Fortis Inc. · TSX:FTS
Fortis — Investor Day (October 2017)
24 slides from Fortis's investor day presentation, Oct 17, 2017
Slide 1: National Retail Call Presentation
National Retail Call Presentation October 17, 2017 2017 INVESTOR DAY 1
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 (c
Slide 3: Our strategy – simple, effective, proven
Our strategy – simple, effective, proven Strategy Leverage the operating model, footprint of our utilities, operating expertise, reputation and financial strength to develop growth opportunities Dividend Growth Dividend Target: Growth Target: Investment-Grade 6% Average Annual 6% Average Annual Cred
Slide 4: High quality & diverse utility portfolio
High quality & diverse utility portfolio Highly regulated, predominantly wires and gas LDCs (1) ~97% ~91% (1) (2) TRANSMISSION, REGULATED UTILITY DISTRIBUTION & OTHER ASSETS ASSETS ~60% EARNINGS FROM THE U.S. (1) As at June 30, 2017. (2) As at December 31, 2016. 2017 INVESTOR DAY 4
Slide 5: High quality & diverse utility portfolio
High quality & diverse utility portfolio One of the lowest risk utility businesses in North America 2017 INVESTOR DAY 5
Slide 6: Executing well in 2017
Executing well in 2017 ~6.25% ~$3.1B Dividend Increase 2017F Capital Plan in Q4 ‘17 44 th consecutive annual Focused on organic growth On track dividend payment increase Fortis 2017F Rate Base $25.4B Regulated- Independent Regulated- Transmission Canadian & (ITC) Caribbean 29% (Electric & Gas) 47
Slide 7: Strong track record of rate base and EPS growth
Strong track record of rate base and EPS growth 2011 – 2016 Rate Base Adjusted Earnings Per Share ($ billions(1)) ($ millions) $24.3 5-Year CAGR Rate base ~25% $6.9 $2.33 Rate base excluding ~7% acquisitions of U.S. subsidiaries $2.11 $16.4 10% $1.72 $1.70 $1.75 $14.0 $6.1 $1.65 $5.5 21% $4.5 3% $10
Slide 8: Past acquisition success delivers strong growth platform today
Past acquisition success delivers strong growth platform today Rate Base from Acquisition to 2017F(1) 5.0 $4.7 4.5 $4.1 4.0 3.5 $3.2 $3.3 $2.9 ($ billions) 3.0 2.5 2.0 $1.5 1.5 $1.3 $1.0 1.0 $0.5 $0.6 0.5 0.0 2004 2017F 2004 2017F 2007 2017F 2013 2017F 2014 2017F FortisBC Electric FortisAlberta Fort
Slide 9: 44 consecutive years of annual dividend payment increases
44 consecutive years of annual dividend payment increases Guidance extended through 2022 Average annual dividend 73% 73% growth through 2022 70% 66% targeted at ~6% 66% 65% (1) 2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F 2021F 2022F Dividend payout ratio (2) (1) 2017 forecast dividend payout ra
Slide 10: Supporting the delivery of superior total shareholder returns
Supporting the delivery of superior total shareholder returns (1) • Average annualized total shareholder return over last 5 years Fortis 10.0% S&P/TSX Composite Index 8.1% S&P/TSX Capped Utilities Index 6.6% (1) For the 5-year period ending September 29, 2017. 2017 INVESTOR DAY 10
Slide 11: Credit metrics support credit ratings
Credit metrics support credit ratings Ample liquidity through forecast period (1) Credit Ratings Credit Facilities 6.0 Fortis Inc. 5.0 S&P A- / BBB+ 4.0 2.2 4.0 3.2 DBRS BBB (high) ($ billions) 3.0 2.2 3.3 Moody’s Baa3 2.0 1.9 1.6 “Fortis Inc. has a very strong business risk profile, 1.0 1.4 1.7 whi
Slide 12: Strong outlook – capital program and rate base growth
Strong outlook – capital program and rate base growth Capital Expenditures(1) Rate Base(2) ($ billions) ($ billions) $14.5 Five-Year Capital Plan $3.2 $31.7 $29.6 $30.4 $2.8 $2.9 $2.9 $28.5 $2.7 $26.8 $25.4 2018F 2019F 2020F 2021F 2022F 2017F 2018F 2019F 2020F 2021F 2022F (3) Other Energy Infrastruc
Slide 13: Improved five-year capital program
Improved five-year capital program Increase resulting from sustainable growth platform $1.5B Increase in $16.0 Five-Year Capital Plan $15.0 +$0.2 +$0.1 $14.5 +$0.5 $14.0 +$0.7 $13.0 (Billions) $13.0 $12.0 $11.0 $10.0 2017-2021 FortisBC UNS FortisAlberta Central Hudson 2018-2022 Capital Plan Capital
Slide 14: FortisBC 2018-2022 base capital plan
FortisBC 2018-2022 base capital plan Unlocking incremental value in our gas LDC business for delivery to customers • Pipeline Integrity Management Program – Program to improve pipeline safety and integrity – Focused on transmission pressure systems – Includes pipeline modifications and looping – Tot
Slide 15: UNS 2018-2022 base capital plan
UNS 2018-2022 base capital plan Modernizing natural gas generating resources support new base capital plan • Flexible Generation Resource – Facilitating renewables on the grid – Provide ramping and peaking requirements – Replace aging, less efficient combustion turbines – Reciprocating engines to be
Slide 16: Opportunities beyond the base capital plan
Opportunities beyond the base capital plan Newfoundland and Labrador Prince MECL & NP: Edward Grid Alberta Island Modernization British Columbia FortisOntario: Wataynikaneyap Project & Municipal Utility Consolidation Minnesota Ontario FortisBC: New York Tilbury, LNG, Gas Infrastructure Iowa Michigan
Slide 17: Near-term projects beyond the base capital plan: Wataynikaneyap
What is the Near-term opportunity projects beyond thefor LNG? base capital plan Wataynikaneyap Power Project – “Line that brings light” 1 Recent Milestones: Remaining Milestones: • Ontario Energy Board (OEB) approved a • Completion of environmental assessments deferral account in March 2017 to recov
Slide 18: Near-term projects beyond the base capital plan: Lake Erie Connector
Near-term projects beyond the base capital plan ITC - Lake Erie Connector 2 • 1,000 MW HVDC transmission line would connect the IESO and PJM markets for the first time • ~73 miles – majority buried in Lake Erie • ~ US$1 billion capital investment opportunity • ~ 3 full years to construct from commen
Slide 19: Long-term opportunities: ITC Regulated Transmission U.S.
Long-term opportunities beyond the base capital plan ITC – Regulated Transmission U.S. Transmission focuses on North America “Grid of the Future”- reliable, resilient, and efficient grid to connect energy resources to customers Regulated Transmission – U.S. • Potential incremental needs within exist
Slide 20: Long-term opportunities: ITC Contracted Transmission and Energy Storage
Long-term opportunities beyond the base capital plan ITC – Contracted Transmission and Energy Storage Transmission focuses on North America “Grid of the Future”- reliable, resilient, and efficient grid to connect energy resources to customers Contracted Transmission Energy Storage New Transmission •
Slide 21: Long-term opportunities: UNS cleaner energy and reliability
Long-term opportunities beyond the base capital plan UNS - Delivery of cleaner energy and increased reliability • Renewable Generation – Purchase existing renewable facilities • Purchase options in existing contracts – Self-build utility-scale projects • Grid Modernization – Distribution automation
Slide 22: Long-term opportunities: FortisBC LNG infrastructure
Long-term opportunities beyond the base capital plan FortisBC - LNG infrastructure opportunities Site of potential future marine Existing facility terminal • Tilbury LNG facility • Site is scalable with ocean access • Tilbury 1B - $400M approved for regulated expansion but not yet started • To serve
Slide 23: Blueprint for growth beyond the capital plan
Blueprint for growth beyond the base capital plan Focused on capitalizing organic opportunities and business trends $25 Incremental Near-Term and Organic Growth Opportunities will Augment Capital Plan Existing Utilities $20 Driving Visible Organic Growth +~$1-$4 ~$15.5-$18.5 $15 (Billions) +$1.5 $14
Slide 24: Our strategy – simple, effective, proven
Our strategy – simple, effective, proven Strategy Leverage the operating model, footprint of our utilities, operating expertise, reputation and financial strength to develop growth opportunities Dividend Growth Dividend Target: Growth Target: Investment-Grade 6% Average Annual 6% Average Annual Cred