Slide 1: Q1 2016 Earnings Call
Q1 2016 Earnings Call May 3, 2016
Slide 2: Forward-looking statement
Forward-looking statement 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 ref
Slide 3: Forward-looking statement (continued)
Forward-looking statement (continued) Forward-looking statements involve significant risks, uncertainties and assumptions. Certain material factors or assumptions have been applied in drawing the conclusions contained in the forward-looking statements. These factors or assumptions are subject to inh
Slide 4: Barry Perry, President & CEO
Barry Perry President & CEO 4
Slide 5: Performance continues to validate our focused strategy
Performance continues to validate our focused strategy • Highly diversified and low risk regulated utility business delivering strong performance • Advanced significant capital projects • Energy infrastructure investments and LNG continue to be a focus • Announcement of acquisition of ITC Holdings C
Slide 6: Low risk and highly diversified
Low risk and highly diversified Capital Expenditures Midyear Rate Base Growth ~$9B Five-Year Capital Plan $20.3 $19.0 $19.8 $18.4 $2.2 $17.5 $16.4 $1.9 $1.9 $1.8 $1.6 $1.6 ($ billions ) (1) ($ billions ) (1) 2015A 2016F 2017F 2018F 2019F 2020F 2015A 2016F 2017F 2018F 2019F 2020F (2) Sustaining Growt
Slide 7: Progress on major capital projects
Progress on major capital projects $M (1) 2016 2017-2020 UNS Energy Solar Program 21 85 Central Hudson Gas Main Replacement Program 28 127 FortisBC Tilbury LNG Facility Expansion – Tilbury 1A 105 15 FortisBC Lower Mainland System Upgrade 31 381 FortisAlberta Pole-Management Program 45 94 Caribbean U
Slide 8: We are executing on opportunities to grow investments within our franchise regions
We are executing on opportunities to grow investments within our franchise regions FortisAlberta: FortisOntario: Rural Electrification Wataynikaneyap Project Associations & Municipal Utility Consolidation FortisBC: Tilbury, Woodfibre, LNG, Gas Central Hudson: Infrastructure REV Demonstration Project
Slide 9: Acquisition of ITC Holdings Corp.
Acquisition of ITC Holdings Corp.
Slide 10: Strategic rationale for acquisition of ITC
Strategic rationale for acquisition of ITC A Premier Fully-Regulated Acquisition of the largest independent fully-regulated electric transmission utility in the U.S. with rates regulated by FERC Electric Establishes scale and an additional platform for growth in electric transmission sector Tran
Slide 11: Minority investor process completed
Minority investor process completed • Completion of process in 71 days • Strong outcome with the right partner: US$100 billion in assets, long-term focus, sophistication and experience in infrastructure investing • Value achieved within expectations: 19.9% stake for US$1.228 billion • Securing minor
Slide 12: Milestones are being met to close the acquisition by year end
Milestones are being met to close the acquisition by year end 2016 Milestone Q1 Q2 Q3 Q4 Status Acquisition Announcement • Definitive agreement for the sale of 19.9% of Sale of Minority Interest ITC to GIC completed in April 2016 Fortis and ITC Proxy Circulars & Shareholder Votes / Registration • FT
Slide 13: Strong platform for sustained growth
Strong platform for sustained growth • Well-run utilities • Low risk and diversified • Financial strength • Predictable dividend growth 13
Slide 14: Karl Smith, Executive VP, Chief Financial Officer
Karl Smith Executive VP, Chief Financial Officer 14
Slide 15: Q1 Results driven by strong performance of all utilities
Q1 Results driven by strong performance of all utilities Q1 2016 Financial Highlights Adjusted Earnings 250 • Earnings are on track $179 $190 ($ millions) • Cash flow from operations $483M, compared to $450M last year • Unused consolidated credit facilities of 0 approximately $2.3B 2015 2016 Q1 • $1
Slide 16: Multiple drivers of EPS growth – Q1
Multiple drivers of EPS growth – Q1 0.72 $0.01 ($0.03) 0.70 $0.01 $2.11 $0.02 0.68 ($0.01) ($) $0.02 $0.67 0.66 $0.65 0.64 0.62 0.60 Adjusted EPS Q1 Waneta Foreign FortisBC Energy Caribbean FortisBC Electric Corporate & Adjusted EPS Q1 2015 Expansion & Exchange Other 2016 Generation 16
Slide 17: Ample liquidity and investment-grade credit ratings
Ample liquidity and investment-grade credit ratings Consolidated Credit Facilities (2) Investment-Grade Credit Ratings (1) 4.0 Fortis Inc. 3.0 S&P A- / BBB+ 2.4 2.3 ($ billions) DBRS A(low) 2.0 Capital Structure 1.0 % Mar 31/16 1.2 1.2 Debt 55 0.0 Preferred 8 Dec 31/15 Mar 31/16 Common 37 Utilized R
Slide 18: Regulatory update
Regulatory update Significant Filings and Applications Regulated Utility Application/Proceeding Filing Date Expected Decision TEP 2017 General Rate Application November 2015 Q4 2016 UNS Electric 2016 General Rate Application May 2015 Q3 2016 Central Hudson Reforming the Energy Vision Not applicable
Slide 19: A Leader in Electric and Gas Utilities in North America
A Leader in Electric and Gas Utilities in North America 19
Slide 20: Q1 2016 Earnings Call
Q1 2016 Earnings Call May 3, 2016