Fortis Inc. ("Fortis" or the "Corporation") (TSX/NYSE: FTS), a
well-diversified leader in the North American regulated electric
and gas utility industry, released its 2024-2028 outlook1.
Highlights
- 2024-2028 capital plan of $25.0
billion, representing 6.3% rate base growth; up $2.7 billion from
2023-2027 five-year plan
- Growth largely driven by
investments in transmission in the U.S. Midwest and resource
transition plan in Arizona
- Fourth quarter common share
dividend increasing by 4.4%, will mark 50 years of consecutive
increases in dividends paid
- Annual dividend growth guidance of
4-6% extended to 2028
"Our Board of Directors declared a fourth
quarter dividend representing a 4.4% increase that will mark 50
years of consecutive increases in dividends paid," said David
Hutchens, President and CEO, Fortis Inc. "This makes Fortis one of
only two companies listed on the Toronto Stock Exchange to reach
this significant milestone."
"Our sustainable regulated growth strategy is
focused on delivering cleaner energy that remains affordable and
reliable for our customers while supporting annual dividend growth
of 4-6% through 2028,” said Mr. Hutchens.
New Five-Year Capital PlanToday
the Corporation announced its new 2024-2028 capital plan of $25.0
billion, the largest in the Corporation’s history, and
$2.7 billion higher than the previous five-year plan. The
increase is supported by the Inflation Reduction Act of 2022, and
largely reflects regional transmission projects at ITC associated
with tranche one of the Midcontinent Independent System Operator
long-range transmission plan, as well as investments in Arizona to
support Tucson Electric Power’s exit from coal. Investments
supporting system adaptation and resiliency, customer growth and
economic development are also driving growth across our entire
footprint.
The five-year capital plan is low risk and
highly executable, with nearly 100% regulated investments and 18%
relating to major capital projects. Approximately 27% of the
five-year capital plan is allocated to cleaner energy investments
focused on connecting renewables to the grid, renewable and storage
investments in Arizona and the Caribbean, and cleaner fuel
solutions in British Columbia. The Corporation's $25.0 billion
five-year capital plan is expected to increase midyear rate base
from $36.8 billion in 2023 to $49.4 billion by 2028,
translating into a five-year compound annual growth rate of 6.3% on
a constant foreign exchange basis. The plan maintains a focus on
customer affordability, while ensuring reliable and resilient
energy delivery service as the Corporation transitions to a cleaner
energy future.
The five-year capital plan is expected to be
funded primarily by cash from operations and regulated debt. Common
equity proceeds are expected to be sourced from the Corporation's
dividend reinvestment plan and an at-the-market common equity
program.
Beyond the five-year capital plan, additional
opportunities to expand and extend growth include: further
expansion of the electric transmission grid in the U.S. to
facilitate the interconnection of cleaner energy, including
infrastructure investments associated with the Inflation Reduction
Act of 2022 and the Midcontinent Independent System Operator, Inc.
long-range transmission plan; climate adaptation and grid
resiliency investments; renewable gas solutions and liquefied
natural gas infrastructure in British Columbia; and the
acceleration of cleaner energy infrastructure investments across
our jurisdictions._________________________
1 All information referenced is presented
in Canadian dollars unless otherwise specified.
Dividends and Dividend
Guidance
The Board of Directors of Fortis declared a
common share dividend of $0.59 per share on the issued and
outstanding fully paid common shares of the Corporation,
representing an approximate 4.4% increase in the quarterly
dividend, payable on December 1, 2023 to the common
Shareholders of Record at the close of business on November 17,
2023, marking 50 consecutive years of increased dividends.
- $0.3063 per share on the First
Preference Shares, Series "F" of the Corporation, payable on
December 1, 2023 to the Shareholders of Record at the close of
business on November 17, 2023;
- $0.3826875 per share on the First
Preference Shares, Series "G" of the Corporation, payable on
December 1, 2023 to the Shareholders of Record at the close of
business on November 17, 2023;
- $0.11469 per share on the First
Preference Shares, Series "H" of the Corporation, payable on
December 1, 2023 to the Shareholders of Record at the close of
business on November 17, 2023;
- $0.406571 per share on the First
Preference Shares, Series "I" of the Corporation, payable on
December 1, 2023 to the Shareholders of Record at the close of
business on November 17, 2023;
- $0.2969 per share on the First
Preference Shares, Series "J" of the Corporation, payable on
December 1, 2023 to the Shareholders of Record at the close of
business on November 17, 2023;
- $0.2455625 per share on the First
Preference Shares, Series "K" of the Corporation, payable on
December 1, 2023 to the Shareholders of Record at the close of
business on November 17, 2023;
- $0.2445625 per share on the First
Preference Shares, Series "M" of the Corporation, payable on
December 1, 2023 to the Shareholders of Record at the close of
business on November 17, 2023; and
- $0.59 per share on the Common
Shares of the Corporation, payable on December 1, 2023 to the
Shareholders of Record at the close of business on November 17,
2023.
The Corporation has designated the common share
dividend and preference share dividends as eligible dividends for
federal and provincial dividend tax credit purposes. All amounts
are given in Canadian dollars unless otherwise indicated.
Fortis expects its long-term growth in rate base
will drive earnings that support annual dividend growth. The
Corporation’s annual dividend growth guidance of 4-6% has been
extended one year through 2028 and is premised on the assumptions
listed under "Forward-Looking Information".
About Fortis
Fortis is a well-diversified leader in the North
American regulated electric and gas utility industry with 2022
revenue of $11.0 billion and total assets of $64 billion as at June
30, 2023. The Corporation's 9,200 employees serve utility
customers in five Canadian provinces, 10 U.S. states and three
Caribbean countries.
Fortis shares are listed on the TSX and NYSE and
trade under the symbol FTS. Additional information can be accessed
at www.fortisinc.com, www.sedarplus.ca, or
www.sec.gov.Forward-Looking Information
Fortis includes forward-looking information in
this media release 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 "forward-looking information").
Forward-looking information reflects expectations of Fortis
management regarding future growth, results of operations,
performance and business prospects and opportunities. Wherever
possible, words such as anticipates, believes, budgets, could,
estimates, expects, forecasts, intends, may, might, plans,
projects, schedule, should, target, will, would and the negative of
these terms and other similar terminology or expressions have been
used to identify the forward-looking information, which includes,
without limitation: forecast capital expenditures for 2024-2028,
including cleaner energy investments; forecast rate base and rate
base growth through 2028; targeted annual dividend growth through
2028; the expectation that the funding plan will support
investment-grade credit ratings and will provide flexibility as the
Corporation pursues incremental growth opportunities; the impact of
the Inflation Reduction Act on the capital plan; the nature, timing
and benefits of certain capital projects, including ITC LRTP
Tranche 1 and further interconnection investments, generation
investments in Arizona to support the TEP's Integrated Resource
Plan, climate adaptation and grid resiliency investments, and
customer growth and economic development; the expectation to exit
coal by 2032; the expected sources of funding for the capital plan;
the expectation that long-term growth in rate base will drive
earnings, support dividend growth and reduce the dividend payout
ratio over time to be in line with historical levels; and the
expectation that the dividend growth guidance will provide
flexibility to fund more capital with internally generated
funds.
Forward-looking information involves significant
risks, uncertainties and assumptions. Certain material factors or
assumptions have been applied in drawing the conclusions contained
in the forward-looking information, including, without limitation:
no material impact from volatility in energy prices, global supply
chain constraints and persistent inflation; reasonable outcomes for
regulatory proceedings and the expectation of regulatory stability;
the successful execution of the five-year capital plan; no material
capital project and financing cost overrun; sufficient human
resources to deliver service and execute the capital plan; the
realization of additional opportunities; no material changes in the
assumed U.S. dollar to Canadian dollar exchange rate; no
significant variability in interest rates; and the Board exercising
its discretion to declare dividends, taking into account the
business performance and financial condition of the Corporation.
Fortis cautions readers that a number of factors could cause actual
results, performance or achievements to differ materially from the
results discussed or implied in the forward-looking information.
For additional information with respect to certain risk factors,
reference should be made to the continuous disclosure materials
filed from time to time by the Corporation with Canadian securities
regulatory authorities and the Securities and Exchange Commission.
All forward-looking information herein is given as of the date of
this media release. Fortis disclaims any intention or obligation to
update or revise any forward-looking information, whether as a
result of new information, future events or otherwise.
Investor Day Webcast to Discuss New
Five-Year Outlook
A webcast will be held today, September 19,
2023, with a formal presentation scheduled from 10:00 a.m. to 12:00
p.m. NDT (8:30 a.m. to 10:30 a.m. EDT). David Hutchens,
President and Chief Executive Officer and Jocelyn Perry, Executive
Vice President and Chief Financial Officer and executives from
certain subsidiaries will provide an update on operations, recent
developments and the strategic outlook for 2024 to 2028.
Shareholders, analysts, members of the media and
other interested parties are invited to participate in the
webcast. A live and archived webcast of the event will be available
on the Corporation's website at www.fortisinc.com.
For more information, please contact:
Investor Enquiries: |
Media Enquiries: |
Ms. Stephanie Amaimo |
Ms. Karen McCarthy |
Vice President, Investor
Relations |
Vice President, Communications
& Government Relations |
Fortis Inc. |
Fortis Inc. |
248.946.3572 |
709.737.5323 |
investorrelations@fortisinc.com |
media@fortisinc.com |
A .pdf version of this press release is available
at: http://ml.globenewswire.com/Resource/Download/cd1ba56b-e32d-4cfa-aa65-4279da471af8
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