Slide 1: Investor Overview Post Second Quarter 2020
INVESTOR OVERVIEW Post Second Quarter 2020 One of North America’s largest electric utilities TSX:H
Slide 2: Why Invest in Hydro One
WHY INVEST IN HYDRO ONE A unique low-risk opportunity to participate in the transformation of a premium, large scale regulated electric utility • One of the largest electric utilities in North America with significant scale and leadership position across Canada’s most populated province. ~5% ~5% Rat
Slide 3: Recent Developments
RECENT DEVELOPMENTS Organization Priorities Second Quarter Highlights • Second quarter earnings per share (EPS) was $1.84 and adjusted EPS was $0.39, compared to EPS and adjusted EPS of $0.26 for the same period in 2019. The change in EPS was driven by the Ontario Divisional Court’s decision on the
Slide 4: The Value of Hydro One
THE VALUE OF HYDRO ONE ABOUT THE COMPANY HOW WE DID IN 2019 WHY INVEST Transmission & Distribution Stable Operations Transmission Distribution Other ~30,000 circuit KMs of transmission lines Stable and growing cash flows with Revenue Net of Purchased Power Total Assets 1% 99% of overall business ful
Slide 5: A Look at the Organization
A LOOK AT THE ORGANIZATION Corporate Structure Public Company TSX: H Hydro One Limited Public Debt Issuer Hydro One Inc. Hydro One Networks Inc. Hydro One Remote Communities Inc. Hydro One Telecom Inc. Rate-Regulated Businesses (99% of revenue) Non-Rate-Regulated Business 5 7 5
Slide 6: Executive Leadership Team
EXECUTIVE LEADERSHIP TEAM A leadership team with strong operational experience committed to achieving efficiencies at Hydro One Mark Poweska President and CEO Brad Bowness Darlene Bradley Jason Fitzsimmons Paul Harricks David Lebeter Chris Lopez Saylor Millitz-Lee Chief Information Officer Chief Saf
Slide 7: Hydro One's Strategy
HYDRO ONE’S STRATEGY Plan, design and build a Be the safest and most Be a trusted partner Advocate for our customers Innovate and grow the Strategic Priorities grid for the future efficient utility and help them make business informed decisions We will plan, design and build a We will transform and
Slide 8: Hydro One's Strategy
HYDRO ONE’S STRATEGY An Ontario focus, and a plan to enhance value Strategic Priorities Business Outcomes Plan, design and build a grid for the future Improved safety culture where Hydro One employees go home safely every single day Be the safest and most efficient utility Improved reliability above
Slide 9: Achievements and Efficiencies
ACHIEVEMENTS AND EFFICIENCIES Paving New Paths in Productivity Savings ($M) 2019 202.3 Generated productivity savings of $202.3 million in 2019 comprised of $84.6 million in OM&A and $117.7 million in capital and totaling a 2018 135.5 nearly half a billion dollars since 2015 $452.2 2017 89.5 Move to
Slide 10: The Regulated Business
THE REGULATED BUSINESS Transmission & Distribution Transmission 98% OF ONTARIO’S TRANSMISSION CAPACITY1 • Hydro One received a decision on 3-year Custom IR application for Transmission from 2020- LDC Customers 38 2022 Large Directly Connected • Hydro One owns and operates 98% of Ontario’s transmissi
Slide 11: Electric Local Distribution Company Consolidation
ELECTRIC LOCAL DISTRIBUTION COMPANY CONSOLIDATION Orillia Power Distribution Corporation Key Points • $41 million purchase price, including approximately $15 million of assumed debt and regulatory liabilities, subject to closing adjustments • Serves approximately 14,000 customers located in Simcoe C
Slide 12: Growth Opportunities for the Telecom Business
GROWTH OPPORTUNITIES FOR THE TELECOM BUSINESS FOCUS ON VALUE-ADDED SERVICES Managed & Managed & Professional Telecommunications Services: Outsourced consultative and operative processes and functions that simplify operations and reduce expenses by leveraging the knowledge and resources of industry e
Slide 13: Sustainability at Hydro One
SUSTAINABILITY AT HYDRO ONE For Hydro One, sustainability means that we are committed to operating safely in an environmentally and socially responsible manner and to partnering with our customers and community stakeholders to build a brighter future for all Approach to Sustainability A Matrix of 10
Slide 14: Delivering Clean and Sustainable Energy
DELIVERING CLEAN AND SUSTAINABLE ENERGY Transmitting and delivering some of the cleanest energy in North America • Ontario was the first North American jurisdiction to fully eliminate coal electricity generation and leads Canada in wind and solar capacity • Recent five year Ontario Climate Change Ac
Slide 15: $10B of Capital Investment Driving Rate Base Growth
$10B OF CAPITAL INVESTMENT DRIVING RATE BASE GROWTH Consistent and predictable organic growth profile underpinned by required replacement of aging infrastructure Projected Regulated Capital Investments* ($M) Projected Rate Base Growth* $25,977 $24,849 $2,121 $2,136 $23,587 $1,855 $1,776 $22,579 $1,8
Slide 16: Affirmed 2022 Guidance
AFFIRMED 2022 GUIDANCE $1.65 $1.52 $0.02 $1.35 $1.30 $0.11 $0.24 $0.08 $0.02 2019 Basic EPS 2018 Distribution Normalizing to Insurance Merger Related Costs Lake Superior Link 2019 Normalized EPS Blank 2022 Basic EPS Decision Catch-Up Distribution Allowed ROE • Company estimates subject to change and
Slide 17: Infrastructure Investments
INFRASTRUCTURE INVESTMENTS Leamington Area Transmission Reinforcement Ontario Grid Control Centre Richview Transmission Station Estimated Total Project Cost: $525 million Estimated Capital Investment: $143 million Estimated Total Project Cost: $115 million Capital Cost To Date: $16 million (2020-202
Slide 18: Hydro One Responds to COVID-19
HYDRO ONE RESPONDS TO COVID-19 How our customers are being supported We announced a Pandemic Relief Fund to assist customers affected by the COVID-19 and offer financial assistance as well as increased payment flexibility to customers. Hydro One temporarily suspended late payment fees for all custom
Slide 19: Constructive Rate Regulator (OEB)
CONSTRUCTIVE RATE REGULATOR (OEB) Consistent, independent regulator with a transparent rate-setting process • Transmission and Distribution businesses rate-regulated by the Ontario Energy Board (OEB) • Deemed debt / equity ratio of 60% / 40% for both transmission and distribution segments • Reduced
Slide 20: Segmented Incentive Regulatory Construct
SEGMENTED INCENTIVE REGULATORY CONSTRUCT The transition from cost of service to incentive based regulatory model coincident with transformation of business will create value for both customers and shareholders Distribution Transmission OEB Approved OEB Approved 2018-2022 2020-2022 Rebasing Year 2018
Slide 21: Reducing Our Customer Bills
REDUCING OUR CUSTOMER BILLS Since 2017, Hydro One customer bills have decreased on average from $165 to $127 per month Pre-Fair Hydro Plan Post Ontario Energy 2017 Monthly Bill- $165 Rebate 2020 Monthly Bill- $127 $8 $90 $38 % of Bill2 Taxes and OCEB 16% Electricity Charges 56% $6 $52 $9 Regulatory
Slide 22: Strong Balance Sheet and Liquidity
STRONG BALANCE SHEET AND LIQUIDITY (as at June 30, 2020) Investment grade balance sheet with one of lowest debt costs in utility sector Significant Available Liquidity ($M) Strong Investment Grade Credit Ratings (LT/ST/Outlook) Shelf Registrations 250 Hydro One Limited Hydro One Inc. (HOI) Hydro One
Slide 23: Equity Market Cap Overview
EQUITY MARKET CAP OVERVIEW Approximate Ownership of Public Float Equity Index Inclusions Approximate Geographic Dispersion of Public Float S&P/TSX Composite FTSE All-World Index (Canada) 20% 23% Canada MSCI World (Canada) S&P/TSX Composite Low Volatility Index US 50% Dow Jones Canada S&P/TSX Utiliti
Slide 24: Common Share Dividends
COMMON SHARE DIVIDENDS Quarterly dividend declared at $0.2536 per common share Key Points Dividend Statistics • Quarterly dividend declared at $0.2536 per common share ($1.0144 annualized) Yield1 4.0% • Targeted dividend payout ratio remains at 70% - 80% of net income Annualized Dividend2,3 $1.0144
Slide 25: Appendix
£ > me) z= APPENDIX
Slide 26: 2Q20 Financial Summary
HYDRO ONE LIMITED 2Q20 FINANCIAL SUMMARY Second Quarter YTD (millions of dollars, except EPS) 2020 2019 % Change 2020 2019 % Change Revenue Transmission $459 $374 22.7% $859 $802 7.1% Distribution 1,201 1,029 16.7% 2,640 2,350 12.3% Distribution (Net of Purchased Power) 393 376 4.5% 825 890 (7.3%) O
Slide 27: Top Transmission Capital Projects Underway
TOP TRANSMISSION CAPITAL PROJECTS UNDERWAY Anticipated Estimated Capital Cost Development Project Name Location Type In-Service Date Cost To-Date Wataynikaneyap Power LP Line Connection Pickle Lake New stations and 2021 $24 million $2 million Northwestern Ontario transmission connection East-West Ti
Slide 28: Regulatory Stakeholders
REGULATORY STAKEHOLDERS Who: Provincial Government, Ministry of Energy What: Policy, legislation, regulations Who: Ontario Energy Board (OEB) What: Independent electric utility price and service quality regulation Who: Independent Electricity System Operator What: Wholesale power market rules, inter
Slide 29: Independent Board of Directors
INDEPENDENT BOARD OF DIRECTORS Timothy Hodgson, MBA, FCPA, ICD.D Stacey Mowbray, Corporate Director, Chair of Hydro One Ltd, Chair of Sagicor Financial Corporation Limited, Director Public Corporate Director, Former President North America WW International (formerly Weight Watchers), Sector Pension
Slide 30: Disclaimers
DISCLAIMERS In this presentation, all amounts are in Canadian dollars, unless otherwise indicated. Any graphs, tables or other information in this presentation demonstrating the historical performance of the Company or any other entity contained in this presentation are intended only to illustrate p
Slide 31: Contact
CONTACT Omar Javed Vice President, Investor Relations ojaved@HydroOne.com (416) 345-5943 http://www.HydroOne.com/InvestorRelations 31 29 31