FTS - Fortis Inc. Releases Third Quarter 2023 Results | Benzinga

This news release constitutes a "Designated News Release" incorporated by reference in the prospectus supplement dated September 19, 2023 to Fortis' short form base shelf prospectus dated November 21, 2022.

ST. JOHN'S, Newfoundland and Labrador, Oct. 27, 2023 (GLOBE NEWSWIRE) -- Fortis Inc. ("Fortis" or the "Corporation") (NYSE:FTS), a well-diversified leader in the North American regulated electric and gas utility industry, released its third quarter results¹.

Highlights

• Third quarter net earnings of $394 million or $0.81 per common share, up from $326 million or $0.68 per common share in 2022
• Adjusted net earnings per common share² of $0.84, up from $0.71 in the third quarter of 2022
• Released 2024-2028 capital plan of $25 billion, representing 6.3% average annualized rate base growth
• Capital expenditures² of $3.0 billion through September; $4.3 billion annual capital plan on track
• Key regulatory decisions received in Western Canada and Arizona

"The fundamentals of our North American regulated energy delivery businesses remain resilient despite volatility in the macroenvironment in which we operate," said David Hutchens, President and Chief Executive Officer of Fortis Inc. "We have delivered strong results for the third quarter, driven by the continued execution of our annual capital plan and the completion of key regulatory proceedings in Arizona and British Columbia."

Net Earnings
The Corporation reported net earnings attributable to common equity shareholders ("Net Earnings") of $394 million for the third quarter, or $0.81 per common share, compared to $326 million, or $0.68 per common share for the third quarter of 2022. The increase reflects the new cost of capital parameters approved for the FortisBC utilities in September 2023 retroactive to January 1, 2023. Also contributing to earnings was higher retail revenue in Arizona, due to warmer weather and new customer rates at Tucson Electric Power ("TEP") effective September 1, 2023, and rate base growth across our utilities. A higher U.S.-to-Canadian dollar foreign exchange rate and higher earnings at Aitken Creek, reflecting market conditions, also favourably impacted earnings. Earnings were tempered by lower long-term wholesale and transmission revenue, as well as higher operating and corporate finance costs. In addition, earnings per share for the quarter reflects an increase in the weighted average number of common shares outstanding, largely associated with the Corporation's dividend reinvestment plan.

On a year-to-date basis, Net Earnings were $1.1 billion, or $2.32 per common share, an increase of $165 million, or $0.31 per common share compared to the same period in 2022. The increase reflects the same factors discussed for the quarter except that an increase in the market value of certain investments that support retirement benefits, and lower depreciation expense at UNS Energy associated with the retirement of the San Juan generating station in 2022, also favourably impacted results.

Adjusted Net Earnings²
Adjusted net earnings attributable to common equity shareholders ("Adjusted Net Earnings") of $411 million for the third quarter, or $0.84 per common share, were $70 million, or $0.13 per common share higher than the same period in 2022. On a year-to-date basis, Adjusted Net Earnings were $1.2 billion, or $2.37 per common share, an increase of $170 million, or $0.31 per common share compared to the same period in 2022. The increase for the quarter and year-to-date periods reflect the same factors discussed for Net Earnings.

In May 2023, FortisBC Holdings Inc. entered into a definitive share purchase and sale agreement with a subsidiary of Enbridge Inc. to sell its Aitken Creek business for approximately $400 million, subject to customary closing conditions and adjustments. In October 2023, the British Columbia Utilities Commission ("BCUC") approved the sale, satisfying all regulatory requirements. The sale is expected to close in the fourth quarter of 2023 with a March 31, 2023 effective date. Fortis continues to recognize earnings associated with Aitken Creek, post the effective date of the pending sale, in accordance with U.S. GAAP as the transaction has not yet closed. For the third quarter of 2023, and the six-month period since March 31, 2023, Aitken Creek contributed $13 million and $24 million, respectively, to Adjusted Net Earnings. Upon close of the transaction, management expects to exclude the gain to be recorded on the sale, as well as the earnings recognized since the March 31^st effective date, in arriving at Adjusted Net Earnings and adjusted net earnings per share.

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