Fortis Inc. · TSX:FTS
Fortis — Investor Presentation (February 2025)
45 slides from Fortis's investor presentation, Feb 17, 2025
Slide 1: Investor Presentation Q1 2025
INVESTOR PRESENTATION Q1 2025
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: Fortis at a Glance
FORTIS AT A GLANCE TSX/NYSE: FTS 93% transmission and distribution assets 10 regulated utilities in Canada, U.S., and Caribbean 3.5 million electricity and gas customers 9,800 dedicated employees 99% Regulated utility assets $5.2 billion 2025F Capital expenditures $40.7 billion 2025F rate base ~8% a
Slide 4: Our Vision & Strategy
OUR VISION & STRATEGY A Premium North American Utility Delivering a Cleaner Energy Future SUSTAINABLE GROWTH • Operational Excellence • Financial Strength • Diversified Regulated Portfolio • Local Business Model • Strong Governance 4
Slide 5: Our Common Ground
OUR COMMON GROUND Provision of Safe & Reliable Service Good Governance Priority #1 Fortis Ranked #1 out of 215 S&P/TSX companies in The Globe & Mail 2024 Board Games • Health and safety of our employees, customers and contractors • Utilities operate within the parameters of common policies and best
Slide 6: Delivering Safe & Reliable Service
DELIVERING SAFE & RELIABLE SERVICE All-Injury Average Electricity Customer Frequency Rate(1) Outage Duration (Hours) 1.70 1.58 4.3 4.2 3.8 3.3 2.3 1.9 2.0 2.0 1.9 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024 Fortis USA Bureau of Labor Statistics Fortis(2) Electricity Canada and U.S. Energy (201
Slide 7: Maintaining Customer Affordability
MAINTAINING CUSTOMER AFFORDABILITY Key Areas of Focus Controllable Operating • Preventative maintenance and the Costs per Customer introduction of innovative practices to reduce costs • Prioritization of capital investment based on operational needs and associated rate impact • Utilization of availa
Slide 8: Five-Year Plan Highlights $26B
FIVE-YEAR PLAN HIGHLIGHTS Capital Rate Funding Dividend Expenditures Base Plan Growth $26B 6.5% >12% 4-6% 2025-2029 2024-2029 Average Cash Flow Annual Dividend Growth Capital Plan CAGR To Debt Metrics Guidance Extended to 2029 58% ~$14B ~59% ~4% Expected in Increase to $53B Funded by Cash From Q4 20
Slide 9: Highly Executable 2025-2029 $26B Capital Plan Supports Low-Risk Rate Base Growth
HIGHLY EXECUTABLE 2025-2029 $26B CAPITAL PLAN SUPPORTS LOW-RISK RATE BASE GROWTH OF ~6.5% 2025-2029 Consolidated Capital Plan Rate Base $53.0B Virtually all Regulated Investments $39.0B 23% Major Capital Projects 2024A 2029F Note: U.S. dollar-denominated rate base converted at a foreign exchange rat
Slide 10: Balanced Approach to Funding Growth
BALANCED APPROACH TO FUNDING GROWTH $26B Key Highlights Capital Plan • Funding plan largely consistent with 2025-2029 Equity prior year plan Corporation’s DRIP at current participation levels(1) 11% and employee share purchase plans • Equity funded through DRIP program 30% Net Debt • $500M ATM progr
Slide 11: Liquidity & Foreign Exchange
LIQUIDITY & FOREIGN EXCHANGE Q4 2024 Long-Term Foreign Exchange & Debt Issuances Hedging • ITC • Capital plan reflects assumed USD:CAD ▪ US$125M 11-year bonds at 4.88% FX of 1.30 for 2025-2029 ▪ US$125M 19-year bonds at 5.25% • +/- $0.05 change in USD:CAD ▪ Five-year capital plan: $600M • Central Hu
Slide 12: Investment-Grade Credit Ratings
INVESTMENT-GRADE CREDIT RATINGS Moody’s CFO/Debt(1) Credit Ratings & Outlooks 12.1% 11.4% 11.0% Baa3 A-(3) A (low) (2) Stable Negative Stable 2023 2024 2025-2029F Avg. S&P FFO/Debt(1) Key Credit Strengths 12.2% Strong business risk profile Geographic and regulatory 11.6% diversity 11.2% Effectively
Slide 13: Updates on Key Opportunities to Expand and Extend Growth Beyond the Plan
UPDATES ON KEY OPPORTUNITIES TO EXPAND AND EXTEND GROWTH BEYOND THE PLAN MISO LRTP Tranche 2.1 • In December 2024, the MISO Board approved the Tranche 2.1 portfolio of projects which includes 24 projects totaling US$21.8B • ITC now expects US$3.7-$4.2B of capital investment for projects in Michigan
Slide 14: Additional Opportunities to Expand and Extend Growth Beyond the Plan
ADDITIONAL OPPORTUNITIES TO EXPAND AND EXTEND GROWTH BEYOND THE PLAN • MISO LRTP Tranche 2.1 • 2023 IRP • Tilbury LNG Expansion • Transmission Investments Projects in Iowa Investment opportunity of Marine bunkering Regional transmission as minority ~US$2.5-$5.0B through 2038 partner in NY Transco •
Slide 15: Long Capex Runway
LONG CAPEX RUNWAY Responding to stakeholder expectations and capitalizing on opportunities to expand & extend growth Connect more renewable Replace aging assets to generation to the grid maintain reliability Build more renewable Invest in technology to ensure C02 generation and provide security and
Slide 16: Recent Regulatory Activity
RECENT REGULATORY ACTIVITY ACC Generic UNS Gas General Regulatory Lag Docket Rate Application • In December 2024, a formula rate plan policy • In November 2024, UNS Gas filed a general rate statement was approved by the ACC application with the ACC requesting an increase in gas delivery rates effect
Slide 17: Three-Year Look Back
THREE-YEAR LOOK BACK Adjusted EPS & Rate Base Adjusted Dividend Payout Ratio 41.5 $37.0B $39.0B 3.5 $3.28 115.0% 36.5 $34.1B 3.3 $3.09 $31.1B 3.1 105.0% 31.5 2.9 $2.78 26.5 2.7 $2.59 95.0% 21.5 2.5 85.0% 2.3 79.2% 16.5 78.1% 73.9% 2.1 75.0% 11.5 72.7% 1.9 65.0% 6.5 1.7 1.5 1.5 55.0% 2021 2022 2023 2
Slide 18: Total Shareholder Returns
TOTAL SHAREHOLDER RETURNS Cumulative 20-Year Total Shareholder Return 595% Average Annual Total Shareholder Returns 395% 1-Year 19.6% 349% 5-Year 5.4% 10-Year 8.0% 20-Year 10.2% 2005 2010 2015 2020 2025 Fortis S&P/TSX Composite Index S&P/TSX Capped Utilities Index Note: Cumulative and average
Slide 19: Dividend Guidance Supported by Long-Term Growth Strategy
DIVIDEND GUIDANCE SUPPORTED BY LONG-TERM GROWTH STRATEGY 4.2% Increase in Q4 2024 Dividend 51 Years of Consecutive Increases in Dividends Paid 4-6% Annual Dividend Growth Guidance through 2029 73 76 79 82 85 88 91 94 97 00 03 06 09 12 15 18 21 24 19 19
Slide 20: Why Invest in Fortis?
SUSTAINABLE GROWTH WHY INVEST IN FORTIS? Focused on Executing Strong Robust Transparent Rate Base Growth Transmission Funding Plan Investment Pipeline Cleaner 4-6% Annual Investment-Grade Energy Transition Dividend Growth Credit Ratings LOW-RISK Safe, Well-Run Utilities Regulatory & Constructive Str
Slide 21: Appendix
APPENDIX FORTIS...
Slide 22: Table of Contents
TABLE OF CONTENTS ITC Holdings Corp. 23-24 UNS Energy 25-27 Central Hudson 28-29 FortisBC 30-31 FortisAlberta 32-33 Other Electric Utilities 34-35 2025-2029 Capital Plan by Business Unit 36 Major Capital Projects 37 2024-2029 Rate Base by Business Unit 38 Sensitivity Exposure & Hedging 39 Ongoing Re
Slide 23: ITC Overview
ITC OVERVIEW FERC REGULATED ELECTRIC TRANSMISSION UTILITY 26,100 km $12.8 billion Lines of transmission 2025F rate base Assets in 8 U.S. States 22,683 MW Michigan and Iowa key states Peak demand ~800 Fortis owns 80.1% dedicated employees Interest in ITC FERC Rate Regulated 10.73-11.41% Allowed ROE C
Slide 24: ITC Capital Investment Overview
ITC CAPITAL INVESTMENT OVERVIEW $4.0B Infrastructure Investments Grid Security Rebuild, reliability, resiliency, system efficiencies, increased capacity, circuit overloads, pocket load growth MISO LRTP $1.7B MISO Long-Range Transmission Plan Includes portion of investments for Tranche 1 & 2.1 $7.6B
Slide 25: UNS Energy Overview
UNS ENERGY OVERVIEW VERTICALLY INTEGRATED ELECTRIC AND GAS UTILITY 23,300 km $7.7 billion of electric T&D lines 2025F rate base 5,100 km 3,442 MW of natural gas T&D lines Generating Capacity 727,000 ACC & FERC Regulated electric and gas customers Cost of service/historical test year & FERC formula t
Slide 26: UNS Energy Capital Investment Overview
UNS ENERGY CAPITAL INVESTMENT OVERVIEW Generation $2.0B Energy Resources Maintenance Expected energy storage, renewables and other investments associated with exit from coal IT, General & Other $1.3B Distribution Infrastructure Energy Resources Grid resiliency and modernization $5.3B $1.1B Transmiss
Slide 27: 2023 IRP Supports Exit from Coal
2023 IRP SUPPORTS EXIT FROM COAL Exit from Coal On Track(1) Delivering reliable, cleaner energy that is lower risk and affordable for customers 2017-2023 2024-2032 TEP 2023 IRP Highlights(3,970 MW) 508 MW Coal-free ✓ 2,240 MW of wind and solar generation Completed Coal Retirements generation mix by
Slide 28: Central Hudson Overview
CENTRAL HUDSON OVERVIEW ELECTRIC AND GAS T&D UTILITY 15,300 km ~1,200 of electric T&D lines dedicated employees 2,400 km $3.4 billion of natural gas T&D lines 2025F rate base New York Public Service 315,000 electric customers Commission Regulated Cost of service on future test year 90,000 9.5% 48% n
Slide 29: Central Hudson Capital Investment Overview
CENTRAL HUDSON CAPITAL INVESTMENT OVERVIEW Transmission Infrastructure $1.35B Distribution Infrastructure Distribution automation and modernization $2.3B Distribution Infrastructure $600M IT, General & Other Building the workforce of the future Capital Plan(1) 2025-2029 $350M Transmission Infrastruc
Slide 30: FortisBC Overview
FORTISBC OVERVIEW GAS LDC AND INTEGRATED ELECTRIC UTILITY 51,700 km ~2,700 of natural gas T&D lines dedicated employees 7,400 km $8.1 billion of electric T&D lines 2025F rate base 1.1 million BCUC Regulated natural gas customers Cost of service with incentive mechanisms 195,000 Gas 45% 9.65% electri
Slide 31: FortisBC Capital Investment Overview
FORTISBC CAPITAL INVESTMENT OVERVIEW Renewable Gases $2.7B Reliability & Integrity Investments AMI Project Ongoing capital and includes customer growth and general plant investments $1.2B LNG Projects $4.8B Reliability LNG Tilbury 1B Tilbury LNG Storage Expansion Capital Plan & Integrity Investments
Slide 32: FortisAlberta Overview
FORTISALBERTA OVERVIEW ELECTRIC DISTRIBUTION UTILITY 91,100 km $4.7 billion distribution lines 2025F rate base ~85% 603,000 of revenue derived from customers fixed-billing determinants 2,867 MW AUC Regulated Peak demand Performance-based rate-setting (PBR) 8.97% 37% ~1,300 Allowed Equity dedicated e
Slide 33: FortisAlberta Capital Investment Overview
FORTISALBERTA CAPITAL INVESTMENT OVERVIEW IT, General & Other $2.7B Distribution Infrastructure Safety and reliability of distribution assets, meter upgrades, pole management program, modernization Distribution Infrastructure $3.4B $700M IT, General & Other Capital Plan 2025-2029 33
Slide 34: Other Electric Overview
OTHER ELECTRIC OVERVIEW ELECTRIC T&D UTILITIES 23,500 km Five of electric T&D lines regulated electric utilities(1) 491,000 Equity investments customers Wataynikaneyap Partnership & Belize Electricity ~1,550 Three dedicated employees North American countries $4.0 billion 8.84% 45.3% 2025F rate base
Slide 35: Other Electric Capital Investment Overview
OTHER ELECTRIC CAPITAL INVESTMENT OVERVIEW IT, General & Other $1.1B Distribution Infrastructure Transmission $700M Generation Diversification $2.5B Infrastructure Capital Plan(1) Distribution $400M Transmission Infrastructure Infrastructure 2025-2029 $300M IT, General & Other Generation Diversifica
Slide 36: 2025-2029 Capital Plan by Business Unit
2025-2029 CAPITAL PLAN BY BUSINESS UNIT Capital Plan 2025-2029 ($MILLIONS) 2025F 2026F 2027F 2028F 2029F TOTAL Regulated – Independent Electric Transmission ITC 1,403 1,488 1,523 1,600 1,573 7,587 Regulated – U.S. Electric & Gas UNS Energy 1,276 1,087 1,201 1,138 581 5,283 Central Hudson 462 480 440
Slide 37: Major Capital Projects
MAJOR CAPITAL PROJECTS 2025- Estimated Completion ($ Millions) 2024A 2029F Date Major Capital ITC MISO LRTP(1) 64 1,704 Post-2029 Projects 23% UNS IRP Related Generation(2) 1 1,620 Various UNS Roadrunner Reserve Battery Storage Project 1 286 51 2025 UNS Roadrunner Reserve Battery Storage Project 2 U
Slide 38: 2024-2029 Rate Base by Business Unit
2024-2029 RATE BASE BY BUSINESS UNIT Rate Base 5-YEAR CAGR to ($BILLIONS, EXCEPT FOR CAGR) 2024A 2025F 2026F 2027F 2028F 2029F 2029 Regulated – Independent Electric Transmission ITC(1) 12.5 12.8 13.9 14.8 15.7 16.5 6.8% Regulated – U.S. Electric & Gas (2) UNS Energy 7.6 7.7 8.3 8.8 9.8 10.7 6.7% Cen
Slide 39: Sensitivity Exposure & Hedging
SENSITIVITY EXPOSURE & HEDGING ROE & Equity Ratio Foreign Exchange ROE Equity • Assumed USD:CAD FX rate of 1.30 for 2025-2029 +/- 25 bps +/- 100 bps • ~65% of regulated earnings(1)/ 60% of capital plan in USD at ITC $0.035 $0.030 U.S. & Caribbean utilities UNS Energy $0.025 $0.015 • +/- $0.05 change
Slide 40: Ongoing Regulatory Proceedings
ONGOING REGULATORY PROCEEDINGS MISO Base ROE In October 2024 FERC issued an order revising the MISO Base ROE from 10.02% to 9.98% and removed use of the risk-premium model in establishing the base ROE; application of the order resulted in a regulatory liability of ~$39M (US$27M) recognized in Q4 202
Slide 41: Sustainability Leadership
SUSTAINABILITY LEADERSHIP Climate and Innovation Community and Indigenous Relations • 2050 net-zero direct emissions goal with interim targets to reduce GHG emissions 50% • Building on our strong record of mutually beneficial partnerships with by 2030 and 75% by 2035; the Corporation's ability to ac
Slide 42: Long-Term Debt Maturities & Preference Share Dividends
LONG-TERM DEBT MATURITIES & PREFERENCE SHARE DIVIDENDS Debt Maturities Preference Share Rate Resets 10-Year Debt Maturities $2.5 2025 $2.0 $1.5 billions Series H - $192M $1.0 June 1, 2025 $0.5 Series I - $58M June 1, 2025 $- 2025F 2026F 2027F 2028F 2029F 2030F 2031F 2032F 2033F 2034F Non-Regulated (
Slide 43: Strong Investment-Grade Credit Ratings
STRONG INVESTMENT-GRADE CREDIT RATINGS (1) Company Fortis Inc. A-(2) Baa3 A (low) ITC Holdings Corp. A-(2) Baa2 n/a ITC Regulated Subsidiaries A A1 n/a TEP A- A3 n/a Central Hudson BBB+ Baa1 n/a FortisBC Energy n/a A3 A FortisBC Electric n/a Baa1 A (low) FortisAlberta A- Baa1 A (low) Newfoundland Po
Slide 44: Strong Leadership Team
STRONG LEADERSHIP TEAM Fortis Inc. Executive David Hutchens Jocelyn Perry Jim Reid Gary Smith Stuart Lochray President & CEO EVP, CFO EVP, Sustainability & CLO EVP, Operations & Technology EVP, Strategy & Business Development Utility CEOs Linda Apsey Roger Dall’Antonia Ruth Forbes Susan Gray Glen Ki
Slide 45: Glossary
GLOSSARY ACC Arizona Corporation Commission FY Fiscal Year AMI Advanced Metering Infrastructure GCOC generic cost of capital ATM At-the-market equity program GHG greenhouse gas AUC Alberta Utilities Commission GWh Gigawatt hours BCUC British Columbia Utilities Commission IRP Integrated Resource Plan