Slide 1: Need to update picture (TH)
Need to update picture (TH)
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 U.S. Private Securities Litigation Reform Act of 1995, collectively referred to as "forw
Slide 3: Our Strategy
Our Strategy S T R AT E G Y 6% Leverage the operating model, footprint of our utilities, operating expertise, reputation and financial Focus on Average Annual Dividend Organic strength to develop growth Growth Target through Growth opportunities 2023 AREAS OF FOCUS: Utility Capital Investment System
Slide 4: High Quality & Diverse Utility Portfolio
High Quality & Diverse Utility Portfolio ~97% REGULATED UTILITY ASSETS 10 UTILITY OPERATIONS Canada, U.S. & Caribbean $ 26.1 BILLION IN MIDYEAR RATE BASE IN 2018 ~60% EARNINGS FROM THE U.S. ~92% TRANSMISSION & DISTRIBUTION 3.3 MILLION UTILITY CUSTOMERS 2.0M Electric & 1.3M Gas Note: All information
Slide 5: Our Unique Business Model
Our Unique Business Model 10 Locally Operated Utilities 1 = Strong North Regulated Electric American Regulated Gas Company FERC-Regulated Electric Transmission Long-Term Contracted Hydro Generation Natural Gas Storage Facility ITC UNS Energy FortisBC FortisAlberta Newfoundland Power Central Hudson F
Slide 6: Sustainability: Environmental Commitment
Sustainability: Environmental Commitment We delivered 19 times more energy to our customers than we generated in 2017 92% of our assets are electricity poles, wires and natural gas lines 63% Decrease in the carbon intensity of operations since 2015 6
Slide 7: Governance and Social Commitment
Governance and Social Commitment $12.5M invested in communities that we serve in 2017 Women on our Women NEOs Board 5 2 1 0 2013 Today 2013 Today 7
Slide 8: Fortis Timeline
Fortis Timeline 1885-2012 2013-2016 2017-Current Focused on Canada U.S. Acquisition Strategy Focused on Organic Growth in North America 8
Slide 9: Strong Financial Track Record
Strong Financial Track Record Adjusted EPS and Dividend Payout Ratio $2.53 $2.31 $2.11 $1.70 $1.75 Adjusted EPS(2) Rate Base 5-Year EPS 5-Year 73% 73% 66% 66% 64% Dividend Payout Historical CAGR Historical CAGR Ratio(2) 7.0%(1) 8.0%(2) 2013 2014 2015 2016 2017 (1) 5-year period ending 2017 and exclu
Slide 10: Average Annualized Total Shareholder Return
Average Annualized Total Shareholder Return 5-Year 10-Year 20-Year Fortis 10.2% 9.2% 12.0% S&P/TSX Composite Index 5.4% 7.6% 7.1% S&P/TSX 5.3% 6.7% 7.9% Capped Utilities Index Note: For the period ending October 31, 2018. 10
Slide 11: New 2019-2023 Business Plan Highlights
New 2019-2023 Business Plan Highlights $17.3B 6-7% 6% 5-Year Rate Base Average Annual Capital Plan Growth Dividend Growth Target to 2023 11
Slide 12: Increase in Capital Plan Driven by Proven Growth Strategy
Increase in Capital Plan Driven by Proven Growth Strategy + $0.6B $17.3 + $0.9B $14.5 + $0.6B Billions 2017 Investor Day 2018 Investor Day + $0.6B 12
Slide 13: $3.5B Average Annual Capital Expenditures
$3.5B Average Annual Capital Expenditures (1) $17.3B 5-Year Capital Plan $3.7 $3.5 $3.6 $3.2 $3.3 Billions 2019F 2020F 2021F 2022F 2023F (1) Capital expenditures are translated at a forecast USD/CAD foreign exchange rate of $1.28. 13
Slide 14: Low Risk, Highly Executable Capital Plan
Low Risk, Highly Executable Capital Plan Regulated 99% Smaller Projects 77% U.S. 55% Canada 42% Non-Regulated 1% Major Capital Projects 23% Caribbean 3% 14
Slide 15: Capital Plan Grows Rate Base to $35 Billion in 2023
Capital Plan Grows Rate Base to $35 Billion in 2023 Rate Base(1) $35.5 $32.0 $33.4 $30.1 $27.9 $26.1 Canadian & Caribbean U.S. Billions 2018F 2019F 2020F 2021F 2022F 2023F (1) Rate base converted at a projected USD/CAD foreign exchange rate of $1.28 for 2018 through 2023. 15
Slide 16: Strong 5-Year Rate Base Growth
Strong 5-Year Rate Base Growth Rate Base Grows 8.4% Central Hudson $9.4B to $35.5B 7.0% ITC 5-Year CAGR Increases from 6.3% UNS Rate Base Growth $8.4 4.5% to 6.3% 5-Year $6.5 6.3% $9.8 6.0% FortisBC Energy $7.7 Growth Mainly $7.7 5.3% Other Canadian & Caribbean Driven by U.S. Utility Investments Not
Slide 17: 45 Years of Dividend Growth and 6% Guidance Extended to 2023
45 Years of Dividend Growth and 6% Guidance Extended to 2023 6% guidance generates annual dividend payment of $2.27 in 2023 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15 17 19F 21F 23F Actual dividend paid Forecasted dividend payments 17
Slide 18: Additional Energy Infrastructure Opportunities
Additional Energy Infrastructure Opportunities FortisBC: Tilbury, LNG & Gas Infrastructure FortisOntario: Municipal Utility Consolidation Maritime Electric & Newfoundland Power: Grid Modernization ITC: Lake Erie Connector & Grid Modernization UNS Energy: Renewables, Storage & Electric Transmission C
Slide 19: Current Regulatory Framework
Current Regulatory Framework Weighted Average Weighted Average Allowed ROE(1) Equity Thickness(1) 10.43% 55.2% 9.84% 48.2% 8.73% 39.0% U.S. Utilities Canadian Utilities Combined (1) Based on 2018 rate base and capital structure for the Canadian and U.S. utilities. 19
Slide 20: Regulatory Outlook
Regulatory Outlook Recent Decisions: Independence Incentive Adder Complaint • Adder reduced to 0.25% • Effective April 20, 2018 Upcoming Proceedings and Decisions: MISO Base ROE Complaints Targeted TEP Rate Case Filing in 2019 Targeted PBR Renewal Filing in 2019 20
Slide 21: Effective Funding Plan For 5-Year Capital Program
Effective Funding Plan For 5-Year Capital Program Cash From Operations(1) No Discrete Equity 69% $17.3B Required to Fund Other(2) 5-Year Capital Plan 2% $17.3B Asset Sales Expected Asset Sales 6% 5-Year to Provide $1-$2 Billion Capital Plan in Proceeds ATM Program Unutilized Regulated Debt 23% and P
Slide 22: Strengthening Our Credit Profile
Strengthening Our Credit Profile Improved Holdco Debt / Total Debt Credit Rating Agencies Rank 38% Business Risk Profile as Excellent/Strong(1) 33% Improving Credit Metrics Over The 5-Year Plan 2018F 2019F 2020F 2021F 2022F 2023F (1) S&P ranks business risk profile as excellent and Moody’s ranks it
Slide 23: Why Invest In Fortis?
Why Invest In Fortis? Well-Run Utilities Highly Regulated Highly Diversified Strong Growth Profile 6% Dividend Guidance Opportunities Beyond Capital Plan 23