Fortis Inc. · TSX:FTS
Fortis — Investor Day (November 2017)
25 slides from Fortis's investor day presentation, Nov 14, 2017
Slide 1: Board-Shareholder Engagement Presentation
Board-Shareholder Engagement Presentation November 14, 2017 2017 INVESTOR DAY 1
Slide 2: Forward Looking Statement
Forward Looking Statement 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 Litig
Slide 3: Meeting Agenda
Meeting Agenda 1 Corporate Overview 2 Board Composition and Operation 3 Corporate Governance • Strategy oversight • Executive succession planning • Executive compensation • Board assessment and renewal • Environmental oversight • Risk management • Social commitment 2017 INVESTOR DAY 3
Slide 4: Corporate Overview
Corporate Overview 2017 INVESTOR DAY 4
Slide 5: Business Overview
Business Overview Fortis Quick Facts(1) Fortis Inc. owns regulated utility 10 Utility Operations in Canada, businesses that are primarily focused the US and the Caribbean 8,000+ Employees on electric transmission and ~2M electric utility customers distribution and natural gas ~1M gas utility custome
Slide 6: One of the Lowest-Risk Utility Businesses in North America
One of the Lowest-Risk Utility Businesses in North America - 97% regulated businesses(1) - Geographic and jurisdictional diversification - Very small (and falling) coal generation component (1) As at September 30, 2017 Corporate Overview 2017 INVESTOR DAY 6
Slide 7: Board Composition and Operation
Board Composition and Operation 2017 INVESTOR DAY 7
Slide 8: Strong and Experienced Board of Directors
Strong and Experienced Douglas J. Haughey Board of Directors Chair of the Board of Fortis Barry V. Perry* Tracey C. Ball Pierre J. Blouin Lawrence T. Borgard Maura J. Clark Margarita K. Dilley President & CEO of Chair of the Audit Chair of Central Hudson Fortis Committee of Fortis and Gas and Electr
Slide 9: Board Composition
Board Composition Diverse board composition (now and targeted 2018) A strong and diverse board Current Targeted Board Gender Diversity 2018 Board Gender Diversity 100% are financially literate (12 Directors) (12 Directors) 10 of 12 directors are independent Average tenure 4.3 years 33% 8 have utilit
Slide 10: Three Standing Board Committees
Three Standing Board Committees Board of Directors Governance & Human Audit Committee Nominating Resources Committee Committee Board Composition and Operation 2017 INVESTOR DAY 10
Slide 11: Substantially Autonomous Operating Model
Substantially Autonomous Operating Model Governance Structure • Fortis oversees 10 utility businesses Corporate Oversight • Most operating subsidiaries are governed by their own board comprised of: • Strategy Capital Attraction • Majority•• of locally resident and independent directors Investor Rela
Slide 12: Corporate Governance
Corporate Governance 2017 INVESTOR DAY 12
Slide 13: Corporate Governance Overview
Corporate Governance Overview • The Board and the management of Fortis embrace the critical importance of good corporate governance practices and focus on the following: • Strategy (Board) • Executive succession planning (Human Resources Committee) • Executive compensation (Human Resources Committee
Slide 14: Recognition of Top Quartile Governance
Recognition of Top Quartile Governance • The 2017 Governance Gavel Award from the Canadian Coalition for Good Governance for "Best Disclosure of Corporate Governance and Executive Compensation Practices" • The 2016 Globe and Mail Board Games awarded Fortis a score of 97 out of 100 ranking 6th out of
Slide 15: Strategy Overview
Strategy Overview Board Driven 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 Credit Ratings
Slide 16: Executive Succession Planning
Executive Succession Planning • Annual review of enterprise-wide talent pipeline for key executive roles • Oversight of talent management programs to support long-term succession needs • Monitor emerging or changing executive talent requirements • Framework for CEO succession process in place Corpor
Slide 17: Executive Compensation
Executive Compensation • Objective: Fair compensation, linked to performance and Total Direct Compensation aligned with shareholders • Reviewed annually, comprehensive review biennially with external advisors Short-Term Base Compensation Incentives (Annual Incentive) • Recent changes to compensation
Slide 18: Board Assessment and Renewal
Board Assessment and Renewal Annual Assessment of Board and Committee Process • Comprehensive survey and interviews help assess individual and overall board performance One-on-one Board meeting Comprehensive Director meeting with the without the Chair director survey self-evaluation Chair of the Boa
Slide 19: Environmental Oversight
Environmental Oversight • Operate in an environmentally responsible manner • Provide safe, reliable and cost-efficient energy to customers • Consultation with customers and stakeholders is paramount to regulatory construct • Environmental reporting and compliance systems implemented and monitored by
Slide 20: Low Environmental Impact
Low Environmental Impact Minimal amount of fossil fuel generation 91% Transmission, Distribution and Other Assets as at December 31, 2016 3% 6% 91% Transmission, Distribution & Other Renewable Generation Fossil Fuel-Based Generation Corporate Governance - Environmental Oversight 2017 INVESTOR DAY 20
Slide 21: Risk Management
Risk Management Risk Management and Financial Oversight Risk Management Overview • Highly regulated businesses • Board oversees corporate-wide enterprise risk management • Board regularly receives and reviews enterprise risk updates throughout the year Financial Reporting • Independent Audit Committ
Slide 22: Risk Management: Cybersecurity
Risk Management Cybersecurity • Cybersecurity is a high priority for the Board • In 2017: • Fortis created a new Executive CIO position • Conducted Board training on cybersecurity • Fortis Approach: • NERC CIP Compliance • C2M2 – Cybersecurity Capability Maturity Model • Establish metrics and contin
Slide 23: Social Commitment
Social Commitment 1 Customers and Stakeholder Engagement • Customers are at the forefront • Continuous engagement with regulators and stakeholders 2 Health and Safety • The safety of our employees, the public and facilities is one of our highest priorities • Fortis and its subsidiaries are committed
Slide 24: Community Involvement
Community Involvement Fortis utilities share a commitment to community service Our companies are spread across Canada, the United States and the Caribbean but there is one principle that they all share: a commitment to engagement with and support for their communities. In areas of health, education,
Slide 25: Board Shareholder Engagement
Board Shareholder Engagement The Board and management are committed to good • Looking ahead we are governance, environmental stewardship and sound considering the business practices. We are also committed to routinely adoption of a formal reviewing our governance framework practices and Shareholder