Fortis(US:FTS)2025-02-14 17:40Financial Data and Key Metrics Changes - Fortis reported a record capital investment of CAD 5.2 billion in 2024, with adjusted EPS growth of approximately 6% [7][26] - The reported EPS for Q4 2024 was CAD 0.79, a CAD 0.01 increase from Q4 2023, while adjusted EPS was CAD 0.83, up CAD 0.11 from the previous year [23][24] - For the full year, reported EPS was CAD 3.24, an increase of CAD 0.14, and adjusted EPS was CAD 3.28, up CAD 0.19 from 2023 [26] Business Line Data and Key Metrics Changes - ITC, the largest utility, achieved a 7% adjusted earnings growth, driven by CAD 1.5 billion in capital investments [27] - U.S. electric and gas utilities increased EPS by CAD 0.12, with UNS Energy contributing CAD 0.08 due to new customer rates and favorable margins [28] - Western Canadian Utilities saw a CAD 0.09 increase in EPS, primarily from rate-based growth [29] Market Data and Key Metrics Changes - The five-year capital plan of CAD 26 billion is on track, with a projected rate base increase of approximately CAD 14 billion to CAD 53 billion by 2029 [12][13] - The company expects average annual rate base growth of 6.5% over the next five years [13] Company Strategy and Development Direction - Fortis remains focused on a regulated growth strategy, with annual dividend growth guidance of 4% to 6% through 2029 [22][42] - The company is committed to reducing climate impacts, having reduced Scope 1 emissions by 34% compared to 2019 levels [8] - Investments are being made to enhance infrastructure and support customer growth across all utilities, particularly in transmission [12][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering stable and compelling returns, with a one-year total shareholder return of approximately 14% [11] - The company is optimistic about future growth opportunities, particularly in Arizona, where significant demand increases are anticipated [15][21] - Management acknowledged the potential impacts of tariffs on the economy and customers but does not foresee immediate material impacts [40] Other Important Information - Fortis was ranked number one in corporate governance among 215 companies in the S&P/TSX Composite Index [8] - The company issued over CAD 3 billion in debt to fund its capital program in 2024 [33] Q&A Session Summary Question: What is the game plan for new rates in Arizona? - Management confirmed plans to file for a formula rate to ensure timely recovery of investments [49] Question: Can projects in BC be accelerated due to favorable permitting? - Management indicated that while existing projects are driven by demand, a streamlined permitting process could improve timelines [54] Question: What are the priorities of the new FERC Chair? - Management noted it is early to determine specific priorities but sees potential for positive growth in the sector [61] Question: What prompted the joint proposal for new nuclear in Arizona? - Management stated it is a preliminary exploration driven by load growth and the need for additional generation [66] Question: How will the formula rates impact TEP? - Management aims to develop a formula that reduces lag and allows for consistent returns [122] Question: What is the outlook for the UNS Gas rate case? - Management is in early stages and expects to learn from the UNS Gas case for TEP's future filings [78] Question: How will the MISO investments impact financing? - Management is optimistic about the MISO opportunities but maintains a cautious approach to dividend growth [110]