Slide 1: 2017 Q2 Earnings Conference Call
2017 Q2 Earnings Conference Call July 28, 2017 FORTIS INC. WIRED FOR GROWTH
Slide 2: Forward-Looking Information
Forward-Looking Information Fortis Inc. (“Fortis” or, the “Corporation”) 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 (
Slide 3: Barry Perry, President & CEO
a AS eee 9 FORTIS President & CEO Barry Perry
Slide 4: Our Focused Strategy Continues to Yield Strong Results
Our Focused Strategy Continues to Yield Strong Results Focused on base growth while making prudent investments to ensure safe, reliable and cost effective energy solutions to our customers Benefitting from the acquisition of ITC Maintaining constructive regulatory relationships: • UNS rate cas
Slide 5: Average Annual Dividend Growth Target of ~6% through 2021
Average Annual Dividend Growth Target of ~6% through 2021 $1.53 $1.40 $1.20 $1.24 $1.28 $1.16 $1.12 $1.04 $1.00 73% 73% $0.82 70% 70% 68% 66% 66% $0.67 64% 61% 59% Average annual dividend growth 47% through 2021 targeted at ~6% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017F 2018F 2019F
Slide 6: Waneta Dam Hydroelectric Facility Agreement
Waneta Dam Hydroelectric Facility Agreement: High Quality Asset that Compliments Existing Service Territory in British Columbia High-quality, renewable energy facility located in current operational area Currently operated by FortisBC Stable long-term asset that will generate strong cash flows
Slide 7: Capital Plan Grows Rate Base to ~$30 Billion in 2021
Capital Plan Grows Rate Base to ~$30 Billion in 2021 ~$13B Five-Year Capital Program (2) 2016 – 2021 Midyear Rate Base $3.1 $2.9 $28.9 $29.6 $28.3 $27.1 $2.4 $2.4 $25.7 $2.3 $24.3 ($ billions ) (1) ($ billions ) (1) (3) 2017F 2018F 2019F 2020F 2021F 2016A 2017F 2018F 2019F 2020F 2021F Other Energy I
Slide 8: Highly Executable Capital Plan
Highly Executable Capital Plan Major Capital Projects Total Forecast Forecast 2017- $millions(1) (2) 2017 2018-2021 2021 5-Year Capital Forecast Spending Forecast ITC Multi-Value Regional 305 244 549 Transmission Projects (3) Utility ITC 34.5 kV to 69 kV Operations (4) 89 369 458 15% Conversion Proj
Slide 9: Beyond the Forecast: Development Project Update
Beyond the Forecast: Development Project Update Opportunity to connect remote First Nations communities in Northern Ontario to the grid During the first quarter 2017, the Ontario Energy Board issued its deferral account approval allowing recovery of spending that occurred since Wataynikaneyap No
Slide 10: Karl Smith, Executive Vice President, Chief Financial Officer
Karl Smith Executive Vice President, Chief Financial Officer
Slide 11: Diversified Portfolio of Utilities Delivers Strong Performance
Diversified Portfolio of Utilities Delivers Strong Performance Adjusted Earnings Adjusted EPS 300 600 0.75 1.40 $253 $540 $0.61 $1.31 500 1.30 ($ millions) 200 0.50 $0.45 400 ($) $319 $129 1.20 300 $1.13 100 0.25 200 1.10 0 100 0.00 1.00 2016 2017 2016 2017 2016 2017 2016 2017 Q2 June Year-to-Date Q
Slide 12: Multiple Drivers of EPS Growth – Q2
Multiple Drivers of EPS Growth – Q2 0.65 0.01 (0.01) 0.60 0.01 0.01 0.04 0.55 0.50 0.10 0.45 ($) 0.61 0.40 0.35 0.45 0.30 0.25 (2) (1) (3) 2016 Q2 UNS ITC Corp. and Aitken Creek Foreign WA Share 2017 Q2 Adjusted Actual Other Exchange Impact Adjusted Actual EPS EPS (1) Inclusive of finance charges an
Slide 13: Multiple Drivers of EPS Growth – June Year-to-Date
Multiple Drivers of EPS Growth – June Year-to-Date 1.40 1.35 (0.01) 0.04 (0.01) (0.03) 1.30 0.05 1.25 ($) 1.20 0.14 1.15 1.31 1.10 1.13 1.05 1.00 (1) (2) (3) 2016 Q2 YTD UNS Aitken Creek ITC Corp. and Other WA Share(4) 2017 Q2 YTD Adjusted Actual Other Regulated Impact Adjusted Actual EPS Utilities
Slide 14: Investment-Grade Credit Ratings and Ample Liquidity
Investment-Grade Credit Ratings and Ample Liquidity Consolidated Credit Facilities 7.0 Credit Ratings(1) 6.0 Fortis Inc. 5.0 S&P A- / BBB+ 4.0 3.7 ($ billions) 4.0 DBRS BBB (high) 3.0 2.0 Moody’s Baa3 (2) 1.0 2.2 1.4 0.0 Dec 31/16 June 30/17 Utilized Remaining Capacity (1) In October 2016, following
Slide 15: Regulatory Stability
Regulatory Stability Recent Regulatory Outcomes Agreement/ Regulated Utility Application/Proceeding Outcome Decision Timing ‒ 10.32% base ROE with a high-end zone of ITC Initial MISO Base ROE Complaint September 2016 reasonableness of 11.35% 2016 Application: ROE and Common ‒ Maintained ROE at 8.75%
Slide 16: Barry Perry, President & CEO
a AS eee 9 FORTIS President & CEO Barry Perry
Slide 17: Poised to Deliver Quality Results
Poised to Deliver Quality Results • On track to execute 2017 plan, supported by acquisition of ITC and reasonable rate case outcome at UNS • Consistent dividend growth • 43 years of consecutive dividend increases • 6% average annual dividend growth guidance through 2021 • Highly diversified regulate
Slide 18: Expected Upcoming Events
Expected Upcoming Events Expected Earnings Release Dates Q3 – 2017 November 3, 2017 Save the Date - 2017 Investor Day Toronto October 16, 2017 New York October 18, 2017 FORTIS INC. WIRED FOR GROWTH
Slide 19: 2017 Q2 Earnings Conference Call
2017 Q2 Earnings Conference Call July 28, 2017 FORTIS INC. WIRED FOR GROWTH
Slide 20: Q2 2017 Results by Segment
Q2 2017 Results by Segment Second Quarter Variance Analysis by Segment ($’s in millions, Q2 2017 Adjustment Q2 2017 Q2 2016 Adjustment Q2 2016 Q2 (Adjusted) excluding EPS) (Adjusted) (Adjusted) Variance Regulated – Independent Electric Transmission ITC Holdings Corp. 93 - 93 - - - 93 Regulated – US
Slide 21: June YTD 2017 Results by Segment
June YTD 2017 Results by Segment June Year-to-Date Variance Analysis by Segment ($’s in millions, June YTD Adjustment June YTD June YTD Adjustment June YTD June YTD excluding EPS) 2017 2017 2016 2016 (Adjusted) (Adjusted) (Adjusted) Variance Regulated – Independent Electric Transmission ITC Holdings
Slide 22: 2017-2021 Five Year Forecast by Segment
2017-2021 Five Year Forecast by Segment 2017 Capital Forecast ($millions) Regulated–Independent Transmission (ITC) ITC 958 Regulated-US Electric & Gas UNS Energy 579 Central Hudson 230 Regulated-Canadian & Caribbean Electric & Gas FortisBC Gas 489 FortisAlberta 419 FortisBC Electric 118 Eastern Cana
Slide 23: Capital Expenditures Exceeding Expectations
Capital Expenditures Exceeding Expectations 2013-2017 Business Plan Capex 2014-2018 Business Plan Capex 2015-2019 Business Plan Capex $ Millions $ Millions $ Millions 3,200 3,200 3,200 2,800 2,800 2,800 2,400 2,400 2,400 2,000 2,000 2,000 1,600 1,600 1,600 1,200 1,200 1,200 800 800 800 400 400 400 0
Slide 24: Opportunities Beyond Base Plan
Opportunities Beyond Base Plan ITC: Lake Erie Connector Prince Newfoundland Edward and Labrador Alberta Island British Columbia Prince Edward FortisOntario: Island Wataynikaneyap Project & British Columbia Municipal Utility Consolidation Ontario Minnesota Ontario FortisBC: New York Tilbury, Woodfibr