Fortis Inc. · TSX:FTS
Fortis — Investor Day (October 2016)
23 slides from Fortis's investor day presentation, Oct 17, 2016
Slide 1: Fortis NYSE Listed
FORTIS FTS LISTED NYSE
Slide 2: Forward Looking Statements
Forward Looking Statements Fortis Inc. (“Fortis” or, the “Corporation”) includes forward-looking statements in this presentation within the meaning of applicable securities laws including the Private Securities Litigation Reform Act of 1995. Forward-looking statements included in this presentation r
Slide 3: Agenda
Agenda Janet Craig Welcome Vice President, Investor Relations Luncheon Barry Perry Presentation President and Chief Executive Officer Executive Various Fortis Management Members (9) half hour sessions Roundtables Closing Janet Craig Vice President, Investor Relations Remarks 3
Slide 4: Today's Objectives
Today’s Objectives Address Key Questions from the Street Discuss the Road Ahead Engage the Street with Key Executives Celebrate the NYSE Listing with Fortis 4
Slide 5: Fortis Today
Fortis Today • Leader in the North American regulated electric and gas utility business • ITC provides new platform in electric transmission sector • Successful utility acquisition track record • Tremendous economic, geographic and regulatory diversity • Commencing period of regulatory stability • V
Slide 6: Key Questions From the Street: Who is Fortis?
Key Questions From the Street MONDAY • OCTOBER 17, 2016 Who is Fortis? 6
Slide 7: Today Fortis is a leader in North American Utility Operations
Who Is Fortis? Today Fortis is a leader in North American Utility Operations • Predecessor company began in 1885 as the St. John’s Electric Light Company in Newfoundland and Labrador, Canada • Fortis was created in 1987 as a holding company to invest in utilities • Always had a mandate to diversify
Slide 8: Have Fortis Acquisitions Added Value?
Have Fortis Acquisitions Added Value? Strong M&A Track Record (1) Networks Canada Fortis $/share $45.00 $40.00 $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $0.00 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (1) Indicates date of announcement by Fortis that it had entered
Slide 9: Strong M&A Track Record
Have Fortis Acquisitions Added Value? Strong M&A Track Record ITC $B US$11.3B 50 45 40 35 UNS Energy US$4.5B 30 25 Central Hudson US$1.5B 20 FortisBC (Gas) 15 $3.7B FortisAlberta & FortisBC (Electric) 10 $1.5B 5 0 (1) 04 05 06 07 08 09 10 11 12 13 14 15 16 (1) Pro Forma as of June 30, 2016, includin
Slide 10: Have Fortis Acquisitions Added Value?
Have Fortis Acquisitions Added Value? Strong M&A Track Record $ 1.5B $ 46B June 30, 2016 Total Assets June 30, 2016 Pro Forma Total Assets $ 1.1B 2016F Midyear Rate Base $ 26B 2017 Pro Forma Midyear Rate Base $ 115M $ 2.9B 2016F CAPEX 2017 Pro Forma CAPEX 10
Slide 11: Why is Fortis Pursuing LNG?
Why is Fortis Pursuing LNG? • Massive amounts of natural gas discovered in BC • FortisBC owns substantial natural gas infrastructure in BC • FortisBC has constructive First Nations relationships • Tilbury LNG site has ocean access that can be expanded • Favourable alignment with provincial goals reg
Slide 12: Why is Fortis Pursuing LNG? Tilbury and Woodfibre
Why is Fortis Pursuing LNG? LNGWhat is the Can Provide opportunity Significant Upside for LNG? • Tilbury 1A – ~$440 million storage and liquefaction • Potential Further Tilbury Expansion – Low-risk tolling model with no commodity exposure • Woodfibre LNG – Pipeline to service new LNG export terminal
Slide 13: How Does ITC Fit With Fortis?
How Does ITC Fit With Fortis? ITC Acquisition Strategic Rationale Premier Electric Accretive to EPS Increases Transmission Utility Diversification Supportive FERC Long-Term Rate Base Regulation Growth Prospects Proven Management Team 13
Slide 14: How Does ITC Fit With Fortis?
How Does ITC Fit With Fortis? Enables Fortis to Become a Leading Transmission & Distribution Business Pro Forma Operating Fortis Pro Forma 2017 Earnings (1) Midyear Rate Base(2) For the Twelve Months $26 Billion Ended December 31, 2015 Electric Caribbean 3% Electric FERC Canada Electric Transmission
Slide 15: Will Fortis Support ITC's Development Projects?
Will Fortis Support ITC’s Development Projects? Platform for Organic Upside Opportunities LNG • Lake Erie Connector Project – 1,000 MW HVDC merchant line would be the only direct connection between IESO and PJM – If key milestones are met, expected in-service date in late 2020 • Mexico – Evaluating
Slide 16: What is Fortis' Liquidity Position?
What is Fortis’ Liquidity Position? Investment-Grade Ratings and Ample Liquidity Consolidated Credit Facilities (2) 6.0 5.0 Fortis Inc. 4.0 S&P(1) A- / BBB+ ($ billions) 3.1 3.0 DBRS(1) A(low) 2.1 Moody’s(1) Baa3 2.0 1.0 1.7 1.4 0.0 30-Jun-16 Pro forma including ITC 30-Jun-16 Utilized Remaining Capa
Slide 17: Is the Business Model Sustainable?
Is the Business Model Sustainable? SUBSTANTIALLY Local teams empowered to AUTONOMOUS maximize the value of utility Operating Companies operations Small management group able LEAN and EFFICIENT to focus and execute on Corporate Model opportunities quickly From a set of independent operations to lever
Slide 18: What Sets Fortis Apart? Investment Highlights
What Sets Fortis Apart? Investment Highlights • Highly diversified; virtually all regulated electric and gas assets with highly executable base capital plan • Focus on Transmission & Distribution • Regulatory stability • Consistent dividend growth through 2021 • 43 years of consecutive dividend incr
Slide 19: Diversified Regulated Assets and Highly Executable CAPEX Plan
What Sets Fortis Apart? Diversified Regulated Assets and Highly Executable CAPEX Plan 2017 Pro Forma Capital Expenditures $2.9B Canada Pro Forma 2017 32% Midyear Rate Base $26B 19
Slide 20: Superior Returns to Shareholders
What Sets Fortis Apart? Superior Returns to Shareholders 10 Total Year Shareholder Average Annualized BasicBasic EPS Dividends Per Share (1) Return Earnings Per Share Dividends Total Shareholder Return(2) 8.26% $1.40 7.41% $2.11 4.78% $1.35 4.38% $0.59 2005 2015 2005 2015 Fortis S&P 500 S&P/ TSX S&P
Slide 21: Ability to Execute
What Sets Fortis Apart? Ability to Execute Secured minority investor. GIC Private Limited to acquire a 19.9% equity interest in ITC for US$1.228B. The process was completed in April 2016 in 71 days. Received Fortis shareholder approval on May 5, 2016 Completed registration process with the SEC in Ma
Slide 22: The Road Ahead
What’s Next? The Road Ahead Continue to Execute Base capital program provides visible on Strategy rate base growth Develop growth opportunities within Integrate ITC collaborative regulatory construct Maintain Balance Maintain adequate liquidity and Sheet Strength investment-grade credit rating Optim
Slide 23: Fortis NYSE Listed
FORTIS FTS LISTED NYSE