Fortis Inc.

Ladies and gentlemen, thank you for standing by. My name is Michelle, and I will be your conference operator today. Welcome to Fortis Q4 2020 conference call and webcast. During the call, all participants will be in a listen-only mode. There will be a question and answer session following the presentation. At that time, those with questions should press star, followed by the number one on their telephone. If at any time during the conference you need to reach out to an operator, please press star zero. At this time, I would like to turn the conference over to Stephanie Amimo.

Please go ahead, Ms. Amimo. Thanks, Michelle, and good morning, everyone, and welcome to Fortis' fourth quarter and annual 2020 results conference call. I'm joined by David Hutchins, President and CEO, Jocelyn Perry, Executive VP and CFO, other members of the senior management team, as well as CEOs from certain subsidiaries. Before we begin today's call, I want to remind you that the discussion will include forward-looking information. which is subject to the cautionary statement contained in the supporting slideshow. Actual results can differ materially from the forecast projections included in the forward-looking information presented today. All non-GAAP financial measures referenced in our prepared remarks are reconciled to the related U.S. GAAP financial measures in our 2020 annual MD&A. Also, unless otherwise specified, all financial information referenced is in Canadian dollars. With that, I will turn the call over to David.

Thank you and good morning, everyone. I'm happy to be hosting today's call from snowy St. John's as Fortis' new president and CEO following Barry Perry's retirement at the end of 2020. Before we get started today, I hope you're all staying safe and healthy as we continue to manage our way through this pandemic. As we look back on 2020, it proved to be a successful year at Fortis on many fronts, despite the challenges that the year presented. The value of our locally driven business model has never been more evident. Our teams across North America leaned on our shared values and each other to find the best solutions to navigate through the year. We continue to demonstrate our commitment to safety while delivering essential service to our customers with the high level of reliability that they have come to expect, even with the pandemic and record weather impacts at several of our subsidiaries. And we kept moving our business forward. We invested $4.2 billion in our systems, our largest annual capital spend to date, increasing our rate base by 8%. On the sustainability front, we announced a corporate-wide target to reduce our carbon emissions 75% by 2035 compared to 2019 levels. We also saw the constructive resolution of key regulatory proceedings, including TEP's recent general rate application which Jocelyn will speak to shortly. 2020 was a strong safety and reliability year for Fortis. In fact, we recorded the best safety performance in our history with safety incidents decreasing 25% over the prior three-year average. This was a significant accomplishment during a pandemic and the execution of our record capital investment plan. On the reliability front, we remain consistently in the top quartile relative to our Canadian and U.S. peers. This continued focus on reliability doesn't go unnoticed. Last month, two of our utilities, ITC and Central Hudson, were presented with the Edison Electric Institute Emergency Response Awards. ITC was recognized for its quick and safe restoration following the derecho windstorm in Iowa, And Central Hudson was recognized for its outstanding storm recovery performance following Tropical Storm Isaias. We are incredibly thankful for the crews and customer service teams, as this would not have been possible without their hard work and dedication. In 2020, our management teams were able to tap into a vast network of expertise across the Fortis Group to stay focused on what matters most to our employees, customers, and local communities. Approximately half of our 9,000 employees transitioned to working from home, while our field operations and critical onsite functions adapted operations to ensure we safely kept electricity and natural gas flowing to our customers. We supported our 3 million customers during the pandemic by offering flexible payment options, suspending disconnections, waiving late fees, and deferring scheduled rate increases. And in the communities we serve, We donated over $15 million throughout the year, including $5 million specifically for COVID-19 community support. As we have noted in the past, our sales are trending consistent with the industry. Generally speaking, we continue to experience higher residential sales tempered by lower commercial and industrial sales. In 2020, 83% of our revenues were from residential sales or protected by regulatory mechanisms. with UNS and our other electric segments having the most exposure to changes in sales. During the fourth quarter, retail sales at these segments increased by 1%. Favorable weather in Arizona contributed to higher sales at UNS, but excluding weather-related impacts, sales at UNS were still up 2% over the same timeframe in 2019. For our other electric segments, Sales were down 3% in the quarter, driven by reduced tourism in the Caribbean. During the year, our utilities invested $4.2 billion into our energy systems. This record level of capital was $400 million higher than 2019, increased rate base by 8%, and represents investments to support delivering a cleaner energy future. Notably, we invested $500 million during the year in the Oso Grande wind project in Arizona. This 250 megawatt wind generation facility is owned by Tucson Electric Power and will complement their existing solar generation portfolio. Commissioning is expected to be completed in the first half of 2021. In 2020, we established a corporate-wide carbon emissions reduction target of 75% by 2035. All of our utilities will contribute to the corporate-wide target, with the majority being underpinned by TEP's integrated resource plan. This plan calls for an additional 2,400 megawatts of wind and solar and 1,400 megawatts of energy storage to support the closure of all of TEP's coal generation assets by 2032. TEP alone will almost quadruple the current renewable energy generation capacity of Fortis by 2035. Additionally, CUC's integrated resource plan calls for adding 170 to 200 megawatts of solar. By 2035, we expect 99% of our assets will be dedicated to energy delivery or carbon-free generation. We remain focused on continuously improving our already highly ranked ESG profile. From a governance perspective, we are consistently recognized for our practices that are grounded in local leadership and independent board oversight. In 2020, we launched our corporate-wide inclusion and diversity council, signed the Black North Initiative, and continued our focus on gender diversity. Today, 60% of our utilities have either a female CEO or board chair, and women represent 40% of the Fortis board. Turning to slide 11, This past September, we rolled out our new $19.6 billion five-year capital plan, reflecting approximately $4 billion of annual investment in our utilities. Virtually all of our planned investments are regulated and consist of a diverse mix of highly executable, low-risk projects needed to maintain and upgrade our energy infrastructure. The capital plan is expected to grow rate-based from $30.5 billion in 2020 to over $40 billion in 2025, an increase of $10 billion or nearly one-third. This yields a five-year compound annual growth rate of approximately 6%. Within our portfolio of utilities, there are several opportunities to expand and extend investments across our businesses, including connecting renewable energy resources to the grid, adding LNG infrastructure, increasing investments in energy efficiency, and expanding low carbon transportation. Additionally, the Biden administration has proposed a sustainable infrastructure and equitable clean energy plan calling for net zero emissions in the U.S. by 2050 and carbon free power from the electricity sector by 2035. This could accelerate capital investments at our U.S. utilities through transmission interconnections of renewables at ITC, clean generation and energy storage in Arizona, and electric vehicle infrastructure in the nine US states we serve today. In the fourth quarter, we increased our quarterly dividend by 5.8%. This marked 47 consecutive years of dividend increases. With our low risk energy delivery business and strong growth outlook, we remain confident in our ability to execute on our 6% average annual dividend growth guidance through 2025. I will now turn the call over to Jocelyn for an update on our fourth quarter and annual financial results.