely than not that they will be realized. Management reviews all readily available current and historical information, including forward-looking information, and the likelihood that deferred income tax assets will be recovered from future taxable income is assessed and assumptions are made about the expected timing of reversal of deferred income tax assets and liabilities. If management subsequently determines it is likely that some or all of a deferred income tax asset will not be realized, a valuation allowance is recorded to reflect the amount of deferred income tax asset expected to be realized.

Generally, investment tax credits are recorded as a reduction to income tax expense in the current or future periods to the extent that realization of such benefit is more likely than not. Investment tax credits earned on regulated assets by TEC, PGS and NMGC are deferred and amortized as required by regulatory practices.

TEC, PGS, NMGC and BLPC collect income taxes from customers based on current and deferred income taxes. NSPI, NSPML and Brunswick Pipeline collect income taxes from customers based on income tax that is currently payable, except for the deferred income taxes on certain regulatory balances specifically prescribed by regulators. For the balance of regulated deferred income taxes, NSPI, NSPML and Brunswick Pipeline recognize regulatory assets or liabilities where the deferred income taxes are expected to be recovered from or returned to customers in future years. These regulated assets or liabilities are grossed up using the respective income tax rate to reflect the income tax associated with future revenues that are required to fund these deferred income tax liabilities, and the income tax benefits associated with reduced revenues resulting from the realization of deferred income tax assets. GBPC is not subject to income taxes.

Emera classifies interest and penalties associated with unrecognized tax benefits as interest and operating expense, respectively. For further detail, refer to note 11.

DERIVATIVES AND HEDGING ACTIVITIES

The Company manages its exposure to normal operating and market risks relating to commodity prices, FX, interest rates and share prices through contractual protections with counterparties where practicable, and by using financial instruments consisting mainly of FX forwards and swaps, interest rate options and swaps, equity derivatives, and coal, oil and gas futures, options, forwards and swaps. In addition, the Company has contracts for the physical purchase and sale of natural gas. These physical and financial contracts are classified as HFT. Collectively, these contracts and financial instruments are considered derivatives.

 

     
EMERA 2024 ANNUAL REPORT    81

Notes to the Consolidated Financial Statements

 

The Company recognizes the FV of all its derivatives on its balance sheet, except for non-financial derivatives that meet the normal purchases and normal sales (“NPNS”) exception. Physical contracts that meet the NPNS exception are not recognized on the balance sheet; these contracts are recognized in income when they settle. A physical contract generally qualifies for the NPNS exception if the transaction is reasonable in relation to the Company’s business needs, the counterparty owns or controls resources within the proximity to allow for physical delivery, the Company intends to receive physical delivery of the commodity, and the Company deems the counterparty creditworthy. The Company continually assesses contracts designated under the NPNS exception and will discontinue the treatment of these contracts under this exemption if the criteria are no longer met.

Derivatives qualify for hedge accounting if they meet stringent documentation requirements and can be proven to effectively hedge identified risk both at the inception and over the term of the instrument. Specifically, for cash flow hedges, change in the FV of derivatives is deferred to AOCI and recognized in income in the same period the related hedged item is realized. Where documentation or effectiveness requirements are not met, the derivatives are recognized at FV with any changes in FV recognized in net income in the reporting period, unless deferred as a result of regulatory accounting.

Derivatives entered into by NSPI, NMGC and GBPC that are documented as economic hedges or for which the NPNS exception has not been taken, are subject to regulatory accounting treatment. The change in FV of the derivatives is deferred to a regulatory asset or liability. The gain or loss is recognized in the hedged item when the hedged item is settled. Management believes any gains or losses resulting from settlement of these derivatives related to fuel for generation and purchased power will be refunded to or collected from customers in future rates. TEC and PGS have no derivatives related to hedging.

Derivatives that do not meet any of the above criteria are designated as HFT, with changes in FV normally recorded in net income of the period. The Company has not elected to designate any derivatives to be included in the HFT category where another accounting treatment would apply.

Emera classifies gains and losses on derivatives as a component of non-regulated operating revenues, fuel for generation and purchased power, other expenses, inventory, and OM&G, depending on the nature of the item being economically hedged. Transportation capacity arising as a result of marketing and trading derivative transactions is recognized as an asset in “Receivables and other current assets” and amortized over the period of the transportation contract term. Cash flows from derivative activities are presented in the same category as the item being hedged within operating activities on the Consolidated Statements of Cash Flows. Non-hedged derivatives are included in operating cash flows on the Consolidated Statements of Cash Flows.

Derivatives, as reflected on the Consolidated Balance Sheets, are not offset by the FV amounts of cash collateral with the same counterparty. Rights to reclaim cash collateral are recognized in “Receivables and other current assets” and obligations to return cash collateral are recognized in “Accounts payable”.

LEASES

The Company determines whether a contract contains a lease at inception by evaluating whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Emera has leases with independent power producers (“IPP”) and other utilities for annual requirements to purchase wind and hydro energy over varying contract lengths which are classified as finance leases. These finance leases are not recorded on the Company’s Consolidated Balance Sheets as payments associated with the leases are variable in nature and there are no minimum fixed lease payments. Lease expense associated with these leases is recorded as “Regulated fuel for generation and purchased power” on the Consolidated Statements of Income.

Operating lease liabilities and right-of-use assets are recognized on the Consolidated Balance Sheets based on the present value of the future minimum lease payments over the lease term at commencement date. As most of Emera’s leases do not provide an implicit rate, the incremental borrowing rate at commencement of the lease is used in determining the present value of future lease payments. Lease expense is recognized on a straight-line basis over the lease term and is recorded as “OM&G” on the Consolidated Statements of Income.

Where the Company is the lessor, a lease is a sales-type lease if certain criteria are met and the arrangement transfers control of the underlying asset to the lessee. For arrangements where the criteria are met due to the presence of a third-party residual value guarantee, the lease is a direct financing lease.

For direct finance leases, a net investment in the lease is recorded that consists of the sum of the minimum lease payments and residual value, net of estimated executory costs and unearned income. The difference between the gross investment and the cost of the leased item is recorded as unearned income at the inception of the lease. Unearned income is recognized in income over the life of the lease using a constant rate of interest equal to the internal rate of return on the lease.

 

     
82    EMERA 2024 ANNUAL REPORT

Notes to the Consolidated Financial Statements

 

For sales-type leases, the accounting is similar to the accounting for direct finance leases however, the difference between the FV and the carrying value of the leased item is recorded at lease commencement rather than deferred over the term of the lease.

Emera has certain contractual agreements that include lease and non-lease components, which management has elected to account for as a single lease component.

CASH, CASH EQUIVALENTS AND RESTRICTED CASH

Cash equivalents consist of highly liquid short-term investments with original maturities of three months or less at acquisition.

RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES

Utility customer receivables are recorded at the invoiced amount and do not bear interest. Standard payment terms for electricity and gas sales are approximately 30 days. A late payment fee may be assessed on account balances after the due date. The Company recognizes allowances for credit losses to reduce accounts receivable for amounts expected to be uncollectable. Management estimates credit losses related to accounts receivable by considering historical loss experience, customer deposits, current events, the characteristics of existing accounts and reasonable and supportable forecasts that affect the collectability of the reported amount. Provisions for credit losses on receivables are expensed to maintain the allowance at a level considered adequate to cover expected losses. Receivables are written off against the allowance when they are deemed uncollectible.

INVENTORY

Fuel and materials inventories are valued at the lower of weighted-average cost or net realizable value, unless evidence indicates the weighted-average cost will be recovered in future customer rates.

ASSET IMPAIRMENT

LONG-LIVED ASSETS:

Emera assesses whether there has been an impairment of long-lived assets and intangibles when a triggering event occurs, such as a significant market disruption or sale of a business.

The assessment involves comparing undiscounted expected future cash flows to the carrying value of the asset. When the undiscounted cash flow analysis indicates a long-lived asset is not recoverable, the amount of the impairment loss is determined by measuring the excess of the carrying amount of the long-lived asset over its estimated FV. The Company’s assumptions relating to future results of operations or other recoverable amounts, are based on a combination of historical experience, fundamental economic analysis, observable market activity and independent market studies. The Company’s expectations regarding uses and holding periods of assets are based on internal long-term budgets and projections, which consider external factors and market forces, as of the end of each reporting period. The assumptions made are consistent with generally accepted industry approaches and assumptions used for valuation and pricing activities.

In 2024, impairment charges of $19 million ($14 million after-tax) were recognized on certain assets, $8 million of which was included in Other income, net with $11 million included in Impairment charges on the Consolidated Income Statement. No impairment charges related to long-lived assets were recognized in 2023.

EQUITY METHOD INVESTMENTS:

The carrying value of investments accounted for under the equity method are assessed for impairment by comparing the FV of these investments to their carrying values, if a FV assessment was completed, or by reviewing for the presence of impairment indicators. If an impairment exists, and it is determined to be other-than-temporary, a charge is recognized in earnings equal to the amount the carrying value exceeds the investment’s FV. No impairment of equity method investments was required in either 2024 or 2023.

FINANCIAL ASSETS:

Equity investments, other than those accounted for under the equity method, are measured at FV, with changes in FV recognized in the Consolidated Statements of Income. Equity investments that do not have readily determinable FV are recorded at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investments. No impairment of financial assets was required in either 2024 or 2023.

ASSET RETIREMENT OBLIGATIONS

An ARO is recognized if a legal obligation exists in connection with the future disposal or removal costs resulting from the permanent retirement, abandonment or sale of a long-lived asset. A legal obligation may exist under an existing or enacted law or statute, written or oral contract, or by legal construction under the doctrine of promissory estoppel.

 

     
EMERA 2024 ANNUAL REPORT    83

Notes to the Consolidated Financial Statements

 

An ARO represents the FV of estimated cash flows necessary to discharge the future obligation, using the Company’s credit adjusted risk-free rate. The amounts are reduced by actual expenditures incurred. Estimated future cash flows are based on completed depreciation studies, remediation reports, prior experience, estimated useful lives, and governmental regulatory requirements. The present value of the liability is recorded and the carrying amount of the related long-lived asset is correspondingly increased. The amount capitalized at inception is depreciated in the same manner as the related long-lived asset. Over time, the liability is accreted to its estimated future value. AROs are included in “Other long-term liabilities” and accretion expense is included as part of “Depreciation and amortization”. Any regulated accretion expense not yet approved by the regulator is recorded in “PP&E” and included in the next depreciation study.

Some of the Company’s transmission and distribution assets may have conditional AROs that are not recognized in the consolidated financial statements, as the FV of these obligations could not be reasonably estimated, given insufficient information to do so. A conditional ARO refers to a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement are conditional on a future event that may or may not be within the control of the entity. Management monitors these obligations and a liability is recognized at FV in the period in which an amount can be determined.

COST OF REMOVAL (“COR”)

TEC, PGS, NMGC and NSPI recognize non-ARO COR as regulatory liabilities or regulatory assets. The non-ARO COR represent funds received from customers through depreciation rates to cover estimated future non-legally required COR of PP&E upon retirement. The companies accrue for COR over the life of the related assets based on depreciation studies approved by their respective regulators. The costs are estimated based on historical experience and future expectations, including expected timing and estimated future cash outlays.

STOCK-BASED COMPENSATION

The Company has several stock-based compensation plans: a common share option plan for senior management; an employee common share purchase plan; a deferred share unit (“DSU”) plan; a performance share unit (“PSU”) plan; and a restricted share unit (“RSU”) plan. The Company accounts for its plans in accordance with the FV-based method of accounting for stock- based compensation. Stock-based compensation cost is measured at the grant date, based on the calculated FV of the award, and is recognized as an expense over the employee’s or director’s requisite service period using the graded vesting method. Stock-based compensation plans recognized as liabilities are initially measured at FV and re-measured at FV at each reporting date, with the change in liability recognized in income.

EMPLOYEE BENEFITS

The costs of the Company’s pension and other post-retirement benefit programs for employees are expensed over the periods during which employees render service. The Company recognizes the funded status of its defined-benefit and other post- retirement plans on the balance sheet and recognizes changes in funded status in the year the change occurs. The Company recognizes unamortized gains and losses and past service costs in “AOCI” or “Regulatory assets” on the Consolidated Balance Sheets. The components of net periodic benefit cost other than the service cost component are included in “Other income, net” on the Consolidated Statements of Income. For further detail, refer to note 22.

GOVERNMENT GRANTS

The Company accounts for government grants by applying a grant accounting model by analogy to International Accounting Standards (“IAS”) 20, Accounting for Government Grants and Disclosure of Government Assistance. A grant relating to an asset is reflected in the determination of the carrying amount of the asset. A grant relating to income is presented as a deduction from the related expense it is intended to compensate.

In 2024, the Company received an aggregate of $47 million (2023 – $7 million) of government grants from various Canadian and US government agencies towards capital projects included in PP&E. The capital projects receiving grants primarily relate to the Company’s decarbonization and environmental compliance initiatives. Further details on significant grant programs utilized in 2024 and 2023 are noted below.

NATURAL RESOURCES CANADA (“NRCAN”) SMART RENEWABLES & ELECTRIFICATION PATHWAYS (“SREP”):

On March 27, 2024, NSPI was approved for a grant under the NRCan SREPs to fund the construction of three 50 MW battery storage systems in Nova Scotia. NSPI can make claims under the grant for 33 per cent of eligible project costs to a maximum $109 million. Eligible costs can be incurred until March 31, 2027. For the year-end December 31, 2024, NSPI received $26 million (2023 – nil) in funding under the grant, which has been recorded as a reduction to the carrying amount of the project in PP&E.

 

     
84    EMERA 2024 ANNUAL REPORT

Notes to the Consolidated Financial Statements

 

2. Change in Accounting Policy

The new USGAAP accounting policy that is applicable to, and adopted by the Company in 2024, is described as follows:

IMPROVEMENTS TO REPORTABLE SEGMENT DISCLOSURES

The Company adopted Accounting Standard Update (“ASU”) 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures. The change in the standard improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The changes improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses. The guidance was effective for annual reporting periods beginning after December 15, 2023, and for interim periods beginning after December 15, 2024. Adoption of the standard resulted in additional qualitative disclosures provided in note 5.

3. Future Accounting Pronouncements

The Company considers the applicability and impact of all ASUs issued by the Financial Accounting Standards Board (“FASB”). The following updates have been issued by the FASB, but as allowed, have not yet been adopted by Emera. Any ASUs not included below were assessed and determined to be either not applicable to the Company or to have an insignificant impact on the consolidated financial statements.

DISAGGREGATION OF INCOME STATEMENT EXPENSES

In November 2024, the FASB issued ASU 2024-03, Income Statement Reporting – Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The standard update improves the disclosures about a public business entity’s expenses by requiring more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation and amortization) included within income statement expense captions. The guidance will be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The standard updates are to be applied prospectively with the option for retrospective application. The Company is currently evaluating the impact of adoption of the standard update on its consolidated financial statements disclosures.

IMPROVEMENTS TO INCOME TAX DISCLOSURES

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The standard enhances the transparency, decision usefulness and effectiveness of income tax disclosures by requiring consistent categories and greater disaggregation of information in the reconciliation of income taxes computed using the enacted statutory income tax rate to the actual income tax provision and effective income tax rate, as well as the disaggregation of income taxes paid (refunded) by jurisdiction. The standard also requires disclosure of income (loss) before provision for income taxes and income tax expense (recovery) in accordance with U.S. Securities and Exchange Commission Regulation S-X 210.4-08(h), Rules of General Application – General Notes to Financial Statements: Income Tax Expense, and the removal of disclosures no longer considered cost beneficial or relevant. The guidance will be effective for annual reporting periods beginning after December 15, 2024. Early adoption is permitted. The standard will be applied on a prospective basis, with retrospective application permitted. The Company is currently evaluating the impact of adoption of the standard on its consolidated financial statements disclosures.

4. Dispositions

PENDING SALE OF NMGC

On August 5, 2024, Emera entered into an agreement to sell its indirect wholly owned subsidiary NMGC for a total enterprise value of approximately $1.3 billion USD, consisting of cash proceeds and the transfer of debt and customary closing adjustments. The transaction is expected to close in late 2025, subject to certain approvals, including approval by the NMPRC. As a result of the pending sale, NMGC’s assets and liabilities are classified as held for sale.

As the transaction proceeds will be lower than the carrying amount of the assets and liabilities being sold, Emera assessed the NMGC reporting unit for goodwill impairment by comparing the FV of expected transaction proceeds to the carrying value of net assets, including goodwill of $366 million USD (“NMGC carrying amount”). The goodwill of the reporting unit was determined to be impaired and a non-cash goodwill impairment charge of $210 million ($198 million, after-tax) or $155 million USD ($146 million USD, after-tax) was recorded in “Impairment Charges” on the Consolidated Statements of Income in Q3 2024.

 

     
EMERA 2024 ANNUAL REPORT    85

Notes to the Consolidated Financial Statements

 

Following the goodwill impairment assessment, the held for sale assets and liabilities were measured at the lower of their carrying amount or fair value less costs to sell. The measurement resulted in an additional loss for the estimated future transaction costs of $16 million ($12 million after-tax), in addition to incurred transaction costs of $9 million ($7 million after-tax) recorded in “Other Income, net” on the Consolidated Statements of Income in Q3 2024.

The Company will continue to record depreciation on the NMGC assets through the transaction closing date, as the depreciation continues to be reflected in customer rates and will be reflected in the carryover basis of the assets when sold. Depreciation and amortization of $26 million ($19 million USD) was recorded on these assets from August 5, 2024, the date they were classified as held for sale, through December 31, 2024.

Details of the assets and liabilities classified as held for sale are as follows:

 

As at

millions of dollars

    December 31
2024		  

Cash and cash equivalents

    $ 8  

Inventory

      9  

Derivative instruments

      1  

Regulatory assets

      28  

Receivables and other current assets

      127  
  

 

 

  

Current assets held for sale

    $ 173  
  

 

 

  

PP&E

      1,828  

Regulatory assets

      6  

Goodwill

      303  

Other long-term assets

      23  
  

 

 

  

Long-term assets held for sale

    $ 2,160  
  

 

 

  

Total assets held for sale

    $ 2,333  
  

 

 

  

Short-term debt

    $ 46  

Derivative instruments

      1  

Regulatory liabilities

      10  

Accounts payable and other current liabilities

      155  
  

 

 

  

Current liabilities associated with assets held for sale

      212  
  

 

 

  

Long-term debt

      696  

Deferred income taxes

      167  

Regulatory liabilities

      274  

Other long-term liabilities

      11  
  

 

 

  

Long-term liabilities associated with assets held for sale

    $ 1,148  
  

 

 

  

Total liabilities associated with assets held for sale

    $ 1,360  
  

 

 

  

SALE OF LIL EQUITY INTEREST

On June 4, 2024, Emera completed the sale of its 31.1 per cent indirect minority equity interest in the LIL for a total transaction value of $1.2 billion, including cash proceeds of $957 million and $235 million for assuming Emera’s contractual obligation to fund the remaining initial capital investment, which represents additional LIL equity interest for the acquirer. Cash proceeds from the sale in the amount of $30 million is held in escrow pending finalization of certain agreements with the LIL general partner. The escrow proceeds receivable is held at FV and included in the gain on sale, after transaction costs. As of December 31, 2024, the estimated FV of the escrow proceeds receivable is $25 million. In Q2 2024, a gain on sale, after transaction costs, of $182 million, ($107 million, after tax and transaction costs), was recognized in “Other Income, net” on the Consolidated Statements of Income and included in the Other segment. In Q4 2024, Emera recognized a $22 million tax benefit due to the reversal of a prior year valuation allowance related to loss carryforwards applied against a portion of the taxable capital gain on the sale of LIL. This tax benefit was recorded in “Income Tax (Recovery) Expense” on the Consolidated Statements of Income in Q4 2024 and included in the Other segment.

 

     
86    EMERA 2024 ANNUAL REPORT

Notes to the Consolidated Financial Statements

 

5. Segment Information

Emera manages its reportable segments separately due in part to their different operating, regulatory and geographical environments. Segments are reported based on each subsidiary’s contribution of revenues, net income attributable to common shareholders and total assets, as reported to the Company’s chief operating decision maker (“CODM”). Emera’s CODM is the Chief Executive Officer.

For the Company’s reportable segments, the CODM uses several measures to allocate capital and resources for each segment, predominantly in the annual budget and forecasting processes. The CODM evaluates segment performance by considering budget-to-actual variances for these measures monthly. The measure used by the CODM that is the most consistent with USGAAP measurement principles is net income attributable to common shareholders.

 

millions of dollars

    Florida
Electric
Utility		      Canadian
Electric
Utilities		     Gas
Utilities and
Infrastructure		      Other
Electric
Utilities		      Other     Inter-
Segment
Eliminations		     Total  

For the year ended December 31, 2024

                  

Operating revenues from external customers (1)

    $ 3,451      $ 1,855     $ 1,595      $ 566      $ (267 )    $ —      $ 7,200  

Inter-segment revenues (1)

      9        —        14        —         19       (42 )      —   
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Total operating revenues

      3,460        1,855       1,609        566        (248 )      (42 )      7,200  
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Regulated fuel for generation and purchased power

      852        859       —         295        —        (14 )      1,992  
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Regulated cost of natural gas

      —         —        396        —         —        —        396  
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

OM&G

      779        408       454        143        154       (20 )      1,918  
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Provincial, state and municipal taxes

      273        48       103        3        —        —        427  
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Depreciation and amortization

      622        282       182        69        7       —        1,162  
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Impairment charges

      —         —        11        —         214       —        225  
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Income from equity investments

      —         73       20        4        2       —        99  
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Other income, net

      66        28       16        12        73       8       203  
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Interest expense, net (2)

      265        168       151        22        367       —        973  
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Income tax expense (recovery)

      94        (41 )      89        1        (302 )      —        (159 ) 
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

NCI in subsidiaries

      —         —        —         1        —        —        1  
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Preferred stock dividends

      —         —        —         —         73       —        73  
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Net income (loss) attributable to common shareholders

    $ 641      $ 232     $ 259      $ 48      $ (686 )    $ —      $ 494  
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Capital expenditures

    $ 1,942      $ 481     $ 619      $ 81      $ 4     $ —      $ 3,127  
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

As at December 31, 2024

                  

Total assets

    $ 24,375      $ 7,609     $ 8,439      $ 1,444      $ 1,810     $ (726 )    $ 42,951  
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Investments subject to significant influence

    $ —       $ 475     $ 124      $ 55      $ —      $ —      $ 654  
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Goodwill

    $ 5,035      $ —      $ 823      $ —       $ —      $ —      $ 5,858  
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

 

(1)

All significant inter-company balances and transactions have been eliminated on consolidation except for certain transactions between non-regulated and regulated entities. Management believes elimination of these transactions would understate PP&E, OM&G, or regulated fuel for generation and purchased power. Inter-company transactions that have not been eliminated are measured at the amount of consideration established and agreed to by the related parties. Eliminated transactions are included in determining reportable segments.

(2)

Segment net income is reported on a basis that includes internally allocated financing costs of $29 million for the year ended December 31, 2024, between the Gas Utilities and Infrastructure and Other segments.

 

     
EMERA 2024 ANNUAL REPORT    87

Notes to the Consolidated Financial Statements

 

millions of dollars

    Florida
Electric
Utility		      Canadian
Electric
Utilities		     Gas
Utilities and
Infrastructure		      Other
Electric
Utilities		      Other     Inter-
Segment
Eliminations		     Total  

For the year ended December 31, 2023

                  

Operating revenues from external customers (1)

    $ 3,548      $ 1,671     $ 1,510      $ 526      $ 308     $ —      $ 7,563  

Inter-segment revenues (1)

      8        —        14        —         31       (53 )      —   
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Total operating revenues

      3,556        1,671       1,524        526        339       (53 )      7,563  
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Regulated fuel for generation and purchased power

      920        699       —         275        —        (13 )      1,881  
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Regulated cost of natural gas

      —         —        527        —         —        —        527  
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

OM&G

      830        384       405        130        151       (21 )      1,879  
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Provincial, state and municipal taxes

      289        45       91        3        5       —        433  
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Depreciation and amortization

      571        276       126        68        8       —        1,049  
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Income from equity investments

      —         109       21        4        12       —        146  
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Other income, net

      69        32       11        7        20       19       158  
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Interest expense, net (2)

      271        170       129        23        332       —        925  
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Income tax expense (recovery)

      117        (9 )      64        —         (44 )      —        128  
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

NCI in subsidiaries

      —         —        —         1        —        —        1  
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Preferred stock dividends

      —         —        —         —         66       —        66  
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Net income (loss) attributable to common shareholders

    $ 627      $ 247     $ 214      $ 37      $ (147 )    $ —      $ 978  
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Capital expenditures

    $ 1,736      $ 450     $ 664      $ 63      $ 8     $ —      $ 2,921  
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

As at December 31, 2023

                  

Total assets

    $ 21,119      $ 8,634     $ 7,735      $ 1,311      $ 1,938     $ (1,257 )    $ 39,480  
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Investments subject to significant influence

    $ —       $ 1,236     $ 118      $ 48      $ —      $ —      $ 1,402  
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Goodwill

    $ 4,628      $ —      $ 1,240      $ —       $ 3     $ —      $ 5,871  

 

(1)

All significant inter-company balances and transactions have been eliminated on consolidation except for certain transactions between non-regulated and regulated entities. Management believes elimination of these transactions would understate PP&E, OM&G, or regulated fuel for generation and purchased power. Inter-company transactions that have not been eliminated are measured at the amount of consideration established and agreed to by the related parties. Eliminated transactions are included in determining reportable segments.

(2)

Segment net income is reported on a basis that includes internally allocated financing costs of $95 million for the year ended December 31, 2023, between the Florida Electric Utility, Gas Utilities and Infrastructure and Other segments.

GEOGRAPHICAL INFORMATION

Revenues (based on country of origin of the product or service sold)

 

     Year ended December 31  

For the

millions of dollars

    2024      2023  

United States

    $ 4,712      $ 5,310  

Canada

      1,922        1,727  

Barbados

      427        389  

The Bahamas

      139        137  
   $ 7,200      $ 7,563  
PP&E:      

As at

millions of dollars

    December 31
2024		      December 31
2023		  

United States (1)

    $ 20,084      $ 18,588  

Canada

      5,068        4,878  

Barbados

      645        576  

The Bahamas

      371        334  
  

 

 

     

 

 

  
   $ 26,168      $ 24,376  

 

(1)

On August 5, 2024, Emera announced an agreement to sell NMGC. As at December 31, 2024, NMGC’s assets and liabilities were classified as held for sale and excluded from the table above. For further details on the pending transaction, refer to note 4.

 

     
88   EMERA 2024 ANNUAL REPORT

Notes to the Consolidated Financial Statements

 

6. Revenue

The following disaggregates the Company’s revenue by major source:

 

     Electric      Gas      Other        

millions of dollars

    Florida
Electric
Utility		     Canadian
Electric
Utilities		      Other
Electric
Utilities		      Gas Utilities
and
Infrastructure		      Other     Inter-
Segment
Eliminations		     Total  

For the year ended December 31, 2024

                  

Regulated Revenue

                  

Residential

    $ 2,063     $ 997      $ 203      $ 712      $ —      $ —      $ 3,975  

Commercial

      939       499        300        496        —        —        2,234  

Industrial

      223       276        28        94        —        (14 )      607  

Other electric

      372       41        7        —         —        —        420  

Regulatory deferrals

      (157 )      —         15        —         —        —        (142 ) 

Other (1)

      20       42        13        224        —        (9 )      290  

Finance income (2)(3)

      —        —         —         63        —        —        63  
  

 

 

    

 

 

     

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Regulated revenue

    $ 3,460     $ 1,855      $ 566      $ 1,589      $ —      $ (23 )    $ 7,447  
  

 

 

    

 

 

     

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Non-Regulated Revenue

                  

Marketing and trading margin (4)

      —        —         —         —         77       —        77  

Other non-regulated operating revenue

      —        —         —         20        32       (24 )      28  

Mark-to-market (3)

      —        —         —         —         (357 )      5       (352 ) 
  

 

 

    

 

 

     

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Non-regulated revenue

    $ —      $ —       $ —       $ 20      $ (248 )    $ (19 )    $ (247 ) 
  

 

 

    

 

 

     

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Total operating revenues

    $ 3,460     $ 1,855      $ 566      $ 1,609      $ (248 )    $ (42 )    $ 7,200  

For the year ended December 31, 2023

                  

Regulated Revenue

                  

Residential

    $ 2,307     $ 910      $ 183      $ 724      $ —      $ —      $ 4,124  

Commercial

      1,083       463        285        425        —        —        2,256  

Industrial

      274       219        33        93        —        (13 )      606  

Other electric

      395       41        7        —         —        —        443  

Regulatory deferrals

      (522 )      —         12        —         —        —        (510 ) 

Other (1)

      19       38        6        199        —        (8 )      254  

Finance income (2)(3)

      —        —         —         62        —        —        62  
  

 

 

    

 

 

     

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Regulated revenue

    $ 3,556     $ 1,671      $ 526      $ 1,503      $ —      $ (21 )    $ 7,235  
  

 

 

    

 

 

     

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Non-Regulated

                  

Marketing and trading margin (4)

      —        —         —         —         96       —        96  

Other non-regulated operating revenue

      —        —         —         21        27       (23 )      25  

Mark-to-market (3)

      —        —         —         —         216       (9 )      207  
  

 

 

    

 

 

     

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Non-regulated revenue

    $ —      $ —       $ —       $ 21      $ 339     $ (32 )    $ 328  
  

 

 

    

 

 

     

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Total operating revenues

    $ 3,556     $ 1,671      $ 526      $ 1,524      $ 339     $ (53 )    $ 7,563  
  

 

 

    

 

 

     

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

 

(1)

Other includes rental revenues, which do not represent revenue from contracts with customers.

(2)

Revenue related to Brunswick Pipeline’s service agreement with Repsol Energy Canada.

(3)

Revenue which does not represent revenues from contracts with customers.

(4)

Includes gains (losses) on settlement of energy related derivatives, which do not represent revenue from contracts with customers.

REMAINING PERFORMANCE OBLIGATIONS:

Remaining performance obligations primarily represent gas transportation contracts, lighting contracts, and long-term steam supply arrangements with fixed contract terms. As of December 31, 2024, the aggregate amount of the transaction price allocated to remaining performance obligations was $495 million (2023 – $488 million), including $3 million related to NMGC. This amount includes $135 million of future performance obligations related to a gas transportation contract between SeaCoast and PGS through 2040. This amount excludes contracts with an original expected length of one year or less and variable amounts for which Emera recognizes revenue at the amount to which it has the right to invoice for services performed. Emera expects to recognize revenue for the remaining performance obligations through 2044.

 

     
EMERA 2024 ANNUAL REPORT   89

Notes to the Consolidated Financial Statements

 

7. Regulatory Assets and Liabilities

Regulatory assets represent prudently incurred costs that have been deferred because it is probable they will be recovered through future rates or tolls collected from customers. Management believes existing regulatory assets are probable for recovery either because the Company received specific approval from the applicable regulator, or due to regulatory precedent established for similar circumstances. If management no longer considers it probable that an asset will be recovered, deferred costs are charged to income.

Regulatory liabilities represent obligations to make refunds to customers or to reduce future revenues for previous collections. If management no longer considers it probable that a liability will be settled, the related amount is recognized in income.

For regulatory assets and liabilities that are amortized, the amortization is as approved by the respective regulator.

 

As at

millions of dollars

    December 31
2024 (1)		      December 31
2023		  

Regulatory assets

      

Deferred income tax regulatory assets

    $ 1,227      $ 1,233  

TEC capital cost recovery for early retired assets

      737        671  

Storm cost recovery clauses

      613        52  

Pension and post-retirement medical plan

      395        364  

TEC capital cost recovery for retired Polk Unit 1 components

      205        —   

Deferrals related to derivative instruments

      42        88  

Cost recovery clauses

      33        151  

Environmental remediations

      29        26  

Stranded cost recovery

      27        25  

NSPI FAM

      —         395  

Other (2)

      119        100  
  

 

 

     

 

 

  
   $ 3,427      $ 3,105  
  

 

 

     

 

 

  

Current

    $ 595      $ 339  

Long-term

      2,832        2,766  
  

 

 

     

 

 

  

Total regulatory assets

    $ 3,427      $ 3,105  
  

 

 

     

 

 

  

Regulatory liabilities

      

Deferred income tax regulatory liabilities

      828        830  

Accumulated reserve – COR

      733        849  

Cost recovery clauses

      121        32  

NSPI FAM

      56        —   

Deferrals related to derivative instruments

      44        17  

BLPC Self-insurance fund (“SIF”) (note 33)

      32        29  

Other (2)

      66        15  
  

 

 

     

 

 

  
   $ 1,880      $ 1,772  
  

 

 

     

 

 

  

Current

    $ 262      $ 168  

Long-term

      1,618        1,604  
  

 

 

     

 

 

  

Total regulatory liabilities

    $ 1,880      $ 1,772  
  

 

 

     

 

 

  

 

(1)

On August 5, 2024, Emera announced an agreement to sell NMGC. As at December 31, 2024, NMGC’s assets and liabilities were classified as held for sale and excluded from the table above. For further details on the pending transaction, refer to note 4.

(2)

Comprised of regulatory assets and liabilities that are not individually significant.

DEFERRED INCOME TAX REGULATORY ASSETS AND LIABILITIES

To the extent deferred income taxes are expected to be recovered from or returned to customers in future years, a regulatory asset or liability is recognized as appropriate.

TEC CAPITAL COST RECOVERY FOR EARLY RETIRED ASSETS

Represents the remaining net book value of Big Bend Power Station Units 1 through 3 and smart meter assets that were early retired. The balance earns a rate of return as permitted by the FPSC and is recovered as a separate line item on customer bills for a period of 15 years, beginning in January 2022.

 

     
90   EMERA 2024 ANNUAL REPORT

Notes to the Consolidated Financial Statements

 

STORM COST RECOVERY CLAUSES

TEC AND PGS STORM RESERVE:

The storm reserve is for hurricanes and other named storms that cause significant damage to TEC and PGS systems. As allowed by the FPSC, if charges to the storm reserve exceed the storm reserve liability, the excess is to be carried as a regulatory asset. TEC and PGS can petition the FPSC to seek recovery of restoration costs over a 12-month period or longer, as determined by the FPSC, as well as replenish the reserve.

NSPI STORM RIDER:

NSPI has a UARB approved storm rider for each of 2023, 2024 and 2025, which gives NSPI the ability to apply to the UARB for recovery of costs if major storm restoration expenses exceed approximately $10 million in a given year. The storm rider was effective as of the General Rate Application (“GRA”) decision date. The application for deferral and recovery of the storm rider is made in the year following the year of the incurred cost, with recovery beginning in the year after the application.

GBPC STORM RESTORATION:

This asset includes storm restoration costs incurred by GBPC related to Hurricane Dorian in 2020 and Hurricane Matthew in 2016.

PENSION AND POST-RETIREMENT MEDICAL PLAN

This asset is primarily related to the deferred costs of pension and post-retirement benefits at TEC, PGS and, in 2023, NMGC. Deferred costs of postretirement benefits that are included in expense are recognized as cost of service for rate-making purposes as permitted by the FPSC and New Mexico Public Regulation Commission (“NMPRC”), as applicable and amortized over the remaining service life of plan participants.

TEC CAPITAL COST RECOVERY FOR RETIRED POLK UNIT 1 COMPONENTS

This regulatory asset relates to the remaining net book value of certain components of Polk Unit 1 that were early retired on December 31, 2024. The balance earns a rate of return as permitted by the FPSC and will be recovered through base rates over an 11-year recovery period beginning on January 1, 2025.

DEFERRALS RELATED TO DERIVATIVE INSTRUMENTS

This asset is primarily related to NSPI deferring changes in FV of derivatives that are documented as economic hedges or that do not qualify for NPNS exemption, as a regulatory asset or liability as approved by the UARB. The realized gain or loss is recognized when the hedged item settles in regulated fuel for generation and purchased power, other income, inventory, or OM&G, depending on the nature of the item being economically hedged.

COST RECOVERY CLAUSES

These assets and liabilities are clauses and riders related to TEC, PGS and, in 2023, NMGC. They are recovered or refunded through cost-recovery mechanisms approved by the FPSC or NMPRC, as applicable, on a dollar-for-dollar basis in a subsequent period.

ENVIRONMENTAL REMEDIATIONS

This asset is primarily related to PGS costs associated with environmental remediation at Manufactured Gas Plant sites. The balance is included in rate base, partially offsetting the related liability, and earns a rate of return as permitted by the FPSC. The timing of recovery is based on a settlement agreement approved by the FPSC.

STRANDED COST RECOVERY

Due to decommissioning of a GBPC steam turbine in 2012, the GBPA approved recovery of a $21 million USD stranded cost through electricity rates; it is included in rate base and expected to be included in rates in future years.

NSPI FAM

NSPI has a FAM, approved by the UARB, allowing NSPI to recover fluctuating fuel and certain fuel-related costs from customers through regularly scheduled fuel rate adjustments. Differences between prudently incurred fuel costs and amounts recovered from customers through electricity rates in a year are deferred to a FAM regulatory asset or liability and recovered from or returned to customers in subsequent periods.

ACCUMULATED RESERVE – COR

This regulatory asset or liability represents the non-ARO COR reserve in TEC, PGS, NSPI and in 2023, NMGC. AROs represent the FV of estimated cash flows associated with the Company’s legal obligation to retire its PP&E. Non-ARO COR represent estimated funds received from customers through depreciation rates to cover future COR of PP&E value upon retirement that are not legally required. This reduces rate base for ratemaking purposes. This liability is reduced as COR are incurred and increased as depreciation is recorded for existing assets and as new assets are put into service.

 

     
EMERA 2024 ANNUAL REPORT   91

Notes to the Consolidated Financial Statements

 

Regulatory Environments and Updates

FLORIDA ELECTRIC UTILITY

TEC is regulated by the FPSC and is also subject to regulation by the Federal Energy Regulatory Commission. The FPSC sets rates at a level that allows utilities such as TEC to collect total revenues or revenue requirements equal to their cost of providing service, plus an appropriate return on invested capital. Base rates are determined in FPSC rate setting hearings which can occur at the initiative of TEC, the FPSC or other interested parties.

TEC’s approved regulated return on equity (“ROE”) range for 2024 and 2023 was 9.25 per cent to 11.25 per cent based on an allowed equity capital structure of 54 per cent. An ROE of 10.20 per cent (2023 – 10.20 per cent) is used for the calculation of the return on investments for clauses.

Base Rates:

On April 2, 2024, TEC filed a rate case with the FPSC for new base rates. On December 3, 2024, the FPSC rendered a decision which includes annual base rate increases of $185 million USD in 2025 and adjustments of $87 million USD and $9 million USD in 2026 and 2027, respectively. The allowed equity in the capital structure will continue to be 54 per cent from investor sources of capital and the allowed regulatory ROE range is 9.50 per cent to 11.50 per cent with a 10.50 per cent midpoint. On February 3, 2025, the FPSC issued the final order approving the decision, effective January 1, 2025. On February 18, 2025, a motion for reconsideration on certain aspects of the rate case order was filed with the FPSC.

On August 16, 2023, TEC filed a petition to implement the 2024 Generation Base Rate Adjustment provisions pursuant to the 2021 rate case settlement agreement. Inclusive of TEC’s ROE adjustment, the increase of $22 million USD was approved by the FPSC on November 17, 2023.

Fuel Recovery and Other Cost Recovery Clauses:

TEC has a fuel recovery clause approved by the FPSC, allowing the opportunity to recover fluctuating fuel expenses from customers through annual fuel rate adjustments. The FPSC annually approves cost-recovery rates for purchased power, capacity, environmental and conservation costs, including a return on capital invested. Differences between prudently incurred fuel costs and the cost-recovery rates and amounts recovered from customers through electricity rates in a year are deferred to a regulatory asset or liability and recovered from or returned to customers in subsequent periods.

On April 2, 2024, TEC requested a mid-course adjustment to its fuel and capacity charges, reflecting a $138 million USD reduction over 12 months, from June 2024 through May 2025. The requested reduction was due to a decrease in actual and projected 2024 natural gas prices since TEC submitted its projected 2024 costs in the fall of 2023. On May 7, 2024, the FPSC approved the mid-course adjustment.

On January 23, 2023, TEC requested an adjustment to its fuel charges to recover the 2022 fuel under-recovery of $518 million USD over a period of 21 months. The request also included an adjustment to 2023 projected fuel costs to reflect the reduction in natural gas prices since September 2022 for a projected reduction of $170 million USD for the balance of 2023. The changes were approved by the FPSC on March 7, 2023, and were effective beginning on April 1, 2023.

Storm Reserve:

On September 26, 2024, Hurricane Helene passed 100 miles west of Tampa and made landfall approximately 200 miles north of Tampa, in Taylor County, as a Category 4 hurricane. TEC’s service territory was impacted by the tropical storm force winds and storm surge which resulted in a peak number of customers out of 100,000. As of December 31, 2024, TEC deferred

$49 million USD to the storm reserve for future recovery.

On October 9, 2024, Hurricane Milton made landfall approximately 50 miles south of Tampa, near Sarasota, and was the worst weather event to impact the area in over 100 years. The Category 3 hurricane had a significant impact on TEC’s service territory which resulted in a peak number of customers out of 600,000. As of December 31, 2024, TEC deferred $340 million USD to the storm reserve for future recovery.

As at December 31, 2024, total restoration costs charged to the storm reserve account have exceeded the storm reserve balance, and therefore $377 million USD has been deferred as a regulatory asset for future recovery. On February 4, 2025, the FPSC approved TEC’s petition, filed on December 27, 2024, for the recovery of $466 million USD for costs associated with Hurricane Idalia, Hurricane Debby, Hurricane Helene and Hurricane Milton and the associated interest which will replenish the storm reserve over an 18-month recovery period beginning March 2025. The amount of cost-recovery is subject to a true-up mechanism with the FPSC.

 

     
92   EMERA 2024 ANNUAL REPORT

Notes to the Consolidated Financial Statements

 

In September 2022, TEC was impacted by Hurricane Ian, with $119 million USD of restoration costs charged against TEC’s FPSC approved storm reserve. On January 23, 2023, TEC petitioned the FPSC for recovery of the storm reserve regulatory asset and the replenishment of the balance in the storm reserve to the approved storm reserve level of $56 million USD, for a total of $131 million USD. The storm cost recovery surcharge was approved by the FPSC on March 7, 2023, and TEC began applying the surcharge in April 2023. Subsequently, on November 9, 2023, the FPSC approved TEC’s petition, filed on August 16, 2023, to update the total storm cost collection to $134 million USD. The remaining balance of $29 million USD as of December 31, 2023, was collected over 12 months in 2024.

Storm Protection Cost Recovery Clause and Settlement Agreement:

The Storm Protection Plan Cost Recovery Clause provides a process for Florida investor-owned utilities, including TEC, to recover transmission and distribution storm hardening costs for incremental activities not already included in base rates. Differences between prudently incurred clause-recoverable costs and amounts recovered from customers through electricity rates in a year are deferred and recovered from or returned to customers in a subsequent year. The current approved plan addressed the years 2023, 2024 and 2025 and was approved by the FPSC in October, 2022.

CANADIAN ELECTRIC UTILITIES

NSPI

NSPI is a public utility as defined in the Public Utilities Act of Nova Scotia (“Public Utilities Act”) and is subject to regulation under the Public Utilities Act by the UARB. The Public Utilities Act gives the UARB supervisory powers over NSPI’s operations and expenditures. Electricity rates for NSPI’s customers are also subject to UARB approval. NSPI is not subject to a general annual rate review process, but rather participates in hearings held from time to time at NSPI’s or the UARB’s request.

NSPI is regulated under a cost-of-service model, with rates set to recover prudently incurred costs of providing electricity service to customers and provide a reasonable return to investors. NSPI’s approved regulated ROE range for 2024 and 2023 was 8.75 per cent to 9.25 per cent based on an actual five quarter average regulated common equity component of up to 40 per cent of approved rate base.

GRA:

On February 2, 2023, the UARB approved the GRA settlement agreement between NSPI, key customer representatives and participating interest groups. This resulted in average customer rate increases of 6.9 per cent effective on February 2, 2023, and further average increases of 6.5 per cent on January 1, 2024, with any under or over-recovery of fuel costs addressed through the UARB’s established FAM process. It also established a storm rider and a demand-side management rider. On March 27, 2023, the UARB issued a final order approving the electricity rates effective on February 2, 2023.

Fuel Recovery:

On April 17, 2024, the UARB approved the sale of $117 million of the FAM regulatory asset to Invest Nova Scotia, a provincial Crown corporation. On April 30, 2024, the transaction closed and the $117 million was remitted to NSPI, which resulted in a corresponding decrease of the FAM regulatory asset. NSPI is collecting the amortization and financing costs related to the

$117 million from customers on behalf of Invest Nova Scotia over a 10-year period, which began in Q2 2024, and is remitting those amounts to Invest Nova Scotia quarterly.

Federal Loan Guarantee (“FLG”):

On September 24, 2024, the Government of Canada finalized an agreement with NSPI, NSPML and the Province of Nova Scotia (the “Province”) on terms and conditions for a FLG of $500 million in debt to be issued by NSPML to help Nova Scotia customers manage unrecovered costs of the replacement energy that was required during the several years of delay in the Muskrat Falls hydroelectricity project. On September 25, 2024, NSPI and NSPML filed applications with the UARB related to the FLG. On November 29, 2024, the UARB approved NSPML’s application to issue the debt, transfer the proceeds to NSPI as a refund of a portion of previous NSPML assessment payments, and to increase its annual assessment charge to NSPI to recover the refund and related financing costs over a 28-year period. On December 16, 2024, the net proceeds of the NSPML debt issuance were transferred to NSPI and applied against the FAM regulatory asset balance. On February 18, 2025, the UARB approved NSPI’s application to increase 2025 fuel rates to service the incremental NSPML debt.

 

     
EMERA 2024 ANNUAL REPORT   93

Notes to the Consolidated Financial Statements

 

Storm Rider:

On December 2, 2024, the UARB approved the recovery of $24 million of major storm restoration and incremental financing costs deferred to NSPI’s storm rider in 2023 to be recovered over a 12-month period beginning on January 1, 2025.

Hurricane Fiona:

On June 27, 2024, the UARB approved the deferred recognition of $25 million in incremental operating costs incurred during the Hurricane Fiona storm restoration efforts in September 2022. Following UARB approval, the $25 million was reclassified to “Regulatory assets” from “Other long-term assets”. The UARB also directed NSPI to reclassify $10 million of undepreciated costs related to assets retired because of Hurricane Fiona to “Regulatory assets” from “PP&E” on the Consolidated Balance Sheets. NSPI began amortizing both of these regulatory assets over a 10-year period beginning July 1, 2024.

Nova Scotia Cap-and-Trade (“Cap-and-Trade”) Program:

On December 31, 2022, the FAM included a cumulative $166 million in fuel costs related to the accrued purchase of emissions credits and $6 million related to credits purchased from provincial auctions. On March 16, 2023, the Province provided NSPI with emissions allowances sufficient to achieve compliance for the 2019 through 2022 period. As such, compliance costs accrued of $166 million were reversed in Q1 2023. The credits NSPI purchased from provincial auctions in the amount of $6 million were not refunded and no further costs were incurred to achieve compliance with the Cap-and-Trade Program.

Extra Large Industrial Active Demand Tariff:

On July 5, 2023, NSPI received approval from the UARB to change the methodology in which fuel cost recovery from an industrial customer is calculated. Due to significant volatility in commodity prices in 2022, the previous methodology did not result in a reasonable determination of the fuel cost to serve this customer. The change in methodology, effective January 1, 2022, results in a shifting of fuel costs from this industrial customer to the FAM. This adjustment was recorded in Q2 2023 resulting in a $51 million increase to the FAM regulatory asset and an offsetting decrease to unbilled revenue within Receivables and other current assets. This adjustment had minimal impact on earnings.

NSPML

Equity earnings from the Maritime Link are dependent on the approved ROE and operational performance of NSPML. NSPML’s approved regulated ROE range is 8.75 per cent to 9.25 per cent, based on an actual five-quarter average regulated common equity component of up to 30 per cent.

Newfoundland and Labrador Hydro’s (“NLH”) Nova Scotia Block (“NS Block”) delivery obligations commenced in 2021 and delivery will continue over the next 35 years pursuant to the agreements.

On September 24, 2024, the Government of Canada finalized an agreement with NSPI, NSPML, and the Province on terms and conditions for a FLG of $500 million in debt to be issued by NSPML. For further information, refer to the NSPI section above.

On November 29, 2024, NSPML received approval from the UARB to collect up to $197 million in 2025 from NSPI; which includes $158 million for the recovery of costs associated with the Maritime Link, and $39 million associated with the additional FLG debt and financing costs noted in the NSPI section above. Payments from NSPI are subject to a holdback of up to $4 million per month. There was no holdback recorded for the year ended December 31, 2024.

On December 21, 2023, NSPML received approval from the UARB to collect up to $164 million in 2024 from NSPI for the recovery of costs associated with the Maritime Link subject to a holdback of $4 million per month.

On October 4, 2023 and January 31, 2024, the UARB issued decisions providing clarification on remaining aspects of the Maritime Link holdback mechanism primarily relating to release of past and future holdback amounts and requirements to end the holdback mechanism. In these decisions, the UARB agreed with the Company’s submission that $12 million ($8 million related to 2022 and $4 million related to 2023) of the previously recorded holdback remain credited to NSPI’s FAM, with the remainder released to NSPML and recorded in Emera’s “Income from equity investments”. The UARB also confirmed that NSPML can apply for termination of the holdback mechanism upon 90 per cent of NS Block deliveries being achieved for 12 consecutive months (subject to potential relief for planned outages or exceptional circumstances) and the net outstanding balance of previously underdelivered NS Block energy is less than 10 per cent of the contracted annual amount. In addition, the UARB increased the monthly holdback amount from $2 million to $4 million beginning December 1, 2023.

 

     
94   EMERA 2024 ANNUAL REPORT

Notes to the Consolidated Financial Statements

 

GAS UTILITIES AND INFRASTRUCTURE

PGS

PGS is regulated by the FPSC. The FPSC sets rates at a level that allows utilities such as PGS to collect total revenues or revenue requirements equal to their cost of providing service, plus an appropriate return on invested capital.

PGS’s approved ROE range for 2024 and 2023 was 9.15 per cent to 11.15 per cent with a 10.15 per cent midpoint, based on an allowed equity capital structure of 54.7 per cent.

Base Rates:

On April 4, 2023, PGS filed a rate case with the FPSC and a hearing for the matter was held in September 2023. On November 9, 2023, the FPSC approved a $118 million USD increase to base revenues which includes $11 million USD transferred from the cast iron and bare steel replacement rider, for a net incremental increase to base revenues of $107 million USD. This reflects a 10.15 per cent midpoint ROE with an allowed equity capital structure of 54.7 per cent. A final order was issued on December 27, 2023, with the new rates effective January 2024.

Fuel Recovery:

PGS recovers the costs it pays for gas supply and interstate transportation for system supply through its Purchased Gas Adjustment Clause (“PGAC”). This clause is designed to recover actual costs incurred by PGS for purchased gas, gas storage services, interstate pipeline capacity, and other related items associated with the purchase, distribution, and sale of natural gas to its customers. These charges may be adjusted monthly based on a cap approved annually by the FPSC.

Recovery of Energy Conservation and Pipeline Replacement Programs:

The FPSC annually approves a conservation charge that is intended to permit PGS to recover prudently incurred expenditures in developing and implementing cost effective energy conservation programs which are required by Florida law and approved and monitored by the FPSC. PGS also has a Cast Iron/Bare Steel Pipe Replacement clause to recover the cost of accelerating the replacement of cast iron and bare steel distribution lines in the PGS system. In February 2017, the FPSC approved expansion of the Cast Iron/Bare Steel clause to allow recovery of accelerated replacement of certain obsolete plastic pipe. The majority of cast iron and bare steel pipe has been removed from its system, with replacement of obsolete plastic pipe continuing until 2028 under the rider.

NMGC

NMGC is subject to regulation by the NMPRC. The NMPRC sets rates at a level that allows NMGC to collect total revenues equal to its cost of providing service, plus an appropriate return on invested capital.

NMGC’s approved ROE for 2024 and 2023 was 9.375 per cent on an allowed equity capital structure of 52 per cent.

Base Rates:

On September 14, 2023, NMGC filed a rate case with the NMPRC for new base rates. On March 1, 2024, NMGC filed with the NMPRC a settlement with the support of all parties in the case for an increase of $30 million USD in annual base revenues and maintaining NMGC’s ROE at 9.375 per cent. The rates reflect the recovery of increased operating costs and capital investments in pipeline projects and related infrastructure, as well as a new customer information and billing system. NMGC also agreed to withdraw, and to not reassert in a future rate case application, its request for a regulatory asset for costs associated with its 2022 application for a certificate of public convenience and necessity for a liquefied natural gas storage facility in New Mexico. The NMPRC approved the rate case settlement on July 25, 2024. New rates became effective October 1, 2024.

Fuel Recovery:

NMGC recovers gas supply costs through a PGAC. This clause recovers actual costs for purchased gas, gas storage services, interstate pipeline capacity, and other related items associated with the purchase, transmission, distribution, and sale of natural gas to its customers. On a monthly basis, NMGC can adjust charges based on the next month’s expected cost of gas and any prior month under-recovery or over-recovery. The NMPRC requires that NMGC annually file a reconciliation of the PGAC period costs and recoveries. NMGC must file a PGAC Continuation Filing with the NMPRC every four years to establish that the continued use of the PGAC is reasonable and necessary. NMGC received approval of its PGAC Continuation in December 2024, for the four-year period ending December 2028.

 

     
EMERA 2024 ANNUAL REPORT   95

Notes to the Consolidated Financial Statements

 

BRUNSWICK PIPELINE

Brunswick Pipeline is a 145-kilometre pipeline delivering natural gas from the Saint John LNG import terminal near Saint John, New Brunswick to markets in the northeastern US. Brunswick Pipeline entered into a 25-year firm service agreement commencing in July 2009 with Repsol Energy Canada. The agreement provides for a predetermined toll increase in the fifth and fifteenth year of the contract. The pipeline is considered a Group II pipeline regulated by the Canada Energy Regulator (“CER”). The CER Gas Transportation Tariff is filed by Brunswick Pipeline in compliance with the requirements of the CER Act and sets forth the terms and conditions of the transportation rendered by Brunswick Pipeline.

OTHER ELECTRIC UTILITIES

BLPC

BLPC is regulated by the Fair Trading Commission (“FTC”), under the Utilities Regulation (Procedural) Rules 2003. BLPC is regulated under a cost-of-service model, with rates set to recover prudently incurred costs of providing electricity service to customers plus an appropriate return on capital invested. BLPC’s approved regulated return on rate base was 10 per cent for 2024 and 2023.

Licenses:

BLPC currently operates pursuant to a single integrated license to generate, transmit and distribute electricity on the island of Barbados until 2028. In 2019, the Government of Barbados passed legislation requiring multiple licenses for the supply of electricity. In 2021, BLPC reached commercial agreement with the Government of Barbados for each of the license types, subject to the passage of implementing legislation. The timing of the final enactment is unknown at this time, but BLPC will work towards the implementation of the licenses once enacted.

Base Rates:

In 2021, BLPC submitted a general rate review application to the FTC. In September 2022, the FTC granted BLPC interim rate relief, allowing an increase in base rates of approximately $1 million USD per month. On February 15, 2023, the FTC issued a decision on the application which included the following significant items: an allowed regulatory ROE of 11.75 per cent, an equity capital structure of 55 per cent, a directive to update the major components of rate base to September 16, 2022, and a directive to establish regulatory liabilities totalling approximately $71 million USD. On March 7, 2023, BLPC filed a Motion for Review and Variation (the “Motion”) and applied for a stay of the FTC’s decision, which was subsequently granted. On November 20, 2023, the FTC issued their decision dismissing the Motion. Interim rates continue to be in effect through to a date to be determined in a final decision and order.

On December 1, 2023, BLPC appealed certain aspects of the FTC’s February 15 and November 20, 2023, decisions to the Supreme Court of Barbados in the High Court of Justice (the “Court”) and requested that they be stayed. On December 11, 2023, the Court granted the stay. BLPC’s position is that the FTC made errors of law and jurisdiction in their decisions and believes the success of the appeal is probable, and as a result, the adjustments to BLPC’s final rates and rate base, including any adjustments to regulatory assets and liabilities, have not been recorded at this time. The appeal is currently scheduled to be heard in 2025.

Fuel Recovery:

BLPC’s fuel costs flow through a fuel pass-through mechanism which provides opportunity to recover all prudently incurred fuel costs from customers in a timely manner. The calculation of the fuel charge is adjusted on a monthly basis and reported to the FTC for approval.

Clean Energy Transition Rider (“CETR”):

On May 31, 2023, the FTC approved BLPC’s application to establish an alternative cost recovery mechanism to recover prudently incurred costs associated with its CETR (the “Decision”). The mechanism is intended to facilitate the timely recovery between rate cases of costs associated with approved renewable energy assets. BLPC will be required to submit an individual application for the recovery of costs of each asset through the cost recovery mechanism, meeting the minimum criteria as set out in the Decision. On October 5, 2023, BLPC applied to the FTC to recover the costs of a battery storage system through the CETR. On May 6, 2024, the FTC approved the recovery of a 15 MW battery storage system through the CETR.

 

     
96   EMERA 2024 ANNUAL REPORT

Notes to the Consolidated Financial Statements

 

Barbados Domestic Tax Rate Change:

On May 24, 2024, the Government of Barbados signed the Income Tax (Amendment and Validation) Act into law. The legislation, effective January 1, 2024, implemented a corporate income tax rate of 9 per cent, requiring BLPC to remeasure its deferred income tax liabilities. On July 18, 2024, BLPC requested the deferred recovery of the $5 million USD remeasurement. BLPC is seeking amortization of the costs over a period to be approved by the FTC during a future rate setting process.

GBPC

GBPC is regulated by the GBPA. The GBPA has granted GBPC a licensed, regulated and exclusive franchise to produce, transmit and distribute electricity on the island until 2054. Rates are set to recover prudently incurred costs of providing electricity service to customers plus an appropriate return on rate base. GBPC’s approved regulated return on rate base was 8.52 per cent for 2024 (2023 – 8.32 per cent).

Electricity Act, 2024:

On June 1, 2024, the Electricity Act, 2024 took effect. The legislation purports to remove the jurisdiction of the GBPA over GBPC and to have the Utilities Regulation and Competition Authority, another Bahamian regulator, regulate GBPC.

Base Rates:

There is a fuel pass-through mechanism and tariff review policy with new rates submitted every three years. On August 1, 2024, as required by the GBPA Operating Protocol and Regulatory Framework Agreement, GBPC filed a rate plan proposal and is awaiting regulatory review.

Fuel Recovery:

GBPC’s fuel costs flow through a fuel pass-through mechanism which provides the opportunity to recover all prudently incurred fuel costs from customers in a timely manner. In 2023 and 2024, the fuel pass through charge was adjusted monthly, in-line with actual fuel costs.

8. Investments Subject to Significant Influence and Equity Income

 

     Carrying Value
As at December 31		      Equity Income
For the year ended
December 31		      Percentage of
Ownership		  

millions of dollars

    2024      2023      2024      2023      2024  

NSPML

    $ 475      $ 489      $ 44      $ 46        100.0  

M&NP (1)

      124        118        20        21        12.9  

Lucelec (1)

      55        48        4        4        19.5  

LIL (2)

      —         747        29        63        —   

Bear Swamp (3)

      —         —         2        12        50.0  
  

 

 

     

 

 

     

 

 

     

 

 

     
   $ 654      $ 1,402      $  99      $ 146     
  

 

 

     

 

 

     

 

 

     

 

 

     

 

(1)

Emera has significant influence over the operating and financial decisions of these companies through Board representation and therefore, records its investment in these entities using the equity method.

(2)

On June 4, 2024, Emera completed the sale of its equity interest in the LIL. For further details, refer to note 4.

(3)

The investment balance in Bear Swamp is in a credit position primarily as a result of a $179 million distribution received in 2015. Bear Swamp’s credit investment balance of $92 million (2023 – $81 million) is recorded in Other long-term liabilities on the Consolidated Balance Sheets.

 

     
EMERA 2024 ANNUAL REPORT   97

Notes to the Consolidated Financial Statements

 

Equity investments include a $9 million difference between the cost and the underlying FV of the investees’ assets as at the date of acquisition. The excess is attributable to goodwill.

Emera accounts for its variable interest investment in NSPML as an equity investment (note 33). NSPML’s consolidated summarized balance sheets are illustrated as follows:

 

As at

millions of dollars

    December 31
2024		      December 31
2023		  

Balance Sheets

      

Current assets

    $ 37      $ 21  

PP&E

      1,425        1,473  

Regulatory assets (1)

      778        272  

Non-current assets

      27        29  
  

 

 

     

 

 

  

Total assets

    $ 2,267      $ 1,795  
  

 

 

     

 

 

  

Current liabilities

    $ 55      $ 48  

Long-term debt (2)

      1,570        1,109  

Non-current liabilities

      167        149  

Equity

      475        489  
  

 

 

     

 

 

  

Total liabilities and equity

    $ 2,267      $ 1,795  
  

 

 

     

 

 

  

 

(1)

On November 29, 2024, the UARB approved the creation of a $500 million regulatory asset for debt issued as a result of the FLG. For further details, refer to note 7.

(2)

On December 16, 2024, NSPML issued a $500 million bond under the FLG. For further details refer to note 7.

9. Other Income, Net

 

For the    Year ended December 31  

millions of dollars

    2024      2023  

Gain on sale of LIL, net of transaction costs (1)

    $ 182      $ —   

AFUDC

      53        38  

Pension non-current service cost recovery

      35        35  

Interest income

      23        43  

Transaction costs related to the pending sale of NMGC (1)

      (25 )       —   

Charges related to wind-down costs and certain asset impairments (2)

      (29 )       —   

FX (losses) gains

      (58 )       20  

Other

      22        22  
  

 

 

     

 

 

  
   $  203      $  158  
  

 

 

     

 

 

  

 

(1)

For more information related to the gain on sale, after transaction costs, of Emera’s indirect minority interest in the LIL and the pending sale of NMGC, refer to note 4.

(2)

Primarily related to the wind-down of Block Energy LLC.

10. Interest Expense, Net

Interest expense, net consisted of the following:

 

For the    Year ended December 31  

millions of dollars

    2024      2023  

Interest on debt

    $ 1,004      $ 954  

Allowance for borrowed funds used during construction

      (23 )       (16 ) 

Other

      (8 )       (13 ) 
  

 

 

     

 

 

  
   $ 973      $ 925  
  

 

 

     

 

 

  

 

     
98    EMERA 2024 ANNUAL REPORT

Notes to the Consolidated Financial Statements

 

11. Income Taxes

The income tax provision, for the years ended December 31, differs from that computed using the enacted combined Canadian federal and provincial statutory income tax rate for the following reasons:

 

millions of dollars

    2024     2023  

Income before provision for income taxes

    $ 409     $ 1,173  
  

 

 

    

 

 

  

Statutory income tax rate

      29.0 %      29.0 % 
  

 

 

    

 

 

  

Income taxes, at statutory income tax rate

      119       340  

Deferred income taxes on regulated income recorded as regulatory assets and regulatory liabilities

      (90 )      (72 ) 

Interest and financing expenses

      (58 )      —   

Valuation allowance

      (58 )      3  

Tax credits

      (57 )      (53 ) 

Goodwill impairment charge

      49       —   

Amortization of deferred income tax regulatory liabilities

      (36 )      (33 ) 

Foreign tax rate variance

      (31 )      (36 ) 

Additional impact from the sale of LIL equity interest

      22       —   

Tax effect of equity earnings

      (14 )      (15 ) 

Manufacturing allowance

      (9 )      (8 ) 

Other

      4       2  
  

 

 

    

 

 

  

Income tax (recovery) expense

    $ (159 )    $ 128  
  

 

 

    

 

 

  

Effective income tax rate

      (39 %)      11 % 
  

 

 

    

 

 

  

BAHAMIAN DOMESTIC MINIMUM TOP-UP TAX ACT (“DOMESTIC TOP-UP TAX ACT”):

On November 28, 2024, the Domestic Top-up Tax Act was enacted with an effective date of January 1, 2024. The Domestic Top-up Tax Act did not have an impact on the Company.

EXCESSIVE INTEREST AND FINANCING EXPENSES LIMITATION (“EIFEL”) REGIME:

On June 20, 2024, Bill C-59, an Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023, and certain provisions of the budget tabled in Parliament on March 28, 2023, was enacted. Bill C-59 includes the EIFEL regime, which is effective January 1, 2024. EIFEL applies to limit a company’s net interest and financing expense deduction to no more than 30 per cent of earnings before interest, income taxes, depreciation, and amortization for tax purposes. Any denied interest and financing expenses under the EIFEL regime can be carried forward indefinitely.

During 2024, the Company incurred $185 million of interest and financing expenses in connection with a specific financing structure. The interest and financing expenses related to the financing structure as well as $88 million of other interest and financing expenses are expected to be denied under the EIFEL regime. It was determined that the Company is more likely than not to realize the tax benefit of the denied interest and financing expenses in future periods and therefore a $79 million deferred income tax asset has been recorded as at December 31, 2024. In Q4 2024, the Company recognized a $58 million tax benefit related to the denied interest and financing expenses and the reversal of the related deferred income tax liability in connection with the financing structure and its wind-up.

CANADIAN GLOBAL MINIMUM TAX ACT (“GMTA”):

On June 20, 2024, the GMTA was enacted with an effective date of January 1, 2024. The GMTA did not have an impact on the Company.

BARBADOS DOMESTIC TAX RATE CHANGE:

On May 24, 2024, the Government of Barbados signed the Income Tax (Amendment and Validation) Act into law. The legislation, effective January 1, 2024, implemented a corporate income tax rate of 9 per cent, requiring BLPC to remeasure its deferred income tax liabilities.

BARBADOS CORPORATION TOP-UP TAX (AMENDMENT) ACT (“TOP-UP TAX ACT”):

On May 24, 2024, the Top-up Tax Act was enacted with an effective date of January 1, 2024. The Top-up Tax Act did not have an impact on the Company.

 

     
EMERA 2024 ANNUAL REPORT    99

Notes to the Consolidated Financial Statements

 

UNITED STATES INFLATION REDUCTION ACT (“IRA”):

On August 16, 2022, the IRA was signed into legislation. The IRA includes numerous tax incentives for clean energy, such as the extension and modification of existing investment and production tax credits for projects placed in service through 2024, and introduces new technology-neutral clean energy related tax credits beginning in 2025. As of December 31, 2024, the Company has recorded a $82 million (December 31, 2023 – $30 million) regulatory liability on the Consolidated Balance Sheets in recognition of its obligation to pass the incremental tax benefits realized to customers.

The following table reflects the composition of taxes on income from continuing operations presented in the Consolidated Statements of Income for the years ended December 31:

 

millions of dollars

    2024      2023  

Current income taxes

      

Canada

    $ 29      $ 26  

United States

      4        5  

Deferred income taxes

      

Canada

      (200 )       93  

United States

       155         128  

Adjustments to beginning of the year valuation allowance

      

Canada

      (61 )       —   

Investment tax credits

      

United States

      (6 )       (29 ) 

Operating loss carryforwards

      

Canada

      (4 )       (93 ) 

United States

      (76 )       (2 ) 
  

 

 

     

 

 

  

Income tax (recovery) expense

    $ (159 )     $ 128  
  

 

 

     

 

 

  

The following table reflects the composition of income before provision for income taxes presented in the Consolidated Statements of Income for the years ended December 31:

 

millions of dollars

    2024      2023  

Canada

    $ 156      $ 171  

United States

      203        964  

Other

      50        38  
  

 

 

     

 

 

  

Income before provision for income taxes

    $  409      $  1,173  
  

 

 

     

 

 

  

 

     
100    EMERA 2024 ANNUAL REPORT

Notes to the Consolidated Financial Statements

 

The deferred income tax assets and liabilities presented in the Consolidated Balance Sheets as at December 31 consisted of the following:

 

millions of dollars

    2024      2023  

Deferred income tax assets:

      

Tax loss carryforwards

    $ 1,118      $ 1,195  

Tax credit carryforwards

      534        454  

Regulatory liabilities

      225        175  

Derivative instruments

      144        205  

Other

      462        372  
  

 

 

     

 

 

  

Total deferred income tax assets before valuation allowance

      2,483        2,401  

Valuation allowance

      (322 )       (363 ) 
  

 

 

     

 

 

  

Total deferred income tax assets after valuation allowance

    $ 2,161      $ 2,038  
  

 

 

     

 

 

  

Deferred income tax liabilities:

      

PP&E

    $ (3,421 )     $ (3,223 ) 

Regulatory assets

      (198 )       (196 ) 

Derivative instruments

      (105 )       (235 ) 

Investments subject to significant influence

      (46 )       (216 ) 

Other

      (330 )       (312 ) 
  

 

 

     

 

 

  

Total deferred income tax liabilities

    $ (4,100 )     $ (4,182 ) 
  

 

 

     

 

 

  

Consolidated Balance Sheets presentation:

      

Long-term deferred income tax assets

    $ 392      $ 208  

Long-term deferred income tax liabilities

      (2,331 )       (2,352 ) 
  

 

 

     

 

 

  

Net deferred income tax liabilities

    $ (1,939 )     $ (2,144 ) 
  

 

 

     

 

 

  

Considering all evidence regarding the utilization of the Company’s deferred income tax assets, it has been determined that Emera is more likely than not to realize all recorded deferred income tax assets, except for certain loss carryforwards and unrealized capital losses on long-term debt and investments. A valuation allowance of $322 million has been recorded as at December 31, 2024 (2023 – $363 million) related to the loss carryforwards, long-term debt and investments. During 2024, the Company recognized a $58 million tax benefit primarily due to the utilization of certain loss carryforwards, which were subject to a valuation allowance as at December 31, 2023.

The Company intends to indefinitely reinvest earnings from certain foreign operations. Accordingly, $4.7 billion as at December 31, 2024 (2023 – $4.7 billion) in cumulative temporary differences for which deferred taxes might otherwise be required, have not been recognized. It is impractical to estimate the amount of income and withholding tax that might be payable if a reversal of temporary differences occurred.

Emera’s NOL, capital loss and tax credit carryforwards and their expiration periods as at December 31, 2024 consisted of the following:

 

millions of dollars

    Tax
Carryforwards		      Subject to
Valuation
Allowance		      Net Tax
Carryforwards		      Expiration
Period		  

Canada

            

NOL

    $ 2,420      $ (967 )     $ 1,453        2026–2044  

Capital loss

      55        (55 )       —         Indefinite  

Tax credit

      2        (1 )       1        2028–2042  
  

 

 

     

 

 

     

 

 

     

 

 

  

United States

            

Federal NOL

    $ 1,587      $ (1 )     $ 1,586        2036–Indefinite  

State NOL

      1,351        (1 )       1,350        2026–Indefinite  

Tax credit

      533        (3 )       530        2025–2044  
  

 

 

     

 

 

     

 

 

     

 

 

  

Other

            

NOL

    $ 91      $ (23 )     $ 68        2025–2031  
  

 

 

     

 

 

     

 

 

     

 

 

  

 

     
EMERA 2024 ANNUAL REPORT    101

Notes to the Consolidated Financial Statements

 

The following table provides details of the change in unrecognized tax benefits for the years ended December 31 as follows:

 

millions of dollars

    2024      2023  

Balance, January 1

    $ 37      $ 33  

Increases due to tax positions related to current year

      6        5  

Increases due to tax positions related to a prior year

      2        1  

Decreases due to tax positions related to a prior year

      (3 )       (2 ) 
  

 

 

     

 

 

  

Balance, December 31

    $  42      $  37  
  

 

 

     

 

 

  

Unrecognized tax benefits relate to the timing of certain tax deductions at NSPI and research and development tax credits primarily at TEC. The total amount of unrecognized tax benefits as at December 31, 2024 was $42 million (2023 – $37 million), which would affect the effective tax rate if recognized. The total amount of accrued interest with respect to unrecognized tax benefits was $10 million (2023 – $9 million) with $1 million interest expense recognized in the Consolidated Statements of Income (2023 – $2 million). No penalties have been accrued. The balance of unrecognized tax benefits could change in the next 12 months as a result of resolving Canada Revenue Agency (“CRA”) and Internal Revenue Service audits. A reasonable estimate of any change cannot be made at this time.

NSPI and the CRA are currently in a dispute with respect to the timing of certain tax deductions for its 2006 through 2010 and 2013 through 2016 taxation years. The ultimate permissibility of the tax deductions is not in dispute; rather, it is the timing of those deductions. The cumulative net amount in dispute to date is $126 million (2023 – $126 million), including interest. NSPI has prepaid $55 million (2023 – $55 million) of the amount in dispute, as required by CRA.

On November 29, 2019, NSPI filed a Notice of Appeal with the Tax Court of Canada with respect to its dispute of the 2006 through 2010 taxation years. Should NSPI be successful in defending its position, all payments including applicable interest will be refunded. If NSPI is unsuccessful in defending any portion of its position, the resulting taxes and applicable interest will be deducted from amounts previously paid, with the difference, if any, either owed to, or refunded from, the CRA. The related tax deductions will be available in subsequent years.

Should NSPI be similarly reassessed by the CRA for years not currently in dispute, further payments will be required; however, the ultimate permissibility of these deductions would be similarly not in dispute.

NSPI and its advisors believe that NSPI has reported its tax position appropriately. NSPI continues to assess its options to resolving the dispute; however, the outcome of the Notice of Appeal process is not determinable at this time.

Emera files a Canadian federal income tax return, which includes its Nova Scotia provincial income tax. Emera’s subsidiaries file Canadian, US, Barbados, and St. Lucia income tax returns. As at December 31, 2024, the Company’s tax years still open to examination by taxing authorities include 2006 and subsequent years.

12. Common Stock

Authorized: Unlimited number of non-par value common shares.

 

Issued and outstanding:

    2024      2023  
   millions of
shares		      millions
of dollars		      millions of
shares		      millions
of dollars		  

Balance, January 1

      284.12      $ 8,462        269.95      $ 7,762  

Issuance of common stock under ATM program (1)(2)

      5.12        261        8.29        397  

Issued under the DRIP, net of discounts

      6.10        291        5.26        272  

Senior management stock options exercised and Employee Share Purchase Plan

      0.60        28        0.62        31  
  

 

 

     

 

 

     

 

 

     

 

 

  

Balance, December 31

      295.94      $ 9,042        284.12      $ 8,462  
  

 

 

     

 

 

     

 

 

     

 

 

  

 

(1)

For the year ended December 31, 2023, a total of 8,287,037 common shares were issued under Emera’s ATM program at an average price of $48.27 per share for gross proceeds of $400 million ($397 million net of after-tax issuance costs).

(2)

For the year ended December 31, 2024, a total of 5,117,273 common shares were issued under Emera’s ATM program at an average price of $51.52 per share for gross proceeds of $264 million ($261 million net of after-tax issuance costs). As at December 31, 2024, an aggregate gross sales limit of $336 million remained available for issuance under the ATM program.

 

     
102    EMERA 2024 ANNUAL REPORT

Notes to the Consolidated Financial Statements

 

As at December 31, 2024, the following common shares were reserved for issuance: 6 million (2023 – 6 million) under the senior management stock option plan, 2 million (2023 – 2 million) under the employee common share purchase plan and 12 million (2023 – 18 million) under the DRIP.

The issuance of common shares under the common share compensation arrangements does not allow the plans to exceed 10 per cent of Emera’s outstanding common shares. As at December 31, 2024, Emera was in compliance with this requirement.

ATM EQUITY PROGRAM

On November 18, 2024, Emera increased the size of the ATM Program to allow the Company to issue up to $1 billion of common shares from treasury to the public from time to time, at the Company’s discretion, at the prevailing market price. The ATM Program was increased by an amendment dated November 18, 2024 to its prospectus supplement dated November 14, 2023 and an amendment dated November 13, 2024 to its short form base shelf prospectus dated October 3, 2023.

13. Earnings Per Share

Basic earnings per share is determined by dividing net income attributable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income attributable to common shareholders by the weighted average number of common shares outstanding during the period, adjusted for the exercise and/or conversion of all potentially dilutive securities. Such dilutive items include Company contributions to the senior management stock option plan, convertible debentures and shares issued under the DRIP.

The following table reconciles the computation of basic and diluted earnings per share:

 

For the    Year ended December 31  

millions of dollars (except per share amounts)

    2024      2023  

Numerator

      

Net income attributable to common shareholders

    $ 493.6      $ 977.7  
  

 

 

     

 

 

  

Diluted numerator

      493.6        977.7  
  

 

 

     

 

 

  

Denominator

      

Weighted average shares of common stock outstanding – basic

      289.1        273.6  

Stock-based compensation

      0.1        0.2  
  

 

 

     

 

 

  

Weighted average shares of common stock outstanding – diluted

      289.2        273.8  
  

 

 

     

 

 

  

Earnings per common share

      

Basic

    $ 1.71      $ 3.57  

Diluted

    $ 1.71      $ 3.57  
  

 

 

     

 

 

  

 

     
EMERA 2024 ANNUAL REPORT    103

Notes to the Consolidated Financial Statements

 

14. Accumulated Other Comprehensive Income

The components of AOCI are as follows:

 

millions of dollars

    Unrealized
gain (loss) on
translation of
self-sustaining
foreign
operations		     Net change in
net investment
hedges		     Gains (losses)
on derivatives
recognized
as cash flow
hedges		     Net change on
available-
for-sale
investments		     Net change in
unrecognized
pension and
post-retirement
benefit costs		     Total
AOCI		  

For the year ended December 31, 2024

 

Balance, January 1, 2024

    $ 369     $ (24 )    $ 14     $ (2 )    $ (52 )    $ 305  

OCI before reclassifications

      1,027       (139 )      —        2       —        890  

Amounts reclassified from AOCI

      —        —        (2 )      —        68       66  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net current period OCI

      1,027       (139 )      (2 )      2       68       956  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Balance, December 31, 2024

    $ 1,396     $ (163 )    $ 12     $ —      $ 16     $ 1,261  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

For the year ended December 31, 2023

             

Balance, January 1, 2023

    $ 639     $ (62 )    $ 16     $ (2 )    $ (13 )    $ 578  

OCI before reclassifications

      (270 )      38       —        —        —        (232 ) 

Amounts reclassified from AOCI

      —        —        (2 )      —        (39 )      (41 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net current period OCI

      (270 )      38       (2 )      —        (39 )      (273 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Balance, December 31, 2023

    $ 369     $ (24 )    $ 14     $ (2 )    $ (52 )    $ 305  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

The reclassifications out of AOCI are as follows:

 

For the         Year ended December 31  

millions of dollars

         2024      2023  

Affected line item in the Consolidated Financial Statements

      

Gains on derivatives recognized as cash flow hedges

      

Interest rate hedge

    Interest expense, net    $ (2 )     $ (2 ) 
     

 

 

     

 

 

  

Net change in unrecognized pension and post-retirement benefit costs

      

Actuarial losses

    Other income, net    $ 2      $ —   

Past service (gains) costs

    Other income, net      (2 )       2  

Amounts reclassified into obligations

    Pension and post-retirement benefits      68        (40 ) 
     

 

 

     

 

 

  

Total before tax

         68        (38 ) 
     

 

 

     

 

 

  

Income tax expense

         —         (1 ) 
     

 

 

     

 

 

  

Total net of tax

       $ 68      $ (39 ) 
     

 

 

     

 

 

  

Total reclassifications out of AOCI, net of tax, for the period

       $ 66      $ (41 ) 
     

 

 

     

 

 

  

15. Inventory

 

As at

millions of dollars

    December 31
2024		      December 31
2023		  

Materials

    $ 453      $ 408  

Fuel

      328        382  
  

 

 

     

 

 

  

Total

    $ 781      $ 790  
  

 

 

     

 

 

  

 

     
104    EMERA 2024 ANNUAL REPORT

Notes to the Consolidated Financial Statements

 

16. Derivative Instruments

Derivative assets and liabilities relating to the foregoing categories consisted of the following:

 

     Derivative Assets      Derivative Liabilities  

As at

millions of dollars

    December 31
2024		      December 31
2023		      December 31
2024		      December 31
2023		  

Regulatory deferral:

            

Commodity swaps and forwards

    $ 25      $ 16      $ 44      $ 76  

FX forwards

      27        3        3        3  
  

 

 

     

 

 

     

 

 

     

 

 

  
     52        19        47        79  
  

 

 

     

 

 

     

 

 

     

 

 

  

HFT derivatives:

            

Power swaps and physical contracts

      34        29        30        36  

Natural gas swaps, futures, forwards, physical contracts

      236        319        660        531  
  

 

 

     

 

 

     

 

 

     

 

 

  
     270        348        690        567  
  

 

 

     

 

 

     

 

 

     

 

 

  

Other derivatives:

            

Equity derivatives

      —         4        2        —   

FX forwards

      —         18        34        7  
  

 

 

     

 

 

     

 

 

     

 

 

  
     —         22        36        7  
  

 

 

     

 

 

     

 

 

     

 

 

  

Total gross current derivatives

      322        389        773        653  
  

 

 

     

 

 

     

 

 

     

 

 

  

Impact of master netting agreements:

            

Regulatory deferral

      (7 )       (3 )       (7 )       (3 ) 

HFT derivatives

      (148 )       (146 )       (148 )       (146 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Total impact of master netting agreements

      (155 )       (149 )       (155 )       (149 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Less: Derivatives classified as held for sale (1)

      (1 )       —         (1 )       —   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total derivatives

    $ 166      $ 240      $ 617      $ 504  
  

 

 

     

 

 

     

 

 

     

 

 

  

Current (2)

      115        174        526        386  

Long-term (2)

      51        66        91        118  
  

 

 

     

 

 

     

 

 

     

 

 

  

Total derivatives

    $ 166      $ 240      $ 617      $ 504  
  

 

 

     

 

 

     

 

 

     

 

 

  

 

(1)

On August 5, 2024, Emera announced an agreement to sell NMGC. As at December 31, 2024, NMGC’s assets and liabilities were classified as held for sale. For further details on the pending transaction, refer to note 4.

(2)

Derivative assets and liabilities are classified as current or long-term based upon the maturities of the underlying contracts.

CASH FLOW HEDGES

On May 26, 2021, a treasury lock was settled for a gain of $19 million that is being amortized through interest expense over 10 years as the underlying hedged item settles. As of December 31, 2024, the unrealized gain in AOCI was $12 million, after-tax (December 31, 2023 – $14 million, after-tax). For the year ended December 31, 2024, unrealized gains of $2 million (2023 – $2 million) have been reclassified from AOCI into interest expense, net. The Company expects $2 million of unrealized gains currently in AOCI to be reclassified into net income within the next twelve months.

 

     
EMERA 2024 ANNUAL REPORT    105

Notes to the Consolidated Financial Statements

 

REGULATORY DEFERRAL

The Company has recorded the following changes with respect to derivatives receiving regulatory deferral:

 

millions of dollars

    Commodity
swaps and
forwards		     FX forwards     Physical
natural gas
purchases		     Commodity
swaps and
forwards		     FX forwards  
For the year ended December 31    2024     2023  

Unrealized gain (loss) in regulatory assets

    $ (27 )    $ 5     $ —      $ (109 )    $ (3 ) 

Unrealized gain (loss) in regulatory liabilities

      11       33       (3 )      (73 )      —   

Realized gain in regulatory assets

      (8 )      —        —        (5 )      —   

Realized loss in regulatory liabilities

      4       —        —        2       —   

Realized (gain) loss in inventory (1)

      11       (8 )      —        4       (10 ) 

Realized (gain) loss in regulated fuel for generation and purchased power (2)

      50       (6 )      (49 )      (9 )      (4 ) 

Other

      —        —        —        (14 )      —   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total change in derivative instruments

    $ 41     $ 24     $ (52 )    $ (204 )    $ (17 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

(1)

Realized (gains) losses will be recognized in fuel for generation and purchased power when the hedged item is consumed.

(2)

Realized (gains) losses on derivative instruments settled and consumed in the period and hedging relationships that have been terminated or the hedged transaction is no longer probable.

As at December 31, 2024, the Company had the following notional volumes designated for regulatory deferral that are expected to settle as outlined below:

 

millions

    2025     2026–2027  

Physical natural gas purchases:

     

Natural gas (MMBtu)

      6       —   
  

 

 

    

 

 

  

Commodity swaps and forwards purchases:

     

Natural gas (MMBtu)

      21       23  

Power (MWh)

      1       —   

Coal (metric tonnes)

      1       —   
  

 

 

    

 

 

  

FX forwards:

     

FX contracts (millions of USD)

    $ 208     $ 69  

Weighted average rate

      1.3361       1.3296  

% of USD requirements

      50 %      17 % 
  

 

 

    

 

 

  

HFT DERIVATIVES

The Company has recognized the following realized and unrealized gains (losses) with respect to HFT derivatives:

 

For the    Year ended December 31  

millions of dollars

    2024      2023  

Power swaps and physical contracts in non-regulated operating revenues

    $ 12      $ (6 ) 

Natural gas swaps, forwards, futures and physical contracts in non-regulated operating revenues

      195        1,043  
  

 

 

     

 

 

  

Total gains in net income

    $ 207      $ 1,037  
  

 

 

     

 

 

  

 

     
106    EMERA 2024 ANNUAL REPORT

Notes to the Consolidated Financial Statements

 

As at December 31, 2024, the Company had the following notional volumes of outstanding HFT derivatives that are expected to settle as outlined below:

 

millions

    2025      2026      2027      2028      2029 and
thereafter		  

Natural gas purchases (Mmbtu)

      262        111        43        30        73  

Natural gas sales (Mmbtu)

      299        69        16        8        4  

Power purchases (MWh)

      1        —         —         —         —   

Power sales (MWh)

      1        —         —         —         —   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

OTHER DERIVATIVES

As at December 31, 2024, the Company had equity derivatives in place to manage cash flow risk associated with forecasted future cash settlements of deferred compensation obligations and FX forwards in place to manage cash flow risk associated with forecasted USD cash inflows. The equity derivatives hedge the return on 2.9 million shares and extends until December 2025. The FX forwards have a combined notional amount of $520 million USD and expire in 2025 through 2026.

 

     Year ended December 31  

For the

millions of dollars

    2024      2023  
     FX Forwards      Equity
Derivatives		      FX Forwards      Equity
Derivatives		  

Unrealized gain (loss) in OM&G

    $ —       $ (2 )     $ —       $ 4  

Unrealized gain (loss) in other income, net

      (44 )       —         28        —   

Realized gain (loss) in OM&G

      —         16        —         (13 ) 

Realized loss in other income, net

      (12 )       —         (11 )       —   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total gains (losses) in net income

    $ (56 )     $ 14      $ 17      $ (9 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

CREDIT RISK

The Company is exposed to credit risk with respect to amounts receivable from customers, energy marketing collateral deposits and derivative assets. Credit risk is the potential loss from a counterparty’s non-performance under an agreement. The Company manages credit risk with policies and procedures for counterparty analysis, exposure measurement, and exposure monitoring and mitigation. Credit assessments are conducted on all new customers and counterparties, and deposits or collateral are requested on any high-risk accounts.

The Company assesses the potential for credit losses on a regular basis and, where appropriate, maintains provisions. With respect to counterparties, the Company has implemented procedures to monitor the creditworthiness and credit exposure of counterparties and to consider default probability in valuing the counterparty positions. The Company monitors counterparties’ credit standing, including those that are experiencing financial problems, have significant swings in default probability rates, have credit rating changes by external rating agencies, or have changes in ownership. Net liability positions are adjusted based on the Company’s current default probability. Net asset positions are adjusted based on the counterparty’s current default probability. The Company assesses credit risk internally for counterparties that are not rated.

As at December 31, 2024, the maximum exposure the Company had to credit risk was $1.3 billion (2023 – $1.2 billion), which included accounts receivable net of collateral/deposits and assets related to derivatives.

It is possible that volatility in commodity prices could cause the Company to have material credit risk exposures with one or more counterparties. If such counterparties fail to perform their obligations under one or more agreements, the Company could suffer a material financial loss. The Company transacts with counterparties as part of its risk management strategy for managing commodity price, FX and interest rate risk. Counterparties that exceed established credit limits can provide a cash deposit or letter of credit to the Company for the value in excess of the credit limit where contractually required. The total cash deposits/collateral on hand as at December 31, 2024 was $303 million (2023 – $310 million), which mitigated the Company’s maximum credit risk exposure. The Company uses the cash as payment for the amount receivable or returns the deposit/ collateral to the customer/counterparty where it is no longer required by the Company.

 

     
EMERA 2024 ANNUAL REPORT    107

Notes to the Consolidated Financial Statements

 

The Company enters into commodity master arrangements with its counterparties to manage certain risks, including credit risk to these counterparties. The Company generally enters into International Swaps and Derivatives Association agreements, North American Energy Standards Board agreements and, or Edison Electric Institute agreements. The Company believes entering into such agreements offers protection by creating contractual rights relating to creditworthiness, collateral, non- performance and default.

As at December 31, 2024, the Company had $140 million (2023 – $142 million) in financial assets, considered to be past due, which have been outstanding for an average 61 days. The FV of these financial assets was $128 million (2023 – $127 million), the difference of which was included in the allowance for credit losses. These assets primarily relate to accounts receivable from electric and gas revenue.

CONCENTRATION RISK

The Company’s concentrations of risk consisted of the following:

 

As at

    December 31, 2024     December 31, 2023  
     millions of
dollars		      % of total
exposure		     millions of
dollars		      % of total
exposure		  

Receivables, net

           

Regulated utilities:

           

Residential

    $ 376        22 %    $ 476        31 % 

Commercial

      184        11 %      194        13 % 

Industrial

      73        4 %      84        5 % 

Other

      105        6 %      103        7 % 

Cash collateral

      46        3 %      94        6 % 
  

 

 

     

 

 

    

 

 

     

 

 

  
     784        46 %      951        62 % 
  

 

 

     

 

 

    

 

 

     

 

 

  

Trading group:

           

Credit rating of A- or above

      88        5 %      47        3 % 

Credit rating of BBB- to BBB+

      42        2 %      33        2 % 

Not rated

      165        10 %      108        7 % 
  

 

 

     

 

 

    

 

 

     

 

 

  
     295        17 %      188        12 % 
  

 

 

     

 

 

    

 

 

     

 

 

  

Other accounts receivable

      331        20 %      151        10 % 

Classification as assets held for sale (1)

      118        7 %      —         0 % 
  

 

 

     

 

 

    

 

 

     

 

 

  
     1,528        90 %      1,290        84 % 
  

 

 

     

 

 

    

 

 

     

 

 

  

Derivative Instruments (current and long-term)

           

Credit rating of A- or above

      91        5 %      138        9 % 

Credit rating of BBB- to BBB+

      1        0 %      7        1 % 

Not rated

      74        5 %      95        6 % 
  

 

 

     

 

 

    

 

 

     

 

 

  
     166        10 %      240        16 % 
  

 

 

     

 

 

    

 

 

     

 

 

  
   $ 1,694        100 %    $ 1,530        100 % 
  

 

 

     

 

 

    

 

 

     

 

 

  

 

(1)

On August 5, 2024, Emera announced the sale of NMGC. As at December 31, 2024 NMGC’s assets and liabilities were classified as held for sale. For further details, refer to note 4.

CASH COLLATERAL

The Company’s cash collateral positions consisted of the following:

 

As at

millions of dollars

    December 31
2024		      December 31
2023		  

Cash collateral provided to others

    $ 198      $ 101  

Cash collateral received from others

    $ 5      $ 22  

 

     
108    EMERA 2024 ANNUAL REPORT

Notes to the Consolidated Financial Statements

 

Collateral is posted in the normal course of business based on the Company’s creditworthiness, including its senior unsecured credit rating as determined by certain major credit rating agencies. Certain derivatives contain financial assurance provisions that require collateral to be posted if a material adverse credit-related event occurs. If a material adverse event resulted in the senior unsecured debt falling below investment grade, the counterparties to such derivatives could request ongoing full collateralization.

As at December 31, 2024, the total FV of derivatives in a liability position was $617 million (December 31, 2023 – $504 million). If the credit ratings of the Company were reduced below investment grade, the full value of the net liability position could be required to be posted as collateral for these derivatives.

17. FV Measurements

The Company is required to determine the FV of all derivatives except those which qualify for the NPNS exemption (see note 1) and uses a market approach to do so. The three levels of the FV hierarchy are defined as follows:

Level 1 – Where possible, the Company bases the fair valuation of its financial assets and liabilities on quoted prices in active markets (“quoted prices”) for identical assets and liabilities.

Level 2 – Where quoted prices for identical assets and liabilities are not available, the valuation of certain contracts must be based on quoted prices for similar assets and liabilities with an adjustment related to location differences. Also, certain derivatives are valued using quotes from over-the-counter clearing houses.

Level 3 – Where the information required for a Level 1 or Level 2 valuation is not available, derivatives must be valued using unobservable or internally developed inputs. The primary reasons for a Level 3 classification are as follows:

 

  •  

While valuations were based on quoted prices, significant assumptions were necessary to reflect seasonal or monthly shaping and locational basis differentials.

 

  •  

The term of certain transactions extends beyond the period when quoted prices are available and, accordingly, assumptions were made to extrapolate prices from the last quoted period through the end of the transaction term.

 

  •  

The valuations of certain transactions were based on internal models, although quoted prices were utilized in the valuations.

Derivative assets and liabilities are classified in their entirety, based on the lowest level of input that is significant to the FV measurement.

 

     
EMERA 2024 ANNUAL REPORT    109

Notes to the Consolidated Financial Statements

 

The following tables set out the classification of the methodology used by the Company to FV its derivatives:

 

     December 31, 2024  

As at

millions of dollars

    Level 1      Level 2      Level 3      Total  

Assets

            

Regulatory deferral:

            

Commodity swaps and forwards

    $ 15      $ 3      $ —       $ 18  

FX forwards

      —         27        —         27  
  

 

 

     

 

 

     

 

 

     

 

 

  
     15        30        —         45  
  

 

 

     

 

 

     

 

 

     

 

 

  

HFT derivatives:

            

Power swaps and physical contracts

      2        23        5        30  

Natural gas swaps, futures, forwards, physical contracts and related transportation

      13        52        27        92  
  

 

 

     

 

 

     

 

 

     

 

 

  
     15        75        32        122  
  

 

 

     

 

 

     

 

 

     

 

 

  

Less: Derivatives classified as held for sale (1)

      —         (1 )       —         (1 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Total assets

      30        104        32        166  
  

 

 

     

 

 

     

 

 

     

 

 

  

Liabilities

            

Regulatory deferral:

            

Commodity swaps and forwards

    $ 18      $ 19      $ —       $ 37  

FX forwards

      —         3        —         3  
  

 

 

     

 

 

     

 

 

     

 

 

  
     18        22        —         40  
  

 

 

     

 

 

     

 

 

     

 

 

  

HFT derivatives:

            

Power swaps and physical contracts

      2        21        4        27  

Natural gas swaps, futures, forwards and physical contracts

      (11 )       89        437        515  
  

 

 

     

 

 

     

 

 

     

 

 

  
     (9 )       110        441        542  
  

 

 

     

 

 

     

 

 

     

 

 

  

Other derivatives:

            

FX forwards

      —         34        —         34  

Equity derivatives

      2        —         —         2  
  

 

 

     

 

 

     

 

 

     

 

 

  
     2        34        —         36  
  

 

 

     

 

 

     

 

 

     

 

 

  

Less: Derivatives classified as held for sale (1)

      —         (1 )       —         (1 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Total liabilities

      11        165        441        617  
  

 

 

     

 

 

     

 

 

     

 

 

  

Net assets (liabilities)

    $ 19      $ (61 )     $ (409 )     $ (451 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

 

(1)

On August 5, 2024, Emera announced an agreement to sell NMGC. As at December 31, 2024, NMGC’s assets and liabilities were classified as held for sale. For further details on the pending transaction, refer to note 4.

 

     
110    EMERA 2024 ANNUAL REPORT

Notes to the Consolidated Financial Statements

 

As at

millions of dollars

    December 31, 2023  
   Level 1      Level 2      Level 3      Total  

Assets

            

Regulatory deferral:

            

Commodity swaps and forwards

    $ 7      $ 6      $ —       $ 13  

FX forwards

      —         3        —         3  
  

 

 

     

 

 

     

 

 

     

 

 

  
     7        9        —         16  
  

 

 

     

 

 

     

 

 

     

 

 

  

HFT derivatives:

            

Power swaps and physical contracts

      (5 )       23        —         18  

Natural gas swaps, futures, forwards, physical contracts and related transportation

      42        108        34        184  
  

 

 

     

 

 

     

 

 

     

 

 

  
     37        131        34        202  
  

 

 

     

 

 

     

 

 

     

 

 

  

Other derivatives:

            

FX forwards

      —         18        —         18  

Equity derivatives

      4        —         —         4  
  

 

 

     

 

 

     

 

 

     

 

 

  
     4        18        —         22  
  

 

 

     

 

 

     

 

 

     

 

 

  

Total assets

      48        158        34        240  
  

 

 

     

 

 

     

 

 

     

 

 

  

Liabilities

            

Regulatory deferral:

            

Commodity swaps and forwards

      43        30        —         73  

FX forwards

      —         3        —         3  
  

 

 

     

 

 

     

 

 

     

 

 

  
     43        33        —         76  
  

 

 

     

 

 

     

 

 

     

 

 

  

HFT derivatives:

            

Power swaps and physical contracts

      —         24        —         24  

Natural gas swaps, futures, forwards and physical contracts

      13        19        365        397  
  

 

 

     

 

 

     

 

 

     

 

 

  
     13        43        365        421  
  

 

 

     

 

 

     

 

 

     

 

 

  

Other derivatives:

            

FX forwards

      —         7        —         7  
  

 

 

     

 

 

     

 

 

     

 

 

  
     —         7        —         7  
  

 

 

     

 

 

     

 

 

     

 

 

  

Total liabilities

      56        83        365        504  
  

 

 

     

 

 

     

 

 

     

 

 

  

Net assets (liabilities)

    $ (8 )     $ 75      $ (331 )     $ (264 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

The change in the FV of the Level 3 financial assets and liabilities for the year ended December 31, 2024 was as follows:

 

     HFT Derivatives  

millions of dollars

    Power      Natural gas      Total  

Assets

         

Balance, beginning of period

    $ —       $ 34      $ 34  

Total realized and unrealized gains (losses) included in non-regulated operating revenues

      5        (7 )       (2 ) 
  

 

 

     

 

 

     

 

 

  

Balance, December 31, 2024

    $ 5      $ 27      $ 32  
  

 

 

     

 

 

     

 

 

  

Liabilities

         

Balance, beginning of period

    $ —       $ 365      $ 365  

Total realized and unrealized gains (losses) included in non-regulated operating revenues

      4        72        76  
  

 

 

     

 

 

     

 

 

  

Balance, December 31, 2024

    $ 4      $ 437      $ 441  
  

 

 

     

 

 

     

 

 

  

Significant unobservable inputs used in the FV measurement of Emera’s natural gas and power derivatives include third-party sourced pricing for instruments based on illiquid markets. Significant increases (decreases) in any of these inputs in isolation would result in a significantly lower (higher) FV measurement. Other unobservable inputs used include internally developed correlation factors and basis differentials; own credit risk; and discount rates. Internally developed correlations and basis differentials are reviewed on a quarterly basis based on statistical analysis of the spot markets in the various illiquid term markets. Discount rates may include a risk premium for those long-term forward contracts with illiquid future price points to incorporate the inherent uncertainty of these points. Any risk premiums for long-term contracts are evaluated by observing similar industry practices and in discussion with industry peers.

 

     
EMERA 2024 ANNUAL REPORT    111

Notes to the Consolidated Financial Statements

 

The Company uses a modelled pricing valuation technique for determining the FV of Level 3 derivative instruments. The following table outlines quantitative information about the significant unobservable inputs used in the FV measurements categorized within Level 3 of the FV hierarchy:

 

millions of dollars

    FV      Significant
Unobservable Input		      Low      High      Weighted
average (1)		  
     Assets      Liabilities                              

As at December 31, 2024

                  

HFT derivatives – Power swaps and physical contracts

    $ 5      $ 4        Third-party pricing      $ 25.60      $ 139.65      $ 82.63  
  

 

 

     

 

 

        

 

 

     

 

 

     

 

 

  

HFT derivatives – Natural gas swaps, futures, forwards and physical contracts

      27        437        Third-party pricing      $ 2.20      $ 17.54      $ 8.57  
  

 

 

     

 

 

        

 

 

     

 

 

     

 

 

  

Total

    $ 32      $ 441              
  

 

 

     

 

 

              

Net liability

       $ 409              
     

 

 

              

As at December 31, 2023

                  

HFT derivatives – Natural gas swaps, futures, forwards and physical contracts

    $ 34      $ 365        Third-party pricing      $ 1.27      $ 16.25      $ 4.85  
  

 

 

     

 

 

        

 

 

     

 

 

     

 

 

  

Total

    $ 34      $ 365              
  

 

 

     

 

 

              

Net liability

       $ 331              
     

 

 

              

 

(1)

Unobservable inputs were weighted by the relative FV of the instruments.

Long-term debt is a financial liability not measured at FV on the Consolidated Balance Sheets. The balance consisted of the following:

 

As at

millions of dollars

    Carrying
Amount		      FV      Level 1      Level 2      Level 3      Total  

December 31, 2024

    $ 18,407      $ 17,941      $ —       $ 17,688      $ 253      $ 17,941  

December 31, 2023

    $ 18,365      $ 16,621      $ —       $ 16,363      $ 258      $ 16,621  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

The Company has designated $1.2 billion USD denominated Hybrid Notes as a hedge of the foreign currency exposure of its net investment in USD denominated operations. The Company’s Hybrid Notes are contingently convertible into preferred shares in the event of bankruptcy or other related events. A redemption option on or after June 15, 2026 is available and at the control of the Company. The Hybrid Notes are classified as Level 2 financial assets. As at December 31, 2024, the FV of the Hybrid Notes was $1.2 billion (2023 – $1.2 billion). An after-tax foreign currency loss of $139 million was recorded in AOCI for the year ended December 31, 2024 (2023 – $38 million after-tax gain).

18. Related Party Transactions

In the ordinary course of business, Emera provides energy and other services and enters into transactions with its subsidiaries, associates and other related companies on terms similar to those offered to non-related parties. Intercompany balances and intercompany transactions have been eliminated on consolidation, except for the net profit on certain transactions between non-regulated and regulated entities in accordance with accounting standards for rate-regulated entities. All material amounts are under normal interest and credit terms.

 

     
112    EMERA 2024 ANNUAL REPORT

Notes to the Consolidated Financial Statements

 

Significant transactions between Emera and its associated companies are as follows:

 

  •  

Transactions between NSPI and NSPML related to the Maritime Link assessment are reported in the Consolidated Statements of Income. NSPI’s expense is reported in Regulated fuel for generation and purchased power, totalling a recovery of $324 million for the year ended December 31, 2024 (2023 – $163 million expense). NSPML is accounted for as an equity investment, and therefore corresponding earnings related to this revenue are reflected in Income from equity investments.

 

  •  

Natural gas transportation capacity purchases from M&NP are reported in the Consolidated Statements of Income. Purchases from M&NP reported net in Operating revenues, Non-regulated, totalled $11 million for the year ended December 31, 2024 (2023 – $14 million).

There were no significant receivables or payables between Emera and its associated companies reported on Emera’s Consolidated Balance Sheets as at December 31, 2024 and at December 31, 2023.

19. Receivables and Other Current Assets

 

As at

millions of dollars

    December 31
2024		      December 31
2023		  

Customer accounts receivable – billed

    $ 834      $ 805  

Customer accounts receivable – unbilled

      342        363  

Capitalized transportation capacity (1)

      216        358  

Cash collateral provided to others

      198        101  

Prepaid expenses

      105        105  

Income tax receivable

      22        10  

Allowance for credit losses

      (12 )       (15 ) 

Other

      106        90  
  

 

 

     

 

 

  

Total receivables and other current assets

    $ 1,811      $ 1,817  
  

 

 

     

 

 

  

 

(1)

Capitalized transportation capacity represents the value of transportation/storage received by EES on asset management agreements at the inception of the contracts. The asset is amortized over the term of each contract.

20. Leases

LESSEE

The Company has operating leases for buildings, land, telecommunication services, and rail cars. Emera’s leases have remaining lease terms of 1 year to 61 years, some of which include options to extend the leases for up to 65 years. These options are included as part of the lease term when it is considered reasonably certain they will be exercised.

 

As at

millions of dollars

    Classification    December 31
2024		      December 31
2023		  

Right-of-use asset

    Other long-term assets    $ 52      $ 54  
     

 

 

     

 

 

  

Lease liabilities

         

Current

    Other current liabilities      3        3  

Long-term

    Other long-term liabilities      54        55  
     

 

 

     

 

 

  

Total lease liabilities

    $ 57      $ 58  
     

 

 

     

 

 

  

The Company recorded lease expense of $123 million for the year ended December 31, 2024 (2023 – $127 million), of which $112 million (2023 – $119 million) related to variable costs for power generation facility finance leases, recorded in “Regulated fuel for generation and purchased power” in the Consolidated Statements of Income.

 

     
EMERA 2024 ANNUAL REPORT    113

Notes to the Consolidated Financial Statements

 

Future minimum lease payments under non-cancellable operating leases for each of the next five years and in aggregate thereafter are as follows:

 

millions of dollars

    2025      2026      2027      2028      2029      Thereafter      Total  

Minimum lease payments

    $ 5      $ 3      $ 3      $ 3      $ 3      $ 115      $ 132  

Less imputed interest

                        (75 ) 
                    

 

 

  

Total

                      $ 57  
                    

 

 

  

Additional information related to Emera’s leases is as follows:

 

     Year ended December 31  

For the

    2024     2023  

Cash paid for amounts included in the measurement of lease liabilities:

     

Operating cash flows for operating leases (millions of dollars)

    $ 10     $ 8  

Right-of-use assets obtained in exchange for lease obligations:

     

Operating leases (millions of dollars)

    $ —      $ 1  

Weighted average remaining lease term (years)

      44       44  
  

 

 

    

 

 

  

Weighted average discount rate – operating leases

      3.96 %      3.93 % 
  

 

 

    

 

 

  

LESSOR

The Company’s net investment in direct finance and sales-type leases primarily relates to Brunswick Pipeline, Seacoast, compressed natural gas (“CNG”) stations, a renewable natural gas (“RNG”) facility and heat pumps.

The Company manages its risk associated with the residual value of the Brunswick Pipeline lease through proper routine maintenance of the asset.

Customers have the option to purchase CNG station assets by paying a make-whole payment at the date of the purchase based on a targeted internal rate of return or may take possession of the CNG station asset at the end of the lease term for no cost. Customers have the option to purchase heat pumps at the end of the lease term for a nominal fee.

Commencing in October 2023, the Company leased a RNG facility to a biogas producer that is classified as a sales-type lease. The term of the facility lease is 15 years, with a nominal value purchase at the end of the term and a net investment of approximately $35 million USD.

Direct finance and sales-type lease unearned income is recognized in income over the life of the lease using a constant rate of interest equal to the internal rate of return on the lease and is recorded as “Operating revenues – regulated gas” and “Other income, net” on the Consolidated Statements of Income.

 

     
114    EMERA 2024 ANNUAL REPORT

Notes to the Consolidated Financial Statements

 

The total net investment in direct finance and sales-type leases consist of the following:

 

As at

millions of dollars

    December 31
2024		      December 31
2023		  

Total minimum lease payment to be received

    $ 1,310      $ 1,360  

Less: amounts representing estimated executory costs

      (182 )       (190 ) 
  

 

 

     

 

 

  

Minimum lease payments receivable

    $ 1,128      $ 1,170  

Estimated residual value of leased property (unguaranteed)

      183        183  

Less: Credit loss reserve

      (2 )       (2 ) 

Less: unearned finance lease income

      (655 )       (693 ) 
  

 

 

     

 

 

  

Net investment in direct finance and sales-type leases

    $ 654      $ 658  
  

 

 

     

 

 

  

Principal due within one year (included in “Receivables and other current assets”)

      44        37  
  

 

 

     

 

 

  

Net Investment in direct finance and sales type leases – long-term

    $ 610      $ 621  
  

 

 

     

 

 

  

As at December 31, 2024, future minimum lease payments to be received for each of the next five years and in aggregate thereafter were as follows:

 

millions of dollars

    2025      2026      2027      2028      2029      Thereafter      Total  

Minimum lease payments to be received

    $ 99      $ 100      $ 99      $ 97      $ 96      $ 819      $ 1,310  

Less: executory costs

                        (182 ) 
                    

 

 

  

Total

                      $ 1,128  
                    

 

 

  

21. Property, Plant and Equipment

PP&E consisted of the following regulated and non-regulated assets:

 

As at

millions of dollars

    Estimated
useful life		      December 31
2024 (1)		      December 31
2023		  

Generation

      5 to 131      $ 14,297      $ 13,500  

Transmission

      10 to 80        3,106        2,835  

Distribution

      10 to 65        8,512        7,417  

Gas transmission and distribution

      15 to 75        4,658        5,536  

General plant and other (2)

      2 to 60        3,078        2,985  
     

 

 

     

 

 

  

Total cost

         33,651        32,273  

Less: Accumulated depreciation (2)

         (10,442 )       (9,994 ) 
     

 

 

     

 

 

  
        23,209        22,279  

Construction work in progress (2)

         2,959        2,097  
     

 

 

     

 

 

  

Net book value

       $ 26,168      $ 24,376  
     

 

 

     

 

 

  

 

(1)

On August 5, 2024, Emera announced an agreement to sell NMGC. As at December 31, 2024, NMGC’s assets and liabilities were classified as held for sale and excluded from the table above. For further details on the pending transaction, refer to note 4.

(2)

SeaCoast owns a 50% undivided ownership interest in a jointly owned 26-mile pipeline lateral located in Florida, which went into service in 2020. At December 31, 2024, SeaCoast’s share of plant in service was $27 million USD (2023 – $27 million USD), and accumulated depreciation of $3 million USD (2023 – $2 million USD). SeaCoast’s undivided ownership interest is financed with its funds and all operations are accounted for as if such participating interest were a wholly owned facility. SeaCoast’s share of direct expenses of the jointly owned pipeline is included in “OM&G” in the Consolidated Statements of Income.

 

     
EMERA 2024 ANNUAL REPORT    115

Notes to the Consolidated Financial Statements

 

22. Employee Benefit Plans

Emera maintains a number of contributory defined-benefit (“DB”) and defined-contribution (“DC”) pension plans, which cover substantially all of its employees. The Company also provides non-pension benefits for its retirees.

Emera’s net periodic benefit cost included the following:

BENEFIT OBLIGATION AND PLAN ASSETS:

Changes in the benefit obligation and plan assets, and the funded status for plans were as follows:

 

For the

millions of dollars

    Year ended December 31  
   2024      2023  
     DB pension
plans		      Non-pension
benefit plans		      DB pension
plans		      Non-pension
benefit plans		  

Change in Projected Benefit Obligation (“PBO”) and Accumulated Post-retirement Benefit Obligation (“APBO”):

            

Balance, January 1

    $ 2,273      $ 227      $ 2,158      $ 243  

Service cost

      35        3        30        3  

Plan participant contributions

      6        5        6        6  

Interest cost

      110        12        111        13  

Plan amendments

      —         —         —         (14 ) 

Benefits paid

      (153 )       (21 )       (147 )       (29 ) 

Actuarial losses (gains) (1)

      13        (3 )       146        10  

Settlements and curtailments

      —         —         (8 )       —   

FX translation adjustment

      83        18        (23 )       (5 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Balance, December 31

    $ 2,367      $ 241      $ 2,273      $ 227  
  

 

 

     

 

 

     

 

 

     

 

 

  

Change in plan assets:

            

Balance, January 1

    $ 2,298      $ 48      $ 2,163      $ 46  

Employer contributions

      36        13        42        23  

Plan participant contributions

      6        5        6        6  

Benefits paid

      (153 )       (21 )       (147 )       (29 ) 

Actual return on assets, net of expenses

      226        4        262        3  

Settlements and curtailments

      —         —         (8 )       —   

FX translation adjustment

      80        5        (20 )       (1 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Balance, December 31

    $ 2,493      $ 54      $ 2,298      $ 48  
  

 

 

     

 

 

     

 

 

     

 

 

  

Funded status, end of year

    $ 126      $ (187 )     $ 25      $ (179 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

 

(1)

The actuarial losses recognized in the period are primarily due to changes in the discount rate, higher than expected indexation, and compensation-related assumption changes.

PLANS WITH PBO/APBO IN EXCESS OF PLAN ASSETS:

The aggregate financial position for pension plans where the PBO or APBO (for post-retirement benefit plans) exceeded the plan assets for the years ended December 31 were as follows:

 

millions of dollars

    2024      2023  
     DB pension
plans		      Non-pension
benefit plans		      DB pension
plans		      Non-pension
benefit plans		  

PBO/APBO

    $ 95      $ 219      $ 120      $ 205  

FV of plan assets

      11        —         37        —   
  

 

 

     

 

 

     

 

 

     

 

 

  

Funded status

    $ (84 )     $ (219 )     $ (83 )     $ (205 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

 

     
116    EMERA 2024 ANNUAL REPORT

Notes to the Consolidated Financial Statements

 

PLANS WITH ACCUMULATED BENEFIT OBLIGATION (“ABO”) IN EXCESS OF PLAN ASSETS:

The ABO for the DB pension plans was $2,255 million as at December 31, 2024 (2023 – $2,172 million). The aggregate financial position for those plans with an ABO in excess of the plan assets for the years ended December 31 were as follows:

 

millions of dollars

    2024      2023  
     DB pension
plans		      DB pension
plans		  

ABO

    $ 90      $ 114  

FV of plan assets

      11        37  
  

 

 

     

 

 

  

Funded status

    $ (79 )     $ (77 ) 
  

 

 

     

 

 

  

BALANCE SHEET:

The amounts recognized in the Consolidated Balance Sheets consisted of the following:

 

As at

millions of dollars

    December 31
2024		      December 31
2023		  
     DB pension
plans		      Non-pension
benefit plans		      DB pension
plans		      Non-pension
benefit plans		  

Other current liabilities

    $ (5 )     $ (21 )     $ (5 )     $ (18 ) 

Liabilities associated with assets held for sale (1)

      —         (1 )       —         —   

Long-term liabilities

      (78 )       (196 )       (78 )       (187 ) 

Other long-term assets

      208        —         108        26  

Assets held for sale (1)

      1        31        —         —   

AOCI, net of tax and regulatory assets

      354        22        385        20  

Deferred income tax expense in AOCI

      (8 )       (1 )       (8 )       (1 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Net amount recognized

    $ 472      $ (166 )     $ 402      $ (160 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

 

(1)

On August 5, 2024, Emera announced an agreement to sell NMGC. As at December 31, 2024, NMGC’s assets and liabilities were classified as held for sale. For further details on the pending transaction, refer to note 4.

AMOUNTS RECOGNIZED IN AOCI AND REGULATORY ASSETS:

Unamortized gains and losses and past service costs arising on post-retirement benefits are recorded in AOCI or regulatory assets. The following table summarizes the change in AOCI and regulatory assets:

 

millions of dollars

    Regulatory
assets		      Actuarial
(gains) losses		      Past service
gains		  

DB Pension Plans:

         

Balance, January 1, 2024

    $ 324      $ 53      $ —   

Amortized in current period

      (9 )       (3 )       —   

Current year additions

      19        (67 )       —   

Change in FX rate

      29        —         —   
  

 

 

     

 

 

     

 

 

  

Balance, December 31, 2024

    $ 363      $ (17 )     $ —   
  

 

 

     

 

 

     

 

 

  

Non-pension benefits plans:

         

Balance, January 1, 2024

    $ 29      $ (8 )     $ (2 ) 

Amortized in current period

      2        1        2  

Current year reductions

      (5 )       (1 )       —   

Change in FX rate

      3        —         —   
  

 

 

     

 

 

     

 

 

  

Balance, December 31, 2024

    $ 29      $ (8 )     $ —   
  

 

 

     

 

 

     

 

 

  

 

     
EMERA 2024 ANNUAL REPORT    117

Notes to the Consolidated Financial Statements

 

As at

millions of dollars

    December 31
2024		      December 31
2023		  
     DB pension
plans		      Non-pension
benefit plans		      DB pension
plans		      Non-pension
benefit plans		  

Actuarial (gains) losses

    $ (17 )     $ (8 )     $ 53      $ (8 ) 

Past service gains

      —         —         —         (2 ) 

Deferred income tax expense

      8        1        8        1  
  

 

 

     

 

 

     

 

 

     

 

 

  

AOCI, net of tax

      (9 )       (7 )       61        (9 ) 

Regulatory assets

      363        29        324        29  
  

 

 

     

 

 

     

 

 

     

 

 

  

AOCI, net of tax and regulatory assets

    $ 354      $ 22      $ 385      $ 20  
  

 

 

     

 

 

     

 

 

     

 

 

  

BENEFIT COST COMPONENTS:

Emera’s net periodic benefit cost included the following:

 

As at

millions of dollars

    Year ended December 31  
   2024      2023  
     DB pension
plans		      Non-pension
benefit plans		      DB pension
plans		      Non-pension
benefit plans		  

Service cost

    $ 35      $ 3      $ 30      $ 3  

Interest cost

      110        12        111        13  

Expected return on plan assets

      (160 )       (2 )       (161 )       (2 ) 

Current year amortization of:

            

Actuarial losses (gains)

      3        (2 )       1        (3 ) 

Past service gains

      —         (2 )       —         —   

Regulatory assets

      9        (2 )       6        (2 ) 

Settlement, curtailments

      —         1        2        —   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ (3 )     $ 8      $ (11 )     $ 9  
  

 

 

     

 

 

     

 

 

     

 

 

  

The expected return on plan assets is determined based on the market-related value of plan assets of $2,571 million as at January 1, 2024 (2023 – $2,577 million), adjusted for interest on certain cash flows during the year. The market-related value of assets is based on a smoothed asset value. Any investment gains (or losses) in excess of (or less than) the expected return on plan assets are recognized on a straight-line basis into the market-related value of assets over a multi-year period.

PENSION PLAN ASSET ALLOCATIONS:

Emera’s investment policy includes discussion regarding the investment philosophy, the level of risk which the Company is prepared to accept with respect to the investment of the Pension Funds, and the basis for measuring the performance of the assets. Central to the policy is the target asset allocation by major asset categories. The objective of the target asset allocation is to diversify risk and to achieve asset returns that meet or exceed the plan’s actuarial assumptions. The diversification of assets reduces the inherent risk in financial markets by requiring that assets be spread out amongst various asset classes. Further, within each asset class, a diversification is undertaken through the investment in a broad range of investment and non-investment grade securities. Emera’s target asset allocation is as follows:

 

Asset Class

    Target Range at Market  

Canadian Pension Plans:

        

Short-term securities

      0 %      to        10 % 

Fixed income

      34 %      to        49 % 

Equities:

        

Canadian

      5 %      to        15 % 

Non-Canadian

      37 %      to        61 % 
  

 

 

       

 

 

  

Non-Canadian Pension Plans:

        

Cash and cash equivalents

      0 %      to        10 % 

Fixed income

      29 %      to        49 % 

Equities

      48 %      to        68 % 
  

 

 

       

 

 

  

Pension plan assets are overseen by the respective management pension committees in the sponsoring companies. All pension investments are in accordance with policies approved by the respective Board of Directors of each sponsoring company.

 

     
118    EMERA 2024 ANNUAL REPORT

Notes to the Consolidated Financial Statements

 

The following tables set out the classification of the methodology used by the Company to FV its investments (for more information on the FV hierarchy and measurement, refer to note 17):

 

millions of dollars

    NAV      Level 1     Level 2     Total     Percentage  

As at

    December 31, 2024  

Cash and cash equivalents

    $ —       $ 39     $ —      $ 39       2 % 

Net in-transits

      —         (27 )      —        (27 )      (1 )% 

Equity securities:

            

Canadian equity

      —         109       —        109       4 % 

United States equity

      —         312       —        312       12 % 

Other equity

      —         140       —        140       5 % 

Fixed income securities:

            

Government

      —         —        132       132       5 % 

Corporate

      —         —        92       92       4 % 

Other

      —         —        22       22       1 % 

Mutual funds

      —         13       —        13       1 % 

Open-ended investments measured at NAV (1)

      1,142        —        —        1,142       46 % 

Common collective trusts measured at NAV (2)

      519        —        —        519       21 % 
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Total

    $ 1,661      $ 586     $ 246     $ 2,493       100 % 
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

As at

    December 31, 2023  

Cash and cash equivalents

    $ —       $ 40     $ —      $ 40       2 % 

Net in-transits

      —         (9 )      —        (9 )      — % 

Equity securities:

            

Canadian equity

      —         96       —        96       4 % 

United States equity

      —         141       —        141       6 % 

Other equity

      —         112       —        112       5 % 

Fixed income securities:

            

Government

      —         —        172       172       8 % 

Corporate

      —         —        90       90       4 % 

Other

      —         4       5       9       – % 

Mutual funds

      —         50       —        50       2 % 

Other

      —         6       (1 )      5       – % 

Open-ended investments measured at NAV (1)

      1,006        —        —        1,006       44 % 

Common collective trusts measured at NAV (2)

      586        —        —        586       25 % 
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Total

    $ 1,592      $ 440     $ 266     $ 2,298       100 % 
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

 

(1)

Net asset value (“NAV”) investments are open-ended registered and non-registered mutual funds, collective investment trusts, or pooled funds. NAV’s are calculated at least monthly and the funds honour subscription and redemption activity regularly.

(2)

The common collective trusts are private funds valued at NAV. The NAVs are calculated based on bid prices of the underlying securities. Since the prices are not published to external sources, NAV is used as a practical expedient. Certain funds invest primarily in equity securities of domestic and foreign issuers while others invest in long duration U.S. investment grade fixed income assets and seeks to increase return through active management of interest rate and credit risks. The funds honour subscription and redemption activity regularly.

NON-PENSION BENEFIT PLANS:

There are no assets set aside to pay for most of the Company’s non-pension benefit plans. As is common practice, post- retirement health benefits are paid from general accounts as required. The exception to this is the NMGC Retiree Medical Plan, which is fully funded.

INVESTMENTS IN EMERA:

As at December 31, 2024 and 2023, assets related to the pension funds and post-retirement benefit plans did not hold any material investments in Emera or its subsidiaries securities. However, as a significant portion of assets for the benefit plan are held in pooled assets, there may be indirect investments in these securities.

 

     
EMERA 2024 ANNUAL REPORT    119

Notes to the Consolidated Financial Statements

 

CASH FLOWS:

The following table shows expected cash flows for DB pension and other post-retirement benefit plans:

 

millions of dollars

    DB pension
plans		      Non-pension
benefit plans		  

Expected employer contributions

      

2025

    $ 41      $ 21  
  

 

 

     

 

 

  

Expected benefit payments

      

2025

      175        23  

2026

      179        23  

2027

      182        23  

2028

      184        23  

2029

      186        22  

2030 – 2034

      950        103  
  

 

 

     

 

 

  

ASSUMPTIONS:

The following table shows the assumptions that have been used in accounting for DB pension and other post-retirement benefit plans:

 

(weighted average assumptions)

    2024     2023  
   DB pension
plans		     Non-pension
benefit plans		     DB pension
plans		     Non-pension
benefit plans		  

Benefit obligation – December 31:

         

Discount rate – past service

      5.07 %      4.91 %      4.89 %      4.89 % 

Discount rate – future service

      5.12 %      5.00 %      4.88 %      4.89 % 

Rate of compensation increase

      3.73 %      3.72 %      3.87 %      3.85 % 

Health care trend – initial (next year)

      —        6.53 %      —        6.04 % 

– ultimate

      —        3.77 %      —        3.76 % 

– year ultimate reached

        2044         2043  
    

 

 

      

 

 

  

Benefit cost for year ended December 31:

         

Discount rate – past service

      4.89 %      4.89 %      5.33 %      5.31 % 

Discount rate – future service

      4.88 %      4.89 %      5.34 %      5.32 % 

Expected long-term return on plan assets

      6.43 %      3.69 %      6.56 %      2.16 % 

Rate of compensation increase

      3.87 %      3.85 %      3.62 %      3.61 % 

Health care trend – initial (current year)

      —        6.04 %      —        5.40 % 

– ultimate

      —        3.76 %      —        3.77 % 

– year ultimate reached

        2043         2043  
    

 

 

      

 

 

  

Actual assumptions used differ by plan.

The expected long-term rate of return on plan assets is based on historical and projected real rates of return for the plan’s current asset allocation, and assumed inflation. A real rate of return is determined for each asset class. Based on the asset allocation, an overall expected real rate of return for all assets is determined. The asset return assumption is equal to the overall real rate of return assumption added to the inflation assumption, adjusted for assumed expenses to be paid from the plan.

The discount rate is based on high-quality long-term corporate bonds, with maturities matching the estimated cash flows from the pension plan.

DC PENSION PLAN:

Emera also provides a DC pension plan for certain employees. The Company’s contribution for the year ended December 31, 2024 was $51 million (2023 – $45 million).

 

     
120    EMERA 2024 ANNUAL REPORT

Notes to the Consolidated Financial Statements

 

23. Goodwill

The change in goodwill for the year ended December 31 was due to the following:

 

millions of dollars

    2024      2023  

Balance, January 1

    $ 5,871      $ 6,012  

Change in FX rate

      504        (141 ) 

Impairment charges

      (214 )       —   

Classified as assets held for sale (1)

      (303 )       —   
  

 

 

     

 

 

  

Balance, December 31

    $ 5,858      $ 5,871  
  

 

 

     

 

 

  

 

(1)

As at December 31, 2024, NMGC’s assets and liabilities were classified as held for sale. For further details on the pending transaction, refer to note 4.

Goodwill is subject to an annual assessment for impairment at the reporting unit level. The goodwill on Emera’s Consolidated Balance Sheets at December 31, 2024, related to TECO Energy, Inc. (reporting units with goodwill are TEC, PGS, and NMGC).

On August 5, 2024, Emera announced an agreement to sell NMGC. As the expected transaction proceeds on the pending sale will be less than the NMGC carrying amount, the Company performed a quantitative goodwill impairment assessment for the NMGC reporting unit. It was determined that the NMGC carrying amount exceeded the FV of the expected transaction proceeds, and as a result, a non-cash goodwill impairment charge of $210 million, pre-tax, was recorded in Q3 2024, reducing the NMGC reporting unit goodwill balance to $303 million as at December 31, 2024. This non-cash charge is included in “Impairment charges” on the Consolidated Statements of Income.

In 2024, a qualitative assessment was performed for TEC given the significant excess of FV over carrying amounts calculated during the last quantitative test in Q4 2023. Management concluded it was more likely than not that the FV of this reporting unit exceeded its carrying amount, including goodwill. As such, no quantitative testing was required. Given the length of time passed since the last quantitative impairment test for the PGS reporting unit, Emera elected to bypass a qualitative assessment and performed a quantitative impairment assessment in Q4 2024 using a combination of the income and market approach. This assessment estimated that the FV of the PGS reporting unit exceeded its carrying amount, including goodwill, and as a result, no impairment charges were recognized.

24. Short-term Debt

Emera’s short-term borrowings consist of commercial paper issuances, advances on revolving and non-revolving credit facilities and short-term notes. Short-term debt and the related weighted-average interest rates as at December 31 consisted of the following:

 

millions of dollars

    2024     Weighted
average
interest rate		     2023      Weighted
average
interest rate		  

Florida Electric Utility

          

Advances on revolving credit facilities

    $ 915       4.77 %    $ 277        5.68 % 
  

 

 

    

 

 

    

 

 

     

 

 

  

Gas Utilities and Infrastructure

          

PGS – Advances on revolving credit facilities

      199       5.36 %      73        6.36 % 

NMGC – Advances on revolving credit facilities

      46       5.52 %      25        6.46 % 
  

 

 

    

 

 

    

 

 

     

 

 

  

Other Electric Utilities

          

GBPC – Advances on revolving credit facilities

      19       7.20 %      8        5.54 % 
  

 

 

    

 

 

    

 

 

     

 

 

  

Other

          

TECO Finance – Advances on revolving credit and term facilities

      265       5.53 %      245        6.54 % 

Emera – Bank indebtedness

      2       — %      9        — % 

Emera – Non-revolving term facilities

      —        — %      796        6.07 % 
  

 

 

    

 

 

    

 

 

     

 

 

  
   $ 1,446       $ 1,433     
  

 

 

      

 

 

     

Adjustment

          

Classification as liabilities held for sale (1)

      (46 )        —      
  

 

 

      

 

 

     

Short-term debt

    $ 1,400       $ 1,433     
  

 

 

      

 

 

     

 

(1)

On August 5, 2024, Emera announced an agreement to sell NMGC. As at December 31, 2024, NMGC’s liabilities were classified as held for sale. For further details on the pending transaction, refer to note 4.

 

     
EMERA 2024 ANNUAL REPORT    121

Notes to the Consolidated Financial Statements

 

The Company’s total short-term unsecured revolving and non-revolving credit facilities, outstanding borrowings and available capacity as at December 31 were as follows:

 

millions of dollars

    Maturity      2024      2023  

TEC – committed revolving credit facility

      2028      $ 1,151      $ 401  

TECO Finance – committed revolving credit facility

      2028        576        529  

PGS – revolving credit facility

      2028        360        331  

NMGC – revolving credit facility

      2026        180        165  

Emera – non-revolving term facility

      2024        —         400  

Emera – non-revolving term facility

      2024        —         400  

TEC – revolving facility

      2024        —         265  

TEC – revolving facility

      2024        —         265  

Other – committed revolving credit facilities

      Various        35        17  
     

 

 

     

 

 

  

Total

       $ 2,302      $ 2,773  
     

 

 

     

 

 

  

Less:

         

Advances under revolving credit and term facilities

         1,400        1,433  

Letters of credit issued within the credit facilities

         4        3  
     

 

 

     

 

 

  

Total advances under available facilities

         1,404        1,436  
     

 

 

     

 

 

  

Available capacity under existing agreements

       $ 898      $ 1,337  
     

 

 

     

 

 

  

The weighted average interest rate on outstanding short-term debt at December 31, 2024 was 5.05 per cent (2023 – 5.95 per cent).

RECENT SIGNIFICANT FINANCING ACTIVITY BY SEGMENT

FLORIDA ELECTRIC UTILITIES

On April 1, 2024, TEC amended its $800 million USD unsecured committed revolving credit facility to extend the maturity date from December 17, 2026 to December 1, 2028. There were no other changes in commercial terms from the prior agreement.

OTHER

On June 24, 2024, Emera repaid its $400 million unsecured non-revolving term facility set to mature in August 2024.

On June 17, 2024, Emera repaid $200 million on the December 2024 unsecured non-revolving term facility, decreasing the facility from $400 million to $200 million. In December 2024, Emera repaid the $200 million upon maturity.

On April 1, 2024, TECO Finance amended its $400 million USD unsecured committed revolving credit facility to extend the maturity date from December 17, 2026 to December 1, 2028. There were no other changes in commercial terms from the prior agreement.

25. Other Current Liabilities

 

As at

millions of dollars

    December 31
2024		      December 31
2023		  

Accrued charges

    $ 189      $ 172  

Accrued interest on long-term debt

      106        107  

Pension and post-retirement liabilities (note 22)

      26        23  

Sales and other taxes payable

      11        11  

Income tax payable

      4        2  

Other

      153        112  
  

 

 

     

 

 

  
   $ 489      $ 427  
  

 

 

     

 

 

  

 

     
122    EMERA 2024 ANNUAL REPORT

Notes to the Consolidated Financial Statements

 

26. Long-term Debt

Bonds, notes and debentures are at fixed interest rates and are unsecured unless noted below. Included are certain bankers’ acceptances and commercial paper where the Company has the intention and the unencumbered ability to refinance the obligations for a period greater than one year.

Long-term debt as at December 31 consisted of the following:

 

     Weighted average interest rate (1)                     

millions of dollars

    2024     2023     Maturity      2024     2023  

Florida Electric Utility

            

Senior unsecured notes

      4.36 %      4.61 %      2029 –2051      $ 5,720     $ 5,654  
         

 

 

    

 

 

  

Canadian Electric Utilities

            

NSPI – Commercial paper (2)

      Variable       Variable       2029      $ 177     $ 721  

NSPI – Senior unsecured notes

      5.12 %      5.13 %      2025 –2097        3,184       3,165  
         

 

 

    

 

 

  
          $ 3,361     $ 3,886  
         

 

 

    

 

 

  

Gas Utilities and Infrastructure

            

PGS – Senior unsecured notes

      5.63 %      5.63 %      2028 –2053      $ 1,331     $ 1,223  

NMGC – Senior unsecured notes

      3.78 %      3.78 %      2026 –2051        698       642  

NMGC – Unsecured loan notes

      N/A       Variable       2024        —        30  

NMGI – Senior unsecured notes

      N/A       3.64 %      2024        —        198  

EBP – Secured loan notes

      Variable       Variable       2028        250       246  
         

 

 

    

 

 

  
          $ 2,279     $ 2,339  
         

 

 

    

 

 

  

Other Electric Utilities

            

Unsecured loan notes

      4.06 %      4.78 %      2025 –2028      $ 143     $ 121  

Unsecured loan notes

      Variable       Variable       2025 –2027        104       104  

Secured senior notes and debentures (3)

      2.38 %      3.06 %      2026 –2040        169       197  
         

 

 

    

 

 

  
          $ 416     $ 422  
         

 

 

    

 

 

  

Other

            

Unsecured loan notes

      Variable       Variable       2026 –2029      $ 992     $ 465  

Senior unsecured notes

      3.99 %      3.65 %      2026 –2046        3,525       3,637  

Senior unsecured notes

      4.84 %      4.84 %      2030        500       500  

Fixed to floating subordinated notes (4)

      6.75 %      6.75 %      2076        1,727       1,587  

Junior subordinated notes

      7.63 %      0.00 %      2054        720       —   
         

 

 

    

 

 

  
          $ 7,464     $ 6,189  
         

 

 

    

 

 

  

Adjustments

            

Debt issuance costs

             (137 )      (125 ) 

Classification as liabilities held for sale (5)

             (696 )      —   

Amount due within one year (6)

             (234 )      (676 ) 
         

 

 

    

 

 

  
          $ (1,067 )    $ (801 ) 
         

 

 

    

 

 

  

Long-Term Debt

           $ 18,173     $ 17,689  
         

 

 

    

 

 

  

 

(1)

Weighted average interest rate of fixed rate long-term debt.

(2)

Discount notes are backed by a revolving credit facility which matures in 2029.

(3)

Notes are issued and payable in either USD or BBD.

(4)

In 2024, the Company recognized $110 million in interest expense (2023 – $109 million) related to its fixed to floating subordinated notes.

(5)

On August 5, 2024, Emera announced an agreement to sell NMGC. As at December 31, 2024, NMGC’s liabilities were classified as held for sale. For further details on the pending transaction, refer to note 4.

(6)

Excludes NMGC amounts which are classified as current liabilities associated with assets held for sale.

 

     
EMERA 2024 ANNUAL REPORT    123

Notes to the Consolidated Financial Statements

 

The Company’s total long-term revolving credit facilities, outstanding borrowings and available capacity as at December 31 were as follows:

 

millions of dollars

    Maturity      2024      2023  

Emera – committed revolving credit facility (1)

      June 2029      $ 1,300      $ 900  

NSPI – revolving credit facility (1)

      June 2029        800        800  

Emera – Unsecured non-revolving credit facility

      February 2026        200        400  

TEC – Unsecured committed revolving credit facility

      December 2026        —         657  

NSPI – non-revolving credit facility

      July 2024        —         400  

NMGC – Unsecured non-revolving credit facility

      March 2024        —         30  

ECI – revolving credit facilities

      October 2024        —         10  
     

 

 

     

 

 

  

Total

 

    $ 2,300      $ 3,197  
     

 

 

     

 

 

  

Less:

         

Borrowings under credit facilities

         1,169        1,884  

Letters of credit issued inside credit facilities

         12        6  
     

 

 

     

 

 

  

Use of available facilities

 

    $ 1,181      $ 1,890  
     

 

 

     

 

 

  

Available capacity under existing agreements

 

    $ 1,119      $ 1,307  
     

 

 

     

 

 

  

 

(1)

Advances on the revolving credit facility can be made by way of overdraft on accounts up to $50 million.

DEBT COVENANTS

Emera and its subsidiaries have debt covenants associated with their credit facilities. Covenants are tested regularly and the Company is in compliance with covenant requirements. Emera’s significant covenants are listed below:

 

    

Financial Covenant

   

Requirement

   

As at

December 31, 2024

Emera

         

Syndicated credit facilities

    Debt to capital ratio    Less than or equal to 0.70 to 1    0.55 : 1
        

 

RECENT SIGNIFICANT FINANCING ACTIVITY BY SEGMENT

FLORIDA ELECTRIC UTILITY

On July 12, 2024, TEC repaid a $300 million USD note upon maturity. This note was repaid with proceeds from commercial paper.

On January 30, 2024, TEC issued $500 million USD of senior unsecured bonds that bear interest at 4.90 per cent with a maturity date of March 1, 2029. Proceeds from the issuance were primarily used for the repayment of short-term borrowings outstanding under the 5-year credit facility.

CANADIAN ELECTRIC UTILITIES

On June 24, 2024, NSPI amended its unsecured non-revolving credit facility to extend the maturity date from July 15, 2024 to June 24, 2025 and reduce the facility from $400 million to $300 million. On December 16, 2024, NSPI repaid the $300 million unsecured non-revolving credit facility.

On June 24, 2024, NSPI amended its unsecured committed revolving credit facility to extend the maturity date from December 16, 2027 to June 24, 2029. There were no other material changes in commercial terms from the prior agreement.

On June 13, 2024, NSPI entered a non-revolving credit facility to finance the Battery Energy Storage Project. NSPI can request funds under the facility quarterly for amounts related to incurred project costs up to the total commitment of the lessor of $120 million and 45.06 per cent of the total eligible project costs over the term of the agreement. The facility will be available until 6 months after completion of the project, not to exceed May 21, 2027, and matures 20 years following the end of the period. As at December 31, 2024, NSPI had utilized $19 million from the facility, which bears interest at 2.51 per cent.

GAS UTILITIES AND INFRASTRUCTURE

On December 10, 2024, Brunswick Pipeline amended its non-revolving loan agreement. The maturity date was extended to December 2028 and now includes annual principal repayments.

On July 30, 2024, New Mexico Gas Intermediate, Inc. repaid its $150 million USD fixed rate notes upon maturity.

 

     
124    EMERA 2024 ANNUAL REPORT

Notes to the Consolidated Financial Statements

 

OTHER ELECTRIC UTILITIES

On May 2, 2024, BLPC amended its $92 million Barbadian dollar ($46 million USD) loan facility to extend the maturity date from February 19, 2025 to July 19, 2028. There were no other material changes in commercial terms from the prior agreement.

OTHER

On June 24, 2024, Emera amended its unsecured committed revolving credit facility increasing the facility from $900 million to $1,300 million. Emera also extended the maturity date from June 24, 2027 to June 24, 2029. There were no other material changes in commercial terms from the prior agreement.

On June 15, 2024, Emera Finance repaid its $300 million USD senior notes upon maturity.

On June 18, 2024, EUSHI Finance, Inc., completed an issuance of $500 million USD fixed-to-fixed reset rate junior subordinated notes. The notes initially bear interest at a rate of 7.625 per cent, and will reset on December 15, 2029, and every five years thereafter, to a rate per annum equal to the five-year U.S. treasury rate plus 3.136 per cent. The notes mature on December 15, 2054. EUSHI Finance, Inc., at its option, may redeem the notes, in whole or in part, 90 days prior to the first interest reset date, and any semi-annual interest payment date thereafter, at a redemption price equal to the principal amount.

On February 16, 2024, Emera amended its $400 million unsecured non-revolving facility to extend the maturity date from February 19, 2024 to February 19, 2025. There were no other changes in commercial terms from the prior agreement. On July 19, 2024, Emera reduced the amount of the facility from $400 million to $200 million. On February 20, 2025, Emera extended the agreement for an additional year to February 2026 with no other changes in terms. This facility was classified as long-term debt at December 31, 2024.

LONG-TERM DEBT MATURITIES

As at December 31, 2024, long-term debt maturities, including capital lease obligations, for each of the next five years and in aggregate thereafter are as follows:

 

millions of dollars

    2025      2026      2027      2028      2029      Thereafter      Total  

Florida Electric Utility

    $ —       $ —       $ —       $ —       $ 720      $ 5,000      $ 5,720  

Canadian Electric Utilities

      125        40        —         —         217        2,979        3,361  

Gas Utilities and Infrastructure

      31        132        31        535        31        1,519        2,279  

Other Electric Utilities

      78        101        89        116        4        28        416  

Other

      —         3,006        —         —         792        3,666        7,464  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 234      $ 3,279      $ 120      $ 651      $ 1,764      $ 13,192      $ 19,240  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

27. Asset Retirement Obligations

AROs mostly relate to reclamation of land at the thermal, hydro and combustion turbine sites; and the disposal of polychlorinated biphenyls in transmission and distribution equipment and a pipeline site. Certain hydro, transmission and distribution assets may have additional AROs that cannot be measured as these assets are expected to be used for an indefinite period and, as a result, a reasonable estimate of the FV of any related ARO cannot be made.

The change in ARO for the years ended December 31 is as follows:

 

millions of dollars

    2024      2023  

Balance, January 1

    $ 192      $ 174  

Additions

      11        —   

Accretion included in depreciation expense

      10        9  

Change in FX rate

      5        (1 ) 

Revisions in estimated cash flows

      2        —   

Accretion deferred to regulatory asset (included in PP&E)

      —         18  

Classified as assets held for sale (1)

      (1 )       —   

Liabilities settled

      (2 )       (8 ) 
  

 

 

     

 

 

  

Balance, December 31

    $ 217      $ 192  
  

 

 

     

 

 

  

 

(1)

As at December 31, 2024, NMGC’s assets and liabilities were classified as held for sale. For further details on the pending transaction, refer to note 4.

 

     
EMERA 2024 ANNUAL REPORT    125

Notes to the Consolidated Financial Statements

 

28. Commitments and Contingencies

A. Commitments

As at December 31, 2024, contractual commitments (excluding pensions and other post-retirement obligations, long-term debt and asset retirement obligations) for each of the next five years and in aggregate thereafter consisted of the following:

 

millions of dollars

    2025      2026      2027      2028      2029      Thereafter      Total  

Purchased power (1)

    $ 307      $ 277      $ 368      $ 368      $ 369      $ 4,487      $ 6,176  

Transportation (2)(3)

      742        545        544        454        412        3,228        5,925  

Capital projects

      604        287        24        —         —         —         915  

Fuel, gas supply and storage (4)

      591        94        21        5        —         —         711  

Other

      160        95        80        59        59        264        717  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
   $ 2,404      $ 1,298      $ 1,037      $ 886      $ 840      $ 7,979      $ 14,444  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

As detailed below, contractual obligations at December 31, 2024 includes those related to NMGC. On completion of the sale of NMGC, all remaining future contractual obligations will be transferred to the buyer. For further details on the pending transaction, refer to note 4.

 

(1)

Annual requirement to purchase electricity production from IPPs or other utilities over varying contract lengths.

(2)

Includes $86 million related to NMGC (2025: $30 million, 2026: $24 million, 2027: $16 million, 2028: $12 million, 2029: $4 million).

(3)

Purchasing commitments for transportation of fuel and transportation capacity on various pipelines. Includes a commitment of $135 million related to a gas transportation contract between PGS and SeaCoast through 2040.

(4)

Includes $177 million related to NMGC (2025: $109 million, 2026: $52 million, 2027: $13 million, 2028: $3 million).

NSPI has a contractual obligation to pay NSPML for use of the Maritime Link over approximately 38 years from its January 15, 2018 in-service date. In November 2024, the UARB approved the collection of up to $197 million from NSPI for the recovery of Maritime Link costs in 2025. The timing and amounts payable to NSPML for the remainder of the 38-year commitment period are subject to UARB approval.

Emera has committed to obtain certain transmission rights in New Brunswick during summer periods (April through October, inclusive) for NLH’s use, if requested, effective August 15, 2021 and continuing for 50 years. As transmission rights are contracted, the obligations are included within “Other” in the above table.

B. Legal Proceedings

SUPERFUND AND FORMER MANUFACTURED GAS PLANT SITES

Previously, TEC had been a potentially responsible party (“PRP”) for certain superfund sites through its Tampa Electric and former PGS divisions, as well as for certain former manufactured gas plant sites through its PGS division. As a result of the separation of the PGS division into a separate legal entity, Peoples Gas System, Inc. is also now a PRP for those sites (in addition to third party PRPs for certain sites). While the aggregate joint and several liability associated with these sites has not changed as a result of the PGS legal separation, the sites continue to present the potential for significant response costs. As at December 31, 2024, the aggregate financial liability of the Florida utilities is estimated to be $17 million ($12 million USD), primarily at PGS. This estimate assumes that other involved PRPs are credit-worthy entities. This amount has been accrued and is primarily reflected in the long-term liability section under “Other long-term liabilities” on the Consolidated Balance Sheets. The environmental remediation costs associated with these sites are expected to be paid over many years.

The estimated amounts represent only the portion of the cleanup costs attributable to the Florida utilities. The estimates to perform the work are based on the Florida utilities’ experience with similar work, adjusted for site-specific conditions and agreements with the respective governmental agencies. The estimates are made in current dollars, are not discounted and do not assume any insurance recoveries.

In instances where other PRPs are involved, most of those PRPs are believed to be currently credit-worthy and are likely to continue to be credit-worthy for the duration of the remediation work. However, in those instances that they are not, the Florida utilities could be liable for more than their actual percentage of the remediation costs. Other factors that could impact these estimates include additional testing and investigation which could expand the scope of the cleanup activities, additional liability that might arise from the cleanup activities themselves or changes in laws or regulations that could require additional remediation. Under current regulations, these costs are recoverable through customer rates established in base rate proceedings.

 

     
126    EMERA 2024 ANNUAL REPORT

Notes to the Consolidated Financial Statements

 

OTHER LEGAL PROCEEDINGS

Emera and its subsidiaries may, from time to time, be involved in other legal proceedings, claims and litigation that arise in the ordinary course of business which the Company believes would not reasonably be expected to have a material adverse effect on the financial condition of the Company.

C. Principal Financial Risks and Uncertainties

Emera believes the following principal financial risks could have a material adverse effect on Emera or its subsidiaries, or their business operations, liquidity or access to or cost of capital, financial position, prospects, and/or results of operations (herein considered a “Material Adverse Effect”). Risks associated with derivative instruments and FV measurements are discussed in note 16 and note 17.

Sound risk management is an essential discipline for running the business efficiently and pursuing the Company’s strategy successfully. Emera has an enterprise-wide risk management process, overseen by its Enterprise Risk Management Committee (“ERMC”) and monitored by the Board of Directors, to ensure risks are appropriately identified, assessed, monitored and subject to appropriate controls. The Board of Directors has a Risk and Sustainability Committee (‘RSC”) to assist in carrying out its risk and sustainability oversight responsibilities. The RSC’s mandate includes oversight of the Company’s Enterprise Risk Management framework, including the identification, assessment, monitoring and management of enterprise risks.

REGULATORY AND POLITICAL RISK

The Company’s rate-regulated subsidiaries and certain investments are subject to complex legislative and regulatory frameworks that cover material aspects of their businesses. These frameworks influence key factors such as rates and cost structures, revenue requirements, allowed ROEs, capital structures, rate base and capital investments, and the recovery of purchased electricity and fuel costs and other costs. Regulators also review the prudency of costs and make other decisions that can impact customer rates and the reliability of service. Emera’s cost-of-service utilities must obtain regulatory approvals for material aspects of their businesses, including changing or adding rates and/or riders. Such approvals often require public hearing proceedings involving numerous stakeholders, and there is no assurance in the outcomes or impact of any regulatory process or decision.

If Emera is unable to recover in a timely manner a material amount of costs or a return on invested capital through regulatory mechanisms or otherwise, is disallowed the recovery of certain costs, is subject to regulatory penalties, is not permitted to make certain capital investments, or is not permitted to invest in or divest certain utility assets, it could result in a Material Adverse Effect, including valuation impairments. Regulatory lag, the time between the incurrence of costs and the granting of the rates to recover those costs by regulators, may also result in a Material Adverse Effect.

Aspects of the acquisition, ownership, operations, siting, planning, construction, and decommissioning of electric generation, storage, transmission and distribution facilities and natural gas transportation and distribution systems are also subject to regulatory processes and approvals of regulators, government departments and agencies, and other third parties. The failure to obtain, maintain, and renew such approvals or significant changes in the terms and conditions thereof could have a Material Adverse Effect.

The regulatory framework, process and regulatory decisions may also be adversely affected by changes in government, shifts in government or public policy, legislative changes, regulatory decisions, geopolitical changes, changes in the economic environment, or other factors. Government interference in the regulatory process or regulatory decisions can undermine regulatory stability, predictability, and independence. Any such changes could have a Material Adverse Effect.

FOREIGN EXCHANGE RISK

The Company is exposed to foreign currency exchange rate changes. Emera operates internationally, with a significant amount of the Company’s net income earned outside of Canada. As such, Emera is exposed to movements in exchange rates between the CAD and, particularly, the USD, which could positively or adversely affect results.

Emera manages currency risks through matching US denominated debt to finance its US operations and may use foreign currency derivative instruments to hedge specific transactions and earnings exposure. The Company may enter FX forward and swap contracts to limit exposure on certain foreign currency transactions such as fuel purchases, revenue streams and capital expenditures, and on net income earned outside of Canada. The regulatory framework for the Company’s rate- regulated subsidiaries permits the recovery of prudently incurred costs, including FX.

 

     
EMERA 2024 ANNUAL REPORT    127

Notes to the Consolidated Financial Statements

 

The Company does not utilize derivative financial instruments for foreign currency trading or speculative purposes or to hedge the value of its investments in foreign subsidiaries. Exchange gains and losses on net investments in foreign subsidiaries do not impact net income as they are reported in AOCI.

LIQUIDITY AND CAPITAL MARKETS RISK

Liquidity risk relates to Emera’s ability to ensure sufficient funds are available to meet its financial obligations. Emera’s access to capital and cost of borrowing is subject to several risk factors, including financial market conditions, market disruptions and ratings assigned by various market analysts, including credit rating agencies. Disruptions in capital markets could prevent Emera from issuing new securities or cause the Company to issue securities with less than preferred terms and conditions. Emera’s growth plan requires significant capital investments in PP&E and the risk associated with changes in interest rates could have an adverse effect on the cost of financing. The Company’s future access to capital and cost of borrowing may be impacted by various market disruptions. The inability to access cost-effective capital could have a material impact on Emera’s ability to fund its growth plan.

Emera is subject to financial risk associated with changes in its credit ratings. There are a number of factors that rating agencies evaluate to determine credit ratings, including the Company’s business, its regulatory framework and legislative environment, political interference in the regulatory process, the ability to recover costs and earn returns, diversification, leverage, liquidity and increased exposure to climate change-related impacts, including increased frequency and severity of hurricanes and other severe weather events. A decrease in a credit rating could result in higher interest rates in future financings, increased borrowing costs under certain existing credit facilities, limit access to the commercial paper market, or limit the availability of adequate credit support for subsidiary operations. For certain derivative instruments, if the credit ratings of the Company were reduced below investment grade, the full value of the net liability of these positions could be required to be posted as collateral.

The Company has exposure to its own common share price through the issuance of various forms of stock-based compensation, which affect earnings through revaluation of the outstanding units every period. The Company uses equity derivatives to reduce the earnings volatility derived from stock-based compensation.

GENERAL ECONOMIC RISK

The Company has exposure to the macro-economic conditions in North America and in other geographic regions in which Emera operates. Like most utilities, economic factors such as consumer income, employment and housing affect demand for electricity and natural gas and, in turn, the Company’s financial results. Adverse changes in general economic conditions and inflation may impact the ability of customers to afford rate increases arising from increases to fuel, operating, capital, environmental compliance, and other costs, and therefore could have a Material Adverse Effect. This may also result in higher credit and counterparty risk, adverse shifts in government policy and legislation, and/or increased risk to full and timely recovery of costs and regulatory assets.

INTEREST RATE RISK:

Emera utilizes a combination of fixed and floating rate debt financing for operations and capital expenditures, resulting in an exposure to interest rate risk.

For Emera’s regulated subsidiaries, the cost of debt is a component of rates and prudently incurred debt costs are recovered from customers. Regulatory ROE will generally follow the direction of interest rates, such that regulatory ROEs are likely to fall in times of reducing interest rates and rise in times of increasing interest rates, albeit not directly and generally with a lag period reflecting the regulatory process. Rising interest rates may also negatively affect the economic viability of project development and acquisition initiatives.

Interest rates could also be impacted by changes in credit ratings. For more information, refer to “Liquidity and Capital Markets Risk”.

As with most other utilities and other similar yield-returning investments, Emera’s share price may be affected by changes in interest rates and could underperform the market in an environment of rising interest rates.

INFLATION RISK:

The Company may be exposed to changes in inflation that may result in increased operating and maintenance costs, capital investment, and fuel costs compared to the revenues provided by customer rates.

 

     
128    EMERA 2024 ANNUAL REPORT

Notes to the Consolidated Financial Statements

 

COMMODITY PRICE RISK

The Company’s utility fuel supply and purchase of other commodities is subject to commodity price risk. In addition, Emera Energy is subject to commodity price risk through its portfolio of commodity contracts and arrangements.

REGULATED UTILITIES:

The Company’s utility fuel supply is exposed to broader global market conditions, which may include impacts on delivery reliability and price, despite contracted terms. Supply and demand dynamics in fuel markets can be affected by a wide range of factors which are difficult to predict and may change rapidly, including but not limited to, currency fluctuations, changes in global economic conditions, natural disasters, transportation or production disruptions, and geo-political risks, such as political instability, conflicts, changes to international trade agreements, tariffs, trade sanctions or embargos.

Prolonged and substantial increases in fuel prices could result in decreased rate affordability, increased risk of recovery of costs or regulatory assets, and/or negative impacts on customer consumption patterns and sales, any of which could result in a Material Adverse Effect.

EMERA ENERGY MARKETING AND TRADING:

The majority of Emera Energy’s portfolio of electricity and gas marketing and trading contracts and, in particular, its natural gas asset management arrangements, are contracted on a back-to-back basis, avoiding any material long or short commodity positions. However, the portfolio is subject to commodity price risk, particularly with respect to basis point differentials between relevant markets in the event of an operational issue, imposition of tariffs or counterparty default. Changes in commodity prices can also result in increased collateral requirements associated with physical contracts and financial hedges, resulting in higher liquidity requirements and increased costs to the business.

INCOME TAX RISK

The computation of the Company’s provision for income taxes is impacted by changes in tax legislation in Canada, the US and the Caribbean and any such changes could have a Material Adverse Effect. The value of Emera’s existing deferred income tax assets and liabilities are determined by existing tax laws and could be negatively impacted by changes in laws.

D. Guarantees and Letters of Credit

Emera has guarantees and letters of credit on behalf of third parties outstanding. The following significant guarantees and letters of credit were not included within the Consolidated Balance Sheets as at December 31, 2024:

TECO Holdings, Inc. (“TECO Holdings”) has a guarantee in connection with SeaCoast’s performance of obligations under a gas transportation precedent agreement. The guarantee is for a maximum potential amount of $45 million USD if SeaCoast fails to pay or perform under the contract. The guarantee expires five years after the gas transportation precedent agreement termination date, which was terminated on January 1, 2022. The counterparty has the right to require TECO Holdings to provide replacement credit support either in the form of a substitute guarantee from an affiliate with an investment grade credit rating or a letter of credit or cash deposit of $27 million USD.

TECO Holdings has a guarantee in connection with SeaCoast’s performance obligations under a firm service agreement, which expires December 31, 2055, subject to two extension terms at the option of the counterparty with a final expiration date of December 31, 2071. The guarantee is for a maximum potential amount of $13 million USD if SeaCoast fails to pay or perform under the firm service agreement. The counterparty has the right to require TECO Holdings to provide replacement credit support in the form of either a substitute guarantee from an affiliate with an investment grade credit rating or a letter of credit or cash deposit of $13 million USD.

Emera has a guarantee of $66 million USD relating to outstanding notes of ECI. This guarantee will automatically terminate on the date upon which the obligations have been repaid in full.

NSPI has guarantees on behalf of its subsidiary, NS Power Energy Marketing Incorporated, in the amount of $104 million USD (2023 – $104 million USD) with terms of varying lengths.

The Company has standby letters of credit and surety bonds in the amount of $105 million USD (December 31, 2023 –

$103 million USD) to third parties that have extended credit to Emera and its subsidiaries. These letters of credit and surety bonds typically have a one-year term and are renewed annually as required.

Emera, on behalf of NSPI, has a standby letter of credit to secure obligations under a supplementary retirement plan. The expiry date of this letter of credit was extended to June 2025. The amount committed as at December 31, 2024 was $58 million (December 31, 2023 – $56 million).

 

     
EMERA 2024 ANNUAL REPORT    129

Notes to the Consolidated Financial Statements

 

Emera has provided an indemnity to a counterparty in relation to certain future tax amounts that could arise from specific future changes in Canadian federal law, subject to certain conditions and limitations. No such changes in law have been proposed at this time. A reasonable estimate of the potential amount of future payments that could result from future claims under this indemnity cannot be calculated, but the risk of having to make any significant payments under this indemnity is considered to be remote.

COLLABORATIVE ARRANGEMENTS

For the years ended December 31, 2024 and 2023, the Company has identified the following material collaborative arrangements:

Through NSPI, the Company is a participant in three wind energy projects in Nova Scotia. The percentage ownership of the wind project assets is based on the relative value of each party’s project assets by the total project assets. NSPI has power purchase arrangements to purchase the entire net output of the projects and, therefore, NSPI’s portion of the revenues are recorded net within regulated fuel for generation and purchased power. NSPI’s portion of operating expenses is recorded in “OM&G” on the Consolidated Statements of Income. In 2024, NSPI recognized $12 million net expense (2023 – $8 million) in “Regulated fuel for generation and purchased power” and $3 million (2023 – $3 million) in “OM&G” on the Consolidated Statements of Income.

29. Cumulative Preferred Stock

Authorized:

Unlimited number of First Preferred shares, issuable in series.

Unlimited number of Second Preferred shares, issuable in series.

 

                   December 31, 2024      December 31, 2023  
     Annual Dividend
Per Share		      Redemption
Price per share		      Issued and
Outstanding		      Net
Proceeds		      Issued and
Outstanding		      Net
Proceeds		  

Series A

    $ 0.5456      $ 25.00        4,866,814      $ 119        4,866,814      $ 119  

Series B

      Floating      $ 25.00        1,133,186      $ 28        1,133,186      $ 28  

Series C

    $ 1.6085      $ 25.00        10,000,000      $ 245        10,000,000      $ 245  

Series E

    $ 1.1250      $ 25.00        5,000,000      $ 122        5,000,000      $ 122  

Series F

    $ 1.0505      $ 25.00        8,000,000      $ 195        8,000,000      $ 195  

Series H

    $ 1.5810      $ 25.00        12,000,000      $ 295        12,000,000      $ 295  

Series J

    $ 1.0625      $ 25.00        8,000,000      $ 196        8,000,000      $ 196  

Series L

    $ 1.1500      $ 26.00        9,000,000      $ 222        9,000,000      $ 222  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total

 

      58,000,000      $ 1,422        58,000,000      $ 1,422  
  

 

 

     

 

 

     

 

 

     

 

 

  

 

     
130    EMERA 2024 ANNUAL REPORT

Notes to the Consolidated Financial Statements

 

Characteristics of the First Preferred Shares:

 

First Preferred Shares (1)(2)

    Annual
Dividend Rate
(%)		      Current Annual
Dividend
($)		      Minimum Reset
Dividend Yield
(%)		      Earliest Redemption
and/or Conversion
Option Date		      Redemption
Value ($)		      Right to
Convert on a
one for
one basis		  

Fixed rate reset (3)(4)

                  

Series A

      2.182        0.5456        1.84        August 15, 2025        25.00        Series B  

Series C

      6.434        1.6085        2.65        August 15, 2028        25.00        Series D  

Series F (5)(6)

      4.202        1.0505        2.63        February 15, 2025        25.00        Series G  

Minimum rate reset (3)(4)

                  

Series B

      2.393        Floating        1.84        August 15, 2025        25.00        Series A  

Series H

      6.324        1.5810        4.90        August 15, 2028        25.00        Series I  

Series J

      4.250        1.0625        4.25        May 15, 2026        25.00        Series K  

Perpetual fixed rate

                  

Series E (7)

      4.500        1.1250              25.00     

Series L (8)

      4.600        1.1500           November 15, 2026        26.00     

 

(1)

Holders are entitled to receive fixed or floating cumulative cash dividends when declared by the Board of Directors of the Corporation.

(2)

On or after the specified redemption dates, the Corporation has the option to redeem for cash the outstanding First Preferred Shares, in whole or in part, at the specified per share redemption value plus all accrued and unpaid dividends up to but excluding the dates fixed for redemption.

(3)

On the redemption and/or conversion option date the reset annual dividend per share will be determined by multiplying $25.00 per share by the annual fixed or floating dividend rate, which for Series A, C, F and H is the sum of the five-year Government of Canada Bond Yield on the applicable reset date, plus the applicable reset dividend yield (Series H annual reset rate must be a minimum of 4.90 per cent) and for Series B equals the Government of Treasury Bill Rate on the applicable reset date, plus 1.84 per cent.

(4)

On each conversion option date, the holders have the option, subject to certain conditions, to convert any or all of their Shares into an equal number of Cumulative Redeemable First Preferred Shares of a specified series. The Company has the right to redeem the outstanding Preferred Shares, Series D, Series G and Series I shares without the consent of the holder every five years thereafter for cash, in whole or in part at a price of $25.00 per share plus all accrued and unpaid dividends up to but excluding the date fixed for redemption and $25.50 per share plus all accrued and unpaid dividends up to but excluding the date fixed for redemption in the case of redemptions on any other date after August 15, 2028, February 15, 2025 and August 15, 2028, respectively. The reset dividend yield for Series I equals the Government of Treasury Bill Rate on the applicable reset date, plus 2.54 per cent.

(5)

On January 8, 2025, Emera announced that it would not redeem the outstanding Preferred Shares, Series F on February 15, 2025. During the conversion period between January 15, 2025 and January 31,2025, subject to certain conditions, the holders of Series F shares had the right, at their option, to convert all or any of their Series F shares, on a one-for-one basis into Cumulative Floating Rate First Preferred Shares, Series G on February 15, 2025. On February 6, 2025, Emera announced after having taken into account all conversion notices received from holders, no Series F were converted into Series G shares.

(6)

On January 16, 2025, Emera announced that the annual fixed dividend per share for Series F shares will be reset from $1.0505 to $1.4372 for the five-year period from and including February 15, 2025.

(7)

First Preferred Shares, Series E are redeemable at $25.00 per share.

(8)

First Preferred Shares, Series L are redeemable at $26.00 on or after November 15, 2026 to November 15, 2027, decreasing $0.25 each year until November 15, 2030 and $25.00 per share thereafter.

First Preferred Shares are neither redeemable at the option of the shareholder nor have a mandatory redemption date. They are classified as equity and the associated dividends are deducted on the Consolidated Statements of Income before arriving at “Net income attributable to common shareholders” and shown on the Consolidated Statement of Changes in Equity as a deduction from retained earnings.

The First Preferred Shares of each series rank on a parity with the First Preferred Shares of every other series and are entitled to a preference over the Second Preferred Shares, the Common Shares, and any other shares ranking junior to the First Preferred Shares with respect to the payment of dividends and the distribution of the remaining property and assets or return of capital of the Company in the liquidation, dissolution or wind-up, whether voluntary or involuntary.

In the event the Company fails to pay, in aggregate, eight quarterly dividends on any series of the First Preferred Shares, the holders of the First Preferred Shares, for only so long as the dividends remain in arrears, will be entitled to attend any meeting of shareholders of the Company at which directors are to be elected and to vote for the election of two directors out of the total number of directors elected at any such meeting.

 

     
EMERA 2024 ANNUAL REPORT    131

Notes to the Consolidated Financial Statements

 

30. Non-controlling Interest in Subsidiaries

 

As at

millions of dollars

    December 31
2024		      December 31
2023		  

Preferred shares of GBPC

    $ 14      $ 14  
  

 

 

     

 

 

  
   $ 14      $ 14  
  

 

 

     

 

 

  

PREFERRED SHARES OF GBPC:

Authorized:

10,000 non-voting cumulative redeemable variable perpetual preferred shares.

 

Issued and outstanding:

    2024      2023  
   number
of shares		      millions
of dollars		      number
of shares		      millions
of dollars		  

Outstanding as at December 31

      10,000      $ 14        10,000      $ 14  
  

 

 

     

 

 

     

 

 

     

 

 

  

GBPC NON–VOTING CUMULATIVE VARIABLE PERPETUAL PREFERRED STOCK:

The preferred shares are redeemable by GBPC after June 17, 2021, at $1,000 Bahamian per share plus accrued and unpaid dividends and are entitled to a 6.0 per cent per annum fixed cumulative preferential dividend to be paid semi-annually.

The Preferred Shares rank behind GBPC’s current and future secured and unsecured debt and ahead of all of GBPC’s current and future common stock.

31. Supplementary Information to Consolidated Statements of Cash Flows

 

For the    Year ended December 31  

millions of dollars

    2024      2023  

Changes in non-cash working capital:

      

Inventory

    $ 38      $ (31 ) 

Receivables and other current assets (1)

      (154 )       653  

Accounts payable

      536        (538 ) 

Other current liabilities (2)

      32        (179 ) 
  

 

 

     

 

 

  

Total non-cash working capital

    $ 452      $ (95 ) 
  

 

 

     

 

 

  

 

(1)

The year ended December 31, 2023, includes $162 million related to the January 2023 NMGC gas hedges. Offsetting change in regulatory liabilities is included in operating cash flow before working capital resulting in no impact to net cash provided by operating activities.

(2)

The year ended December 31, 2023, includes ($166) million related to the decreased accrual for the Nova Scotia Cap-and-Trade emissions compliance charges. Offsetting regulatory asset (FAM) balance is included in operating cash flow before working capital resulting in no impact to net cash provided by operating activities.

 

For the    Year ended December 31  

millions of dollars

    2024      2023  

Supplemental disclosure of cash paid:

      

Interest

    $ 989      $ 930  
  

 

 

     

 

 

  

Income taxes

    $ 34      $ 43  
  

 

 

     

 

 

  

Supplemental disclosure of non-cash activities:

      

Accrued proceeds from disposal of investment subject to significant influence

    $ 25      $ —   
  

 

 

     

 

 

  

Common share dividends reinvested

    $ 291      $ 271  
  

 

 

     

 

 

  

Reclassification of short-term debt to long-term debt

    $ —       $ 657  
  

 

 

     

 

 

  

Decrease in accrued capital expenditures

    $ —       $ (19 ) 
  

 

 

     

 

 

  

Supplemental disclosure of operating activities:

      

Net change in short-term regulatory assets and liabilities

    $ (118 )     $ 123  
  

 

 

     

 

 

  

 

     
132    EMERA 2024 ANNUAL REPORT

Notes to the Consolidated Financial Statements

 

32. Stock-based Compensation

ECSPP AND COMMON SHAREHOLDERS DRIP

Eligible employees can participate in the ECSPP. As of December 31, 2024, the plan allows employees to make cash contributions of a minimum of $25 per month to a maximum of $20,000 CAD or $15,000 USD per year for the purpose of purchasing common shares of Emera. The Company also contributes 20 per cent of the employees’ contributions to the plan.

The plan allows reinvestment of dividends for all participants except for where prohibited by law. The maximum aggregate number of Emera common shares reserved for issuance under this plan is 7 million common shares. As at December 31, 2024, Emera was in compliance with this requirement.

Compensation cost for shares issued under the ECSPP for the year ended December 31, 2024 was $4 million (2023 – $3 million) and was included in “OM&G” on the Consolidated Statements of Income.

The Company also has a Common Shareholders DRIP, which provides an opportunity for shareholders residing in Canada to reinvest dividends and purchase common shares. This plan provides for a discount of up to 5 per cent from the average market price of Emera’s common shares for common shares purchased with the reinvestment of cash dividends. The discount was 2 per cent in 2024.

STOCK-BASED COMPENSATION PLANS

STOCK OPTION PLAN

The Company has a stock option plan that grants options to senior management of the Company for a maximum term of 10 years. The option price of the stock options is the closing price of the Company’s common shares on the Toronto Stock Exchange on the last business day on which such shares were traded before the date on which the option is granted. The maximum aggregate number of shares issuable under this plan is 14.7 million shares. As at December 31, 2024, Emera was in compliance with this requirement.

Stock options granted in 2021 and prior vest in 25 per cent increments on the first, second, third and fourth anniversaries of the date of the grant. Stock options granted in 2022 and thereafter vest in 20 per cent increments on the first, second, third, fourth and fifth anniversaries of the date of the grant. If an option is not exercised within 10 years, it expires and the optionee loses all rights thereunder. The holder of the option has no rights as a shareholder until the option is exercised and shares have been issued. The total number of stocks to be optioned to any optionee shall not exceed five per cent of the issued and outstanding common stocks on the date the option is granted.

For stock options granted in 2021 and prior, unless a stock option has expired, vested options may be exercised within the 27 months following the option holder’s date of retirement, six months following a termination without just cause or death, and within sixty days following the date of termination for just cause or resignation. Commencing with the 2022 stock option grant, vested options may be exercised during the full term of the option following the option holders date of retirement, six months following a termination without just cause or death, and within sixty days following the date of termination for just cause or resignation. If stock options are not exercised within such time, they expire.

The Company uses the Black-Scholes valuation model to estimate the compensation expense related to its stock-based compensation and recognizes the expense over the vesting period on a straight-line basis.

The following table shows the weighted average FV per stock option along with the assumptions incorporated into the valuation models for options granted, for the year-ended December 31:

 

     2024     2023  

Weighted average FV per option

    $ 4.66     $ 6.32  

Expected term (1)

      5 years       5 years  

Risk-free interest rate (2)

      3.56 %      3.53 % 

Expected dividend yield (3)

      6.11 %      5.05 % 

Expected volatility (4)

      20.67 %      20.07 % 
  

 

 

    

 

 

  

 

(1)

The expected term of the option awards is calculated based on historical exercise behaviour and represents the period of time that the options are expected to be outstanding.

(2)

Based on the Bank of Canada five-year government bond yields.

(3)

Incorporates current dividend rates and historical dividend increase patterns.

(4)

Estimated using the five-year historical volatility.

 

     
EMERA 2024 ANNUAL REPORT    133

Notes to the Consolidated Financial Statements

 

The following table summarizes stock option information for 2024:

 

     Total Options      Non-Vested Options(1)  
     Number of
Options		      Weighted
average
exercise price
per share		      Number of
Options		      Weighted
average grant
date fair-value		  

Outstanding as at December 31, 2023

      3,095,604      $ 51.20        1,253,255      $ 5.17  

Granted

      792,600        46.97        792,600        4.66  

Exercised

      (78,839 )       39.86        N/A        N/A  

Forfeited

      (13,325 )       56.14        —         N/A  

Vested

      N/A        N/A        (438,365 )       4.58  
  

 

 

     

 

 

     

 

 

     

 

 

  

Options outstanding December 31, 2024

      3,796,040      $ 50.53        1,607,490      $ 5.08  
  

 

 

     

 

 

     

 

 

     

 

 

  

Options exercisable December 31, 2024 (2)(3)

      2,188,550      $ 50.07        
  

 

 

     

 

 

        

 

(1)

As at December 31, 2024, there was $6 million of unrecognized compensation related to stock options not yet vested which is expected to be recognized over a weighted average period of approximately 3 years (2023 – $5 million, 3 years).

(2)

As at December 31, 2024, the weighted average remaining term of vested options was 4 years with an aggregate intrinsic value of $11 million (2023 – 5 years, $8 million).

(3)

As at December 31, 2024, the FV of options that vested in the year was $2 million (2023 – $2 million).

Compensation cost recognized for stock options for the year ended December 31, 2024 was $2 million (2023 – $2 million), which was included in “OM&G” on the Consolidated Statements of Income.

As at December 31, 2024, cash received from option exercises was $3 million (2023 – $6 million). The total intrinsic value of options exercised for the year ended December 31, 2024 was $1 million (2023 – $2 million). The range of exercise prices for the options outstanding as at December 31, 2024 was $39.93 to $60.03 (2023 – $32.35 to $60.03).

SHARE UNIT PLANS

The Company has DSU, PSU and RSU plans. The plans and the liabilities are marked-to-market at the end of each period based on an average common share price at the end of the period.

DEFERRED SHARE UNIT PLANS

Under the Directors’ DSU plan, Directors of the Company may elect to receive all or any portion of their compensation in DSUs in lieu of cash compensation, subject to requirements to receive a minimum portion of their annual retainer in DSUs. Directors’ fees are paid on a quarterly basis and, at the time of each payment of fees, the applicable amount is converted to DSUs. A DSU has a value equal to one Emera common share. When a dividend is paid on Emera’s common shares, the Director’s DSU account is credited with additional DSUs. DSUs cannot be redeemed for cash until the Director retires, resigns or otherwise leaves the Board. The cash redemption value of a DSU equals the market value of a common share at the time of redemption, pursuant to the plan. Following retirement or resignation from the Board, the value of the DSUs credited to the participant’s account is calculated by multiplying the number of DSUs in the participant’s account by Emera’s closing common share price on the date DSUs are redeemed.

Under the executive and senior management DSU plan, each participant may elect to defer all or a percentage of their annual incentive award in the form of DSUs with the understanding, for participants who are subject to executive share ownership guidelines, a minimum of 50 per cent of the value of their actual annual incentive award (25 per cent in the first year of the program) will be payable in DSUs until the applicable guidelines are met.

When short-term incentive awards are determined, the amount elected is converted to DSUs, which have a value equal to the market price of an Emera common share. When a dividend is paid on Emera’s common shares, each participant’s DSU account is allocated additional DSUs equal in value to the dividends paid on an equivalent number of Emera common shares. Unless otherwise determined by the Management Resources and Compensation Committee (“MRCC”), following termination of employment or retirement, and by December 15 of the calendar year after termination or retirement, the value of the DSUs credited to the participant’s account is calculated by multiplying the number of DSUs in the participant’s account by the average of Emera’s stock closing price for the fifty trading days prior to a given calculation date. Payments are made in cash.

In addition, special DSU awards may be made from time to time by the MRCC to selected executives and senior management to recognize singular achievements or by achieving certain corporate objectives.

 

     
134    EMERA 2024 ANNUAL REPORT

Notes to the Consolidated Financial Statements

 

A summary of the activity related to employee and director DSUs for the year ended December 31, 2024 is presented in the following table:

 

     Employee
DSU		      Weighted
Average
Grant Date
FV		      Director
DSU		      Weighted
Average
Grant Date
FV		  

Outstanding as at December 31, 2023

      712,963      $ 42.29        729,058      $ 46.24  

Granted including DRIP

      86,417        45.20        134,795        48.98  

Exercised

      (10,292 )       38.77        (34,997 )       36.04  
  

 

 

     

 

 

     

 

 

     

 

 

  

Outstanding and exercisable as at December 31, 2024

      789,088      $ 42.65        828,856      $ 47.12  
  

 

 

     

 

 

     

 

 

     

 

 

  

Compensation cost recognized for employee and director DSU’s for the year ended December 31, 2024 was $13 million (2023 – $2 million cost recovery). Tax benefits related to this compensation cost for share units realized for the year ended December 31, 2024 were $4 million (2023 – $1 million tax expense). The aggregate intrinsic value of the outstanding shares for the year ended December 31, 2024 for employees was $43 million (2023 – $36 million). The aggregate intrinsic value of the outstanding shares for the year ended December 31, 2024 for directors was $45 million (2023 – $37 million). Cash payments made during the year ended December 31, 2024 associated with the DSU plan were $2 million (2023 – $3 million).

PERFORMANCE SHARE UNIT PLAN

Under the PSU plan, certain executive and senior employees are eligible for long-term incentives payable through the plan. PSUs are granted annually for three-year overlapping performance cycles, resulting in a cash payment. Unless otherwise determined by the MRCC, PSUs are granted based on the average of Emera’s stock closing price for the fifty trading days prior to the effective grant date. Dividend equivalents are awarded and paid in the form of additional PSUs. The PSU value varies according to the Emera common share market price and corporate performance.

PSUs vest at the end of the three-year cycle and the payouts will be calculated and approved by the MRCC early in the following year. The value of the payout considers actual service over the performance cycle and may be pro-rated in certain departure scenarios. In the case of retirement, as defined in the PSU plan, grants may continue to vest in full and payout in normal course post-retirement.

A summary of the activity related to employee PSUs for the year ended December 31, 2024 is presented in the following table:

 

     Employee
PSU		      Weighted
Average
Grant Date
FV		      Aggregate
intrinsic
value		  

Outstanding as at December 31, 2023

      743,365      $ 55.13      $ 41  

Granted including DRIP

      354,793        48.69     

Exercised

      (253,136 )       54.66     

Forfeited

      (12,929 )       52.53     
  

 

 

     

 

 

     

 

 

  

Outstanding as at December 31, 2024

      832,093      $ 52.57      $ 50  
  

 

 

     

 

 

     

 

 

  

Compensation cost recognized for the PSU plan for the year ended December 31, 2024 was $18 million (2023 – $11 million). Tax benefits related to this compensation cost for share units realized for the year ended December 31, 2024 were $5 million (2023 – $3 million). Cash payments made during the year ended December 31, 2024 associated with the PSU plan were $14 million (2023 – $19 million).

RESTRICTED SHARE UNIT PLAN

Under the RSU plan, certain executive and senior employees are eligible for long-term incentives payable through the plan. RSUs are granted annually for three-year overlapping performance cycles, resulting in a cash payment. Unless otherwise determined by the MRCC, RSUs are granted based on the average of Emera’s stock closing price for the fifty trading days prior to the effective grant date. Dividend equivalents are awarded and paid in the form of additional RSUs. The RSU value varies according to the Emera common share market price.

 

     
EMERA 2024 ANNUAL REPORT    135

Notes to the Consolidated Financial Statements

 

RSUs vest at the end of the three-year cycle and the payouts will be calculated and approved by the MRCC early in the following year. The value of the payout considers actual service over the performance cycle and may be pro-rated in certain departure scenarios. In the case of retirement, as defined in the RSU plan, grants may continue to vest in full and payout in normal course post-retirement.

A summary of the activity related to employee RSUs for the year ended December 31, 2024 is presented in the following table:

 

     Employee
RSU		      Weighted
Average
Grant Date
FV		      Aggregate
intrinsic
value		  

Outstanding as at December 31, 2023

      562,641      $ 55.01      $ 32  

Granted including DRIP

      287,976        48.65     

Exercised

      (183,241 )       54.66     

Forfeited

      (14,228 )       52.45     
  

 

 

     

 

 

     

 

 

  

Outstanding as at December 31, 2024

      653,148      $ 52.36      $ 41  
  

 

 

     

 

 

     

 

 

  

Compensation cost recognized for the RSU plan for the year ended December 31, 2024 was $15 million (2023 – $10 million). Tax benefits related to this compensation cost for share units realized for the year ended December 31, 2024 were $4 million (2023 – $3 million). Cash payments made during the year ended December 31, 2024 associated with the RSU plan were

$10 million (2023 – $10 million).

33. Variable Interest Entities

Emera holds a variable interest in NSPML, a VIE for which it was determined that Emera is not the primary beneficiary since it does not have the controlling financial interest of NSPML. When the critical milestones were achieved, NLH was deemed the primary beneficiary of the asset for financial reporting purposes as it has authority over the majority of the direct activities that are expected to most significantly impact the economic performance of the Maritime Link. Thus, Emera began recording the Maritime Link as an equity investment.

BLPC has established a SIF, primarily for the purpose of building a fund to cover risk against damage and consequential loss to certain generating, transmission and distribution systems. ECI holds a variable interest in the SIF for which it was determined that ECI was the primary beneficiary and, accordingly, the SIF must be consolidated by ECI. In its determination that ECI controls the SIF, management considered that, in substance, the activities of the SIF are being conducted on behalf of ECI’s subsidiary BLPC and BLPC, alone, obtains the benefits from the SIF’s operations. Additionally, because ECI, through BLPC, has rights to all the benefits of the SIF, it is also exposed to the risks related to the activities of the SIF. Any withdrawal of SIF fund assets by the Company would be subject to existing regulations. Emera’s consolidated VIE in the SIF is recorded as “Other long-term assets”, “Restricted cash” and “Regulatory liabilities” on the Consolidated Balance Sheets. Amounts included in restricted cash represent the cash portion of funds required to be set aside for the BLPC SIF.

The Company has identified certain long-term purchase power agreements that meet the definition of variable interests as the Company has to purchase all or a majority of the electricity generation at a fixed price. However, it was determined that the Company was not the primary beneficiary since it lacked the power to direct the activities of the entity, including the ability to operate the generating facilities and make management decisions.

The following table provides information about Emera’s portion of material unconsolidated VIEs:

 

As at

    December 31, 2024      December 31, 2023  

millions of dollars

    Total
assets		      Maximum
exposure
to loss		      Total
assets		      Maximum
exposure
to loss		  

Unconsolidated VIEs in which Emera has variable interests

            

NSPML (equity accounted)

    $ 475      $ 6      $ 489      $ 6  
  

 

 

     

 

 

     

 

 

     

 

 

  

34. Subsequent Events

These financial statements and notes reflect the Company’s evaluation of events occurring subsequent to the balance sheet date through February 21, 2025, the date the financial statements were issued.

 

     
136    EMERA 2024 ANNUAL REPORT

Notes to the Consolidated Financial Statements

 

Emera Leadership and Board

As of March 31, 2025

 

Emera Leadership      

Scott C. Balfour

President and

Chief Executive Officer,

Emera Inc.

 

Mike Barrett

Executive Vice President,

Legal and General Counsel,

Emera Inc.

 

Greg Blunden

Chief Financial Officer,

Emera Inc.

 

Archie Collins

President and Chief Executive Officer,

Tampa Electric

   

Peter Gregg

President and Chief Executive Officer,

Nova Scotia Power Inc.

 

Karen Hutt

Chief Strategy and Growth Officer,

Emera Inc.

 

Dan Muldoon

Executive Vice President,

Project Development and

Operations Support,

Emera Inc.

 

Janelle Poole

Vice President, Corporate Affairs,

Emera Inc.

   

Michael Roberts

Chief Human Resources Officer,

Emera Inc.

 

Ryan Shell

President,

New Mexico Gas Company Inc.

 

Judy Steele

President and Chief Operating Officer,

Emera Energy

 

Helen Wesley

President, Peoples Gas System, Inc.

 

Board of Directors      

Karen H. Sheriff

Chair of the Board

Picton, Ontario

 

Scott C. Balfour

President and Chief Executive Officer

Halifax, Nova Scotia

 

James V. Bertram

Calgary, Alberta

 

Henry E. Demone

Lunenburg, Nova Scotia

   

Paula Y. Gold-Williams

San Antonio, Texas

 

Kent M. Harvey

New York, New York

 

B. Lynn Loewen

Montreal, Quebec

 

Brian J. Porter

Toronto, Ontario

 

Ian E. Robertson

Oakville, Ontario

   

M. Jacqueline Sheppard

Calgary, Alberta

 

Jochen E. Tilk

Toronto, Ontario

 

Carla M. Tully

Arlington, Virginia

 

     
EMERA 2024 ANNUAL REPORT    137

Shareholder Information

 

For general inquiries, please contact our corporate office:

Emera Inc.

P.O. Box 910

Halifax, Nova Scotia B3J 2W5

T: 902.450.0507 or 1.888.450.0507

Information regarding Company news and initiatives, including our 2024 Annual Report, is available on our website: www.emera.com

TRANSFER AGENT

TSX Trust Company

P.O. Box 2082, Station C

Halifax, Nova Scotia B3J 3B7

T: 1.877.982.8762

F: 1.888.249.6189

www.tsxtrust.com

INVESTOR SERVICES

T: 902.428.6060 or 1.800.358.1995

F: 902.428.6181

E: investors@emera.com

FINANCIAL ANALYSTS, PORTFOLIO MANAGERS AND INSTITUTIONAL INVESTORS

Dave Bezanson

Vice President, Investor Relations and Pensions

T: 902.474.2126

E: dave.bezanson@emera.com

Arianne Amirkhalkhali

Director, Investor Relations

T: 902.425.8130

E: arianne.amirkhalkhali@emera.com

This Annual Report contains forward- looking information. Actual future results may differ materially. Additional financial and operational information is filed electronically with various securities commissions in Canada, copies of which are available electronically under Emera’s profile on SEDAR+ at www.sedarplus.ca.

SHARE LISTINGS

Toronto Stock Exchange (TSX)

Common shares: EMA

Preferred shares: EMA.PR.A,

EMA.PR.B, EMA.PR.C, EMA.PR.E,

EMA.PR.F, EMA.PR.H,

EMA.PR.J and EMA.PR.L

Barbados Stock Exchange (BSE)

Depositary receipts: EMABDR

Bahamas International Securities

Exchange (BISX)

Depositary receipts: EMAB

SHARES OUTSTANDING

Common shares: 295,935,686

(as of December 31, 2024)

DIVIDENDS PAID IN 2024

Emera Inc. paid common share dividends of $0.7175 per quarter in Q1, Q2 and Q3 (annualized rate of $2.87 per common share) and $0.7250 in Q4 (annualized rate of $2.90 per common share), for an effective annual common share dividend rate of $2.8775 per common share.

DIVIDEND PAYMENTS IN 2025

Subject to approval by the Board of Directors, dividends for Emera Inc. are payable on or about the 15th of February, May, August and November. A first quarter common share dividend of $0.7250, a Series A First Preferred Share dividend of $0.1364, a Series B First Preferred Share dividend of $0.3630, a Series C First Preferred Share dividend of $0.40213, a Series E First Preferred Share dividend of $0.28125, a Series F First Preferred Share dividend of $0.26263, a Series H First Preferred Share dividend of $0.39525, a Series J First Preferred Share dividend of $0.265625 and a Series L First Preferred Share dividend of $0.2875 were declared and paid on February 14, 2025.

DIVIDEND REINVESTMENT AND SHARE PURCHASE PLAN

Emera’s Dividend Reinvestment and Share Purchase Plan is available to shareholders who reside in Canada. The plan provides a convenient and economical means of acquiring additional common shares through the reinvestment of dividends with a discount of up to five per cent. In 2024, the discount was two per cent. Plan participants may also contribute cash payments of up to $5,000 per quarter. Plan participants pay no commissions, service charges or brokerage fees for shares purchased under the plan. Please contact Investor Services if you have questions or wish to receive an enrollment form.

DIRECT DEPOSIT SERVICE

Registered shareholders may have dividends deposited directly to any bank account in Canada. To arrange this service, please contact TSX Trust Company.

Beneficial shareholders should contact their financial intermediary.

QUARTERLY EARNINGS

Quarterly earnings are expected to be announced in May, August and November 2025. Year-end results for 2025 will be released in February 2026.

 

LOGO

Emera is represented in the TSX Composite, TSX Capped Utilities, TSX60 and select world indexes.

 

 

     
138    EMERA 2024 ANNUAL REPORT

LOGO

www.emera.com

Exhibit 99.7

Notice of Annual Meeting of Common Shareholders and Management Information Circular

Notice of Emera’s 2025

Annual Meeting of Shareholders

 

WHEN:    Thursday, May 22, 2025, 2:00 p.m. (Atlantic time)
HOW:    Accessible, transparent and interactive virtual-only meeting via live webcast at https://meetings.lumiconnect.com/400-560-695-216
   Password: emera2025 (case sensitive)
   The virtual meeting format is designed to ensure that opportunities for shareholders to participate are comparable to attending an in-person meeting
AGENDA:    The meeting will cover the following items of business:
  

1.  Receiving the audited financial statements for the year ended December 31, 2024 and the Auditors’ report thereon;

  

2.  Electing Directors to serve until the next Annual Meeting of Shareholders;

  

3.  Appointing auditors;

  

4.  Authorizing the Directors to establish the auditors’ fee;

  

5.  Considering an advisory resolution on the Company’s approach to executive compensation; and

  

6.  Transacting any other business that properly comes before the meeting.

   The accompanying Management Information Circular provides detailed information on these items.
WHO:    Emera shareholders as of close of business on March 25, 2025 (the “Record Date”) have the right to receive notice of and vote at the meeting or any adjournment.
HOW TO VOTE:    Participate and vote your shares in real time during the meeting by visiting https://meetings.lumiconnect.com/400-560-695-216, using password emera2025 (case sensitive). Please note, only registered shareholders and duly appointed proxyholders can vote at the meeting.
   For more information about how to vote during the meeting, please see the accompanying Management Information Circular.
   If you do not plan to participate in the meeting:
  

•  Mail your proxy or voting instruction form using the postage-paid, pre-addressed envelope provided.

  

•  Vote by telephone or via internet (see the proxy or voting instruction form). Proxies must be received prior to 5:00 p.m. Atlantic time on Tuesday May 20, 2025, or, if the meeting is adjourned, or postponed, 5:00 p.m. Atlantic time two business days prior to the reconvened meeting date.

QUESTIONS:    If you have any questions about any of the information contained within the Management Information Circular, please contact us by writing to the Corporate Secretary, Emera Incorporated, P.O. Box 910, Halifax, Nova Scotia B3J 2W5 or by telephone at 1-800-358-1995 from anywhere in North America or by email at AGM@emera.com.
   By order of the Board
   Brian C. Curry
   Corporate Secretary