Slide 1: Q2 2024 Earnings Conference Call
Q2 2024 EARNINGS CONFERENCE CALL July 31, 2024
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: David Hutchens and Jocelyn Perry
DAVID HUTCHENS President & Chief Executive Officer JOCELYN PERRY EVP & Chief Financial Officer 3
Slide 4: Q2 2024 Business Highlights
Q2 2024 BUSINESS HIGHLIGHTS Safe & Reliable YTD June Capital EPS Service Expenditures of $2.3B Growth Regulatory Proceedings 2024 Sustainability Advanced Report Released 4
Slide 5: Highly Executable Capital Plan, Low-Risk Rate Base Growth
HIGHLY EXECUTABLE CAPITAL PLAN LOW-RISK RATE BASE GROWTH OF ~6% $2.3B YTD June Capital Expenditures 2024 annual capital plan of $4.8B on track with major projects progressing $25B 2024-2028 Capital Plan ~20% major capital projects; ~$7B in Cleaner Energy investments $49B 6.3% $37B 5-Year Rate Base C
Slide 6: Update on Opportunities Beyond the Plan
UPDATE ON OPPORTUNITIES BEYOND THE PLAN MISO Long-Range Transmission Plan – Tranche 2.1 & 2.2 • In June 2024, MISO released an updated near-final map of Tranche 2.1 projects • Tranche 2.1 transmission investments now estimated in the range of ~US$23-$27B with certain projects expected in ITC’s footp
Slide 7: Dividend Guidance Supported by Long-Term Growth Strategy
DIVIDEND GUIDANCE SUPPORTED BY LONG-TERM GROWTH STRATEGY 4-6% Annual Dividend Growth Guidance through 2028 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15 17 19 21 23 7
Slide 8: Second Quarter Results
SECOND QUARTER RESULTS Reported EPS Adjusted EPS Key Q2 Adjusted EPS Drivers $0.67 $0.67 $0.62 • Rate base growth $0.61 • New customer rates and warmer weather in Arizona Q2 2023 Q2 2024 Q2 2023 Q2 2024 • Timing of GCOC decision at FortisBC in 2023 $1.60 $1.60 $1.51 $1.53 YTD 2023 YTD 2024 YTD 2023
Slide 9: Second Quarter 2024 EPS Drivers
SECOND QUARTER 2024 EPS DRIVERS Q2 Adjusted EPS impacted by ($0.01) associated with disposition of Aitken Creek; on an annual basis Aitken Creek will be neutral to EPS, net of finance cost savings $0.02 ($0.01) ($0.02) $0.02 ($0.01) $0.05 $0.67 $0.62 Q2 2023 U.S. U.S. Western Other Corporate & Weigh
Slide 10: Year-to-Date June 2024 EPS Drivers
YTD adjusted EPS impacted YEAR-TO-DATE JUNE 2024 EPS DRIVERS by ($0.04) associated with disposition of Aitken Creek; on an annual basis Aitken Creek will be neutral to EPS, net of finance cost savings $0.04 ($0.07) $0.05 ($0.03) $0.08 $1.60 $1.53 YTD 2023 Western U.S. U.S. Corporate & Weighted YTD 2
Slide 11: Liquidity & Credit Ratings
LIQUIDITY & CREDIT RATINGS Raised ~$1.4B Debt Maturities & Credit Ratings & in Long-Term Debt Preference Share Dividends Outlooks • ITC • Limited near-term non-regulated debt maturities ▪ US$85M 10-year notes at 5.98% ▪ US$150M bonds(1) ▪ Fortis Inc. – US$190M (2024) ▪ US$400M 10-year notes at 5.65%
Slide 12: Recent Regulatory Activity
RECENT REGULATORY ACTIVITY Iowa Transmission ACC Generic Regulatory CIS Right of First Refusal Lag Docket Implementation • In 2023, the Iowa District Court ruled that the • In July 2024, the ACC voted to continue the • In June 2024, the PSC issued an order Iowa ROFR legislation is unconstitutional,
Slide 13: Why Invest in Fortis?
SUSTAINABLE GROWTH Focused on Executing Strong Robust Transmission Transparent Rate Base Growth Investment Pipeline Funding Plan Cleaner 4-6% Annual Investment-Grade Energy Transition Dividend Growth Credit Ratings WHY INVEST IN FORTIS? LOW-RISK Safe, Well-Run Utilities Strong Regulatory & Construct
Slide 14: Upcoming Events
UPCOMING EVENTS Expected Earnings Release Dates • Q3 2024 – November 5, 2024 • Q4 2024 – February 14, 2025 14 14
Slide 15: Q2 2024 Earnings Conference Call
Q2 2024 EARNINGS CONFERENCE CALL July 31, 2024
Slide 16: Non-U.S. GAAP Reconciliation
NON-U.S. GAAP RECONCILIATION YTD June YTD June ($MILLIONS, EXCEPT EPS) Q2 2024 Q2 2023 VARIANCE 2024 2023 VARIANCE Adjusted Net Earnings Net Earnings 331 294 37 790 731 59 Adjusting item: Unrealized loss on mark-to-market of derivatives at Aitken Creek(1) - 8 (8) - 10 (10) Adjusted Net Earnings 331
Slide 17: Second Quarter Results by Business Unit
SECOND QUARTER RESULTS BY BUSINESS UNIT Second Quarter Earnings Variance Analysis by Business Unit ($MILLIONS, EXCEPT WEIGHTED AVERAGE SHARES ADJUSTED ADJUSTED Q2 2024 ADJUSTMENT (1) Q2 2023 ADJUSTMENT (1) VARIANCE AND EPS) Q2 2024 Q2 2023 Regulated – Independent Electric Transmission ITC 139 - 139
Slide 18: Year-to-Date June Results by Business Unit
YEAR-TO-DATE JUNE RESULTS BY BUSINESS UNIT Year-to-Date June Earnings Variance Analysis by Business Unit ADJUSTED ADJUSTED ($MILLIONS, EXCEPT WEIGHTED AVERAGE SHARES YTD June YTD June ADJUSTMENT YTD June ADJUSTMENT YTD June VARIANCE AND EPS) 2024 (1) 2023 (1) 2024 2023 Regulated – Independent Electr
Slide 19: 2023-2028 Rate Base by Business Unit
2023-2028 RATE BASE BY BUSINESS UNIT Rate Base 5-YEAR CAGR to ($BILLIONS, EXCEPT FOR CAGR) 2023A 2024F 2025F 2026F 2027F 2028F 2028 Regulated – Independent Electric Transmission ITC(1) 11.5 12.0 12.7 13.4 14.4 15.6 7.0% Regulated – U.S. Electric & Gas UNS Energy 7.3 7.6 8.1 8.5 9.0 9.5 6.3% Central
Slide 20: 2024-2028 Capital Plan by Business Unit
2024-2028 CAPITAL PLAN BY BUSINESS UNIT Capital Plan 2024-2028 ($MILLIONS) 2024F 2025F 2026F 2027F 2028F TOTAL Regulated – Independent Electric Transmission ITC 1,252 1,474 1,449 1,477 1,537 7,189 Regulated – U.S. Electric & Gas UNS Energy 1,111 854 912 1,310 973 5,160 Central Hudson 408 421 437 421
Slide 21: Major Capital Projects
MAJOR CAPITAL PROJECTS 2024- Estimated Major Capital ($ Millions) 2028F Completion Date Projects ITC MISO LRTP(1) 1,477 Post-2028 ~20% UNS Roadrunner Reserve Battery Storage Project 345 2025 UNS Vail-to-Tortolita Transmission Project 286 2026 $25B UNS IRP Energy Resources(2) 417 2027 FortisBC Eagle
Slide 22: Sensitivity Exposure
SENSITIVITY EXPOSURE Foreign Exchange • Assumed forecast USD:CAD FX rate of 1.30 for 2024-2028 • 65% of regulated earnings(1) / 60% of capital plan in USD at U.S. & Caribbean utilities • +/- $0.05 change in USD:CAD ▪ EPS: ~$0.06 ▪ Five-year capital plan: $600M ROE & Equity Ratio ROE Equity +/- 25 bp
Slide 23: Ongoing Regulatory Proceedings
ONGOING REGULATORY PROCEEDINGS MISO Base ROE In 2022, the U.S. Court of Appeals for the D.C. Circuit vacated certain FERC orders that established the methodology used to calculate the MISO base ROE; matter dates back to complaints filed at FERC in 2013 and 2015; D.C. Circuit noted FERC did not adequ
Slide 24: Q2 2024 Sales Trends
Q2 2024 SALES TRENDS CHANGE IN Q2 2024 vs. Q2 2023 RETAIL ENERGY SALES TRENDS SALES • Peak load up 4% primarily due to warmer weather and N/A increased economic activity in Michigan • Increase primarily due to higher air conditioning load +4% associated with warmer temperatures; absent weather (1) i
Slide 25: Debt Maturities & Preference Share Dividends
DEBT MATURITIES & PREFERENCE SHARE DIVIDENDS Debt Maturities Preference Share Dividend Rate Resets 10-Year Debt Maturities 2024 $2.5 $2.0 billions $1.5 Series M - $600M December 1, 2024 $1.0 $0.5 Series H - $192M June 1, 2025 $- 2024F 2025F 2026F 2027F 2028F 2029F 2030F 2031F 2032F 2033F (1) Non-Reg
Slide 26: Strong Investment-Grade Credit Ratings
STRONG INVESTMENT-GRADE CREDIT RATINGS (1) COMPANY Fortis Inc. A-(2) Baa3 A (low) ITC Holdings Corp. A-(2) Baa2 n/a ITC Regulated Subsidiaries A A1 n/a TEP A- A3 n/a Central Hudson BBB+ Baa1 n/a FortisBC Energy n/a A3 A FortisBC Electric n/a Baa1 A (low) FortisAlberta A- Baa1 A (low) Newfoundland Po
Slide 27: Glossary
GLOSSARY ACC Arizona Corporation Commission FortisBC Electric FortisBC Inc., an indirect wholly owned subsidiary of Fortis, together with its subsidiaries Aitken Creek Aitken Creek Gas Storage ULC, formerly a direct 93.8%-owned subsidiary of FortisBC Holdings Inc. FortisBC Energy FortisBC Energy Inc