![]() |
Fortis Inc. Reports 2020 Results | ![]() |
Friday, 12. February 2021 12:00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
ST. JOHN'S, Newfoundland and Labrador, Feb. 12, 2021 (GLOBE NEWSWIRE) -- 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 2020 fourth quarter and annual financial results1 today. Highlights
"2020 proved to be a successful year on many fronts. Despite the challenges presented by the pandemic, our 9,000 dedicated employees continued to reliably provide essential energy service to our customers and executed our largest annual capital program while achieving our best safety performance on record," said David Hutchens, President and Chief Executive Officer, Fortis. "Our teams also worked with their regulators and communities to help customers who have been most impacted by the pandemic, demonstrating our core values and the benefits of our local business model." Net Earnings Excluding these one-time items, earnings grew by $94 million in 2020 reflecting: (i) rate base growth of 8.2%; (ii) increased retail electricity sales at UNS Energy, driven largely by weather; and (iii) higher earnings from Belize, mainly from increased hydroelectric production. Earnings were also favourably impacted by mark-to-market accounting of natural gas derivatives at Aitken Creek which resulted in unrealized losses of $15 million in 2019. Fortis delivered this growth despite: (i) the delay in Tucson Electric Power's ("TEP") general rate application, resulting in approximately $1 billion of rate base not reflected in customer rates in 2020; and (ii) the impact of the COVID-19 pandemic, reflecting lower sales in the Caribbean and higher net operational expenses, including increased credit loss expense, largely at Central Hudson and UNS Energy. For the fourth quarter of 2020, net earnings attributable to common equity shareholders were $331 million, compared to $346 million for the same period in 2019. The decrease was due to the reversal of prior period liabilities of $83 million in the fourth quarter of 2019 associated with the November 2019 FERC base ROE decision. Excluding this one-time item, quarterly earnings grew by $68 million reflecting: (i) the timing of earnings at ITC associated with the implementation of the November 2019 base ROE decision; (ii) rate base growth; (iii) the impact of mark-to-market accounting of natural gas derivatives at Aitken Creek; and (iv) higher earnings from Belize, mainly from increased hydroelectric production.
Earnings per common share decreased by $0.06 and $1.19 for the fourth quarter and annual periods, respectively, as compared to 2019. In addition to the above-noted items, the decrease in earnings per common share also reflected a higher weighted average number of common shares outstanding, largely associated with the Corporation's $1.2 billion common equity issuance in the fourth quarter of 2019. The impact was a decrease in earnings per common share for the fourth quarter and annual periods of $0.03 and $0.15, respectively. The common equity issuance and the Waneta Expansion disposition generated a significant portion of the equity funding required to execute our five-year capital plan, and strengthened the Corporation's balance sheet, liquidity and credit metrics. As at December 31, 2020, total consolidated credit facilities were $5.6 billion with $4.3 billion unutilized. Adjusted Net Earnings On an adjusted basis, for the fourth quarter of 2020, net earnings attributable to common equity shareholders were $320 million, or $0.69 per common share, an increase of $43 million, or $0.07 per common share compared to the fourth quarter of 2019. The increase in adjusted quarterly earnings was due to the timing of earnings at ITC associated with the implementation of the November 2019 base ROE decision, rate base growth and higher earnings from Belize, partially offset by a higher weighted average number of common shares outstanding. COVID-19 Pandemic In addition to the efforts across the Fortis group to control costs during the pandemic, the Corporation's utilities have regulatory mechanisms that help stabilize cash flow and earnings which support the continued delivery of reliable service. Approximately 83% of the Corporation's revenues are either protected by regulatory mechanisms or are derived from residential sales which have generally increased as a result of work-from-home practices. Excluding the impact of the delay in TEP's general rate application, the COVID-19 pandemic did not have a material impact on the Corporation's capital expenditures, revenue or earnings in 2020. The financial impact to Fortis approximated $0.05 per common share, reflecting reduced sales in the Caribbean and higher net operational expenses, including an increase in credit loss expense, largely at Central Hudson and UNS Energy. Regulatory Proceedings In December 2020, the Arizona Corporation Commission issued a rate order on TEP's general rate application. The order established new customer rates effective January 1, 2021, including: (i) an increase in non-fuel revenue of $77 million (US$58 million); (ii) an allowed ROE of 9.15%, with a 0.20% return on the fair value increment and a capital structure of 53% common equity; and (iii) a rate base of approximately $3.5 billion (US$2.7 billion). The approved rate base includes the Gila River natural gas generation station Unit 2 and ten natural gas reciprocating internal combustion engine units that will help TEP transition its generation mix to more than 70% renewable by 2035. In October 2020, the Alberta Utilities Commission ("AUC") concluded the 2021 generic cost of capital proceeding and set FortisAlberta's ROE for 2021 at 8.50% using a capital structure of 37% common equity, consistent with 2020. In November 2020, the AUC issued a decision reversing proposed changes to the Alberta Electric System Operator's customer contribution policy resulting in FortisAlberta retaining approximately $400 million of unamortized customer contributions in its rate base. Capital Expenditures The Corporation's five-year capital plan for 2021 through 2025 is $19.6 billion, up $0.8 billion from the prior five-year plan. The increase is largely due to: (i) two new major capital projects at FortisBC Energy; (ii) additional investment in information technology systems and storm hardening at Central Hudson; and (iii) interconnections and system rebuilds providing additional capacity and other improvements at ITC. Capital expenditures are expected to be funded primarily with cash from operations, debt issued at the regulated utilities and the Corporation's dividend reinvestment plan. Focus on Sustainability "Sustainability remains front and center across our utilities," said David Hutchens. "With the strength of our low-risk growth outlook and the talent of our North American team, we are positioned well to deliver a cleaner energy future." Outlook The Corporation's five-year capital plan is expected to increase rate base from $30.5 billion in 2020 to $36.4 billion by 2023 and $40.3 billion by 2025, translating into three- and five-year compound annual growth rates3 of approximately 6.5% and 6.0%, respectively. Beyond the five-year capital plan, Fortis continues to pursue additional energy infrastructure opportunities, including: further expansion of liquefied natural gas infrastructure in British Columbia; the fully permitted, cross-border, Lake Erie Connector electric transmission project in Ontario; and the acceleration of cleaner energy infrastructure investments across our jurisdictions. Fortis expects long-term growth in rate base will support earnings and dividend growth. The Corporation is targeting average annual dividend growth of approximately 6% through 2025. This dividend growth guidance is premised on the assumptions listed under "Forward-Looking Information" below, including no material impact from the COVID-19 pandemic, the expectation of reasonable outcomes for regulatory proceedings and the successful execution of the five-year capital plan. Non-US GAAP Reconciliation
About Fortis Forward-Looking Information 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 the COVID-19 pandemic; 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; the impact of fluctuations in foreign exchange; 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.
Additional Information A .pdf version of this press release is available at: http://ml.globenewswire.com/Resource/Download/0a679b0c-ae4e-47f3-ab92-6ad2d637f4cb For more information, please contact:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Links: Fortis Inc. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Author: Copyright GlobeNewswire, Inc. 2016. All rights reserved. You can register yourself on the website to receive press releases directly via e-mail to your own e-mail account. |