Fortis Inc. · TSX:FTS
Fortis — Conference Presentation (2018)
17 slides from Fortis's conference presentation, 2018
Slide 1: Investor Relations Presentation Q2 2018 - Investing in Our Networks
Investor Relations Presentation Q2 2018 Investing in Our Networks
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 U.S. Private Securities Litigation Reform Act of 1995, collectively referred to as "forw
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 Dividend6% AVERAGE Growth Target: ANNUAL 6% Average DIVIDEND Annual Growth INVESTMENT- GROWTH Through 2021T
Slide 4: High Quality & Diverse Utility Portfolio
High Quality & Diverse Utility Portfolio Highly Regulated, Predominantly Wires and Gas LDCs ~ 97% REGULATED UTILITY ASSETS 10 UTILITY OPERATIONS Canada, U.S. & Caribbean $ 49 BILLION IN TOTAL ASSETS 64% EARNINGS FROM THE U.S. ~ 92% TRANSMISSION, DISTRIBUTION & OTHER ASSETS 3.3 MILLION UTILITY CUSTOM
Slide 5: One of the Lowest-Risk Utility Businesses in North America
One of the Lowest-Risk Utility Businesses in North America FORTIS INC. Investing in Our Networks 5
Slide 6: First Quarter Reinforces the Strength of Fortis as a North American Utility Leader
First Quarter Reinforces the Strength of Q1 HIGHLIGHTS: Fortis as a North American Utility Leader $323M Capital Investments: REPORTED -Focused on providing safe, reliable, NET affordable, cleaner energy solutions to EARNINGS customers -$3.2 billion capital forecast for 2018 on track 9% OPERATING Dev
Slide 7: Strong Track Record of Rate Base and EPS Growth
Strong Track Record of Rate Base and EPS Growth Historical Rate Base Growth Aligned with EPS Growth Over the Past 5 Years 2012 – 2017 Rate Base(1) ($ billions) Adjusted Earnings Per Share 3-Year 5-Year CAGR CAGR Rate base ~22% ~24% Rate base excluding acquisitions ~8% ~7% of U.S. subsidiaries $2.53
Slide 8: 44 Years of Consecutive Annual Dividend Growth
44 Years of Consecutive Annual Dividend Growth 73% 73% Average annual dividend 70% 66% 66% growth through 2022 64% targeted at ~6% 2012 2013 2014 2015 2016 2017 2018F 2019F 2020F 2021F 2022F Dividend payout ratio(1) (1) Dividend payout ratio adjusted for non-operating items. FORTIS INC. Investing in
Slide 9: Supporting the Delivery of Superior Total Shareholder Returns
Supporting the Delivery of Superior Total Shareholder Returns Average annualized total shareholder return over last 5 years(1) Fortis 8.7% S&P/TSX Composite Index 8.0% S&P/TSX Capped Utilities Index 4.9% (1) For the 5-year period ending May 31, 2018. FORTIS INC. Investing in Our Networks 9
Slide 10: U.S. Tax Reform Updates
U.S. Tax Reform Updates Benefits Customers Immediately and Shareholders Over the Long Term Interest Expense Credit Rating Agency Customer Rate Decrease Deductibility Clarity Updates TEP – Application approved by U.S. Treasury confirmed Held meetings with rating ACC to return savings through applicat
Slide 11: Investment-Grade Credit Ratings and Ample Liquidity
Investment-Grade Credit Ratings and Ample Liquidity Consolidated Credit Facilities 6.0 Credit Ratings 5.0 (1) 4.0 A- / BBB+ ($ billions) 3.0 3.9 3.9 BBB (high) 2.0 (2) 1.0 Baa3 1.1 1.1 0.0 Mar 31/18 Dec 31/17 Utilized Remaining Capacity (1) In March 2018, S&P affirmed the Corporation’s credit rating
Slide 12: Advancing the Wataynikaneyap Power Project
Advancing the Wataynikaneyap Power Project Canada’s Largest First Nation’s-Led Infrastructure Project Partnership with First Nations to connect remote communities in Northern Ontario to the grid via 1,800 km of transmission line In March 2018, a funding framework was reached with Wataynikaneyap Powe
Slide 13: Rate Base Growth Supports Dividend Guidance
Rate Base Growth Supports Dividend Guidance 2018-2022 Capital Expenditure Program of $15.1B Increases Rate Base to $33B by 2022 Capital Expenditures(1) Rate Base(2) (billions) (billions) $15.1B Five-Year Capital Plan $33.0 $3.2 $31.6 $3.0 $3.0 $3.0 $30.4 $2.9 $28.9 $26.8 $25.4 2018F 2019F 2020F 2021
Slide 14: Highly Executable Capital Plan
Highly Executable Capital Plan Significant Projects(1) ($ millions)(2) Forecast Forecast Forecast Total 2018- 2018 2019-2022 2022 ITC Multi-Value Regional Transmission Projects(3) 169 194 363 ITC 34.5 kV to 69 kV Conversion Project 111 369 480 UNS Flexible Generation – Reciprocating Engines 150 45 1
Slide 15: Opportunities Beyond the Base Capital Plan
Opportunities Beyond the Base Capital Plan FortisOntario: Municipal Utility FortisBC: Consolidation Tilbury, LNG & Gas Infrastructure MECL & NP: Grid Modernization UNS Energy: Renewables, Storage & Electric ITC: Transmission Lake Erie Connector & Grid Modernization ITC: Mexico Transmission Projects
Slide 16: Regulatory Stability Continues
Regulatory Stability Continues Remaining Significant Regulatory Decisions 97% Regulated Utility Assets as at December 31, 2017 TRANSMISSION - ITC 37% • MISO Base ROE • General Rate Application – GAS Application/Proceeding Complaints Joint Proposal 16% Filing Date • Not applicable • July 2017 NON-REG
Slide 17: 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 Dividend6% AVERAGE Growth Target: ANNUAL 6% Average DIVIDEND Annual Growth INVESTMENT- GROWTH Through 2021T