Slide 1: 2017 Third Quarter Earnings Conference Call
2017 Third Quarter Earnings Conference Call November 3, 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: Barry Perry, President & CEO
Barry Perry President & CEO
Slide 4: Growth Strategy Delivers Strong Results
Growth Strategy Delivers Strong Results Successful integration of ITC and constructive Arizona rate case settlement 5-year capital program of $14.5 billion, up $1.5 billion from the prior plan Supports average annual dividend growth target of ~6% through 2022 Realized $24 million after tax b
Slide 5: Restoration Efforts Continue Following Hurricane Irma
Restoration Efforts Continue Following Hurricane Irma Hurricane Irma caused significant damage to the electric transmission and distribution system on Turks and Caicos Islands ~1,500 poles damaged No generation asset losses Fortis responded quickly with crews from various Fortis subsidiaries
Slide 6: 44 Consecutive Years of Annual Dividend Payment Increases
44 Consecutive Years of Annual Dividend Payment Increases 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 ratio based on the consensus EPS
Slide 7: Capital Program Increases Rate Base to ~$32B by 2022
Capital Program Increases Rate Base to ~$32B by 2022 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 Infrastructure
Slide 8: Improved Five-Year Capital Program
Improved Five-Year Capital Program $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 Plan 2017 INVESTOR DAY 8
Slide 9: Beyond the Forecast: Development Project Update
Beyond the Forecast: Development Project Update Two near-term development projects highlighted in Ontario’s Long-Term Energy Plan Opportunity to connect remote First Nation communities in Northern Ontario to the grid During Q3 the federal government announced it will fully fund, up to $60 millio
Slide 10: Karl Smith, Executive Vice President, CFO
Karl Smith Executive Vice President, Chief Financial Officer
Slide 11: Diversified Portfolio of Utilities Delivers Strong Performance
Diversified Portfolio of Utilities Delivers Strong Performance Adjusted Earnings Adjusted EPS 300 900 0.80 2.00 $254 $794 $1.92 0.70 1.90 700 $0.61 ($ millions) 200 0.60 $153 $0.54 1.80 $472 ($) 500 0.50 100 1.70 $1.66 0.40 300 0.30 1.60 0 100 0.20 1.50 2016 2017 2016 2017 2016 2017 2016 2017 Q3 Sep
Slide 12: Multiple Drivers of EPS Growth – Q3
Multiple Drivers of EPS Growth – Q3 0.70 0.65 0.02 (0.01) (0.02) 0.02 0.60 0.03 0.55 0.03 ($) 0.50 0.45 0.61 0.54 0.40 0.35 0.30 (1) (2) (3) Q3 2016 Adjusted ITC Aitken Creek UNS Energy FortisAlberta Foreign Exchange WA Share Q3 2017 Adjusted Actual EPS Impact Actual EPS (1) Inclusive of finance cha
Slide 13: Multiple Drivers of EPS Growth – September Year to Date
Multiple Drivers of EPS Growth – September Year to Date 2.00 1.95 (0.01) (0.03) 0.07 1.90 1.85 0.08 ($) 1.80 1.75 0.15 1.70 1.92 1.65 1.60 1.66 1.55 1.50 (1) (2) YTD 2016 UNS Energy Aitken Creek ITC Other Regulated WA Share YTD 2017 (3) (4) Adjusted Actual Utilities Impact Adjusted Actual EPS EPS (1
Slide 14: Investment-Grade Credit Ratings and Ample Liquidity
Investment-Grade Credit Ratings and Ample Liquidity Credit Ratings Consolidated Credit Facilities 7.0 Fortis Inc. 6.0 S&P A- / BBB+ 5.0 4.0 3.7 DBRS BBB (high) 4.0 ($ billions) 3.0 Moody’s(1) Baa3 2.0 (2) 1.0 2.2 1.3 - 0.0 Dec 31/16 Sept 30/17 Utilized Remaining Capacity (1) In September 2017, Moody
Slide 15: Regulatory Stability
Regulatory Stability Recent regulatory outcomes Agreement/ Regulated Utility Application/Proceeding Outcome Decision Timing ‒ 10.32% base ROE with a high-end zone of ITC Initial MISO Base ROE Complaint September 2016 reasonableness of 11.35% 2016 Application: ROE and Common ‒ Maintained ROE at 8.75%
Slide 16: Barry Perry, President & CEO
Barry Perry President & CEO
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 Dividend Growth Dividend Target: Growth Target: Investment-Grade 6% Average Annual 6% Average Annual Cred
Slide 18: Expected Upcoming Events
Expected Upcoming Events Expected Upcoming Events Upcoming Q4 2017 Investor Presentations EEI – 52nd Financial Conference November 7, 2017 Scotiabank Energy November 16, 2017 Infrastructure Conference Expected Upcoming Earnings Release Dates Q4 – 2017 February 15, 2018 Q1 – 2018 May 1, 2018 Q2 – 201
Slide 19: 2017 Third Quarter Earnings Conference Call
2017 Third Quarter Earnings Conference Call November 3, 2017 2017 INVESTOR DAY 19
Slide 20: Q3 2017 Results by Segment
Q3 2017 Results by Segment Third Quarter Variance Analysis by Segment ($s in millions, excluding EPS) Q3 2017 Adjustment Q3 2017 Q3 2016 Adjustment Q3 2016 Q3 (Adjusted) (Adjusted) (Adjusted) Variance Regulated – Independent Electric Transmission ITC Holdings Corp. 89 - 89 - - - 89 Regulated – US El
Slide 21: YTD September 2017 Results by Segment
YTD September 2017 Results by Segment September Year-to-Date Variance Analysis by Segment ($s in millions, excluding EPS) September Adjustment September September Adjustment September September YTD YTD 2017 YTD 2017 YTD 2016 YTD 2016 (Adjusted) (Adjusted) (Adjusted) Variance Regulated – Independent
Slide 22: 2018-2022 Capital Forecast by Segment
2018-2022 Capital Forecast by Segment Fortis 2018F 2018 Capital Forecast ($millions) Rate Base(1) Regulated–Independent Transmission (ITC) ~$26.8 Billion ITC 863 Regulated-U.S. Electric & Gas UNS Energy 759 Regulated- Central Hudson 275 Regulated- Independent Regulated-Canadian & Caribbean Electric
Slide 23: Highly-Executable Capital Plan
Highly-Executable Capital Plan Low-risk capital plan of $14.5 billion Significant Capital Projects (1) Forecast Forecast Forecast ($millions) (2) 2018 2019-2022 Total 2018-2022 ITC Multi-Value Regional Transmission Projects(3) 165 192 357 ITC 34.5 kV to 69 kV Conversion Project 110 361 471 UNS Flexi
Slide 24: Capital Expenditures Exceeding Expectations
Capital Expenditures Exceeding Expectations 2013-2017 Business Plan Capex 2014-2018 Business Plan Capex 2015-2019 Business Plan Capex ($Millions) ($Millions) ($Millions) 3,300 3,300 3,300 3,000 3,000 3,000 2,700 2,700 2,700 2,400 2,400 2,400 2,100 2,100 2,100 1,800 1,800 1,800 1,500 1,500 1,500 1,20
Slide 25: Opportunities Beyond the Base Capital Program
Opportunities Beyond the Base Capital Program 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 Michi