Slide 1: Working Together Powering Growth
WORKING TOGETHER POWERING GROWTH INVESTOR PRESENTATION Q1 2020
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: Focused Strategy
FOCUSED STRATEGY STRATEGY Leverage the operating model, 6% footprint of our businesses, operating expertise, reputation Average Annual Dividend and financial strength to execute Focused on Growth Target through 2024 on growth opportunities Growth AREAS OF FOCUS: Capital Customer & Sustainability & S
Slide 4: A Geographically Diverse Energy Delivery Business
A Geographically Diverse Energy Delivery Business 4
Slide 5: High Quality Portfolio of Operations
HIGH QUALITY PORTFOLIO 10 OPERATIONS Canada, U.S. & Caribbean 3.3M CUSTOMERS 2.0M Electric & 1.3M Gas ~99% REGULATED UTILITY ASSETS ~93% TRANSMISSION & DISTRIBUTION $28B 2019 RATE BASE ~65% (1) EARNINGS FROM THE U.S. Note: All information as at December 31, 2019. (1) Non-US GAAP measure. 5
Slide 6: Sustainability: It's How We Do Everything
SUSTAINABILITY: IT’S HOW WE DO EVERYTHING 93% of our assets are dedicated to energy transmission and distribution, limiting our impact on the environment. Focused on Delivering Cleaner Energy Strong Performance Industry Recognition (1) MSCI ESG Rating Upgrade to ‘AA’ Outperformed Industry Averages A
Slide 7: Path to Cleaner Energy
PATH TO CLEANER ENERGY Generation Shifting from Fossil Innovation and Fuel to Solar, Wind and Storage Enabling Technologies Capital Investment in a Electric Vehicle Green and Resilient Grid Penetration Renewable Gas at Energy FortisBC Efficiency CLEANER ENERGY 7
Slide 8: Strong Operational Performance
STRONG OPERATIONAL PERFORMANCE All Injury Frequency Rate(1) 2.0 1.78 1.59 SAFETY 1.0 0.0 2015 2016 2017 2018 2019 Fortis USA Bureau of Labor Statistics Average (2015-2018) Canadian Electricity Association Average (2015-2018) Electricity Customer Average Outage Duration(2) 5.0 (Hours) 4.0 RELIABILITY
Slide 9: Superior 20-Year Total Shareholder Return
SUPERIOR 20-YEAR TOTAL SHAREHOLDER RETURN 1,600 FTS 1,400 S&P/TSX Capped Utilities Index 1,363% FTS Total Shareholder Returns 1,200 S&P/TSX Composite Index (Average Annual) 1,000 1-Year 22.7% % 800 5-Year 10.8% 729% 10-Year 10.6% 600 20-Year 14.3% 400 200 237% 0 (200) 2000 2005 2010 2015 2020 Note:
Slide 10: Our Five-Year Plan
OUR FIVE-YEAR PLAN $18.8B ~7% ~6% CAPITAL RATE BASE DIVIDEND PLAN GROWTH GROWTH GUIDANCE 10
Slide 11: Five-Year Capital Plan
FIVE-YEAR CAPITAL PLAN $18.8B Capital Plan(1) Capital Revised to Account for $500M Shifted $4.3 from 2019 to 2020 & 2021 $0.3 $3.8 $3.8 $3.7 $0.2 $3.2 Primarily Driven by Timing of Oso Grande Wind Project Billions Payment of~$300M $4.0 $3.6 Capital Invested in January 2020 2020F 2021F 2022F 2023F 20
Slide 12: 2020-2024 Rate Base
2020-2024 RATE BASE (1) $38.4 $36.8 $34.5 $32.5 $30.7 Rate base grows over $10B $28.0 to $38.4B during 5-year period 2019A 2020F 2021F 2022F 2023F 2024F Regulated - Canadian & Caribbean Electric & Gas Regulated - U.S. Electric & Gas Regulated - Independent Electric Transmission (ITC) (1) Reflects mi
Slide 13: Growth Expected Beyond 2024
GROWTH EXPECTED BEYOND 2024: THREE LARGEST UTILITIES ACCOUNT FOR 2/3 OF CAPITAL PLAN TODAY’S 5-YEAR $4.9B $3.8B $3.9B CAPITAL PLAN • Generation shift to renewables: • Resiliency: • TEP target of 30% renewables 9 years ▪ Tilbury LNG storage ahead of schedule POTENTIAL ▪ Significant renewable capacity
Slide 14: Outperforming Historical Capital Plans
OUTPERFORMING HISTORICAL CAPITAL PLANS 2016 INVESTOR DAY(1) 2017 INVESTOR DAY 2018 INVESTOR DAY $19.5B $18.9B $17.3B $18.2B $14.5B $12.9B 2017-2021 CAPITAL PLAN 2018-2022 CAPITAL PLAN 2019-2023 CAPITAL PLAN ORIGINAL PLAN ACTUAL/CURRENT FORECAST (1) Released in conjunction with Q3 2016 earnings 14
Slide 15: Current Regulatory Matters
CURRENT REGULATORY MATTERS FERC Return on Equity Tucson Electric Power Rate Application Multi-Year Rate Plan Generic Cost of Capital Proceeding AESO Tariff Application 15
Slide 16: $1.2B of Equity Issued in Fourth Quarter
$1.2B OF EQUITY ISSUED IN FOURTH QUARTER DEAL OVERVIEW: • $700M Bought Deal • $500M Private Placement • Issued at 1% Discount OUTCOME: • Terminated ATM Program • 2% DRIP discount terminated • Acceleration of equity funding needs • Redemption of US$500M notes • Repayment of credit facilities 16
Slide 17: Stronger Credit Metrics
STRONGER CREDIT METRICS CREDIT RATINGS A-(1) 2018 2019 (2) CFO/Debt ~10.5% ~12% BBB (high) (2) Holdco Debt/Total Debt ~39% ~34% Baa3 (1) S&P rating reflects the issuer credit rating. Fortis’ unsecured debt rating is BBB+. (2) Based on Moody’s methodology: (i) cash from operations (“CFO”) is before c
Slide 18: Dividend Guidance Supported by Growth Strategy
DIVIDEND GUIDANCE SUPPORTED BY GROWTH STRATEGY $2.5 6% 46 YEARS $2.0 AVERAGE ANNUAL OF CONSECUTIVE $1.5 DIVIDEND DIVIDEND INCREASES GROWTH GUIDANCE $1.0 EXTENDED TO 2024 $0.5 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20F 22F 24F Dividend Payments Forecast Dividend Payme
Slide 19: Why Invest in Fortis?
WHY INVEST IN FORTIS? WELL-RUN SUSTAINABILITY HIGHLY FOCUSED ON STRONG VIRTUALLY 6% INNOVATIVE BUSINESSES LEADER DIVERSIFIED ENERGY GROWTH ALL DIVIDEND DELIVERY PROFILE REGULATED GUIDANCE 19
Slide 20: Appendix
WORKING TOGETHER POWERING GROWTH APPENDIX
Slide 21: Table of Contents
TABLE OF CONTENTS UTILITY OVERVIEW OTHER ITC Holdings Corp. 22 – 24 2019-2024 Rate Base by Segment 39 UNS Energy 25 – 28 2020-2024 Capital Plan by Segment 40 Central Hudson 29 – 30 Major Capital Projects 41 FortisBC 31 – 33 Manageable Debt Maturities and Ample Liquidity 42 FortisAlberta 34 – 35 Inve
Slide 22: ITC Holdings Corp.
ITC HOLDINGS CORP. Type of Utility Transmission Regulator FERC Regulatory Model Independent Transmission Company Current Regulatory Compact 10.63-12.16% ROE on 60% equity 2020F Rate Base(1) $9.5B 5-Year Rate Base CAGR(1) 6.4% 2019 Assets % of Total Consolidated 38% Regulated Assets(2) Multi-Value Re
Slide 23: ITC's 5-Year Capital Plan
ITC’s 5-YEAR CAPITAL PLAN 2020-2024 CAPITAL(1) $3.3B Infrastructure Investments Rebuild, reliability, resiliency, system efficiencies, Infrastructure increased capacity, circuit overloads, pocket load growth Investments $600M Major Capital Projects Multi-Value Regional Transmission Projects & 34.5 t
Slide 24: ITC Building the Grid of the Future
ITC BUILDING THE GRID OF THE FUTURE ~16,000 OPPORTUNITIES BEYOND THE PLAN Miles of Transmission & 565 New 3GW and 7GW of battery storage in MISO Access to MISO multi-value projects at capacity upon completion Substations Technologies Regional and SPP queues Markets ~6,800 MW Generation 64GW and 61GW
Slide 25: UNS Energy
UNS ENERGY Tucson Electric UNS Electric UNS Gas Gas Type of Utility Electricity distribution Regulator Arizona Corporation Commission Regulatory Model Cost of service/historical test year 9.75% ROE on 9.5% ROE on 9.75% ROE on Current Regulatory Compact 50% equity 52.8% equity 50.8% equity 2020F Rate
Slide 26: UNS Capital Plan
UNS CAPITAL PLAN 2020-2024 CAPITAL(1) Distribution Infrastructure $1.2B Distribution Infrastructure Generation Customer meter infrastructure, grid resiliency, Diversification modernization $3.9B $1.0B Generation Diversification Reciprocating engines, 250 MW Wind $1.0B Transmission Infrastructure Dir
Slide 27: Arizona Focused on Renewables
ARIZONA FOCUSED ON RENEWABLES TEP’s RESOURCE TRANSITION % Renewable Energy Renewable Energy Production of 28% in 2021 (1) Projects developed through purchase power agreements 27
Slide 28: TEP Collaborating with Local University to Create New Goals
TEP COLLABORATING WITH LOCAL UNIVERSITY TO CREATE NEW GOALS TEP’s TEP’s Renewable Current Energy Mix Target Developing New Carbon 28% 30% Emission Goals With 13% University of Arizona’s Institute of the Environment 2019 2021 2030 28
Slide 29: Central Hudson
CENTRAL HUDSON Type of Utility Gas and Electricity New York State Public Service Regulator Commission Regulatory Model Cost of service on future test year Current Regulatory Compact(1) 8.8% ROE on 49% equity(1) 2020F Rate Base(2) $2.1B 5-Year Rate Base CAGR(2) 8.2% 2019 Assets % of Total Consolidate
Slide 30: Central Hudson Capital Plan
CENTRAL HUDSON CAPITAL PLAN 2020-2024 CAPITAL(1) Distribution Infrastructure $900M Distribution Infrastructure Distribution Automation and Modernization $250M Transmission Infrastructure $1.6B Replacement of Aging Infrastructure $450M IT, General and Other IT, General and Other Transmission Infrastr
Slide 31: FortisBC
FORTISBC FortisBC Gas FortisBC Electric Type of Utility Gas distribution Electricity Regulator British Columbia Utilities Commission Regulatory Model Cost of service + PBR Current Regulatory Compact 8.75% ROE on 38.5% equity 9.15% ROE on 40.0% equity 2020F Rate Base $5.0B $1.4B 5-Year Rate Base CAGR
Slide 32: FortisBC Capital Plan
FORTISBC CAPITAL PLAN 2020-2024 CAPITAL $1.9B Sustainment & Customer Growth Sustainment & Ongoing maintenance requires significant capital investment Customer Growth Includes customer growth and general plant investment $1.1B Major Integrity Projects Inland Gas Upgrades Project Transmission Integrit
Slide 33: Path to Cleaner Energy: FortisBC's Clean Growth Pathway
PATH TO CLEANER ENERGY: FORTISBC’s CLEAN GROWTH PATHWAY Energy Efficiency Renewable LNG Bunkering Zero & Low-Carbon Natural Gas Transportation Positioning BC as a Conservation & Efficiency Currently Operate Domestic & International FortisBC Programs Increased to Five RNG Facilities(1) Bunkering Hub
Slide 34: FortisAlberta
FORTISALBERTA Type of Utility Electricity distribution Regulator Alberta Utilities Commission Regulatory Model PBR Current Regulatory Compact 8.5% ROE on 37% equity 2020F Rate Base $3.7B 5-Year Rate Base CAGR 4.1% 2019 Assets % of Total Consolidated 9% Regulated Assets(1) 2018 Alberta Independent Sy
Slide 35: FortisAlberta Capital Plan
FORTISALBERTA CAPITAL PLAN 2020-2024 CAPITAL Distribution Infrastructure $1.9B Distribution Infrastructure Safety & Reliability of Distribution Assets, Meter $2.2B Upgrades, Pole Management Program, Modernization IT, General $300M IT, General and Other and Other 35
Slide 36: Other Electric Utilities
OTHER ELECTRIC UTILITIES (1) Type of Utility Electricity Island Regulatory and Appeals Newfoundland and Labrador Board of Regulator Ontario Energy Board Commission Commissioners of Public Utilities Regulatory Model Cost of service with incentives Cost of service on future test year Cost of service o
Slide 37: Other Electric Utilities (Continued)
OTHER ELECTRIC UTILITIES (CONTINUED) (1) Type of Utility Electricity Regulator Utility Regulation and Competition Office Government of the Turks and Caicos Islands Regulatory Model Cost of service Cost of service 2019 Achieved ROE 12.10% 8.00% 2020F Rate Base(2) $0.7B $0.5B 5-Year Rate Base CAGR(2)
Slide 38: Other Electric Capital Plan
OTHER ELECTRIC CAPITAL PLAN 2020-2024 CAPITAL Distribution Infrastructure $900M Distribution Infrastructure Newfoundland Power and Caribbean Utilities $600M Generation Diversification IT, General $2.3B Caribbean Utilities Shift to Cleaner Energy and Other $600M Transmission Infrastructure Generation
Slide 39: 2019-2024 Rate Base by Segment
2019-2024 RATE BASE BY SEGMENT (1) Midyear Rate Base 3-Year CAGR 5-Year CAGR ($billions) 2019A 2020F 2021F 2022F 2023F 2024F to 2022 to 2024 Regulated - Independent Electric Transmission ITC(2) 8.8 9.5 10.2 10.8 11.4 12.0 7.2% 6.4% Regulated - US Electric & Gas UNS Energy 5.0 5.8 6.1 6.4 6.8 6.9 8.6
Slide 40: 2020-2024 Capital Plan by Segment
2020-2024 CAPITAL PLAN BY SEGMENT (1) Capital Forecast 2020-2024 ($millions) 2020F 2021F 2022F 2023F 2024F TOTAL Regulated - Independent Electric Transmission ITC 976 987 1,043 1,018 922 4,946 Regulated - US Electric & Gas UNS Energy 1,390 828 710 575 371 3,874 Central Hudson 292 309 359 306 292 1,5
Slide 41: Major Capital Projects
MAJOR CAPITAL PROJECTS(1) Total Incurred to Total 2020- Expected Year of ($Millions) Smaller Projects 80% the End of 2019 2024 Plan Completion ITC Multi-Value Regional Transmission Projects 625(2) 276 2023 ITC 34.5 to 69 kV Transmission Conversion Project 352(2) 268 Post-2024 UNS Southline Transmiss
Slide 42: Manageable Debt Maturities and Ample Liquidity
MANAGEABLE DEBT MATURITIES AND AMPLE LIQUIDITY CONSOLIDATED FIXED-TERM DEBT MATURITIES(1) CONSOLIDATED CREDIT FACILITIES 5-year average ~$0.9B $2.0 $4.3 $1.5 $1.0 Billions Billions $0.5 2020F 2021F 2022F 2023F 2024F $1.3 ($millions) 2020F 2021F 2022F 2023F 2024F Total As at December 31, 2019 Canadia
Slide 43: Investment-Grade Credit Ratings
INVESTMENT-GRADE CREDIT RATINGS Company Fortis Inc. A-(1) Baa3 BBB (High) ITC Holdings Corp. A-(1) Baa2 n/a ITC Regulated Subsidiaries A A1 n/a TEP A- A3 n/a Central Hudson A- A3 n/a FortisBC Energy n/a A3 A FortisBC Electric n/a Baa1 A (low) FortisAlberta A- Baa1 A (low) Newfoundland Power n/a A2 A
Slide 44: Executive Team
EXECUTIVE TEAM Barry Perry President & CEO Jocelyn Perry Jim Reid David Hutchens Nora Duke James Laurito EVP, CFO EVP, CLO & Chief Operating Officer, EVP, Sustainability & EVP, Business Development & Corporate Secretary CEO UNS Energy CHRO CTO Linda Apsey Charles Freni Gary Smith Michael Mosher Roge