Fortis Inc. · TSX:FTS
Fortis — Investor Presentation (November 2020)
29 slides from Fortis's investor presentation, Nov 19, 2020
Slide 1: Board Shareholder Engagement
BOARD SHAREHOLDER ENGAGEMENT NOVEMBER 19, 2020
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 Private Securities Litigation Reform Act of 1995 (collectively referred to as "forward-looki
Slide 3: Meeting Agenda
MEETING AGENDA Formal Presentation Business Overview & Board Structure ➢ Douglas Haughey – Chair of the Board Corporate Governance ➢ Pierre Blouin – Chair of the Governance and Nominating Committee Executive Succession & Compensation ➢ Jo Mark Zurel – Chair of the Human Resources Committee Stakehold
Slide 4: Business Overview & Board Structure
BUSINESS OVERVIEW & BOARD STRUCTURE
Slide 5: A Premium Energy Delivery Business
A PREMIUM ENERGY DELIVERY BUSINESS 93% TRANSMISSION & DISTRIBUTION ASSETS HIGH-QUALITY PORTFOLIO: ➢ 10 Regulated Utility Businesses ➢ 3.3M Electric & Gas Customers ➢ 9,000 Employees ➢ 99% Regulated Utility Assets ➢ $24B Market Capitalization(1) ➢ ~14% Average Annual 20-Year Total Shareholder Return(
Slide 6: Strategically Positioned to Navigate Through COVID-19
STRATEGICALLY POSITIONED TO NAVIGATE THROUGH COVID-19 Operationally: ➢ Strong business model with seasoned leadership at 10 locally operated utilities ➢ Cohesive culture and relationships supporting effective communication and nimble decision-making ➢ Essential workers maintaining and operating elec
Slide 7: Five-Year Outlook Highlights
FIVE-YEAR OUTLOOK HIGHLIGHTS ~$19.6B ~6% ~6% 2021-2025 Rate Base Average Annual Capital Plan Growth Dividend Growth Guidance to 2025 $800M increase Rate base grows 47 consecutive years over prior year ~$10B to $40.3B of dividend increases plan of $18.8B over five-year plan 7
Slide 8: Corporate-Wide Carbon Emissions Reduction Target of 75% by 2035
CORPORATE-WIDE CARBON EMISSIONS REDUCTION TARGET OF 75% BY 2035 COMPARED TO 2019 LEVELS PROVIDES CUSTOMERS WITH CLEANER ENERGY Reduction in Scope 1 Emissions by 2035 Using a 2019 Base Year 16,000 ➢ Industry leader in sustainability with 14,000 shorter timeframe for reduction and 12,000 using current
Slide 9: Sustainability Leader
SUSTAINABILITY LEADER Continued Focus on Carbon emissions reduction target of Energy 75% by 2035 Delivery using a 2019 base year Industry leader in Industry recognition(1) for Safety Strong Governance and Reliability grounded in local leadership & independence More than 40% of Fortis Inc. Directors
Slide 10: Dividend Guidance Supported by Long-Term Growth Strategy
DIVIDEND GUIDANCE SUPPORTED BY LONG-TERM GROWTH STRATEGY 6% 47 YEARS $2.0 AVERAGE ANNUAL DIVIDEND OF CONSECUTIVE GROWTH GUIDANCE TO 2025 DIVIDEND INCREASES $1.5 $1.0 $0.5 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20F 10
Slide 11: Strategy Oversight
STRATEGY OVERSIGHT AREAS OF FOCUS • Board continuously engaged on the development and execution of strategy Overview • Regular communication between the Board Chair and CEO (and other executives) • Strategy discussion at every Board meeting and annual in-depth strategy session • Focus on regulated e
Slide 12: Committee & Board Structure
COMMITTEE & BOARD STRUCTURE Douglas J. Haughey Chair of the Board Board of Directors Barry V. Perry(1) President & CEO Tracey C. Ball Chair of the Audit Committee Pierre J. Blouin Chair of Governance & Nominating Committee Audit Governance & Human Paul J. Bonavia Lawrence T. Borgard Maura J. Clark C
Slide 13: Strong & Diverse Board
STRONG & DIVERSE BOARD AGE TENURE RESIDENCY GENDER (AVERAGE 61 YEARS) (AVERAGE 4.7 YEARS) 60-65 4-8 years Male 60% 60% U.S. 60% 50% < 60 < 4 years Canada 30% 30% 50% Female 40% 9-12 years 66-72 10% 10% Note: Data as at March 20, 2020. Expect to enhance diversity of Board with nomination of two new d
Slide 14: Corporate Governance
CORPORATE GOVERNANCE F@RTIS..
Slide 15: Governance Overview
GOVERNANCE OVERVIEW Board Independence Compensation Director Elections Ethics & Education Composition ➢ Majority ➢ Independent Board ➢ Annual advisory vote ➢ Directors elected ➢ Code of Conduct Independent Chair separate from on executive pay annually updated regularly Directors (9 of 10) CEO to ref
Slide 16: Approach to Corporate Governance
APPROACH TO CORPORATE GOVERNANCE Governance & Human Nominating Resources Audit Strong Performance Responsibility Matrix Board Committee Committee Committee ➢ ISS and Glass Lewis supportive of all Strategy ✓ resolutions for past five years ➢ Fortis named among Best 50 Corporate Executive Succession P
Slide 17: Board Assessment & Renewal
BOARD ASSESSMENT & RENEWAL Annual Assessment of Board and Committee Process • Comprehensive survey and interviews to assess individual and overall board performance • The Board has a guideline and practice of rotating committee chairs every 4 years One-on-one Board meeting Comprehensive Director mee
Slide 18: Risk Management & Financial Oversight
RISK MANAGEMENT & FINANCIAL OVERSIGHT Risk Management Overview • Highly regulated businesses • Board oversees enterprise risk management across the organization Financial Reporting • Independent Audit Committee supported by experienced management • Subsidiaries have majority independent Audit Commit
Slide 19: Cybersecurity – A Key Priority
CYBERSECURITY – A KEY PRIORITY Leadership & Oversight • Oversight by Governance and Nominating Committee • Chief Technology Officer appointed in 2019 sharing oversight of cybersecurity with Chief Information Officer • Executive involvement through Fortis Cybersecurity Executive Committee Cyber Risk
Slide 20: Sustainability Oversight
SUSTAINABILITY OVERSIGHT • Oversight by Governance and Nominating Committee • Nora Duke key executive responsible for sustainability Sustainability Report Issued in July 2020 • Enterprise-wide engagement on ESG priorities and initiatives • Sustainability Report principles and disclosure guided by: •
Slide 21: Social Commitment
SOCIAL COMMITMENT Customers and Stakeholder Engagement • Our subsidiaries continuously engage with customers, local regulators and other stakeholders Health and Safety • Committed to a culture of safety • Fortis outperforms industry averages on safety in Canada and the U.S. Employee Relations • Tale
Slide 22: Executive Succession & Compensation Overview
EXECUTIVE SUCCESSION & COMPENSATION OVERVIEW
Slide 23: Strong Leadership Team
STRONG LEADERSHIP TEAM Barry Perry(1) President & CEO Fortis Inc. Executives Nora Duke David Hutchens(1) James Laurito Jocelyn Perry Jim Reid Gary Smith EVP, Sustainability & COO, EVP, Business EVP, CFO EVP, CLO & EVP, Eastern Canadian & CHRO CEO UNS Energy Development & CTO Corporate Secretary Cari
Slide 24: Executive Succession
EXECUTIVE SUCCESSION Effective succession planning process: • Annual review of enterprise-wide talent pipeline for key executive roles • Oversight of talent management programs to identify high potential Barry Perry President & CEO(2) employees and support long-term succession needs • 3 of our 4 lar
Slide 25: Executive Compensation
EXECUTIVE COMPENSATION TOTAL DIRECT COMPENSATION Long Term Incentives Compensation Objectives: (PSUs, RSU, Stock Options) • Total direct compensation reviewed annually ➢ Fair compensation with external advisors supplemented by a ➢ Linked to performance comprehensive review of select and emerging ➢ A
Slide 26: Conclusion
CONCLUSION F@RTIS..
Slide 27: Board Shareholder Engagement Supportive of Value Proposition
BOARD SHAREHOLDER ENGAGEMENT SUPPORTIVE OF VALUE PROPOSITION ✓ Board aligned on strategy ✓ Well-run utilities ✓ Strong governance model ✓ Regulatory and geographic diversity ✓ Receptive to shareholders ✓ Strong growth profile ✓ Committed to continuously ✓ Strategically positioned to navigate through
Slide 28: Stakeholder Feedback
STAKEHOLDER FEEDBACK F@RTIS..
Slide 29: Questions
QUESTIONS F@RTIS..