Slide 1: Second Quarter 2019 Earnings Conference Call
Second Quarter 2019 Earnings Conference Call August 2, 2019
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 Private Securities Litigation Reform Act of 1995 (collectively referred to as "forward-looki
Slide 3: Barry Perry, President & CEO
FORTIS... Barry Perry President & CEO
Slide 4: Q2 Business Highlights
Q2 Business Highlights Revising 2019 Capital Guidance Commenced Utilizing ATM Invested $1.6B June YTD Upwards By ~16% to $4.3B To Fund Incremental Growth $484M Net Gain Booked in Q2 Issued Two-Year Agreement Signed For Waneta Asset Sale 2019 Sustainability Update To Export LNG to China 4
Slide 5: 2019 Capital Guidance Increased by $0.6B to $4.3B
2019 Capital Guidance Increased by $0.6B to $4.3B $0.1B 2019 Capital Plan $0.1B $0.1B $4.3B Increased by $600M $0.3B $3.7B 2020-2024 Capital Plan to be Prior 2019 Capital Plan UNS Energy ITC Other Other Regulated Regulated Foreign Exchange (1) Revised 2019 Capital Plan Announced in Fall 2019 Utiliti
Slide 6: Progress on 2019 Major Capital Projects
Progress on 2019 Major Capital Projects YTD June 2019 Expected Significant Capital Projects ($millions)(1) 2019 Annual Year of Spending Forecast Completion ITC Multi-Value Regional Transmission 34 65 2023 Projects ITC 34.5 kV to 69 kV Transmission 59 120 Post-2023 Conversion Project UNS Energy Gila
Slide 7: Leader in Dividend Growth With 45 Consecutive Years of Dividend Increases
Leader in Dividend Growth With 45 Consecutive Years of Dividend Increases $ 1.5 1.0 0.5 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 Dividend paid 7
Slide 8: Jocelyn Perry, Executive Vice President & CFO
Jocelyn Perry Executive Vice President & CFO
Slide 9: Second Quarter Results
Second Quarter Results Reported EPS $2.39 $1.66 $484M Net Gain $1.33 Realized in Q2 $0.57 For Waneta Asset Sale Q2 2018 Q2 2019 YTD 2018 YTD 2019 Adjusted EPS(1) Q2 2019 Adjusted EPS of $0.54 Impacted by $1.30 $1.28 Weather Changes $0.59 $0.54 Q2 2018 Q2 2019 YTD 2018 YTD 2019 (1) Non-US GAAP measur
Slide 10: Earnings Impacted by Weather Changes
Earnings Impacted by Weather Changes UNS ENERGY (Arizona) Earnings Retail Sales (GWh) Tucson Temperatures $81M 2,766 Q2 2018 Q2 2019 2,501 $60M $60M 2nd Highest Lowest in on Record 20 Years Q2 2018 Q2 2019 Q2 2018 Q2 2019 BECOL (Belize) Production (GWh) Belize Rainfall 120 Below-Normal Rainfall with
Slide 11: EPS Drivers – Q2
EPS Drivers – Q2 Includes weather-driven $0.01 ($0.06) impacts of ($0.06) $0.01 $0.01 $0.03 ($0.03) ($0.01) $0.59 ($0.01) $0.54 $8.4 $9.8 Q2 2018 (1) U.S. Western Foreign Corporate & UNS Energy Energy Other Central Q2 2019 (1) (3) (4) (5) Adjusted EPS Transmission Canadian (2) Exchange Other Infrast
Slide 12: EPS Drivers – YTD
EPS Drivers – YTD Includes $0.01 ($0.05) weather-driven $0.02 impacts of ($0.06) $0.03 $0.04 ($0.06) ($0.01) $1.30 $1.28 $8.4 $9.8 Q2 YTD 2018 Foreign (2) U.S. Transmission Western Central UNS Energy Energy (4) Corporate & Q2 YTD 2019 (1) (1) (5) Adjusted EPS Exchange (ITC) Canadian (3) Hudson Infra
Slide 13: 2019 Regulatory Outlook
2019 Regulatory Outlook MISO Base ROE Complaints • FERC recently established new supportive methodology • Awaiting final decision from FERC Notice of Inquiries (NOIs) issued by FERC in March 2019 seeking stakeholder comment on: • Incentive policies for transmission investment • Methodology for estab
Slide 14: Why Invest In Fortis?
Why Invest In Fortis? Well-Run Utilities Virtually All Regulated Virtually Focused onAll Energy Regulated Delivery Highly Diversified Strong Organic Growth Profile 6% Dividend Guidance ESG Leader 14
Slide 15: Expected Upcoming Events
Expected Upcoming Events Upcoming Events Investor Day (hosted at ITC) September 10, 2019 Expected Earnings Release Dates Q3 2019 November 1, 2019 Q4 2019 February 14, 2020 15
Slide 16: Second Quarter 2019 Earnings Conference Call
Second Quarter 2019 Earnings Conference Call August 2, 2019
Slide 17: Appendix
Appendix
Slide 18: Q2 2019 Results by Segment
Q2 2019 Results by Segment APPENDIX Second Quarter Variance Analysis by Segment ($millions, excluding weighted Adjusted Adjusted Adjusted Q2 2019 Adjustment (1) Q2 2018 Adjustment (1) average shares and EPS) Q2 2019 Q2 2018 Q2 Variance Regulated – Independent Electric Transmission ITC 101 - 101 86 -
Slide 19: June YTD 2019 Results by Segment
June YTD 2019 Results by Segment APPENDIX June YTD Variance Analysis by Segment Adjusted Adjusted Adjusted ($millions, excluding weighted June YTD June YTD Adjustment June YTD Adjustment June YTD June YTD average shares and EPS) 2019 (1) 2018 (1) 2019 2018 Variance Regulated – Independent Electric T
Slide 20: Adjusted Earnings Reconciliation
Adjusted Earnings Reconciliation APPENDIX Non-US GAAP Reconciliation June YTD June YTD ($millions, except for common share data) Q2 2019 Q2 2018 Variance Variance 2019 2018 Net Earnings Attributable to Common Equity 720 240 480 1,031 563 468 Shareholders Adjusting Items: Gain on disposition(1) (484)
Slide 21: 2019 Forecast Capital & Rate Base By Segment
2019 Forecast Capital & Rate Base By Segment APPENDIX 2019F 2019F ($billions) Capital(1) Rate Base(1) 2019F Regulated – Independent Electric Transmission Capital Expenditures ITC 1.0 8.8 Regulated – US Electric & Gas Sustaining 64% UNS Energy 1.4 5.0 Central Hudson 0.3 1.9 Total Regulated – US Elect
Slide 22: Fortis Remains Committed to Investment-Grade Credit Ratings
Fortis Remains Committed to Investment-Grade Credit Ratings and Strong Regulated Utility Ratings APPENDIX Company Fortis Inc. BBB+ Baa3 BBB (high) ITC Regulated Subsidiaries A A1 n/a Tucson Electric Power A- A3 n/a Central Hudson A- A3(1) n/a FortisBC Energy n/a A3 A FortisBC Electric n/a Baa1 A (lo