Slide 1: Second Quarter Earnings Conference Call
2018 SECOND QUARTER EARNINGS CONFERENCE CALL July 31, 2018 Investing in Our Networks
Slide 2: Forward-Looking Information
Forward-Looking Information Fortis includes "forward-looking information" in this presentation within the meaning of applicable Canadian securities laws and "forward- looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, collectively referred to as "for
Slide 3: Barry Perry, President and CEO
Barry Perry President and CEO FORTIS INC. Investing in Our Networks
Slide 4: Growth Strategy Driving Quality Results
Growth Strategy Driving Quality Results Utility leader with strong operating businesses: • Q2 results of $240 million(1), or $0.57 EPS, aligned with $563M expectations REPORTED YTD(1) NET EARNINGS Highly executable, low-risk capital plan: • $3.2 billion capital forecast for 2018 remains on track Mai
Slide 5: Capital Plan Grows Rate Base to $33 Billion in 2022
Capital Plan Grows Rate Base to $33 Billion in 2022 Rate Base Growth Supports 6% Dividend Guidance to 2022 Capital Expenditures(1) Rate Base (2) (billions) (billions) $15.1B Five-Year Capital Plan $33.0 $3.2 $31.6 $3.0 $3.0 $3.0 $30.4 $2.9 $28.9 $26.8 $25.4 2018F 2019F 2020F 2021F 2022F 2017A 2018F
Slide 6: Highly Executable Capital Plan
Highly Executable Capital Plan Significant Projects Remain on Track Forecast Total Forecast 2018 2019-2022 ($ millions)(1) ITC Multi-Value Regional Transmission Projects(2) 169 194 ITC 34.5 kV to 69 kV Transmission Conversion Project 111 369 UNS Flexible Generation – Reciprocating Natural Gas-Fired
Slide 7: Opportunities Beyond the Base Capital Plan
Opportunities Beyond the Base Capital Plan FortisOntario: Municipal Utility Consolidation FortisBC: Tilbury, MECL & NP: LNG & Gas Grid Infrastructure Modernization UNS Energy: Renewables, ITC: Storage & Electric Lake Erie Connector & Transmission Grid Enhancements ITC: Mexico Transmission Projects C
Slide 8: 44 Years of Consecutive Annual Dividend Growth
44 Years of Consecutive Annual Dividend Growth 73% 73% Average annual dividend 70% 66% 66% growth through 2022 64% targeted at ~6% 2012 2013 2014 2015 2016 2017 2018F 2019F 2020F 2021F 2022F Dividend payout ratio(1) (1) Dividend payout ratio adjusted for non-operating items. FORTIS INC. Investing in
Slide 9: Jocelyn Perry, Executive Vice President, CFO
Jocelyn Perry Executive Vice President, Chief Financial Officer FORTIS INC. Investing in Our Networks
Slide 10: Fortis Delivers Results Aligned With Expectations
Fortis Delivers Results Aligned With Expectations (1) Adjusted EPS 0.75 $0.61 $0.57 Key Drivers: ($) 0.50 Growth in Base Business 0.25 2017 2018 Q2 Mark-to-Market 1.50 (Aitken Creek) $1.31 $1.26 1.25 U.S. Tax ($) 1.00 Reform 0.75 2017 2018 June Year-to-Date (1) Non-US GAAP measure. FORTIS INC. Inves
Slide 11: EPS Drivers – Q2
EPS Drivers – Q2 $0.65 Aitken Creek MTM and U.S. Tax Reform Base Business (0.03) 0.02 (0.02) $0.60 0.02 (0.01) (0.03) (0.01) 0.01 0.02 0.61 $0.55 ($) 0.57 $0.50 (4) Q2 2017 Aitken Creek U.S. Tax Energy (3) ITC Other UNS Foreign Weighted Q2 2018 (6) (7) Adjusted (1) MTM (2) Reform Infrastructure Regu
Slide 12: EPS Drivers – June Year-to-Date
EPS Drivers – June Year-to-Date $1.40 Aitken Creek MTM Base Business and U.S. Tax Reform $1.35 0.01 (0.03) (0.06) 0.02 $1.30 0.02 (0.03) 0.03 (0.01) $1.25 $1.20 1.31 1.26 $1.15 $1.10 (5) June YTD 2017 Aitken Creek U.S. Tax Energy ITC UNS Other Foreign Weighted June YTD 2018 (1) (2) (3) (4) (6) (8) (
Slide 13: Investment-Grade Credit Ratings and Ample Liquidity
Investment-Grade Credit Ratings and Ample Liquidity Consolidated Credit Facilities 6.0 Credit Ratings 5.0 (1) 4.0 A- / BBB+ ($ billions) 3.8 3.0 3.9 BBB (high) 2.0 (2) 1.0 Baa3 1.2 1.1 0.0 June 30/18 Dec 31/17 Utilized Remaining Capacity (1) In March 2018, S&P affirmed the Corporation’s credit ratin
Slide 14: Regulatory Stability Continues
Regulatory Stability Continues Recent Significant Regulatory Outcomes Application/ Proceeding Outcome Decision Timing • 3-year rate plan for July 2018 - June 2021 • ROE of 8.8% • General Rate • Equity thickness: • June 2018 Application • 48% in rate-year one • 49% in rate-year two • 50% in rate-year
Slide 15: Investing in Our Networks
FORTIS... Investing in Our Networks
Slide 16: Our Strategy - Simple, Effective, Proven
Our Strategy - Simple, Effective, Proven Strategy Leverage the operating model, footprint of our utilities, operating expertise, reputation and financial strength to develop growth opportunities 6% AVERAGE Dividend ANNUAL 6% Average Growth Target: AnnualDIVIDEND Growth INVESTMENT- GROWTH Through 202
Slide 17: Expected Upcoming Events
Expected Upcoming Events Expected Upcoming Earnings Release Dates Q3 – 2018 November 2, 2018 Q4 – 2018 February 14, 2019 Save the Date – 2018 Investor Days Toronto October 15, 2018 New York October 16, 2018 FORTIS INC. Investing in Our Networks 17
Slide 18: Second Quarter Earnings Conference Call
2018 SECOND QUARTER EARNINGS CONFERENCE CALL July 31, 2018 Investing in Our Networks
Slide 19: Q2 2018 Results by Segment
Q2 2018 Results by Segment Second Quarter Variance Analysis by Segment Q2 ($ in millions, Q2 Q2 2018 Q2 Q2 2017 Adjustment (1) Adjustment (1) (Adjusted) excluding EPS) 2018 (Adjusted) 2017 (Adjusted) Variance Regulated – Independent Electric Transmission ITC 86 - 86 93 - 93 (7) Regulated – US Electr
Slide 20: June YTD 2018 Results by Segment
June YTD 2018 Results by Segment June Year-to-Date Variance Analysis by Segment June June YTD June June YTD June YTD ($ in millions, YTD Adjustment 2018 YTD Adjustment 2017 (Adjusted) excluding EPS) (1) (1) 2018 (Adjusted) 2017 (Adjusted) Variance Regulated – Independent Electric Transmission ITC 17
Slide 21: 2018-2022 Capital Forecast by Segment
2018-2022 Capital Forecast by Segment 2018 Capital Forecast(1) ($ millions) 2018F Rate Base(1) Regulated – Independent Electric Transmission ITC 863 ~$26.8 Billion Regulated – U.S. Electric & Gas UNS Energy 686 Central Hudson 275 Regulated- Regulated Canadian & Caribbean Electric & Gas Regulated- In