Slide 1: Q3 2016 Earnings Call
Q3 2016 Earnings Call November 4, 2016
Slide 2: Forward-Looking Statement
Forward-Looking Statement Fortis Inc. (“Fortis” or, the “Corporation”) includes forward-looking statements in this presentation within the meaning of applicable securities laws including the Private Securities Litigation Reform Act of 1995. Forward-looking statements included in this presentation re
Slide 3: Barry Perry, President & CEO
FORTIS... Barry Perry President & CEO
Slide 4: ITC Acquisition Closed
ITC Acquisition Closed Secured minority investor with GIC Private Limited to acquire a 19.9% equity interest in ITC for US$1.228B. The process was completed in just over 70 days in April 2016. Received Fortis shareholder approval on May 5, 2016 Received ITC shareholder approval on June 22, 2016 The
Slide 5: NYSE Listing
NYSE Listing • Fortis listed on the NYSE under the symbol “FTS” – October 14, 2016 • Investor executive roundtable sessions held by Fortis at NYSE – October 17, 2016 • Fortis commemorated the listing by ringing the opening bell at NYSE – October 18, 2016 5
Slide 6: Fortis Today
Fortis Today • Leader in the North American regulated electric and gas utility business • ITC provides strong platform in electric transmission sector • Successful utility acquisition track record • Tremendous economic, geographic and regulatory diversity • Regulatory outcomes provide stability for
Slide 7: 43 Consecutive Years of Annual Dividend Increases
43 Consecutive Years of Annual Dividend Increases $1.53 $1.40 $1.20 $1.24 $1.28 $1.12 $1.16 $1.00 $1.04 $0.82 $0.67 Average annual dividend growth through 2021 targeted at 6% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016F 2017F 2018F 2019F 2020F 2021F Dividend paid per common share Longest
Slide 8: Q3 Highlights
Q3 Highlights • Successful completion of ITC transaction on October 14, 2016 • Issued US$2 billion unsecured notes to finance a portion of the acquisition • Listed shares on the NYSE • Significant progress on key regulatory proceedings • TEP revenue requirement settlement agreement • GCOC decisions
Slide 9: 2017-2021 Capital Program
2017-2021 Capital Program Capital Expenditures ~$13B Five-Year Capital Program $2.9 $2.9 $2.4 $2.4 $2.3 ($ billions ) (1) 2017F 2018F 2019F 2020F 2021F Other Energy Infrastructure Regulated - Canadian & Caribbean Regulated - US Electric & Gas Regulated - Independent Transmission (ITC) (1) US Dollar
Slide 10: 2016 – 2021 Midyear Rate Base
Midyear Rate Base 2016 – 2021 Midyear Rate Base (1) $28.9 $29.6 $28.3 $27.1 $25.7 $24.2 ($ billions ) (2) 2016F 2017F 2018F 2019F 2020F 2021F Regulated - Independent Transmission (ITC) Regulated - US Electric & Gas (3) Regulated - Canadian & Caribbean (1) Includes the impact of bonus depreciation an
Slide 11: Progress on Major Capital Projects
Progress on Major Capital Projects $millions(1) 2016 2017-2021 ITC Multi-Value Regional Transmission Projects (2) 74 450 ITC 34.5kV to 69kV Conversion Project (2) 18 458 UNS Energy Springerville Unit 1 Purchase 112 - Central Hudson Gas Main Replacement Program 26 202 FortisBC Tilbury LNG Facility Ex
Slide 12: Opportunities Beyond Base Plan
Opportunities Beyond Base Plan FortisAlberta: Rural Electrification ITC: Associations Lake Erie Connector Prince Newfoundland Edward Alberta Island British Columbia Prince Edward FortisOntario: Island Wataynikaneyap Project & British Columbia Municipal Utility Consolidation Ontario Minnesota Ontario
Slide 13: Karl Smith, Executive Vice President, Chief Financial Officer
Karl Smith Executive Vice President, Chief Financial Officer
Slide 14: Diversified Portfolio of Utilities Continues to Deliver Strong Performance
Diversified Portfolio of Utilities Continues to Deliver Strong Performance Adjusted Earnings Financial Highlights 200 500 $475 • Strong performance from regulated $447 utilities during the quarter $154 ($ millions) 150 $145 400 • Unused consolidated credit facilities of approximately $2.2B, excludin
Slide 15: Multiple Drivers of EPS Growth – Q3
Multiple Drivers of EPS Growth – Q3 0.65 $0.01 ($0.02) 0.60 $0.03 ($0.02) $2.11 $0.04 ($0.01) ($0.01) 0.55 ($) 0.50 $0.54 0.45 $0.52 0.40 0.35 0.30 2015 Adjusted UNS Energy Regulated Aitken Creek FortisAlberta Non-Utility Corporate Increase in 2016 Adjusted Actual Q3 EPS Utilities Weighted Actual Q3
Slide 16: Multiple Drivers of EPS Growth– YTD
Multiple Drivers of EPS Growth– YTD 1.90 1.80 $0.02 $0.01 ($0.04) $0.05 ($0.03) ($0.01) ($0.04) $0.06 1.70 $0.04 1.60 ($) 1.50 1.40 $1.67 1.30 $1.61 1.20 1.10 1.00 2015 Adjusted Foreign Regulated UNS Energy Aitken Creek Waneta Non-Utility FortisAlberta Corporate Increase in 2016 Adjusted Actual EPS
Slide 17: ITC’s Q3 Highlights
ITC’s Q3 Highlights Financial Highlights • Q3 and September YTD performance reflects impacts of transaction costs and MISO base ROE complaints • Q3 2016 net income of US$50M • Q3 YTD 2016 net income of US$185M • In October, S&P reaffirmed the credit ratings of ITC Holdings and its operating companie
Slide 18: Liquidity and Credit Ratings
Liquidity and Credit Ratings Credit Ratings(1) Credit Facilities 6.0 5.0 Fortis Inc. 4.0 2.2 3.2 ($ billions) S&P A- / BBB+ 3.0 2.2 DBRS BBB (high) 2.0 Moody’s Baa3 1.9 1.0 1.6 0.0 Sept 30/16 Pro forma Sept 30/16 Incl. ITC Utilized Remaining Capacity (1) In October 2016, following the completion of
Slide 19: Regulatory Stability
Regulatory Stability Summary of Recent Regulatory Outcomes Agreement/ Regulated Utility Application/Proceeding Outcome Decision Timing 2017 General Rate Application - Settlement agreement reached on revenue requirement TEP August 2016 (GRA) - 9.75% ROE and common equity thickness of 50% 2016 Generic
Slide 20: 2017-2021 Forecast Highlights
2017-2021 Forecast Highlights Capital - ~$13B base capital program Expenditures - Highly executable, low-risk, capital projects - Woodfibre – Potential ~$600 million LNG opportunity Opportunities - ITC Lake Erie Connector – 1,000 MW, bi-directional, HDVC line connecting PJM and IESO Beyond Base Plan
Slide 21: 2017-2021 Five Year Forecast by Segment
2017-2021 Five Year Forecast by Segment 2017 Capital Forecast ($millions) Regulated–Independent Transmission (ITC) 5-Year Capital Forecast by Segment ITC 958 Regulated-US Electric & Gas UNS Energy 520 Central Hudson 222 Regulated - Regulated-Canadian & Caribbean Regulated - US Independent FortisBC G
Slide 22: Rate Base Growth at ITC
Rate Base Growth at ITC (1) ITC’s Midyear Rate Base $8.8 $8.4 $8.6 $8.0 $7.3 $6.9 ($ billions ) (2) 2016F 2017F 2018F 2019F 2020F 2021F Regulated - Independent Transmission (ITC) ($Billions) 2016 2017 2018 2019 2020 2021 Bonus depreciation impact (0.2) (0.3) (0.3) (0.4) (0.5) (0.5) on midyear rate b
Slide 23: Barry Perry, President & CEO
FORTIS... Barry Perry President & CEO
Slide 24: What Sets Fortis Apart?
What Sets Fortis Apart? • Highly diversified; virtually all regulated electric and gas assets • Highly executable base capital plan • Focus on transmission & distribution • Regulatory stability • Consistent dividend growth • 43 years of consecutive dividend increases • 6% average annual dividend gro
Slide 25: Q3 2016 Earnings Call
Q3 2016 Earnings Call November 4, 2016