Slide 1: First Quarter 2019 Earnings Conference Call
First Quarter 2019 Earnings Conference Call May 1, 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 U.S. Private Securities Litigation Reform Act of 1995, collectively referred to as "forw
Slide 3: Barry Perry, President & CEO
Barry Perry President & CEO
Slide 4: Business Highlights – Strong Start to 2019
Business Highlights – Strong Start to 2019 Q1 2019 Adjusted EPS of $0.74 Utilities Invested $740M in Q1 TEP Rate Case Filed Closed $1B Waneta Asset Sale Settled Tender Offer for US$400M of the 3.055% 2026 Notes 4
Slide 5: Executing on Capital Plan Supporting a Cleaner Energy Future
Executing on Capital Plan Supporting a Cleaner Energy Future FortisBC Obtained TEP Oso Grande Energy Conservation & Leave to Construct 247 MW Wind Project Efficiency Program from OEB Increased to ~$370M Once complete: Expected to: Next steps include: • Renewable energy • Decrease CO2 • Environmental
Slide 6: Capital Plan Supports 6-7% Average Annual Rate Base Growth
Capital Plan Supports 6-7% Average Annual Rate Base Growth (1) $17.3B 5-Year Capital Plan Rate Base(2) $3.7 $35.5 $3.5 $3.6 $33.4 $32.0 $3.2 $3.3 $30.1 $27.9 $26.1 Billions Billions 2019F 2020F 2021F 2022F 2023F 2018A 2019F 2020F 2021F 2022F 2023F Canadian & Caribbean U.S. (1) Capital expenditures a
Slide 7: Leader in Dividend Growth With 45 Years of Dividend Increases
Leader in Dividend Growth With 45 Years of Dividend Increases (1) 6% guidance generates annual dividend payment of $2.27 in 2023 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15 17 19F 21F 23F Actual dividend paid Forecasted dividend payments (1) Based on an annualized dividend of $
Slide 8: Jocelyn Perry, Executive Vice President & CFO
Jocelyn Perry Executive Vice President & CFO
Slide 9: Strong First Quarter Results
Strong First Quarter Results Reported EPS Adjusted EPS Increased $0.77 $0.72 5.7% over Q1 2018 Rate Base Growth Q1 2018 Q1 2019 Supports Earnings Growth Adjusted EPS(1) $0.74 $0.70 Utilities Invested $740M in Q1 Q1 2018 Q1 2019 (1) Non-US GAAP measure 9
Slide 10: EPS Drivers – Q1
EPS Drivers – Q1 Increase of 5.7% over Q1 2018 $0.01 ($0.02) $0.01 $0.02 ($0.01) $0.03 $0.74 $8.4 $0.70 $9.8 Q1 2018 Adjusted (1) U.S. Foreign U.S. Transmission Canadian & Energy Corporate & Q1 2019 Adjusted (1) (2) EPS Electric & Gas Exchange (ITC) Caribbean Infrastructure Weighted Average EPS Elec
Slide 11: Execution of Funding Plan Supports Investment-Grade Credit Ratings
Execution of Funding Plan Supports Investment-Grade Credit Ratings Investment-Grade Credit Ratings Cash From S&P Global A- / BBB+(3) Operations(1) DBRS BBB (high) Capital 68% Moody’s Baa3 Plan Funding CFO/Debt > 11% Regulated (4) Debt 24% & Improved Holdco Other(2) Waneta Debt / Total Debt 2% Asset
Slide 12: 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 to seek stakeholder comments on: • Incentive policies for transmission investment • Methodology for esta
Slide 13: TEP Rate Case Filing
TEP Rate Case Filing Summary of TEP Rate Case Applications 2017 General Rate 2019 Rate Case 2018 Approved Application Requested Application Test Year Test Year June 30, 2015 December 31, 2018 New Rates Effective February 2017 May 1, 2020 Annual Customer Rate Base US$2.0B US$2.7B Rate Increases Non-F
Slide 14: Why Invest In Fortis?
Why Invest In Fortis? Well-Run Utilities Virtually All Regulated Highly Diversified Strong Growth Profile 6% Dividend Guidance Opportunities Beyond Capital Plan 14
Slide 15: Expected Upcoming Events
Expected Upcoming Events Upcoming Events 2019 Annual General Meeting May 2, 2019 Investor Day at ITC September 10, 2019 Expected Upcoming Earnings Release Dates Q2 – 2019 August 2, 2019 Q3 – 2019 November 1, 2019 15
Slide 16: First Quarter 2019 Earnings Conference Call
First Quarter 2019 Earnings Conference Call May 1, 2019
Slide 17: Appendix
Appendix May 1, 2019
Slide 18: Q1 2019 Results by Segment
Q1 2019 Results by Segment APPENDIX First Quarter 2019 Variance Analysis by Segment ($millions, excluding weighted Adjusted Adjusted Adjusted Q1 2019 Adjustment (1) Q1 2018 Adjustment (1) average shares and EPS) Q1 2019 Q1 2018 Q1 Variance Regulated – Independent Electric Transmission ITC 92 - 92 86
Slide 19: Q1 Adjusted Earnings Reconciliation
Q1 Adjusted Earnings Reconciliation APPENDIX Non-US GAAP Reconciliation ($millions, except for common share data) Q1 2019 Q1 2018 Variance Net Earnings Attributable to Common Equity Shareholders 311 323 (12) Adjusting Items: Unrealized loss on mark-to-market of derivatives(1) 5 4 1 Consolidated stat
Slide 20: Regulated Utility Subsidiaries Have Very Strong Investment-Grade Credit Ratings
Regulated Utility Subsidiaries Have Very Strong Investment-Grade Credit Ratings APPENDIX Company ITC Regulated Subsidiaries A A1 n/a Tucson Electric Power A- A3 n/a Central Hudson A- A2 n/a FortisBC Energy n/a A3 A FortisBC Electric n/a Baa1 A (low) FortisAlberta A- Baa1 A (low) Newfoundland Power n
Slide 21: 2019-2023 Capital Forecast by Segment
2019-2023 Capital Forecast by Segment APPENDIX Capital Forecast(1) 2019-2023 ($millions) 2019 2020 2021 2022 2023 Total Regulated - Independent Electric Transmission ITC 865 878 951 943 861 4,498 Regulated - US Electric & Gas UNS Energy 1,076 875 624 476 476 3,527 Central Hudson 280 268 276 291 274
Slide 22: Major Capital Projects
Major Capital Projects AAAPPPPPPEEEN ND N DIIIXXX D Total Expected Year Significant Capital Projects ($millions)(1) 2019 2019-2023 of Capital Plan Forecast By Project Type Plan Completion ITC Multi-Value Regional Transmission Projects 88 332 2023 ITC 34.5 kV to 69 kV Transmission Conversion Project
Slide 23: 2018-2023 Rate Base by Segment
2018-2023 Rate Base by Segment APPENDIX (1) Rate Base 3-Year CAGR 5-Year CAGR ($billions) 2018A 2019F 2020F 2021F 2022F 2023F to 2021 to 2023 Regulated - Independent Electric Transmission ITC(2) 7.8 8.5 9.1 9.7 10.3 10.8 7.7% 6.8% Regulated - US Electric & Gas UNS Energy 4.7 5.3 6.0 6.3 6.4 6.6 10.1