If You Invested in Fortis (FTS)

Fortis Inc. (FTS) is a diversified company in the North American regulated electric and gas utility industry. According to its public disclosures, Fortis operates through a portfolio of regulated utilities that provide electricity and gas service to customers in multiple jurisdictions. The corporation’s utilities serve customers in five Canadian provinces, ten U.S. states and the Caribbean, reflecting a broad geographic footprint across North America and certain Caribbean markets.

Fortis is described in its news releases as a diversified leader in this regulated utility space. Its operations include electric and gas utilities, as well as electric transmission businesses. The company’s subsidiary ITC operates electric transmission in several U.S. states, with a substantial network of high-voltage transmission lines. Fortis also reports that its employees serve utility customers across its service territories, highlighting the scale of its utility operations.

Business model and operations

Fortis characterizes itself as a well-diversified regulated utility business. Its activities are focused on regulated electric and gas utilities, including transmission and distribution. The company’s capital plans, as described in its news releases, emphasize investments in regulated assets such as transmission projects, distribution infrastructure and related utility systems. Fortis has also referenced investments in projects like pipeline infrastructure and battery energy storage through its utility subsidiaries.

The corporation has communicated multi-year capital plans in its public updates. These plans include significant capital expenditures across its utilities, with a focus on rate base growth. Fortis links this rate base growth to its long-term earnings profile and to its dividend guidance. The company has also indicated that it expects to fund its capital plans primarily through cash from operations and regulated debt, with additional common equity proceeds associated with its dividend reinvestment plan.

Geographic footprint and segments

Fortis reports that its utilities serve customers in five Canadian provinces and ten U.S. states. It also notes operations in the Caribbean, and has disclosed dispositions of certain Caribbean assets. For example, the corporation has reported the sale of its utility in Turks and Caicos and its assets in Belize, including non-regulated hydro generation facilities. These dispositions were described as supporting its funding plans and balance sheet strength while maintaining a focus on regulated utility growth.

The company’s filings and news releases reference several key operating entities, including ITC Holdings Corp., UNS Energy Corporation, Central Hudson Gas & Electric Corporation, FortisBC Energy Inc., FortisBC Inc., FortisAlberta Inc., and other electric operations. These entities reflect Fortis’ mix of electric transmission, electric distribution and gas utility businesses. Fortis has also referenced interests in projects such as the Eagle Mountain Pipeline project and the Wataynikaneyap Transmission Power project through its subsidiaries and partnerships.

Regulated utility focus and capital planning

Fortis emphasizes a focus on low-risk, regulated utility growth. In its public communications, the corporation has outlined multi-year capital plans measured in the tens of billions of dollars over five-year periods. These plans include higher transmission investments at ITC, transmission and distribution investments at UNS Energy, and customer growth and reliability investments across its utilities. Fortis has also referred to planned generation investments in certain jurisdictions, including projects related to natural gas conversion at an existing generating station and battery energy storage projects.

The company’s capital plans are closely tied to regulatory processes in its jurisdictions. Fortis regularly reports on rate applications, rate frameworks and regulatory decisions affecting its utilities. Examples include general rate applications at Tucson Electric Power and Central Hudson, as well as a multi-year rate framework decision for FortisBC utilities. These regulatory outcomes influence allowed returns on equity, capital structures and mechanisms such as formulaic rate adjustments and earnings sharing.

Financial reporting and listings

Fortis files annual and interim financial statements, management discussion and analysis, and other disclosure documents with Canadian securities regulators and with the U.S. Securities and Exchange Commission. As a foreign private issuer, it files reports on Form 40-F and Form 6-K, and has referenced several registration statements, including Form F-3 and Form F-10, as well as multiple Form S-8 filings related to share-based plans. The company has also filed an annual information form in Canada.

Fortis shares are listed on the Toronto Stock Exchange (TSX) and the New York Stock Exchange (NYSE) under the symbol FTS. The company has noted that additional information is available through Canadian and U.S. securities regulatory websites. It has also highlighted the use of non-U.S. GAAP financial measures in its reporting, explaining that management and external stakeholders use these measures to evaluate performance.

Dividends and shareholder communications

Fortis regularly announces dividends on its common shares and various series of first preference shares. The corporation’s Board of Directors has declared dividends payable on common and preference shares, and has designated these as eligible dividends for federal and provincial dividend tax credit purposes in Canada. Fortis has also communicated dividend growth guidance, expressing expectations for annual dividend growth within a specified range over multi-year periods, linked to anticipated rate base growth.

The company engages with shareholders through annual meetings, teleconferences and webcasts associated with quarterly results and capital outlooks. It has reported shareholder voting results on matters such as the election of directors, appointment of auditors and advisory votes on executive compensation. Fortis also provides investor presentations in connection with its earnings conference calls, which are furnished as exhibits to its Form 6-K filings.

Sustainability and greenhouse gas emissions

Fortis has discussed sustainability and greenhouse gas (GHG) emissions reduction in its public disclosures. The corporation reports that it has achieved a reduction in corporate-wide direct GHG emissions from a 2019 base year and has set targets for further reductions by 2030 and 2035, along with a longer-term net-zero direct GHG emissions target for 2050. Fortis has also indicated that it has released sustainability update reports containing key sustainability performance indicators.

The company notes that its ability to achieve interim GHG reduction targets may be influenced by factors such as load growth, customer affordability, the development of clean energy technology and energy policies at various government levels. It has also stated that it remains committed to a coal-free generation mix by a specified year and to its net-zero goal, while acknowledging that interim targets may require reassessment as energy resource planning progresses.

Risk factors and forward-looking information

In its news releases and filings, Fortis includes forward-looking information and cautions that such information involves significant risks, uncertainties and assumptions. The company identifies factors and assumptions underlying its outlook, including expectations regarding regulatory stability, execution of capital plans, availability of energy supplies, interest rates, foreign exchange rates and other macroeconomic conditions. It also references risk factors described in its continuous disclosure materials filed with Canadian securities regulators and the SEC.

Fortis states that forward-looking information is given as of the date of the relevant release and that it disclaims any intention or obligation to update or revise such information except as required by law. This context is important for investors reviewing the company’s stated capital plans, rate base growth expectations, dividend guidance and emissions reduction targets.

Corporate governance and codes

Fortis has filed a Code of Conduct as an exhibit to a Form 6-K, indicating the existence of corporate policies governing conduct. The company also reports on corporate governance matters through its annual meeting materials and information circulars, including the election of directors and advisory votes on executive compensation. These disclosures provide insight into the company’s governance framework and shareholder engagement practices.