Fortis Inc. · TSX:FTS
Fortis — Q2 2016 Earnings Presentation
18 slides from Fortis's earnings presentation, Jul 29, 2016
Slide 1: Q2 2016 Earnings Call
Q2 2016 Earnings Call July 29, 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: Performance continues to validate our focused strategy
Performance continues to validate our focused strategy • Delivering strong performance with highly diversified and low risk regulated utility business • Advancing significant capital projects • Continuing focus on energy infrastructure investments • Progressing regulatory filings and applications •
Slide 5: $9.3B capital plan delivers over $20B in rate base
$9.3B capital plan delivers over $20B in rate base Capital Expenditures Midyear Rate Base Growth $9.3B Five-Year Capital Plan $19.8 $20.3 $18.9 $18.1 $17.3 $2.0 $16.4 $1.9 $2.0 $1.7 $1.7 ($ billions ) (1) ($ billions ) (1) 2016F 2017F 2018F 2019F 2020F 2015A 2016F 2017F 2018F 2019F 2020F (2) Sustain
Slide 6: Progress on major capital projects
Progress on major capital projects $M (1) 2016 2017-2020 UNS Energy Solar Program 21 85 UNS Energy Springerville Unit 1 Purchase 112 - Central Hudson Gas Main Replacement Program 28 127 FortisBC Tilbury LNG Facility Expansion – Tilbury 1A 105 15 FortisBC Lower Mainland System Upgrade 32 378 FortisAl
Slide 7: We are executing on opportunities to grow investments within our franchise regions
We are executing on opportunities to grow investments within our franchise regions FortisAlberta: FortisOntario: Rural Electrification Wataynikaneyap Project Associations & Municipal Utility Consolidation FortisBC: Tilbury, Woodfibre, LNG, Gas Central Hudson: Infrastructure REV Demonstration Project
Slide 8: ITC – strategic rationale
ITC – strategic rationale Increases Premier Electric Accretive to EPS Diversification Transmission Utility Accretive in First Full Pro Forma 38% Fully Regulated Year Following Close FERC-Regulated Earnings Supportive FERC Long-Term Rate Regulation Base Growth Proven Management Prospects Team Formula
Slide 9: Milestones are being met to close the acquisition by the end of 2016
Milestones are being met to close the acquisition by the end of 2016 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
Slide 10: Strong platform for sustained growth
Strong platform for sustained growth • Low risk and diversified • Financial strength • Predictable dividend growth 10
Slide 11: Karl Smith, Executive VP, Chief Financial Officer
Karl Smith Executive VP, Chief Financial Officer
Slide 12: Diversified portfolio of utilities continues to deliver strong performance
Diversified portfolio of utilities continues to deliver strong performance Financial Highlights Adjusted Earnings $302 $321 • Strong performance from regulated 300 utilities during the quarter ($ millions) $131 150 $123 • Unused consolidated credit facilities of approximately $2.1B 0 • $1.9B capital
Slide 13: Multiple drivers of EPS growth – Q2
Multiple drivers of EPS growth – Q2 0.55 $0.02 ($0.01) 0.50 ($0.03) $2.11 $0.01 $0.01 $0.02 ($) 0.45 $0.46 $0.44 0.40 0.35 0.30 Adjusted EPS Foreign Exchange FortisBC Electric Aitken Creek Regulated Utilities FortisAlberta Non-Utility Adjusted EPS Q2 2015 Q2 2016 13
Slide 14: Multiple drivers of EPS growth – YTD
Multiple drivers of EPS growth – YTD 1.20 $0.01 ($0.02) $0.01 $0.01 ($0.02) 1.16 $0.02 ($0.01) $0.04 ($) 1.12 $1.13 1.08 $1.09 1.04 1.00 Adjusted EPS Foreign FortisBC Energy Aitken Creek Waneta Belize FortisBC Non-Utility Corporate Adjusted EPS YTD 2015 Exchange Electricity Electric YTD 2016 14
Slide 15: Ample liquidity and investment-grade credit ratings
Ample liquidity and investment-grade credit ratings Investment-Grade Credit Ratings (1) Consolidated Credit Facilities (2) 4.0 Fortis Inc. 3.0 S&P A- / BBB+ 2.4 2.1 ($ billions) DBRS A(low) 2.0 Capital Structure 1.0 % Jun/16 1.2 1.4 Debt 55 0.0 Preferred 8 Dec 31/15 Jun 30/16 Common 37 Utilized Rema
Slide 16: Focused on constructive regulatory relationships
Focused on constructive regulatory relationships Significant Filings and Applications Regulated Utility Application/Proceeding Filing Date Expected Decision TEP 2017 General Rate Application November 2015 Q4 2016 UNS Electric 2016 General Rate Application May 2015 Q3 2016 FortisBC Energy 2016 Cost o
Slide 17: A Leader in Electric and Gas Utilities in North America
A Leader in Electric and Gas Utilities in North America
Slide 18: Q2 2016 Earnings Call
Q2 2016 Earnings Call July 29, 2016