Fortis Inc. · TSX:FTS
Fortis — EEI 54th Financial Conference (November 2019)
22 slides from Fortis's conference presentation, November 2019
Slide 1: EEI 54th Financial Conference
EEI 54th Financial Conference November 2019
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 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 2019F RATE BASE ~65% EARNINGS FROM THE U.S. Note: All information as at September 30, 2019, except earnings from the U.S. is as at
Slide 6: Average Annualized Total Shareholder Returns
AVERAGE ANNUALIZED TOTAL SHAREHOLDER RETURNS 1-Year 5-Year 10-Year 20-Year 30.5% 12.2% 12.1% 14.0% 35.3% 9.8% 9.9% 10.2% 13.3% 5.6% 7.3% 6.8% Fortis S&P/TSX Capped Utilities Index S&P/TSX Composite Index Note: As at October 31, 2019 6
Slide 7: Sustainability: Primarily an Energy Delivery Business
SUSTAINABILITY: PRIMARILY AN ENERGY DELIVERY BUSINESS 93% of our assets relate to electricity poles, wires and natural gas lines that enable a cleaner energy future 7
Slide 8: Sustainability: It's How We Do Everything
SUSTAINABILITY: IT’S HOW WE DO EVERYTHING Ranked Top Decile on Focused on Delivering Governance Matters Cleaner Energy • Ranked in top 15 of Globe & Mail Board Games • FortisBC set a goal to reduce GHG emissions for past four years(1) associated with customer‘s energy use • ISS and Glass Lewis suppo
Slide 9: Path to Cleaner Energy
PATH TO CLEANER ENERGY Generation Shifting from Fossil Fuel to Solar and Wind Projects Capital Investment in a Electric Vehicle Penetration Green and Resilient Grid Renewable Gas at Energy Efficiency FortisBC CLEANER ENERGY 9
Slide 10: Path to Cleaner Energy: Delivering Energy as Clean as We Can
PATH TO CLEANER ENERGY: DELIVERING ENERGY AS CLEAN AS WE CAN, AS FAST AS WE CAN Connecting First Nations to Cleaner Energy 20MW Utility-Scale -------------------------------------------------------------------------- Battery Storage Project Financial Close and Notice to Proceed Issued in October 201
Slide 11: 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 Will Programs Increased to Five RNG Facilities(1) Bunkering
Slide 12: Our Five-Year Plan
OUR FIVE-YEAR PLAN $18.3B ~7% ~6% CAPITAL RATE BASE DIVIDEND PLAN GROWTH GROWTH GUIDANCE 12
Slide 13: 2020-2024 Capital Plan
2020-2024 CAPITAL PLAN 43% 32% $18.3B Capital Plan(1) TRANSMISSION DISTRIBUTION $4.3 $4.0 $3.6 $3.7 $3.7 $3.2 $3.3 $3.0 Billions 18% 7% OTHER(2) GENERATION 2017A 2018A 2019F 2020F 2021F 2022F 2023F 2024F (1) Capital expenditures are translated at a forecast USD/CAD foreign exchange rate of $1.32. (2
Slide 14: The Shift to Cleaner Energy Driving Incremental Investments
THE SHIFT TO CLEANER ENERGY DRIVING INCREMENTAL INVESTMENTS 5-YEAR CAPITAL PLAN(1) +$300M $1.0B $18.3B +$300M $17.3B +$200M 2019-2023 2020-2024 +$200M FOREIGN EXCHANGE(1) Capital Plan Capital Plan (1) Capital expenditures for 2020-2024 are translated at a forecast USD/CAD foreign exchange rate of $1
Slide 15: Low Risk, Highly Executable $18.3B Capital Plan
LOW RISK, HIGHLY EXECUTABLE $18.3B CAPITAL PLAN Regulated 99% Smaller Projects 80% U.S. 54% Canada 41% Non-Regulated 1% Major Projects(1) 20% Caribbean 5% (1) Capital projects with a total project cost of $200 million or greater and excludes ongoing capital maintenance projects. 15
Slide 16: 2020-2024 Rate Base
2020-2024 RATE BASE (1) $38.4 $36.8 $34.5 $30.7 $32.5 Rate base grows over $10B $28.0 to $38.4B during 5-year period 2019F 2020F 2021F 2022F 2023F 2024F Regulated - Canadian & Caribbean Electric & Gas Regulated - U.S. Electric & Gas Regulated - Independent Electric Transmission (ITC) (1) Rate base i
Slide 17: Growth Expected Beyond 2024: Three Largest Utilities
GROWTH EXPECTED BEYOND 2024: THREE LARGEST UTILITIES ACCOUNT FOR 2/3 OF CAPITAL PLAN TODAY’S 5-YEAR $4.9B $3.8B $3.4B CAPITAL PLAN • Generation shift to renewables: • Resiliency: • TEP target of 30% renewables 9 years • Tilbury LNG storage ahead of schedule • Significant renewable capacity and FUTUR
Slide 18: Outperforming Historical Capital Plans
OUTPERFORMING HISTORICAL CAPITAL PLANS 2016 INVESTOR DAY(1) 2017 INVESTOR DAY 2018 INVESTOR DAY $19.3B $18.8B $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 18
Slide 19: Current Regulatory Outlook
CURRENT REGULATORY OUTLOOK • Final decision pending from FERC on MISO Base ROE • TEP rate case filed with the ACC on April 1, 2019 using a December 31, 2018 test year • Notices of Inquiry issued by FERC in 2019 on incentive policies for transmission investment and • Requested 10.35% ROE & 53% equity
Slide 20: Strengthening Credit Metrics
STRENGTHENING CREDIT METRICS FUNDING PLAN Cash From Operations(1) RECOVERING FROM U.S. TAX REFORM 73% 2018 2019F CFO/Debt(4) ~10.5% ~11% 5-Year Holdco Debt/Total Debt (4) ~39% ~36% Capital Plan of $18.3B Debt(2) 2020-2024 Business Plan 24% Average CFO/Debt(4) ~12% 2024 Holdco Debt/Total Debt(4) ~32%
Slide 21: 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 7273 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 Pay
Slide 22: Why Invest in Fortis?
WHY INVEST IN FORTIS? WELL-RUN HIGHLY FOCUSED ON STRONG VIRTUALLY SUSTAINABILITY 6% INNOVATIVE BUSINESSES DIVERSIFIED ENERGY GROWTH ALL LEADER DIVIDEND DELIVERY PROFILE REGULATED GUIDANCE 22
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