(Province of other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification Number) |
(Title of each class) | (Trading Symbol(s) | (Name of exchange on which registered) |
Exhibit | Description | ||||
101.INS | XBRL Instance | ||||
101.SCH | XBRL Taxonomy Extension Schema | ||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | ||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase | ||||
101.LAB | XBRL Taxonomy Extension Label Linkbase | ||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase |
FORTIS INC. | ||||||||
/s/ Jocelyn H. Perry | ||||||||
Jocelyn H. Perry Executive Vice President, Chief Financial Officer | ||||||||
Date: February 12, 2021 |
TABLE OF CONTENTS | ||||||||||||||
Forward-Looking Information | Sustainability | |||||||||||||
Glossary | Social and Environmental Policies | |||||||||||||
Corporate Structure | Sustainability Regulation and Environmental | |||||||||||||
Name and Incorporation | Contingencies | |||||||||||||
Inter-Corporate Relationships | Capital Structure and Dividends | |||||||||||||
General Development of the Business | Description of Capital Structure | |||||||||||||
Overview | Dividends and Distributions | |||||||||||||
Three-Year History | Debt Covenant Restrictions on Dividend | |||||||||||||
Outlook | Distributions | |||||||||||||
Description of the Business | Credit Ratings | |||||||||||||
Regulated Utilities | Directors and Officers | |||||||||||||
ITC | Audit Committee | |||||||||||||
UNS Energy | Members | |||||||||||||
Central Hudson | Education and Experience | |||||||||||||
FortisBC Energy | Pre-Approval Policies and Procedures | |||||||||||||
FortisAlberta | External Auditor Service Fees | |||||||||||||
FortisBC Electric | Transfer Agent and Registrar | |||||||||||||
Other Electric | Interests of Experts | |||||||||||||
Non-Regulated | Additional Information | |||||||||||||
Energy Infrastructure | Exhibit A: Summary of Terms and Conditions | |||||||||||||
Corporate and Other | of Authorized Securities | |||||||||||||
Human Resources | Exhibit B: Market for Securities | |||||||||||||
Legal Proceedings and Regulatory Actions | Exhibit C: Audit Committee Mandate | |||||||||||||
Risk Factors | Exhibit D: Material Contracts | |||||||||||||
ANNUAL INFORMATION FORM | 1 | December 31, 2020 |
ANNUAL INFORMATION FORM | 2 | December 31, 2020 |
ANNUAL INFORMATION FORM | 3 | December 31, 2020 |
ANNUAL INFORMATION FORM | 4 | December 31, 2020 |
Subsidiary | Jurisdiction of Incorporation | Votes attaching to voting securities beneficially owned, controlled or directed by the Corporation (%) | ||||||
ITC (1) | Michigan, United States | 80.1 | ||||||
UNS Energy (2) | Arizona, United States | 100 | ||||||
Central Hudson (3) | New York, United States | 100 | ||||||
FortisBC Energy (4) | British Columbia, Canada | 100 | ||||||
FortisAlberta (5) | Alberta, Canada | 100 | ||||||
Newfoundland Power (6) | Newfoundland and Labrador, Canada | 100 |
ANNUAL INFORMATION FORM | 5 | December 31, 2020 |
ANNUAL INFORMATION FORM | 6 | December 31, 2020 |
ANNUAL INFORMATION FORM | 7 | December 31, 2020 |
ANNUAL INFORMATION FORM | 8 | December 31, 2020 |
Customers | Peak Demand (1) | Electric T&D Lines (circuit km) | Gas T&D Lines (km) | Generating Capacity (MW) | Revenue ($ millions) | GWh Sales | Gas Volumes (PJ) | Employees | |||||||||||||||||||||||||||
Regulated Utilities | |||||||||||||||||||||||||||||||||||
ITC | — | 23,364 | MW | 25,800 | — | — | 1,744 | — | — | 699 | |||||||||||||||||||||||||
UNS Energy | 694,000 | 3,309 | MW | 22,700 | 5,100 | 3,233 | 2,260 | 16,763 | 15 | 2,057 | |||||||||||||||||||||||||
107 | TJ | ||||||||||||||||||||||||||||||||||
Central Hudson | 380,000 | 1,142 | MW | 15,100 | 2,400 | 65 | 953 | 4,969 | 23 | 1,061 | |||||||||||||||||||||||||
121 | TJ | ||||||||||||||||||||||||||||||||||
FortisBC Energy | 1,048,000 | 1,555 | TJ | — | 49,500 | — | 1,385 | — | 219 | 1,954 | |||||||||||||||||||||||||
FortisAlberta | 572,000 | 2,770 | MW | 91,000 | — | — | 596 | 16,092 | — | 1,085 | |||||||||||||||||||||||||
FortisBC Electric | 182,000 | 740 | MW | 7,300 | — | 225 | 424 | 3,291 | — | 560 | |||||||||||||||||||||||||
Other Electric | |||||||||||||||||||||||||||||||||||
Newfoundland Power | 270,000 | 1,356 | MW | 12,500 | — | 143 | 717 | 5,729 | — | 613 | |||||||||||||||||||||||||
Maritime Electric | 84,000 | 287 | MW | 6,300 | — | 130 | 219 | 1,293 | — | 200 | |||||||||||||||||||||||||
FortisOntario | 67,000 | 258 | MW | 3,500 | — | 5 | 225 | 1,289 | — | 213 | |||||||||||||||||||||||||
Caribbean Utilities | 31,000 | 109 | MW | 800 | — | 161 | 243 | 644 | — | 228 | |||||||||||||||||||||||||
FortisTCI | 15,000 | 40 | MW | 700 | — | 91 | 81 | 220 | — | 168 | |||||||||||||||||||||||||
Non-Regulated | |||||||||||||||||||||||||||||||||||
Energy Infrastructure | — | — | — | — | 51 | 88 | 229 | — | 68 | ||||||||||||||||||||||||||
Corporate and Other | — | — | — | — | — | — | — | — | 55 | ||||||||||||||||||||||||||
Total | 3,343,000 | 33,375 | MW | 185,700 | 57,000 | 4,104 | 8,935 | 50,519 | 257 | 8,961 | |||||||||||||||||||||||||
1,783 | TJ |
ANNUAL INFORMATION FORM | 9 | December 31, 2020 |
Revenue (%) | ||||||||
2020 | 2019 | |||||||
Network revenues | 65.6 | 63.0 | ||||||
Regional cost-sharing revenues | 27.9 | 27.9 | ||||||
Point-to-point | 1.0 | 1.0 | ||||||
Scheduling, control and dispatch | 1.6 | 1.3 | ||||||
Recognition of ROE complaint liabilities (1) | 2.4 | 5.2 | ||||||
Other | 1.5 | 1.6 | ||||||
Total | 100.0 | 100.0 |
ANNUAL INFORMATION FORM | 10 | December 31, 2020 |
ANNUAL INFORMATION FORM | 11 | December 31, 2020 |
Revenue (%) | GWh Sales (%) | PJ Volumes (%) | ||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||
Residential | 40.9 | 36.5 | 30.9 | 25.0 | 57.3 | 57.9 | ||||||||||||||
Commercial | 20.9 | 21.2 | 16.1 | 15.1 | 22.1 | 23.4 | ||||||||||||||
Industrial | 13.8 | 13.8 | 18.0 | 16.6 | 1.9 | 2.0 | ||||||||||||||
Other (1) | 24.4 | 28.5 | 35.0 | 43.3 | 18.7 | 16.7 | ||||||||||||||
Total | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 |
ANNUAL INFORMATION FORM | 12 | December 31, 2020 |
Generation Source | Unit No. | Location | Date in Service | Total Capacity (MW) | Operating Agent | TEP's Share (%) | TEP's Share (MW) | ||||||||||||||||
Coal | |||||||||||||||||||||||
Springerville Station | 1 | Springerville, AZ | 1985 | 387 | TEP | 100.0 | 387 | ||||||||||||||||
Springerville Station (1) | 2 | Springerville, AZ | 1990 | 406 | TEP | 100.0 | 406 | ||||||||||||||||
San Juan Station | 1 | Farmington, NM | 1976 | 340 | PNM | 50.0 | 170 | ||||||||||||||||
Four Corners Station | 4 | Farmington, NM | 1969 | 785 | APS | 7.0 | 55 | ||||||||||||||||
Four Corners Station | 5 | Farmington, NM | 1970 | 785 | APS | 7.0 | 55 | ||||||||||||||||
Natural Gas | |||||||||||||||||||||||
Gila River Power Station | 2 | Gila Bend, AZ | 2003 | 550 | SRP | 100.0 | 550 | ||||||||||||||||
Gila River Power Station (2) | 3 | Gila Bend, AZ | 2003 | 550 | SRP | 75.0 | 413 | ||||||||||||||||
Luna Generating Station | 1 | Deming, NM | 2006 | 555 | PNM | 33.3 | 185 | ||||||||||||||||
Sundt Station | 3 | Tucson, AZ | 1962 | 104 | TEP | 100.0 | 104 | ||||||||||||||||
Sundt Station | 4 | Tucson, AZ | 1967 | 156 | TEP | 100.0 | 156 | ||||||||||||||||
Sundt Internal Combustion Turbines | Tucson, AZ | 1972-1973 | 50 | TEP | 100.0 | 50 | |||||||||||||||||
Sundt Reciprocating Internal Combustion Engine (3) | 1-10 | Tucson, AZ | 2019-2020 | 188 | TEP | 100.0 | 188 | ||||||||||||||||
DeMoss Petrie | N/A | Tucson, AZ | 2001 | 75 | TEP | 100.0 | 75 | ||||||||||||||||
North Loop | N/A | Tucson, AZ | 2001 | 96 | TEP | 100.0 | 96 | ||||||||||||||||
Solar | |||||||||||||||||||||||
Utility-Scale Renewables (4) | Various | 2002-2017 | 42 | TEP | 100.0 | 42 | |||||||||||||||||
Total Capacity | 2,932 |
ANNUAL INFORMATION FORM | 13 | December 31, 2020 |
Generation Source | Unit No. | Location | Date In Service | Resource Type | Total Capacity (MW) | Operating Agent | UNSE's Share (%) | UNSE's Share (MW) | |||||||||||||||||||||
Black Mountain | 1 | Kingman, AZ | 2011 | Gas | 45 | UNSE | 100.0 | 45 | |||||||||||||||||||||
Black Mountain | 2 | Kingman, AZ | 2011 | Gas | 45 | UNSE | 100.0 | 45 | |||||||||||||||||||||
Valencia | 1 | Nogales, AZ | 1989 | Gas/Oil | 14 | UNSE | 100.0 | 14 | |||||||||||||||||||||
Valencia | 2 | Nogales, AZ | 1989 | Gas/Oil | 14 | UNSE | 100.0 | 14 | |||||||||||||||||||||
Valencia | 3 | Nogales, AZ | 1989 | Gas/Oil | 14 | UNSE | 100.0 | 14 | |||||||||||||||||||||
Valencia | 4 | Nogales, AZ | 2006 | Gas/Oil | 21 | UNSE | 100.0 | 21 | |||||||||||||||||||||
Gila River Power Station | 3 | Gila Bend, AZ | 2003 | Gas | 550 | SRP | 25.0 | 137 | |||||||||||||||||||||
Utility-Scale Renewables | N/A | Various | 2011 -2017 | Solar | 12 | UNSE | 100.0 | 12 | |||||||||||||||||||||
Total Capacity | 302 |
ANNUAL INFORMATION FORM | 14 | December 31, 2020 |
Revenue (%) | GWh Sales (%) | PJ Volumes (%) | ||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||
Residential | 63.3 | 62.5 | 44.6 | 41.4 | 25.5 | 28.8 | ||||||||||||||
Commercial | 26.9 | 27.8 | 35.9 | 38.9 | 34.1 | 38.8 | ||||||||||||||
Industrial | 4.3 | 3.9 | 17.9 | 18.1 | 14.2 | 16.9 | ||||||||||||||
Other (1) | 5.5 | 5.8 | 1.6 | 1.6 | 26.2 | 15.5 | ||||||||||||||
Total | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 |
ANNUAL INFORMATION FORM | 15 | December 31, 2020 |
Revenue (%) | PJ Volumes (%) | |||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||
Residential | 57.4 | 57.7 | 37.2 | 35.7 | ||||||||||
Commercial | 28.7 | 28.6 | 24.6 | 22.9 | ||||||||||
Industrial | 6.7 | 4.3 | 7.8 | 4.4 | ||||||||||
Other (1) | 7.2 | 9.4 | 30.4 | 37.0 | ||||||||||
Total | 100.0 | 100.0 | 100.0 | 100.0 |
ANNUAL INFORMATION FORM | 16 | December 31, 2020 |
Revenue (%) | GWh Deliveries (%) (1) | |||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||
Residential | 43.5 | 42.6 | 29.3 | 27.3 | ||||||||||
Commercial | 24.3 | 24.7 | 13.3 | 13.8 | ||||||||||
Industrial | 20.0 | 21.2 | 57.4 | 58.9 | ||||||||||
Other (2) | 12.2 | 11.5 | — | — | ||||||||||
Total | 100.0 | 100.0 | 100.0 | 100.0 |
ANNUAL INFORMATION FORM | 17 | December 31, 2020 |
Revenue (%) | GWh Sales (%) | |||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||
Residential | 50.5 | 48.9 | 40.5 | 38.8 | ||||||||||
Commercial | 27.1 | 27.1 | 29.4 | 29.4 | ||||||||||
Industrial | 12.6 | 13.2 | 17.0 | 17.6 | ||||||||||
Other (1) | 9.8 | 10.8 | 13.1 | 14.2 | ||||||||||
Total | 100.0 | 100.0 | 100.0 | 100.0 |
ANNUAL INFORMATION FORM | 18 | December 31, 2020 |
Plant | Capacity (MW) | Owners | |||||||||
Canal Plant | 580 | BC Hydro | |||||||||
Waneta Dam | 493 | BC Hydro | |||||||||
Waneta Expansion | 335 | Waneta Expansion Power Corporation | |||||||||
Kootenay River System | 225 | FortisBC Electric | |||||||||
Brilliant Dam | 149 | Brilliant Power Corporation | |||||||||
Brilliant Expansion | 120 | Brilliant Expansion Power Corporation | |||||||||
Total | 1,902 |
ANNUAL INFORMATION FORM | 19 | December 31, 2020 |
Customers | Peak Demand (MW) | T&D Lines (circuit km) | Generating Capacity (MW) | Resource Type(s) | |||||||||||||
Newfoundland Power | 270,000 | 1,356 | 12,500 | 143 | Hydroelectric, Gas, Diesel | ||||||||||||
Maritime Electric | 84,000 | 287 | 6,300 | 130 | Thermal, Diesel | ||||||||||||
FortisOntario (1) | 67,000 | 258 | 3,500 | 5 | Natural Gas Cogeneration | ||||||||||||
Caribbean Utilities (2) | 31,000 | 109 | 800 | 161 | Diesel | ||||||||||||
FortisTCI | 15,000 | 40 | 700 | 91 | Diesel | ||||||||||||
Total | 467,000 | 2,050 | 23,800 | 530 |
Revenue (%) | GWh Sales (%) | |||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||
Residential | 58.7 | 56.0 | 57.3 | 55.4 | ||||||||||
Commercial | 37.4 | 40.1 | 39.1 | 41.2 | ||||||||||
Industrial | 1.9 | 1.9 | 2.7 | 2.6 | ||||||||||
Other (1) | 2.0 | 2.0 | 0.9 | 0.8 | ||||||||||
Total | 100.0 | 100.0 | 100.0 | 100.0 |
ANNUAL INFORMATION FORM | 20 | December 31, 2020 |
ANNUAL INFORMATION FORM | 21 | December 31, 2020 |
ANNUAL INFORMATION FORM | 22 | December 31, 2020 |
Employees | Participation in a Collective Agreement | Union(s) | Collective Agreement(s) Expiry Date(s) | ||||||||||||||||||||
Regulated Utilities | |||||||||||||||||||||||
ITC | 699 | None | — | — | |||||||||||||||||||
UNS Energy | 2,057 | 50 | % | IBEW | June 2021 – February 2025 | ||||||||||||||||||
Central Hudson | 1,061 | 57 | % | IBEW | March 2021 – April 2022 | ||||||||||||||||||
FortisBC Energy (1) | 1,954 | 61 | % | IBEW, MoveUP | March 2019 (2) – June 2023 | ||||||||||||||||||
FortisAlberta | 1,085 | 79 | % | UUWA | December 2020 (3) | ||||||||||||||||||
FortisBC Electric | 560 | 70 | % | IBEW, MoveUP | January 2021 (4) – June 2023 | ||||||||||||||||||
Other Electric (5) | 1,422 | 39 | % | CUPE, IBEW, PWU | January 2022 – December 2023 | ||||||||||||||||||
Non-Regulated | |||||||||||||||||||||||
Energy Infrastructure (6) | 68 | None | — | — | |||||||||||||||||||
Corporate and Other (7) | 55 | None | — | — | |||||||||||||||||||
Total | 8,961 | 52 | % |
ANNUAL INFORMATION FORM | 23 | December 31, 2020 |
ANNUAL INFORMATION FORM | 24 | December 31, 2020 |
ANNUAL INFORMATION FORM | 25 | December 31, 2020 |
ANNUAL INFORMATION FORM | 26 | December 31, 2020 |
2020 | 2019 | 2018 | |||||||||
Common Shares | 1.9650 | 1.8550 | 1.7500 | ||||||||
First Preference Shares, Series F (1) | 1.2250 | 1.2250 | 1.2250 | ||||||||
First Preference Shares, Series G (2) | 1.0983 | 1.0983 | 1.0345 | ||||||||
First Preference Shares, Series H (3) | 0.5003 | 0.6250 | 0.6250 | ||||||||
First Preference Shares, Series I (4) | 0.4987 | 0.7771 | 0.7116 | ||||||||
First Preference Shares, Series J (1) | 1.1875 | 1.1875 | 1.1875 | ||||||||
First Preference Shares, Series K (5) | 0.9823 | 0.9823 | 1.0000 | ||||||||
First Preference Shares, Series M (6) | 0.9783 | 1.0133 | 1.0250 |
ANNUAL INFORMATION FORM | 27 | December 31, 2020 |
Company/Security | DBRS Morningstar | S&P | Moody's | ||||||||
Fortis - Unsecured Debt (1)(2) | BBB (high), Positive | BBB+, Negative | Baa3, Stable | ||||||||
Caribbean Utilities - Unsecured Debt (3) | A (low), Stable | BBB+, Negative | — | ||||||||
Central Hudson - Unsecured Debt (4) (5) | — | A-, Stable | A3, Negative | ||||||||
FortisAlberta - Unsecured Debt | A (low), Stable | A-, Negative | Baa1, Stable | ||||||||
FortisBC Electric | |||||||||||
Secured Debt | A (low), Stable | — | — | ||||||||
Unsecured Debt | A (low), Stable | — | Baa1, Stable | ||||||||
Commercial Paper | R-1 (low), Stable | — | — | ||||||||
FortisBC Energy | |||||||||||
Unsecured Debt | A, Stable | — | A3, Stable | ||||||||
Commercial Paper | R-1 (low), Stable | — | — | ||||||||
ITC Holdings | |||||||||||
Unsecured Debt (2) | — | BBB+, Negative | Baa2, Stable | ||||||||
Commercial Paper (2) | — | A-2, Negative | Prime-2, Stable | ||||||||
ITC Great Plains - First Mortgage Bonds (2) | — | A, Negative | A1, Stable | ||||||||
ITC Midwest - First Mortgage Bonds (2) | — | A, Negative | A1, Stable | ||||||||
ITCTransmission - First Mortgage Bonds (2) | — | A, Negative | A1, Stable | ||||||||
Maritime Electric - Secured Debt | — | A, Stable | — | ||||||||
METC - Secured Debt (2) | — | A, Negative | A1, Stable | ||||||||
Newfoundland Power - First Mortgage Bonds | A, Stable | — | A2, Stable | ||||||||
TEP | |||||||||||
Unsecured Debt (2) | — | A-, Negative | A3, Stable | ||||||||
Unsecured Bank Credit Facility | A3, Stable | ||||||||||
UNS Electric | |||||||||||
Unsecured Debt | — | — | A3, Stable | ||||||||
Unsecured Bank Credit Facility | — | — | A3, Stable | ||||||||
UNS Gas - Unsecured Debt | — | — | A3, Stable | ||||||||
UNS Energy - Unsecured Bank Credit Facility | — | — | Baa1, Stable |
ANNUAL INFORMATION FORM | 28 | December 31, 2020 |
ANNUAL INFORMATION FORM | 29 | December 31, 2020 |
Name, Residence, Principal Occupation Within Five Preceding Years | Director Since | Committees (1) | ||||||||||||
AC | GS | HR | ||||||||||||
DOUGLAS J. HAUGHEY (Chair), Alberta, Canada Corporate Director. | 2009 | l | l | l | ||||||||||
TRACEY C. BALL, British Columbia, Canada Corporate Director. | 2014 | C | l | |||||||||||
PIERRE J. BLOUIN, Quebec, Canada Corporate Director. | 2015 | C | l | |||||||||||
PAUL J. BONAVIA, Texas, USA Corporate Director. | 2018 | l | l | |||||||||||
LAWRENCE T. BORGARD, Florida, USA Corporate Director. President and Chief Operating Officer of Integrys Energy Group from 2014 to 2015. | 2017 | l | l | |||||||||||
MAURA J. CLARK, New York, USA Corporate Director. | 2015 | l | l | |||||||||||
MARGARITA K. DILLEY, District of Columbia, USA Corporate Director. | 2016 | l | l | |||||||||||
JULIE A. DOBSON, Maryland, USA Corporate Director. | 2018 | l | l | |||||||||||
DAVID G. HUTCHENS, Arizona, USA President and Chief Executive Officer of the Corporation. | 2021 | (2) | ||||||||||||
JO MARK ZUREL, Newfoundland and Labrador, Canada Corporate Director. President of Stonebridge Capital Inc., a private investment company from 2006 to March 2019. | 2016 | l | C |
ANNUAL INFORMATION FORM | 30 | December 31, 2020 |
Name, Residence, Principal Occupation During the Five Preceding Years | Office | ||||
DAVID G. HUTCHENS, Arizona, USA President and Chief Executive Officer since January 2021. Chief Operating Officer from January 2020 to December 2020 and Executive Vice President, Western Utility Operations from January 2018 to January 2020. Chief Executive Officer of UNS Energy from January 2020 to December 2020 and President and Chief Executive Officer of UNS Energy from May 2014 to January 2020. | President and Chief Executive Officer | ||||
JOCELYN H. PERRY, Newfoundland and Labrador, Canada Executive Vice President, Chief Financial Officer since June 2018. President and Chief Executive Officer of Newfoundland Power from 2017 to May 2018, Chief Financial Officer and Chief Operating Officer from 2016 to 2017 and Vice President, Finance & Chief Financial Officer from 2007 to 2016. | Executive Vice President, Chief Financial Officer | ||||
NORA M. DUKE, Newfoundland and Labrador, Canada Executive Vice President, Sustainability and Chief Human Resource Officer since December 2017 and Executive Vice President, Corporate Services and Chief Human Resource Officer from August 2015 to December 2017. | Executive Vice President, Sustainability and Chief Human Resource Officer | ||||
JAMES P. LAURITO, Florida, USA Executive Vice President, Business Development and Chief Technology Officer since May 2019 and Executive Vice President, Business Development since April 2016. President and Chief Executive Officer of Central Hudson from 2010 to April 2016. | Executive Vice President, Business Development and Chief Technology Officer | ||||
JAMES R. REID, Ontario, Canada Executive Vice President, Chief Legal Officer and Corporate Secretary since March 2018. Partner with Davies Ward Phillips & Vineberg LLP from 2003 to March 2018. | Executive Vice President, Chief Legal Officer and Corporate Secretary | ||||
GARY J. SMITH, Newfoundland and Labrador, Canada Executive Vice President, Eastern Canadian and Caribbean Operations since June 2017. President and Chief Executive Officer of Newfoundland Power from 2014 to June 2017. | Executive Vice President, Eastern Canadian and Caribbean Operations | ||||
STEPHANIE A. AMAIMO, Michigan, USA Vice President, Investor Relations since October 2017, Director, Investor Relations from 2016 to October 2017 and Director, Investor Relations of ITC Holdings from 2015 to 2016. | Vice President, Investor Relations | ||||
KAREN J. GOSSE, Newfoundland and Labrador, Canada Vice President, Treasury and Planning since April 2018. Vice President, Planning and Forecasting from November 2015 to April 2018. | Vice President, Treasury and Planning | ||||
RONALD J. HINSLEY, Michigan, USA Vice President, Chief Information Officer since May 2019.Vice President, Information Technology and Chief Information Officer of ITC Holdings since 2013. | Vice President, Chief Information Officer | ||||
KAREN M. MCCARTHY, Newfoundland and Labrador, Canada Vice President, Communications and Corporate Affairs since May 2018 and Director, Communications and Corporate Affairs from 2016 to May 2018. Director, Customer and Corporate Relations of Newfoundland Power from 2014 to 2016. | Vice President, Communications and Corporate Affairs | ||||
REGAN P. O'DEA, Newfoundland and Labrador, Canada Vice President, General Counsel since May 2017 and Associate General Counsel from 2014 to May 2017. | Vice President, General Counsel | ||||
JAMIE D. ROBERTS, Newfoundland and Labrador, Canada Vice President, Controller since March 2013. | Vice President, Controller |
ANNUAL INFORMATION FORM | 31 | December 31, 2020 |
Committee Member | Relevant Education and Experience | ||||
TRACEY C. BALL (Chair) | Ms. Ball retired in September 2014 as Executive Vice President and Chief Financial Officer of Canadian Western Bank Group. Ms. Ball has served on several private and public sector boards, including the Province of Alberta Audit Committee and the Financial Executives Institute of Canada. She graduated from Simon Fraser University with a Bachelor of Arts (Commerce). She is a member of the Chartered Professional Accountants of Alberta and the Chartered Professional Accountants of British Columbia. Ms. Ball was elected as a Fellow of the Chartered Professional Accountants of Alberta in 2007. She holds an ICD.D designation from the Institute of Corporate Directors. | ||||
LAWRENCE T. BORGARD | Mr. Borgard retired from Integrys Energy Group in 2015 where he was President and Chief Operating Officer and the Chief Executive Officer of each of Integrys' six regulated electric and natural gas utilities. Mr. Borgard graduated from Michigan State University with a Bachelor of Science (Electrical Engineering) and the University of Wisconsin-Oshkosh with an MBA. He also attended the Advanced Management Program at Harvard University Business School. | ||||
MAURA J. CLARK | Ms. Clark retired from Direct Energy, a subsidiary of Centrica plc, in March 2014 where she was President of Direct Energy Business, a leading energy retailer in Canada and the US. Previously Ms. Clark was Executive Vice President of North American Strategy and Mergers and Acquisitions for Direct Energy. Ms. Clark's prior experience includes investment banking and serving as Chief Financial Officer of an independent oil refining and marketing company. Ms. Clark graduated from Queen's University with a Bachelor of Arts in Economics. She is a member of the Association of Chartered Professional Accountants of Ontario. | ||||
MARGARITA K. DILLEY | Ms. Dilley retired from ASTROLINK International LLC in 2004, an international wireless broadband telecommunications company, where she was Vice President and Chief Financial Officer. Ms. Dilley's prior experience includes serving as Director, Strategy & Corporate Development as well as Treasurer for Intelsat. Ms. Dilley graduated from Cornell University with a Bachelor of Arts, from Columbia University with a Master of Arts and from Wharton Graduate School, University of Pennsylvania with an MBA. | ||||
DOUGLAS J. HAUGHEY | Mr. Haughey, from August 2012 through May 2013, was Chief Executive Officer of The Churchill Corporation. Prior to that, he served as President and Chief Executive Officer of Provident Energy Ltd. and held several executive roles with Spectra Energy and predecessor companies. He graduated from the University of Regina with a Bachelor of Business Administration and from the University of Calgary with an MBA. Mr. Haughey holds an ICD.D designation from the Institute of Corporate Directors. | ||||
JO MARK ZUREL | Mr. Zurel was the president of Stonebridge Capital Inc., a private investment company, from 2006 to March 2019. From 1998 to 2006, Mr. Zurel was Senior Vice-President and Chief Financial Officer of CHC Helicopter Corporation. Mr. Zurel graduated from Dalhousie University with a Bachelor of Commerce and is a Fellow of the Association of Chartered Professional Accountants of Newfoundland and Labrador. He holds an ICD.D designation from the Institute of Corporate Directors. |
ANNUAL INFORMATION FORM | 32 | December 31, 2020 |
Deloitte LLP | |||||||||||
($ thousands) | Description of Fee Category | 2020 | 2019 | ||||||||
Audit Fees | Core audit services | 9,362 | 9,745 | ||||||||
Audit-Related Fees | Assurance and related services that are reasonably related to the audit or review of the Financial Statements and are not included under Audit Fees | 1,267 | 1,490 | ||||||||
Tax Fees | Services related to tax compliance, planning and advice | 240 | 669 | ||||||||
Other | Services which are not Audit Services, Audit-Related Fees or Tax Fees | 22 | — | ||||||||
Total | 10,891 | 11,904 |
ANNUAL INFORMATION FORM | 33 | December 31, 2020 |
ANNUAL INFORMATION FORM | 34 | December 31, 2020 |
ANNUAL INFORMATION FORM | 35 | December 31, 2020 |
Authorized | Issued and Outstanding | Initial Yield (%) | Annual Dividend ($) (1) | Reset Dividend Yield (%) | Redemption and/or Conversion Option Date (2) | Redemption Value ($) | Right to Convert on a One for One Basis | |||||||||||||||||||
Perpetual Fixed Rate | ||||||||||||||||||||||||||
Series F | 5,000,000 | 5,000,000 | 4.90 | 1.2250 | — | Currently Redeemable | 25.00 | — | ||||||||||||||||||
Series J (3) | 8,000,000 | 8,000,000 | 4.75 | 1.1875 | — | Currently Redeemable | 25.25 | — | ||||||||||||||||||
Fixed Rate Reset (4) | ||||||||||||||||||||||||||
Series G | 9,200,000 | 9,200,000 | 5.25 | 1.0983 | 2.13 | September 1, 2023 | 25.00 | — | ||||||||||||||||||
Series H (5)(6) | 10,000,000 | 7,665,082 | 4.25 | 0.4588 | 1.45 | June 1, 2025 | 25.00 | Series I | ||||||||||||||||||
Series K (5) | 12,000,000 | 10,000,000 | 4.00 | 0.9823 | 2.05 | March 1, 2024 | 25.00 | Series L | ||||||||||||||||||
Series M (5) | 24,000,000 | 24,000,000 | 4.10 | 0.9783 | 2.48 | December 1, 2024 | 25.00 | Series N | ||||||||||||||||||
Floating Rate Reset (5) (7) | ||||||||||||||||||||||||||
Series I | 10,000,000 | 2,334,918 | 2.10 | — | 1.45 | June 1, 2025 | 25.00 | Series H | ||||||||||||||||||
Series L | 12,000,000 | — | — | — | — | — | — | Series K | ||||||||||||||||||
Series N | 24,000,000 | — | — | — | — | — | — | Series M |
ANNUAL INFORMATION FORM | 36 | December 31, 2020 |
ANNUAL INFORMATION FORM | 37 | December 31, 2020 |
2020 Trading Prices and Volumes – Common Shares | ||||||||||||||||||||
TSX | NYSE | |||||||||||||||||||
Month | High ($) | Low ($) | Volume | High (US$) | Low (US$) | Volume | ||||||||||||||
January | 58.53 | 53.23 | 28,162,388 | 44.49 | 41.00 | 7,129,151 | ||||||||||||||
February | 59.28 | 54.02 | 29,749,946 | 44.72 | 40.16 | 6,769,689 | ||||||||||||||
March | 58.81 | 41.52 | 70,060,854 | 43.89 | 28.59 | 21,903,132 | ||||||||||||||
April | 56.46 | 50.21 | 43,128,034 | 40.45 | 35.45 | 13,852,377 | ||||||||||||||
May | 54.87 | 49.87 | 47,773,297 | 39.02 | 35.53 | 9,893,976 | ||||||||||||||
June | 54.63 | 50.06 | 32,723,978 | 40.76 | 36.64 | 8,778,081 | ||||||||||||||
July | 54.89 | 50.95 | 26,455,647 | 40.88 | 37.55 | 7,308,449 | ||||||||||||||
August | 55.25 | 51.94 | 29,087,042 | 41.20 | 39.62 | 7,501,978 | ||||||||||||||
September | 55.00 | 51.30 | 30,618,813 | 41.19 | 38.73 | 7,165,906 | ||||||||||||||
October | 56.16 | 52.40 | 30,823,383 | 42.47 | 39.32 | 5,481,500 | ||||||||||||||
November | 56.34 | 51.96 | 40,244,074 | 43.49 | 39.53 | 8,477,013 | ||||||||||||||
December | 53.76 | 51.10 | 32,629,574 | 42.17 | 39.50 | 6,763,915 |
2020 Trading Prices and Volumes – First Preference Shares | ||||||||||||||||||||
First Preference Shares, Series F | First Preference Shares, Series G | |||||||||||||||||||
Month | High ($) | Low ($) | Volume | High ($) | Low ($) | Volume | ||||||||||||||
January | 24.19 | 23.62 | 77,489 | 17.74 | 16.78 | 334,760 | ||||||||||||||
February | 24.30 | 23.24 | 42,563 | 17.51 | 16.16 | 113,369 | ||||||||||||||
March | 23.95 | 18.96 | 95,026 | 16.31 | 11.11 | 297,277 | ||||||||||||||
April | 23.10 | 20.37 | 38,451 | 15.67 | 13.40 | 158,094 | ||||||||||||||
May | 23.33 | 22.05 | 43,997 | 14.61 | 13.58 | 143,485 | ||||||||||||||
June | 23.65 | 22.45 | 55,503 | 14.60 | 13.83 | 119,970 | ||||||||||||||
July | 24.50 | 23.58 | 46,797 | 16.62 | 13.95 | 118,575 | ||||||||||||||
August | 24.10 | 23.57 | 83,306 | 15.75 | 14.75 | 191,711 | ||||||||||||||
September | 25.19 | 23.69 | 503,275 | 15.89 | 15.02 | 242,547 | ||||||||||||||
October | 26.51 | 24.80 | 268,263 | 16.23 | 15.34 | 129,750 | ||||||||||||||
November | 25.70 | 24.80 | 29,800 | 17.00 | 15.96 | 111,071 | ||||||||||||||
December | 25.45 | 25.00 | 32,236 | 16.83 | 16.27 | 125,012 |
ANNUAL INFORMATION FORM | 38 | December 31, 2020 |
First Preference Shares, Series H | First Preference Shares, Series I | |||||||||||||||||||
Month | High ($) | Low ($) | Volume | High ($) | Low ($) | Volume | ||||||||||||||
January | 13.88 | 12.88 | 115,276 | 13.65 | 12.80 | 9,123 | ||||||||||||||
February | 13.47 | 11.99 | 108,214 | 13.40 | 11.99 | 24,979 | ||||||||||||||
March | 12.01 | 7.48 | 294,824 | 12.11 | 7.71 | 49,701 | ||||||||||||||
April | 10.85 | 9.61 | 173,256 | 10.50 | 9.00 | 55,117 | ||||||||||||||
May | 9.99 | 9.34 | 85,007 | 10.01 | 9.10 | 58,793 | ||||||||||||||
June | 9.95 | 9.16 | 66,803 | 9.59 | 8.95 | 91,680 | ||||||||||||||
July | 11.18 | 9.55 | 104,299 | 9.95 | 8.91 | 43,239 | ||||||||||||||
August | 10.84 | 10.10 | 119,067 | 10.25 | 9.65 | 20,372 | ||||||||||||||
September | 10.74 | 10.20 | 94,257 | 10.30 | 9.99 | 53,357 | ||||||||||||||
October | 10.70 | 10.16 | 140,485 | 10.42 | 10.00 | 18,278 | ||||||||||||||
November | 11.10 | 10.10 | 123,715 | 10.60 | 9.99 | 50,935 | ||||||||||||||
December | 12.22 | 10.92 | 120,688 | 11.34 | 10.80 | 49,137 | ||||||||||||||
First Preference Shares, Series J | First Preference Shares, Series K | |||||||||||||||||||
Month | High ($) | Low ($) | Volume | High ($) | Low ($) | Volume | ||||||||||||||
January | 22.92 | 22.31 | 349,242 | 16.95 | 16.00 | 166,582 | ||||||||||||||
February | 23.45 | 22.35 | 176,650 | 16.83 | 15.55 | 170,052 | ||||||||||||||
March | 22.95 | 17.77 | 191,724 | 15.60 | 10.00 | 188,053 | ||||||||||||||
April | 22.22 | 19.32 | 109,252 | 14.16 | 12.75 | 364,109 | ||||||||||||||
May | 22.49 | 21.50 | 119,188 | 14.06 | 12.95 | 160,251 | ||||||||||||||
June | 22.65 | 21.80 | 81,518 | 14.15 | 13.19 | 249,878 | ||||||||||||||
July | 23.20 | 22.20 | 107,069 | 15.79 | 13.28 | 149,365 | ||||||||||||||
August | 23.10 | 22.61 | 78,263 | 15.09 | 14.03 | 112,132 | ||||||||||||||
September | 24.77 | 22.90 | 82,101 | 15.12 | 14.45 | 120,530 | ||||||||||||||
October | 25.00 | 23.76 | 245,504 | 15.45 | 14.62 | 73,351 | ||||||||||||||
November | 24.67 | 23.99 | 133,621 | 15.87 | 15.00 | 88,164 | ||||||||||||||
December | 24.61 | 24.16 | 147,781 | 16.40 | 15.72 | 97,530 | ||||||||||||||
First Preference Shares, Series M | ||||||||||||||||||||
Month | High ($) | Low ($) | Volume | |||||||||||||||||
January | 18.39 | 17.25 | 623,228 | |||||||||||||||||
February | 18.42 | 16.46 | 221,623 | |||||||||||||||||
March | 16.69 | 11.98 | 599,336 | |||||||||||||||||
April | 15.99 | 14.17 | 286,909 | |||||||||||||||||
May | 15.71 | 14.68 | 512,391 | |||||||||||||||||
June | 15.54 | 14.70 | 264,972 | |||||||||||||||||
July | 17.38 | 14.99 | 382,513 | |||||||||||||||||
August | 17.10 | 16.24 | 278,654 | |||||||||||||||||
September | 17.20 | 16.76 | 275,954 | |||||||||||||||||
October | 17.70 | 17.00 | 549,645 | |||||||||||||||||
November | 18.57 | 17.39 | 134,214 | |||||||||||||||||
December | 18.85 | 18.02 | 205,217 |
ANNUAL INFORMATION FORM | 39 | December 31, 2020 |
ANNUAL INFORMATION FORM | 40 | December 31, 2020 |
ANNUAL INFORMATION FORM | 41 | December 31, 2020 |
ANNUAL INFORMATION FORM | 42 | December 31, 2020 |
ANNUAL INFORMATION FORM | 43 | December 31, 2020 |
ANNUAL INFORMATION FORM | 44 | December 31, 2020 |
ANNUAL INFORMATION FORM | 45 | December 31, 2020 |
ANNUAL INFORMATION FORM | 46 | December 31, 2020 |
ANNUAL INFORMATION FORM | 47 | December 31, 2020 |
ANNUAL INFORMATION FORM | 48 | December 31, 2020 |
Management's Report on Internal Control over Financial Reporting | i | NOTE 11 | Intangible Assets | 26 | ||||||||||||||||
Report of Independent Registered Public Accounting Firm - Opinion on the Financial Statements | ii | NOTE 12 | Goodwill | 26 | ||||||||||||||||
Report of Independent Registered Public Accounting Firm - Opinion on Internal Control over Financial Reporting | v | NOTE 13 | Accounts Payable and Other Current Liabilities | 26 | ||||||||||||||||
Consolidated Balance Sheets | 1 | NOTE 14 | Long-Term Debt | 27 | ||||||||||||||||
Consolidated Statements of Earnings | 2 | NOTE 15 | Leases | 30 | ||||||||||||||||
Consolidated Statements of Comprehensive Income | 2 | NOTE 16 | Other Liabilities | 32 | ||||||||||||||||
Consolidated Statements of Cash Flows | 3 | NOTE 17 | Common Shares | 33 | ||||||||||||||||
Consolidated Statements of Changes in Equity | 4 | NOTE 18 | Earnings Per Common Share | 33 | ||||||||||||||||
Notes to Consolidated Financial Statements | NOTE 19 | Preference Shares | 33 | |||||||||||||||||
NOTE 1 | Description of Business | 5 | NOTE 20 | Accumulated Other Comprehensive Income | 35 | |||||||||||||||
NOTE 2 | Regulation | 6 | NOTE 21 | Stock-Based Compensation Plans | 35 | |||||||||||||||
NOTE 3 | Summary of Significant Accounting Policies | 10 | NOTE 22 | Disposition | 38 | |||||||||||||||
NOTE 4 | Segmented Information | 18 | NOTE 23 | Other Income, Net | 38 | |||||||||||||||
NOTE 5 | Revenue | 20 | NOTE 24 | Income Taxes | 39 | |||||||||||||||
NOTE 6 | Accounts Receivable and Other Current Assets | 21 | NOTE 25 | Employee Future Benefits | 41 | |||||||||||||||
NOTE 7 | Inventories | 22 | NOTE 26 | Supplementary Cash Flow Information | 46 | |||||||||||||||
NOTE 8 | Regulatory Assets and Liabilities | 22 | NOTE 27 | Fair Value of Financial Instruments and Risk Management | 46 | |||||||||||||||
NOTE 9 | Other Assets | 24 | NOTE 28 | Commitments and Contingencies | 50 | |||||||||||||||
NOTE 10 | Property, Plant and Equipment | 24 |
i |
ii |
iii |
iv |
v |
FORTIS INC. | |||||||||||
Consolidated Balance Sheets | |||||||||||
As at December 31 | |||||||||||
(in millions of Canadian dollars) | |||||||||||
2020 | 2019 | ||||||||||
ASSETS | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable and other current assets (Note 6) | |||||||||||
Prepaid expenses | |||||||||||
Inventories (Note 7) | |||||||||||
Regulatory assets (Note 8) | |||||||||||
Total current assets | |||||||||||
Other assets (Note 9) | |||||||||||
Regulatory assets (Note 8) | |||||||||||
Property, plant and equipment, net (Note 10) | |||||||||||
Intangible assets, net (Note 11) | |||||||||||
Goodwill (Note 12) | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND EQUITY | |||||||||||
Current liabilities | |||||||||||
Short-term borrowings (Note 14) | $ | $ | |||||||||
Accounts payable and other current liabilities (Note 13) | |||||||||||
Regulatory liabilities (Note 8) | |||||||||||
Current installments of long-term debt (Note 14) | |||||||||||
Total current liabilities | |||||||||||
Other liabilities (Note 16) | |||||||||||
Regulatory liabilities (Note 8) | |||||||||||
Deferred income taxes (Note 24) | |||||||||||
Long-term debt (Note 14) | |||||||||||
Finance leases (Note 15) | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Note 28) | |||||||||||
Equity | |||||||||||
Common shares (Note 17) (1) | |||||||||||
Preference shares (Note 19) | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated other comprehensive income (Note 20) | |||||||||||
Retained earnings | |||||||||||
Shareholders' equity | |||||||||||
Non-controlling interests | |||||||||||
Total equity | |||||||||||
Total liabilities and equity | $ | $ | |||||||||
Approved on Behalf of the Board | |||||||||||
/s/ Douglas J. Haughey | /s/ Tracey C. Ball | ||||||||||
Douglas J. Haughey, | Tracey C. Ball, | ||||||||||
See accompanying Notes to Consolidated Financial Statements | Director | Director |
FORTIS INC. | ||||||||||||||
Consolidated Statements of Earnings | ||||||||||||||
For the years ended December 31 | ||||||||||||||
(in millions of Canadian dollars, except per share amounts) | ||||||||||||||
2020 | 2019 | |||||||||||||
Revenue (Note 5) | $ | $ | ||||||||||||
Expenses | ||||||||||||||
Energy supply costs | ||||||||||||||
Operating expenses | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Total expenses | ||||||||||||||
Gain on disposition (Note 22) | ||||||||||||||
Operating income | ||||||||||||||
Other income, net (Note 23) | ||||||||||||||
Finance charges | ||||||||||||||
Earnings before income tax expense | ||||||||||||||
Income tax expense (Note 24) | ||||||||||||||
Net earnings | $ | $ | ||||||||||||
Net earnings attributable to: | ||||||||||||||
Non-controlling interests | $ | $ | ||||||||||||
Preference equity shareholders | ||||||||||||||
Common equity shareholders | ||||||||||||||
$ | $ | |||||||||||||
Earnings per common share (Note 18) | ||||||||||||||
Basic | $ | $ | ||||||||||||
Diluted | $ | $ | ||||||||||||
See accompanying Notes to Consolidated Financial Statements |
FORTIS INC. | ||||||||||||||
Consolidated Statements of Comprehensive Income | ||||||||||||||
For the years ended December 31 | ||||||||||||||
(in millions of Canadian dollars) | ||||||||||||||
2020 | 2019 | |||||||||||||
Net earnings | $ | $ | ||||||||||||
Other comprehensive loss | ||||||||||||||
Unrealized foreign currency translation losses, net of hedging activities and income tax expense of $ | ( | ( | ||||||||||||
Other, net of income tax recovery of $ | ( | ( | ||||||||||||
( | ( | |||||||||||||
Comprehensive income | $ | $ | ||||||||||||
Comprehensive income attributable to: | ||||||||||||||
Non-controlling interests | $ | $ | ||||||||||||
Preference equity shareholders | ||||||||||||||
Common equity shareholders | ||||||||||||||
$ | $ | |||||||||||||
See accompanying Notes to Consolidated Financial Statements |
FORTIS INC. | |||||||||||||||||
Consolidated Statements of Cash Flows | |||||||||||||||||
For the years ended December 31 | |||||||||||||||||
(in millions of Canadian dollars) | |||||||||||||||||
2020 | 2019 | ||||||||||||||||
Operating activities | |||||||||||||||||
Net earnings | $ | $ | |||||||||||||||
Adjustments to reconcile net earnings to net cash provided by | |||||||||||||||||
operating activities: | |||||||||||||||||
Depreciation - property, plant and equipment | |||||||||||||||||
Amortization - intangible assets | |||||||||||||||||
Amortization - other | |||||||||||||||||
Deferred income tax expense (Note 24) | |||||||||||||||||
Equity component, allowance for funds used during construction (Note 23) | ( | ( | |||||||||||||||
Gain on disposition (Note 22) | ( | ||||||||||||||||
Other | |||||||||||||||||
Change in long-term regulatory assets and liabilities | ( | ||||||||||||||||
Change in working capital (Note 26) | ( | ( | |||||||||||||||
Cash from operating activities | |||||||||||||||||
Investing activities | |||||||||||||||||
Capital expenditures - property, plant and equipment | ( | ( | |||||||||||||||
Capital expenditures - intangible assets | ( | ( | |||||||||||||||
Contributions in aid of construction | |||||||||||||||||
Proceeds on disposition (Note 22) | |||||||||||||||||
Other | ( | ( | |||||||||||||||
Cash used in investing activities | ( | ( | |||||||||||||||
Financing activities | |||||||||||||||||
Proceeds from long-term debt, net of issuance costs (Note 14) | |||||||||||||||||
Repayments of long-term debt, net of extinguishment costs, and finance leases | ( | ( | |||||||||||||||
Borrowings under committed credit facilities | |||||||||||||||||
Repayments under committed credit facilities | ( | ( | |||||||||||||||
Net change in short-term borrowings | ( | ||||||||||||||||
Issue of common shares, net of costs, and dividends reinvested (Note 17) | |||||||||||||||||
Dividends | |||||||||||||||||
Common shares, net of dividends reinvested | ( | ( | |||||||||||||||
Preference shares | ( | ( | |||||||||||||||
Subsidiary dividends paid to non-controlling interests | ( | ( | |||||||||||||||
Other | |||||||||||||||||
Cash from financing activities | |||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | ( | ( | |||||||||||||||
Change in cash and cash equivalents | ( | ||||||||||||||||
Cash and change in cash associated with assets held for sale | |||||||||||||||||
Cash and cash equivalents, beginning of year | |||||||||||||||||
Cash and cash equivalents, end of year | $ | $ | |||||||||||||||
Supplementary Cash Flow Information (Note 26) | |||||||||||||||||
See accompanying Notes to Consolidated Financial Statements |
FORTIS INC. | ||||||||||||||||||||||||||||||||||||||||||||
Consolidated Statements of Changes in Equity | ||||||||||||||||||||||||||||||||||||||||||||
For the years ended December 31, 2020 and 2019 | ||||||||||||||||||||||||||||||||||||||||||||
(in millions of Canadian dollars, except share numbers) | ||||||||||||||||||||||||||||||||||||||||||||
Common Shares (# millions) | Common Shares (Note 17) | Preference Shares (Note 19) | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) (Note 20) | Retained Earnings | Non-Controlling Interests | Total Equity | |||||||||||||||||||||||||||||||||||||
As at December 31, 2019 | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Net earnings | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | — | ( | ( | ||||||||||||||||||||||||||||||||||||
Common shares issued | — | ( | — | — | — | |||||||||||||||||||||||||||||||||||||||
Advances to non-controlling interests | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||
Subsidiary dividends paid to non-controlling interests | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||
Dividends declared on common shares ($ | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||
Dividends on preference shares | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||
Other | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
As at December 31, 2020 | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
As at December 31, 2018 | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Net earnings | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | — | ( | ( | ||||||||||||||||||||||||||||||||||||
Common shares issued | — | ( | — | — | — | |||||||||||||||||||||||||||||||||||||||
Advances to non-controlling interests | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||
Subsidiary dividends paid to non-controlling interests | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||
Dividends declared on common shares ($ | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||
Dividends on preference shares | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||
Disposition (Note 22) | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||
Other | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
As at December 31, 2019 | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
See accompanying Notes to Consolidated Financial Statements |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
5 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
6 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
Nature of Regulation | ||||||||||||||||||||
Allowed Common Equity (%) | Allowed ROE (1) (%) | |||||||||||||||||||
Regulated Utility | Regulatory Authority | 2020 | 2019 | Significant Features | ||||||||||||||||
ITC (2) (3) | Federal Energy Regulatory Commission ("FERC") | Cost-based formula rates, with annual true-up mechanism (4) Incentive adders | ||||||||||||||||||
TEP | Arizona Corporation Commission ("ACC") (5) FERC (6) | COS regulation Historical test year Formula transmission rates | ||||||||||||||||||
UNS Electric | ACC | |||||||||||||||||||
UNS Gas | ACC | |||||||||||||||||||
Central Hudson (7) | New York State Public Service Commission ("PSC") | COS regulation Future test year | ||||||||||||||||||
FortisBC Energy | British Columbia Utilities Commission ("BCUC") | COS regulation with formula components and incentives (8) | ||||||||||||||||||
FortisBC Electric | BCUC | Future test year | ||||||||||||||||||
FortisAlberta | Alberta Utilities Commission ("AUC") | PBR (9) | ||||||||||||||||||
Newfoundland Power | Newfoundland and Labrador Board of Commissioners of Public Utilities | COS regulation Future test year | ||||||||||||||||||
Maritime Electric | Island Regulatory and Appeals Commission | COS regulation Future test year | ||||||||||||||||||
FortisOntario (10) | Ontario Energy Board | COS regulation with incentive mechanisms | ||||||||||||||||||
Caribbean Utilities (11) | Utility Regulation and Competition Office | N/A | COS regulation Rate-cap adjustment mechanism based on published consumer price indices | |||||||||||||||||
FortisTCI (12) | Government of the Turks and Caicos Islands | N/A | COS regulation Historical test year |
7 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
8 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
9 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
10 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
11 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
2020 | 2019 | |||||||||||||||||||
(years) | Service Life Ranges | Weighted Average Remaining Service Life | Service Life Ranges | Weighted Average Remaining Service Life | ||||||||||||||||
Distribution | ||||||||||||||||||||
Electric | ||||||||||||||||||||
Gas | ||||||||||||||||||||
Transmission | ||||||||||||||||||||
Electric | ||||||||||||||||||||
Gas | ||||||||||||||||||||
Generation | ||||||||||||||||||||
Other |
2020 | 2019 | |||||||||||||||||||
(years) | Service Life Ranges | Weighted Average Remaining Service Life | Service Life Ranges | Weighted Average Remaining Service Life | ||||||||||||||||
Computer software | ||||||||||||||||||||
Land, transmission and water rights | ||||||||||||||||||||
Other |
12 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
13 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
14 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
15 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
16 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
17 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
(in millions) | 2020 | 2019 | ||||||
Lease of gas storage capacity and gas sales from Aitken Creek to FortisBC Energy | $ | $ | ||||||
Sale of capacity from the Waneta Expansion to FortisBC Electric (1) |
18 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
REGULATED | NON-REGULATED | |||||||||||||||||||||||||||||||||||||||||||
Year ended | Energy | Inter- | ||||||||||||||||||||||||||||||||||||||||||
December 31, 2020 | UNS | Central | FortisBC | Fortis | FortisBC | Other | Sub | Infra- | Corporate | segment | ||||||||||||||||||||||||||||||||||
(in millions) | ITC | Energy | Hudson | Energy | Alberta | Electric | Electric | total | structure | and Other | eliminations | Total | ||||||||||||||||||||||||||||||||
Revenue | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Energy supply costs | ||||||||||||||||||||||||||||||||||||||||||||
Operating expenses | ||||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||||||||||||||||||||||||||
Operating income | ( | |||||||||||||||||||||||||||||||||||||||||||
Other income, net | ||||||||||||||||||||||||||||||||||||||||||||
Finance charges | ||||||||||||||||||||||||||||||||||||||||||||
Income tax expense | ( | |||||||||||||||||||||||||||||||||||||||||||
Net earnings | ( | |||||||||||||||||||||||||||||||||||||||||||
Non-controlling interests | ||||||||||||||||||||||||||||||||||||||||||||
Preference share dividends | ||||||||||||||||||||||||||||||||||||||||||||
Net earnings attributable to common equity shareholders | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||
Goodwill | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Total assets | ( | |||||||||||||||||||||||||||||||||||||||||||
Capital expenditures | ||||||||||||||||||||||||||||||||||||||||||||
Year ended | ||||||||||||||||||||||||||||||||||||||||||||
December 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||||||||
Revenue | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||
Energy supply costs | ||||||||||||||||||||||||||||||||||||||||||||
Operating expenses | ( | |||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||||||||||||||||||||||||||
Gain on disposition | ||||||||||||||||||||||||||||||||||||||||||||
Operating income | ||||||||||||||||||||||||||||||||||||||||||||
Other income, net | ||||||||||||||||||||||||||||||||||||||||||||
Finance charges | ||||||||||||||||||||||||||||||||||||||||||||
Income tax expense | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Net earnings | ||||||||||||||||||||||||||||||||||||||||||||
Non-controlling interests | ||||||||||||||||||||||||||||||||||||||||||||
Preference share dividends | ||||||||||||||||||||||||||||||||||||||||||||
Net earnings attributable to common equity shareholders | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Goodwill | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Total assets | ( | |||||||||||||||||||||||||||||||||||||||||||
Capital expenditures |
19 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
(in millions) | 2020 | 2019 | ||||||
Electric and gas revenue | ||||||||
United States | ||||||||
ITC | $ | $ | ||||||
UNS Energy | ||||||||
Central Hudson | ||||||||
Canada | ||||||||
FortisBC Energy | ||||||||
FortisAlberta | ||||||||
FortisBC Electric | ||||||||
Newfoundland Power | ||||||||
Maritime Electric | ||||||||
FortisOntario | ||||||||
Caribbean | ||||||||
Caribbean Utilities | ||||||||
FortisTCI | ||||||||
Total electric and gas revenue | ||||||||
Other services revenue (1) | ||||||||
Revenue from contracts with customers | ||||||||
Alternative revenue (2) | ||||||||
Other revenue | ||||||||
Total revenue | $ | $ |
20 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
(in millions) | 2020 | 2019 | ||||||
Trade accounts receivable | $ | $ | ||||||
Unbilled accounts receivable | ||||||||
Allowance for credit losses (1) | ( | ( | ||||||
Income tax receivable | ||||||||
Other (2) | ||||||||
$ | $ |
(in millions) | 2020 | ||||
Balance, beginning of year | $ | ( | |||
Credit loss expensed | ( | ||||
Credit loss deferred (Note 2) | ( | ||||
Write-offs, net of recoveries | |||||
Foreign exchange | ( | ||||
Balance, end of year | $ | ( |
21 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
(in millions) | 2019 | ||||
Balance, beginning of year | $ | ( | |||
Bad debt expensed | ( | ||||
Write-offs, net of recoveries | |||||
Foreign exchange | |||||
Balance, end of year | $ | ( |
(in millions) | 2020 | 2019 | ||||||
Materials and supplies | $ | $ | ||||||
Gas and fuel in storage | ||||||||
Coal inventory | ||||||||
$ | $ |
(in millions) | 2020 | 2019 | ||||||
Regulatory assets | ||||||||
Deferred income taxes (Notes 3 and 24) | $ | $ | ||||||
Employee future benefits (Notes 3 and 25) | ||||||||
Deferred energy management costs (1) | ||||||||
Rate stabilization and related accounts (2) | ||||||||
Deferred lease costs (3) | ||||||||
Manufactured gas plant site remediation deferral (Note 16) | ||||||||
Derivatives (Notes 3 and 27) | ||||||||
Generation early retirement costs (4) | ||||||||
Other regulatory assets (5) | ||||||||
Total regulatory assets | ||||||||
Less: Current portion | ( | ( | ||||||
Long-term regulatory assets | $ | $ | ||||||
Regulatory liabilities | ||||||||
Deferred income taxes (Notes 3 and 24) | $ | $ | ||||||
Asset removal cost provision (Note 3) | ||||||||
Rate stabilization and related accounts (2) | ||||||||
Renewable energy surcharge (6) | ||||||||
Energy efficiency liability (7) | ||||||||
Employee future benefits (Notes 3 and 25) | ||||||||
Electric and gas moderator account (8) | ||||||||
ROE complaints liability (Note 2) | ||||||||
Other regulatory liabilities (5) | ||||||||
Total regulatory liabilities | ||||||||
Less: Current portion | ( | ( | ||||||
Long-term regulatory liabilities | $ | $ |
22 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
23 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
(in millions) | 2020 | 2019 | ||||||
Supplemental Executive Retirement Plan ("SERP") | $ | $ | ||||||
Renewable Energy Credits (Note 8) | ||||||||
Equity investment - Belize Electricity | ||||||||
Employee future benefits (Note 25) | ||||||||
Other investments | ||||||||
Operating leases (Note 15) | ||||||||
Deferred compensation plan | ||||||||
Equity Investment - Wataynikaneyap Partnership | ||||||||
Other (1) | ||||||||
$ | $ |
(in millions) | Cost | Accumulated Depreciation | Net Book Value | |||||||||||||||||
2020 | ||||||||||||||||||||
Distribution | ||||||||||||||||||||
Electric | $ | $ | ( | $ | ||||||||||||||||
Gas | ( | |||||||||||||||||||
Transmission | ||||||||||||||||||||
Electric | ( | |||||||||||||||||||
Gas | ( | |||||||||||||||||||
Generation | ( | |||||||||||||||||||
Other | ( | |||||||||||||||||||
Assets under construction | ||||||||||||||||||||
Land | ||||||||||||||||||||
$ | $ | ( | $ |
2019 | ||||||||||||||||||||
Distribution | ||||||||||||||||||||
Electric | $ | $ | ( | $ | ||||||||||||||||
Gas | ( | |||||||||||||||||||
Transmission | ||||||||||||||||||||
Electric | ( | |||||||||||||||||||
Gas | ( | |||||||||||||||||||
Generation | ( | |||||||||||||||||||
Other | ( | |||||||||||||||||||
Assets under construction | ||||||||||||||||||||
Land | ||||||||||||||||||||
$ | $ | ( | $ |
24 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
Ownership | Accumulated | Net Book | ||||||||||||
(in millions, except as noted) | (%) | Cost | Depreciation | Value | ||||||||||
Transmission Facilities | $ | $ | ( | $ | ||||||||||
Springerville Common Facilities (1) | ( | |||||||||||||
San Juan Unit 1 ("San Juan") | ( | |||||||||||||
Springerville Coal Handling Facilities | ( | |||||||||||||
Four Corners Units 4 and 5 ("Four Corners") | ( | |||||||||||||
Gila River Common Facilities | ( | |||||||||||||
Luna Energy Facility ("Luna") | ( | |||||||||||||
$ | $ | ( | $ |
25 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
Accumulated | Net Book | ||||||||||
(in millions) | Cost | Amortization | Value | ||||||||
2020 | |||||||||||
Computer software | $ | $ | ( | $ | |||||||
Land, transmission and water rights | ( | ||||||||||
Other | ( | ||||||||||
Assets under construction | |||||||||||
$ | $ | ( | $ | ||||||||
2019 | |||||||||||
Computer software | $ | $ | ( | $ | |||||||
Land, transmission and water rights | ( | ||||||||||
Other | ( | ||||||||||
Assets under construction | |||||||||||
$ | $ | ( | $ |
(in millions) | 2020 | 2019 | ||||||
Balance, beginning of year | $ | $ | ||||||
Foreign currency translation impacts (1) | ( | ( | ||||||
Balance, end of year | $ | $ |
(in millions) | 2020 | 2019 | ||||||
Trade accounts payable | $ | $ | ||||||
Employee compensation and benefits payable | ||||||||
Dividends payable | ||||||||
Accrued taxes other than income taxes | ||||||||
Interest payable | ||||||||
Customer and other deposits | ||||||||
Gas and fuel cost payable | ||||||||
Fair value of derivatives (Note 27) | ||||||||
Manufactured gas plant site remediation (Note 16) | ||||||||
Employee future benefits (Note 25) | ||||||||
Other | ||||||||
$ | $ |
26 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
(in millions) | Maturity Date | 2020 | 2019 | |||||||||||
ITC | ||||||||||||||
Secured US First Mortgage Bonds - | ||||||||||||||
2024-2055 | $ | $ | ||||||||||||
Secured US Senior Notes - | ||||||||||||||
2040-2055 | ||||||||||||||
Unsecured US Senior Notes - | ||||||||||||||
2022-2043 | ||||||||||||||
Unsecured US Shareholder Note - | ||||||||||||||
2028 | ||||||||||||||
Unsecured US Term Loan Credit Agreement - | ||||||||||||||
n/a | ||||||||||||||
UNS Energy | ||||||||||||||
Unsecured US Tax-Exempt Bonds - | ||||||||||||||
average fixed and variable rate (2019 - | 2029-2030 | |||||||||||||
Unsecured US Fixed Rate Notes - | ||||||||||||||
2021-2050 | ||||||||||||||
Central Hudson | ||||||||||||||
Unsecured US Promissory Notes - | ||||||||||||||
average fixed and variable rate (2019 - | 2021-2060 | |||||||||||||
FortisBC Energy | ||||||||||||||
Unsecured Debentures - | ||||||||||||||
2026-2050 | ||||||||||||||
FortisAlberta | ||||||||||||||
Unsecured Debentures - | ||||||||||||||
2024-2052 | ||||||||||||||
FortisBC Electric | ||||||||||||||
Secured Debentures - | ||||||||||||||
2023 | ||||||||||||||
Unsecured Debentures - | ||||||||||||||
2021-2050 | ||||||||||||||
Other Electric | ||||||||||||||
Secured First Mortgage Sinking Fund Bonds - | ||||||||||||||
2022-2060 | ||||||||||||||
Secured First Mortgage Bonds - | ||||||||||||||
2025-2061 | ||||||||||||||
Unsecured Senior Notes - | ||||||||||||||
2041-2048 | ||||||||||||||
Unsecured US Senior Loan Notes and Bonds - | ||||||||||||||
average fixed and variable rate (2019 - | 2022-2049 | |||||||||||||
Corporate and Other | ||||||||||||||
Unsecured US Senior Notes and Promissory Notes - | ||||||||||||||
2021-2044 | ||||||||||||||
Unsecured Debentures - | ||||||||||||||
2039 | ||||||||||||||
Unsecured Senior Notes - | 2023 | |||||||||||||
Long-term classification of credit facility borrowings | ||||||||||||||
Fair value adjustment - ITC acquisition | ||||||||||||||
Total long-term debt (Note 27) | ||||||||||||||
Less: Deferred financing costs and debt discounts | ( | ( | ||||||||||||
Less: Current installments of long-term debt | ( | ( | ||||||||||||
$ | $ |
27 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
(in millions, except as noted) | Month Issued | Interest Rate (%) | Maturity | Amount ($) | Use of Proceeds | ||||||||||||||||||
ITC | |||||||||||||||||||||||
Unsecured term loan credit agreement | January | (1) | 2021 | US | (2)(3) | ||||||||||||||||||
Unsecured term loan credit agreement (4) | January | (5) | 2021 | US | (4) | ||||||||||||||||||
Unsecured senior notes | May | 2030 | US | (2)(3)(6) | |||||||||||||||||||
First mortgage bonds | July | 2051 | US | (2)(3)(7) | |||||||||||||||||||
Secured senior notes | October | 2055 | US | (2)(3)(7)(8) | |||||||||||||||||||
UNS Energy | |||||||||||||||||||||||
Unsecured senior notes | April | 2050 | US | (2)(3) | |||||||||||||||||||
Unsecured senior notes | August | 2030 | US | (7) | |||||||||||||||||||
Unsecured senior notes | September | 2032 | US | (2)(3) | |||||||||||||||||||
Central Hudson | |||||||||||||||||||||||
Unsecured senior notes | May | 2050 | US | (3) | |||||||||||||||||||
Unsecured senior notes | July | 2060 | US | (3)(7) | |||||||||||||||||||
Unsecured senior notes | September | 2030 | US | (8) | |||||||||||||||||||
Unsecured senior notes | November | 2030 | US | (3)(7) | |||||||||||||||||||
FortisBC Energy | |||||||||||||||||||||||
Unsecured debentures | July | 2050 | (7) | ||||||||||||||||||||
FortisAlberta | |||||||||||||||||||||||
Unsecured senior debentures | December | 2051 | (2) | ||||||||||||||||||||
FortisBC Electric | |||||||||||||||||||||||
Unsecured debentures | May | 2050 | (2) | ||||||||||||||||||||
Newfoundland Power | |||||||||||||||||||||||
First mortgage sinking fund bonds | April | 2060 | (2)(3) | ||||||||||||||||||||
FortisTCI | |||||||||||||||||||||||
Unsecured senior notes | June/October | 2035 | US | (7)(8) | |||||||||||||||||||
Unsecured senior notes | October/December | 2030 | US | (3) |
28 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
(in millions) | Total | ||||
2021 | $ | ||||
2022 | |||||
2023 | |||||
2024 | |||||
2025 | |||||
Thereafter | |||||
$ |
(in millions) | Regulated Utilities | Corporate and Other | 2020 | 2019 | ||||||||||
Total credit facilities | $ | $ | $ | $ | ||||||||||
Credit facilities utilized: | ||||||||||||||
Short-term borrowings (1) | ( | ( | ( | |||||||||||
Long-term debt (including current portion) (2) | ( | ( | ( | ( | ||||||||||
Letters of credit outstanding | ( | ( | ( | ( | ||||||||||
Credit facilities unutilized | $ | $ | $ | $ |
29 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
(in millions) | Amount ($) | Maturity | ||||||
Unsecured committed revolving credit facilities | ||||||||
Regulated utilities | ||||||||
ITC (1) | US | October 2023 | ||||||
UNS Energy | US | October 2022 | ||||||
Central Hudson | US | March 2025 | ||||||
FortisBC Energy | August 2024 | |||||||
FortisAlberta | August 2024 | |||||||
FortisBC Electric | April 2024 | |||||||
Other Electric | (2) | |||||||
Other Electric | US | January 2025 | ||||||
Corporate and Other | (3) | |||||||
Other facilities | ||||||||
Regulated utilities | ||||||||
Central Hudson - uncommitted credit facility | US | n/a | ||||||
FortisBC Energy - uncommitted credit facility | March 2022 | |||||||
FortisBC Electric - unsecured demand overdraft facility | n/a | |||||||
Other Electric - unsecured demand facilities | n/a | |||||||
Other Electric - unsecured demand facility and emergency standby loan | US | June 2021 | ||||||
Corporate and Other - unsecured non-revolving facility | n/a |
30 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
(in millions) | 2020 | 2019 | ||||||
Operating leases | ||||||||
Other assets | $ | $ | ||||||
Accounts payable and other current liabilities | ( | ( | ||||||
( | ( | |||||||
Finance leases (1) (2) | ||||||||
Regulatory assets | $ | $ | ||||||
PPE, net | ||||||||
Accounts payable and other current liabilities | ( | ( | ||||||
Finance leases | ( | ( |
The components of lease expense were as follows. | ||||||||
(in millions) | 2020 | 2019 | ||||||
Operating lease cost | $ | $ | ||||||
Finance lease cost: | ||||||||
Amortization | ||||||||
Interest | ||||||||
Variable lease cost | ||||||||
Total lease cost | $ | $ |
(in millions) | Operating Leases | Finance Leases | Total | ||||||||
2021 | $ | $ | $ | ||||||||
2022 | |||||||||||
2023 | |||||||||||
2024 | |||||||||||
2025 | |||||||||||
Thereafter | |||||||||||
Less: Imputed interest | ( | ( | ( | ||||||||
Total lease obligations | |||||||||||
Less: Current installments | ( | ( | ( | ||||||||
$ | $ | $ |
31 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
Supplemental lease information was as follows. | ||||||||
(in millions, except as noted) | 2020 | 2019 | ||||||
Weighted average remaining lease term (years) | ||||||||
Operating leases | ||||||||
Finance leases | ||||||||
Weighted average discount rate (%) | ||||||||
Operating leases | ||||||||
Finance leases | ||||||||
Cash payments related to lease liabilities | ||||||||
Operating cash flows used for operating leases | $ | ( | $ | ( | ||||
Operating cash flows used for finance leases | ( | ( | ||||||
Financing cash flows used for finance leases | ( | ( | ||||||
Investing cash flows used for finance leases | ( | ( |
(in millions) | 2020 | 2019 | |||||||||
Employee future benefits (Note 25) | $ | $ | |||||||||
Customer and other deposits | |||||||||||
AROs (Note 3) | |||||||||||
Stock-based compensation plans (Note 21) | |||||||||||
Manufactured gas plant site remediation (1) | |||||||||||
Fair value of derivatives (Note 27) | |||||||||||
Mine reclamation obligations (2) | |||||||||||
Retail energy contract (3) | |||||||||||
Deferred compensation plan (Note 9) | |||||||||||
Operating leases | |||||||||||
Other | |||||||||||
$ | $ |
32 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
2020 | 2019 | |||||||||||||||||||
Net Earnings | Weighted | Net Earnings | Weighted | |||||||||||||||||
to Common | Average | to Common | Average | |||||||||||||||||
Shareholders | Shares | EPS | Shareholders | Shares | EPS | |||||||||||||||
($ millions) | (# millions) | ($) | ($ millions) | (# millions) | ($) | |||||||||||||||
Basic EPS | $ | $ | $ | $ | ||||||||||||||||
Potential dilutive effect of stock options | — | — | ||||||||||||||||||
Diluted EPS | $ | $ | $ | $ |
Issued and Outstanding | 2020 | 2019 | ||||||||||||||||||
First Preference Shares | Number | Number | ||||||||||||||||||
of Shares | Amount | of Shares | Amount | |||||||||||||||||
(in thousands) | (in millions) | (in thousands) | (in millions) | |||||||||||||||||
Series F | $ | $ | ||||||||||||||||||
Series G | ||||||||||||||||||||
Series H | ||||||||||||||||||||
Series I | ||||||||||||||||||||
Series J | ||||||||||||||||||||
Series K | ||||||||||||||||||||
Series M | ||||||||||||||||||||
$ | $ |
33 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
Reset | Redemption | Right to | ||||||||||||||||||
Initial | Annual | Dividend | and/or | Redemption | Convert on | |||||||||||||||
Yield | Dividend | Yield | Conversion | Value | a One-For- | |||||||||||||||
First Preference Shares (1) (2) | (%) | ($) | (%) | Option Date | ($) | One Basis | ||||||||||||||
Perpetual fixed rate | ||||||||||||||||||||
Series F | Currently Redeemable | — | ||||||||||||||||||
Series J (3) | Currently Redeemable | — | ||||||||||||||||||
Fixed rate reset (4) (5) | ||||||||||||||||||||
Series G | September 1, 2023 | — | ||||||||||||||||||
Series H (6) | June 1, 2025 | Series I | ||||||||||||||||||
Series K | March 1, 2024 | Series L | ||||||||||||||||||
Series M | December 1, 2024 | Series N | ||||||||||||||||||
Floating rate reset (5) (7) | ||||||||||||||||||||
Series I | June 1, 2025 | Series H | ||||||||||||||||||
Series L | — | Series K | ||||||||||||||||||
Series N | — | Series M |
34 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
(in millions) | Opening Balance | Net Change | Ending Balance | ||||||||
2020 | |||||||||||
Unrealized foreign currency translation gains (losses) | |||||||||||
Net investments in foreign operations | $ | $ | ( | $ | |||||||
Hedges of net investments in foreign operations | ( | ( | |||||||||
Income tax expense | ( | ( | ( | ||||||||
( | |||||||||||
Other | |||||||||||
Cash flow hedges (Note 27) | ( | ( | |||||||||
Unrealized employee future benefits losses (Note 25) | ( | ( | ( | ||||||||
Income tax recovery | |||||||||||
( | ( | ( | |||||||||
Accumulated other comprehensive income | $ | $ | ( | $ | |||||||
2019 | |||||||||||
Unrealized foreign currency translation gains (losses) | |||||||||||
Net investments in foreign operations | $ | $ | ( | $ | |||||||
Hedges of net investments in foreign operations | ( | ( | |||||||||
Income tax recovery (expense) | ( | ( | |||||||||
( | |||||||||||
Other | |||||||||||
Cash flow hedges (Note 27) | |||||||||||
Unrealized employee future benefits losses (Note 25) | ( | ( | ( | ||||||||
Income tax recovery | |||||||||||
( | ( | ( | |||||||||
Accumulated other comprehensive income | $ | $ | ( | $ |
35 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
2020 | 2019 | |||||||
Options granted (in thousands) | ||||||||
Exercise price ($) (1) | ||||||||
Grant date fair value ($) | ||||||||
Valuation assumptions: | ||||||||
Dividend yield (%) (2) | ||||||||
Expected volatility (%) (3) | ||||||||
Risk-free interest rate (%) (4) | ||||||||
Weighted average expected life (years) (5) |
Total Options | Non-vested Options (1) | ||||||||||||||||||||||
(in thousands, except as noted) | Number of Options | Weighted Average Exercise Price | Number of Options | Weighted Average Grant Date Fair Value | |||||||||||||||||||
Options outstanding, beginning of year | $ | $ | |||||||||||||||||||||
Granted | $ | $ | |||||||||||||||||||||
Exercised | ( | $ | n/a | n/a | |||||||||||||||||||
Vested | n/a | n/a | ( | $ | |||||||||||||||||||
Cancelled/Forfeited | ( | $ | ( | $ | |||||||||||||||||||
Options outstanding, end of year | $ | $ | |||||||||||||||||||||
Options vested, end of year (2) | $ |
(in millions) | 2020 | 2019 | ||||||
Stock options exercised: | ||||||||
Cash received for exercise price | $ | $ | ||||||
Intrinsic value realized by employees | ||||||||
36 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
2020 | 2019 | |||||||
Number of units (in thousands) | ||||||||
Beginning of year | ||||||||
Granted | ||||||||
Notional dividends reinvested | ||||||||
Paid out | ( | ( | ||||||
End of year | ||||||||
2020 | 2019 | |||||||
Number of units (in thousands) | ||||||||
Beginning of year | ||||||||
Granted | ||||||||
Notional dividends reinvested | ||||||||
Paid out | ( | ( | ||||||
Cancelled/forfeited | ( | ( | ||||||
End of year | ||||||||
Additional information (in millions) | ||||||||
Compensation expense recognized | $ | $ | ||||||
Compensation expense unrecognized (1) | ||||||||
Cash payout | ||||||||
Accrued liability as at December 31 (2) | ||||||||
Aggregate intrinsic value as at December 31 (3) |
37 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
2020 | 2019 | |||||||
Number of units (in thousands) | ||||||||
Beginning of year | ||||||||
Granted | ||||||||
Notional dividends reinvested | ||||||||
Paid out | ( | ( | ||||||
Cancelled/forfeited | ( | ( | ||||||
End of year | ||||||||
Additional information (in millions) | ||||||||
Compensation expense recognized | $ | $ | ||||||
Compensation expense unrecognized (1) | ||||||||
Cash payout | ||||||||
Accrued liability as at December 31 (2) | ||||||||
Aggregate intrinsic value as at December 31 (3) |
(in millions) | 2020 | 2019 | ||||||
Equity component of AFUDC | $ | $ | ||||||
Equity income | ( | |||||||
Derivative gains | ||||||||
Interest income | ||||||||
Gain on repayment of debt | ||||||||
Other | ||||||||
$ | $ |
38 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
(in millions) | 2020 | 2019 | ||||||
Gross deferred income tax assets | ||||||||
Regulatory liabilities | $ | $ | ||||||
Tax loss and credit carryforwards | ||||||||
Employee future benefits | ||||||||
Unrealized foreign exchange losses on long-term debt (1) | ||||||||
Other | ||||||||
Valuation allowance (1) | ( | ( | ||||||
Net deferred income tax asset | $ | $ | ||||||
Gross deferred income tax liabilities | ||||||||
PPE | $ | ( | $ | ( | ||||
Regulatory assets | ( | ( | ||||||
Intangible assets | ( | ( | ||||||
( | ( | |||||||
Net deferred income tax liability | $ | ( | $ | ( |
(in millions) | 2020 | 2019 | ||||||
Beginning of year | $ | $ | ||||||
Additions related to current year | ||||||||
Adjustments related to prior years | ( | ( | ||||||
End of year | $ | $ |
39 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
(in millions) | 2020 | 2019 | ||||||
Canadian | ||||||||
Earnings before income tax expense | $ | $ | ||||||
Current income tax | ||||||||
Deferred income tax | ( | |||||||
Total Canadian | $ | $ | ||||||
Foreign | ||||||||
Earnings before income tax expense | $ | $ | ||||||
Current income tax | ( | ( | ||||||
Deferred income tax | ||||||||
Total Foreign | $ | $ | ||||||
Income tax expense | $ | $ |
(in millions, except as noted) | 2020 | 2019 | ||||||
Earnings before income tax expense | $ | $ | ||||||
Combined Canadian federal and provincial statutory income tax rate (%) | ||||||||
Expected federal and provincial taxes at statutory rate | $ | $ | ||||||
Decrease resulting from: | ||||||||
Foreign and other statutory rate differentials | ( | ( | ||||||
Difference between gain on sale for accounting and amounts calculated for tax purposes | ( | |||||||
Release of valuation allowance | ( | |||||||
AFUDC | ( | ( | ||||||
Effects of rate-regulated accounting: | ||||||||
Difference between depreciation claimed for income tax and accounting purposes | ( | ( | ||||||
Items capitalized for accounting purposes but expensed for income tax purposes | ( | ( | ||||||
Other | ( | ( | ||||||
Income tax expense | $ | $ | ||||||
Effective tax rate (%) |
40 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
(in millions) | Expiring Year | 2020 | ||||||
Canadian | ||||||||
Capital loss | n/a | $ | ||||||
Non-capital loss | 2035-2040 | |||||||
Other tax credits | 2026-2040 | |||||||
Unrecognized | ( | |||||||
Foreign | ||||||||
Federal and state net operating loss | 2021-2040 | |||||||
Other tax credits | 2022-2040 | |||||||
Total income tax carryforwards recognized | $ |
2020 Target Allocation | |||||||||||
(weighted average %) | 2020 | 2019 | |||||||||
Equities | |||||||||||
Fixed income | |||||||||||
Real estate | |||||||||||
Cash and other | |||||||||||
41 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
(in millions) | Level 1 (1) | Level 2 (1) | Level 3 (1) | Total | ||||||||||
2020 | ||||||||||||||
Equities | $ | $ | $ | $ | ||||||||||
Fixed income | ||||||||||||||
Real estate | ||||||||||||||
Private equities | ||||||||||||||
Cash and other | ||||||||||||||
$ | $ | $ | $ | |||||||||||
2019 | ||||||||||||||
Equities | $ | $ | $ | $ | ||||||||||
Fixed income | ||||||||||||||
Real estate | ||||||||||||||
Private equities | ||||||||||||||
Cash and other | ||||||||||||||
$ | $ | $ | $ |
(in millions) | 2020 | 2019 | ||||||
Balance, beginning of year | $ | $ | ||||||
(Loss) return on plan assets | ( | |||||||
Foreign currency translation | ( | ( | ||||||
Purchases, sales and settlements | ( | ( | ||||||
Balance, end of year | $ | $ |
42 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
Funded Status | Defined Benefit Pension Plans | OPEB Plans | ||||||||||||
(in millions) | 2020 | 2019 | 2020 | 2019 | ||||||||||
Change in benefit obligation (1) | ||||||||||||||
Balance, beginning of year | $ | $ | $ | $ | ||||||||||
Service costs | ||||||||||||||
Employee contributions | ||||||||||||||
Interest costs | ||||||||||||||
Benefits paid | ( | ( | ( | ( | ||||||||||
Actuarial losses | ||||||||||||||
Past service (credits) costs/plan amendments | ( | |||||||||||||
Foreign currency translation | ( | ( | ( | ( | ||||||||||
Balance, end of year (2) (3) | $ | $ | $ | $ | ||||||||||
Change in value of plan assets | ||||||||||||||
Balance, beginning of year | $ | $ | $ | $ | ||||||||||
Actual return on plan assets | ||||||||||||||
Benefits paid | ( | ( | ( | ( | ||||||||||
Employee contributions | ||||||||||||||
Employer contributions | ||||||||||||||
Foreign currency translation | ( | ( | ( | ( | ||||||||||
Balance, end of year (4) | $ | $ | $ | $ | ||||||||||
Funded status | $ | ( | $ | ( | $ | ( | $ | ( | ||||||
Balance sheet presentation | ||||||||||||||
Long-term assets (Note 9) | $ | $ | $ | $ | ||||||||||
Current liabilities (Note 13) | ( | ( | ( | ( | ||||||||||
Long-term liabilities (Note 16) | ( | ( | ( | ( | ||||||||||
$ | ( | $ | ( | $ | ( | $ | ( |
43 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
Net Benefit Cost (1) | Defined Benefit Pension Plans | OPEB Plans | ||||||||||||
(in millions) | 2020 | 2019 | 2020 | 2019 | ||||||||||
Service costs | $ | $ | $ | $ | ||||||||||
Interest costs | ||||||||||||||
Expected return on plan assets | ( | ( | ( | ( | ||||||||||
Amortization of actuarial losses (gains) | ( | ( | ||||||||||||
Amortization of past service credits/plan amendments | ( | ( | ( | ( | ||||||||||
Regulatory adjustments | ||||||||||||||
$ | $ | $ | $ |
Defined Benefit Pension Plans | OPEB Plans | |||||||||||||
(in millions) | 2020 | 2019 | 2020 | 2019 | ||||||||||
Unamortized net actuarial losses (gains) | $ | $ | $ | ( | $ | ( | ||||||||
Unamortized past service costs | ||||||||||||||
Income tax recovery | ( | ( | ( | ( | ||||||||||
Accumulated other comprehensive income | $ | $ | $ | $ | ||||||||||
Net actuarial losses (gains) | $ | $ | $ | $ | ( | |||||||||
Past service credits | ( | ( | ( | ( | ||||||||||
Other regulatory deferrals | ||||||||||||||
$ | $ | $ | $ | ( | ||||||||||
Regulatory assets (Note 8) | $ | $ | $ | $ | ||||||||||
Regulatory liabilities (Note 8) | ( | ( | ||||||||||||
Net regulatory assets (liabilities) | $ | $ | $ | $ | ( |
44 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
Defined Benefit Pension Plans | OPEB Plans | |||||||||||||
(in millions) | 2020 | 2019 | 2020 | 2019 | ||||||||||
Current year net actuarial losses | $ | $ | $ | $ | ||||||||||
Past service costs/plan amendments | ||||||||||||||
Amortization of actuarial losses | ||||||||||||||
Foreign currency translation | ||||||||||||||
Income tax recovery | ( | ( | ||||||||||||
Total recognized in comprehensive income | $ | $ | $ | $ | ||||||||||
Current year net actuarial losses | $ | $ | $ | $ | ||||||||||
Past service costs (credits)/plan amendments | ( | |||||||||||||
Amortization of actuarial (losses) gains | ( | ( | ||||||||||||
Amortization of past service (costs) credits | ( | |||||||||||||
Foreign currency translation | ( | ( | ||||||||||||
Regulatory adjustments | ( | ( | ( | |||||||||||
Total recognized in regulatory assets | $ | $ | $ | $ |
Significant Assumptions | Defined Benefit Pension Plans | OPEB Plans | ||||||||||||
(weighted average %) | 2020 | 2019 | 2020 | 2019 | ||||||||||
Discount rate during the year (1) | ||||||||||||||
Discount rate as at December 31 | ||||||||||||||
Expected long-term rate of return on plan assets (2) | ||||||||||||||
Rate of compensation increase | ||||||||||||||
Health care cost trend increase as at December 31 (3) |
Expected Benefit Payments | Defined Benefit | OPEB | ||||||
(in millions) | Pension Payments | Payments | ||||||
2021 | $ | $ | ||||||
2022 | ||||||||
2023 | ||||||||
2024 | ||||||||
2025 | ||||||||
2026-2030 |
45 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
(in millions) | 2020 | 2019 | ||||||
Cash paid (received) for | ||||||||
Interest | $ | $ | ||||||
Income taxes | ( | ( | ||||||
Change in working capital | ||||||||
Accounts receivable and other current assets | $ | ( | $ | |||||
Prepaid expenses | ( | ( | ||||||
Inventories | ( | ( | ||||||
Regulatory assets - current portion | ( | ( | ||||||
Accounts payable and other current liabilities | ( | ( | ||||||
Regulatory liabilities - current portion | ( | ( | ||||||
$ | ( | $ | ( | |||||
Non-cash investing and financing activities | ||||||||
Accrued capital expenditures | $ | $ | ||||||
Common share dividends reinvested | ||||||||
Contributions in aid of construction | ||||||||
Right-of-use assets obtained in exchange for operating lease liabilities | ||||||||
Exercise of stock options into common shares | ||||||||
Finance leases |
46 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
47 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
(in millions) | Level 1 (1) | Level 2 (1) | Level 3 (1) | Total | ||||||||||
As at December 31, 2020 | ||||||||||||||
Assets | ||||||||||||||
Energy contracts subject to regulatory deferral (2) (3) | $ | $ | $ | $ | ||||||||||
Energy contracts not subject to regulatory deferral (2) | ||||||||||||||
Foreign exchange contracts and total return swaps (2) | ||||||||||||||
Other investments (4) | ||||||||||||||
$ | $ | $ | $ | |||||||||||
Liabilities | ||||||||||||||
Energy contracts subject to regulatory deferral (3) (5) | $ | $ | ( | $ | $ | ( | ||||||||
Energy contracts not subject to regulatory deferral (5) | ( | ( | ||||||||||||
$ | $ | ( | $ | $ | ( |
As at December 31, 2019 | ||||||||||||||
Assets | ||||||||||||||
Energy contracts subject to regulatory deferral (2) (3) | $ | $ | $ | $ | ||||||||||
Energy contracts not subject to regulatory deferral (2) | ||||||||||||||
Foreign exchange contracts, interest rate and total return swaps (2) | ||||||||||||||
Other investments (4) | ||||||||||||||
$ | $ | $ | $ | |||||||||||
Liabilities | ||||||||||||||
Energy contracts subject to regulatory deferral (3) (5) | $ | ( | $ | ( | $ | $ | ( | |||||||
Energy contracts not subject to regulatory deferral (5) | ( | ( | ||||||||||||
$ | ( | $ | ( | $ | $ | ( |
48 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
(in millions) | Gross Amount Recognized in Balance Sheet | Counterparty Netting of Energy Contracts | Cash Collateral Received/Posted | Net Amount | ||||||||||
As at December 31, 2020 | ||||||||||||||
Derivative assets | $ | $ | $ | $ | ||||||||||
Derivative liabilities | ( | ( | ( | ( |
As at December 31, 2019 | ||||||||||||||
Derivative assets | $ | $ | $ | $ | ( | |||||||||
Derivative liabilities | ( | ( | ( | ( |
2020 | 2019 | |||||||
Energy contracts subject to regulatory deferral (1) | ||||||||
Electricity swap contracts (GWh) | ||||||||
Electricity power purchase contracts (GWh) | ||||||||
Gas swap contracts (PJ) | 156 | 168 | ||||||
Gas supply contract premiums (PJ) | 203 | 241 | ||||||
Energy contracts not subject to regulatory deferral (1) | ||||||||
Wholesale trading contracts (GWh) | ||||||||
Gas swap contracts (PJ) | 36 | 43 |
49 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
(in millions) | Total | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Thereafter | ||||||||||||||||
Waneta Expansion capacity agreement (1) | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||
Gas and fuel purchase obligations (2) | |||||||||||||||||||||||
Power purchase obligations (3) | |||||||||||||||||||||||
Renewable PPAs (4) | |||||||||||||||||||||||
ITC easement agreement (5) | |||||||||||||||||||||||
Debt collection agreement (6) | |||||||||||||||||||||||
Renewable energy credit purchase agreements (7) | |||||||||||||||||||||||
Other (8) | |||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ |
50 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
51 |
FORTIS INC. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 |
52 |
TABLE OF CONTENTS | |||||||||||
About Fortis | 1 | Cash Flow Requirements | 19 | ||||||||
Significant Items | 3 | Cash Flow Summary | 20 | ||||||||
Performance at a Glance | 5 | Contractual Obligations | 22 | ||||||||
The Industry | 8 | Capital Structure and Credit Ratings | 23 | ||||||||
Operating Results | 9 | Capital Plan | 24 | ||||||||
Business Unit Performance | 10 | Business Risks | 28 | ||||||||
ITC | 11 | Accounting Matters | 35 | ||||||||
UNS Energy | 11 | Financial Instruments | 38 | ||||||||
Central Hudson | 12 | Long-Term Debt and Other | 38 | ||||||||
FortisBC Energy | 12 | Derivatives | 39 | ||||||||
FortisAlberta | 13 | Selected Annual Financial Information | 41 | ||||||||
FortisBC Electric | 13 | Fourth Quarter Results | 42 | ||||||||
Other Electric | 14 | Summary of Quarterly Results | 44 | ||||||||
Energy Infrastructure | 14 | Related-Party and Inter-Company Transactions | 45 | ||||||||
Corporate and Other | 14 | Management's Evaluation of Controls and Procedures | 45 | ||||||||
Non-US GAAP Financial Measures | 15 | Outlook | 46 | ||||||||
Regulatory Highlights | 15 | Forward-Looking Information | 46 | ||||||||
Financial Position | 18 | Glossary | 48 | ||||||||
Liquidity and Capital Resources | 19 | Annual Consolidated Financial Statements | F-1 | ||||||||
MANAGEMENT DISCUSSION AND ANALYSIS | 1 | December 31, 2020 |
MANAGEMENT DISCUSSION AND ANALYSIS | 2 | December 31, 2020 |
MANAGEMENT DISCUSSION AND ANALYSIS | 3 | December 31, 2020 |
MANAGEMENT DISCUSSION AND ANALYSIS | 4 | December 31, 2020 |
Key Financial Metrics | |||||||||||
($ millions, except as indicated) | 2020 | 2019 | Variance | ||||||||
Common Equity Earnings | |||||||||||
Actual | 1,209 | 1,655 | (446) | ||||||||
Adjusted (1) | 1,195 | 1,115 | 80 | ||||||||
Basic EPS ($) | |||||||||||
Actual | 2.60 | 3.79 | (1.19) | ||||||||
Adjusted (1) | 2.57 | 2.55 | 0.02 | ||||||||
Dividends | |||||||||||
Paid per Common Share ($) | 1.9375 | 1.8275 | 0.11 | ||||||||
Actual Payout Ratio (%) | 74.5 | 48.2 | 26.3 | ||||||||
Adjusted Payout Ratio (%) (1) | 75.4 | 71.7 | 3.7 | ||||||||
Weighted Average Number of Common Shares Outstanding (millions) | 464.8 | 436.8 | 28 | ||||||||
Operating Cash Flow | 2,701 | 2,663 | 38 | ||||||||
Capital Expenditures (2) | 4,177 | 3,818 | 359 |
TSR (1) (%) | 1-Year | 3-Year | 5-Year | 10-Year | 20-Year | ||||||||||||
Fortis | — | 8.0 | 10.9 | 8.3 | 13.3 |
MANAGEMENT DISCUSSION AND ANALYSIS | 5 | December 31, 2020 |
MANAGEMENT DISCUSSION AND ANALYSIS | 6 | December 31, 2020 |
MANAGEMENT DISCUSSION AND ANALYSIS | 7 | December 31, 2020 |
MANAGEMENT DISCUSSION AND ANALYSIS | 8 | December 31, 2020 |
Variance | |||||||||||||||||
($ millions) | 2020 | 2019 | FX | Other | |||||||||||||
Revenue | 8,935 | 8,783 | 59 | 93 | |||||||||||||
Energy Supply Costs | 2,562 | 2,520 | 14 | 28 | |||||||||||||
Operating Expenses | 2,437 | 2,452 | 19 | (34) | |||||||||||||
Depreciation and Amortization | 1,428 | 1,350 | 8 | 70 | |||||||||||||
Gain on Disposition | — | 577 | — | (577) | |||||||||||||
Other Income, Net | 154 | 138 | (2) | 18 | |||||||||||||
Finance Charges | 1,042 | 1,035 | 8 | (1) | |||||||||||||
Income Tax Expense | 231 | 289 | — | (58) | |||||||||||||
Net Earnings | 1,389 | 1,852 | 8 | (471) | |||||||||||||
Net Earnings Attributable to: | |||||||||||||||||
Non-Controlling Interests | 115 | 130 | 1 | (16) | |||||||||||||
Preference Equity Shareholders | 65 | 67 | — | (2) | |||||||||||||
Common Equity Shareholders | 1,209 | 1,655 | 7 | (453) | |||||||||||||
Net Earnings | 1,389 | 1,852 | 8 | (471) |
MANAGEMENT DISCUSSION AND ANALYSIS | 9 | December 31, 2020 |
Common Equity Earnings | |||||||||||||||||
Variance | |||||||||||||||||
($ millions) | 2020 | 2019 | FX (1) | Other | |||||||||||||
Regulated Utilities | |||||||||||||||||
ITC | 449 | 471 | 8 | (30) | |||||||||||||
UNS Energy | 302 | 292 | 4 | 6 | |||||||||||||
Central Hudson | 91 | 85 | — | 6 | |||||||||||||
FortisBC Energy | 175 | 165 | — | 10 | |||||||||||||
FortisAlberta | 133 | 131 | — | 2 | |||||||||||||
FortisBC Electric | 56 | 54 | — | 2 | |||||||||||||
Other Electric (2) | 112 | 106 | — | 6 | |||||||||||||
1,318 | 1,304 | 12 | 2 | ||||||||||||||
Non-Regulated | |||||||||||||||||
Energy Infrastructure (3) | 39 | 18 | — | 21 | |||||||||||||
Corporate and Other (4) | (148) | 333 | (5) | (476) | |||||||||||||
Common Equity Earnings | 1,209 | 1,655 | 7 | (453) |
MANAGEMENT DISCUSSION AND ANALYSIS | 10 | December 31, 2020 |
ITC | Variance | ||||||||||||||||
($ millions) | 2020 | 2019 | FX | Other | |||||||||||||
Revenue (1) | 1,744 | 1,761 | 22 | (39) | |||||||||||||
Earnings (1) | 449 | 471 | 8 | (30) |
UNS Energy | Variance | ||||||||||||||||
2020 | 2019 | FX | Other | ||||||||||||||
Retail electricity sales (GWh) | 10,920 | 10,431 | — | 489 | |||||||||||||
Wholesale electricity sales (GWh) (1) | 5,843 | 7,923 | — | (2,080) | |||||||||||||
Gas sales (PJ) | 15 | 16 | — | (1) | |||||||||||||
Revenue ($ millions) | 2,260 | 2,212 | 24 | 24 | |||||||||||||
Earnings ($ millions) | 302 | 292 | 4 | 6 |
MANAGEMENT DISCUSSION AND ANALYSIS | 11 | December 31, 2020 |
Central Hudson | Variance | ||||||||||||||||
2020 | 2019 | FX | Other | ||||||||||||||
Electricity sales (GWh) | 4,969 | 4,963 | — | 6 | |||||||||||||
Gas sales (PJ) | 23 | 22 | — | 1 | |||||||||||||
Revenue ($ millions) | 953 | 917 | 9 | 27 | |||||||||||||
Earnings ($ millions) | 91 | 85 | — | 6 |
FortisBC Energy | 2020 | 2019 | Variance | ||||||||
Gas sales (PJ) | 219 | 227 | (8) | ||||||||
Revenue ($ millions) | 1,385 | 1,331 | 54 | ||||||||
Earnings ($ millions) | 175 | 165 | 10 |
MANAGEMENT DISCUSSION AND ANALYSIS | 12 | December 31, 2020 |
FortisAlberta | 2020 | 2019 | Variance | ||||||||
Electricity deliveries (GWh) | 16,092 | 16,887 | (795) | ||||||||
Revenue ($ millions) | 596 | 598 | (2) | ||||||||
Earnings ($ millions) | 133 | 131 | 2 |
FortisBC Electric | 2020 | 2019 | Variance | ||||||||
Electricity sales (GWh) | 3,291 | 3,326 | (35) | ||||||||
Revenue ($ millions) | 424 | 418 | 6 | ||||||||
Earnings ($ millions) | 56 | 54 | 2 |
MANAGEMENT DISCUSSION AND ANALYSIS | 13 | December 31, 2020 |
Other Electric | Variance | ||||||||||||||||
2020 | 2019 | FX | Other | ||||||||||||||
Electricity sales (GWh) | 9,175 | 9,366 | — | (191) | |||||||||||||
Revenue ($ millions) | 1,485 | 1,467 | 4 | 14 | |||||||||||||
Earnings ($ millions) | 112 | 106 | — | 6 |
Energy Infrastructure | 2020 | 2019 | Variance | |||||||||||
Electricity sales (GWh) | 229 | 144 | 85 | |||||||||||
Revenue ($ millions) | 88 | 82 | 6 | |||||||||||
Earnings ($ millions) | 39 | 18 | 21 |
Corporate and Other | Variance | ||||||||||||||||
($ millions) | 2020 | 2019 | FX | Other | |||||||||||||
Net (expenses) income | (148) | 333 | (5) | (476) |
MANAGEMENT DISCUSSION AND ANALYSIS | 14 | December 31, 2020 |
Non-US GAAP Reconciliation | |||||||||||
($ millions, except as shown) | 2020 | 2019 | Variance | ||||||||
Common Equity Earnings | 1,209 | 1,655 | (446) | ||||||||
Adjusting items: | |||||||||||
FERC base ROE decisions (1) | (27) | (83) | 56 | ||||||||
US tax reform (2) | 13 | 12 | 1 | ||||||||
Unrealized loss on mark-to-market of derivatives (3) | — | 15 | (15) | ||||||||
Gain on disposition (4) | — | (484) | 484 | ||||||||
Adjusted Common Equity Earnings | 1,195 | 1,115 | 80 | ||||||||
Adjusted Basic EPS ($) | 2.57 | 2.55 | 0.02 |
MANAGEMENT DISCUSSION AND ANALYSIS | 15 | December 31, 2020 |
MANAGEMENT DISCUSSION AND ANALYSIS | 16 | December 31, 2020 |
MANAGEMENT DISCUSSION AND ANALYSIS | 17 | December 31, 2020 |
Significant Changes between December 31, 2020 and 2019 | |||||||||||
Increase (Decrease) | |||||||||||
FX | Other | ||||||||||
Balance Sheet Account | ($ millions) | ($ millions) | Explanation | ||||||||
Cash and cash equivalents | (3) | (118) | Related to the timing of debt and equity issuances, and the related reinvestment in capital and operating requirements. | ||||||||
Regulatory assets (current and long-term) | (25) | 230 | Due primarily to deferred income taxes, and the operation of energy management cost and employee future benefits deferrals, partially offset by lower derivative loss deferrals at UNS Energy. | ||||||||
Property, plant and equipment, net | (425) | 2,435 | Due to capital expenditures, partially offset by depreciation. | ||||||||
Goodwill | (212) | — | |||||||||
Short-term borrowings | (10) | (370) | Reflects the repayment of short-term borrowings at UNS Energy and commercial paper at ITC. | ||||||||
Other liabilities | (16) | 169 | Reflects employee future benefits, refundable deposits received by ITC for transmission network upgrades, and an upfront payment received by FortisAlberta associated with a long-term energy retailer agreement. | ||||||||
Regulatory liabilities (current and long-term) | (48) | (207) | Due to ROE complaints liability at ITC, deferred income taxes, and the normal operation of rate stabilization and related accounts. | ||||||||
Deferred income tax liabilities | (34) | 409 | Due to higher temporary differences associated with ongoing capital investment. |
MANAGEMENT DISCUSSION AND ANALYSIS | 18 | December 31, 2020 |
Significant Changes between December 31, 2020 and 2019 | |||||||||||
Increase (Decrease) | |||||||||||
FX | Other | ||||||||||
Balance Sheet Account | ($ millions) | ($ millions) | Explanation | ||||||||
Long-term debt (including current portion) | (296) | 2,472 | Reflects debt issuances, partially offset by debt repayments at the regulated utilities, largely at ITC and UNS Energy. | ||||||||
Shareholders' equity | (279) | 445 | Due primarily to: (i) Common Equity Earnings for 2020, less dividends declared on common shares; and (ii) the issuance of common shares. | ||||||||
Credit Facilities | ||||||||||||||
As at December 31 | Regulated | Corporate | ||||||||||||
($ millions) | Utilities | and Other | 2020 | 2019 | ||||||||||
Total credit facilities (1) | 3,700 | 1,881 | 5,581 | 5,590 | ||||||||||
Credit facilities utilized: | ||||||||||||||
Short-term borrowings | (132) | — | (132) | (512) | ||||||||||
Long-term debt (including current portion) | (714) | (266) | (980) | (640) | ||||||||||
Letters of credit outstanding | (77) | (53) | (130) | (114) | ||||||||||
Credit facilities unutilized | 2,777 | 1,562 | 4,339 | 4,324 |
MANAGEMENT DISCUSSION AND ANALYSIS | 19 | December 31, 2020 |
Summary of Cash Flows | |||||||||||
Years ended December 31 | |||||||||||
($ millions) | 2020 | 2019 | Variance | ||||||||
Cash, beginning of year | 370 | 332 | 38 | ||||||||
Cash provided from (used in): | |||||||||||
Operating activities | 2,701 | 2,663 | 38 | ||||||||
Investing activities | (4,132) | (2,768) | (1,364) | ||||||||
Financing activities | 1,327 | 154 | 1,173 | ||||||||
Effect of exchange rate changes on cash and cash equivalents | (17) | (26) | 9 | ||||||||
Cash and change in cash associated with assets held for sale | — | 15 | (15) | ||||||||
Cash, end of year | 249 | 370 | (121) |
MANAGEMENT DISCUSSION AND ANALYSIS | 20 | December 31, 2020 |
Long-Term Debt Issuances | Month Issued | Interest Rate (%) | Maturity | Amount | Use of Proceeds | ||||||||||||||||||
Year ended December 31, 2020 | |||||||||||||||||||||||
($ millions, except %) | |||||||||||||||||||||||
ITC | |||||||||||||||||||||||
Unsecured term loan credit agreement | January | (1) | 2021 | US | 75 | (2)(3) | |||||||||||||||||
Unsecured term loan credit agreement (4) | January | (5) | 2021 | US | 200 | (4) | |||||||||||||||||
Unsecured senior notes | May | 2.95 | 2030 | US | 700 | (2)(3)(6) | |||||||||||||||||
First mortgage bonds | July | 3.13 | 2051 | US | 180 | (2)(3)(7) | |||||||||||||||||
Secured senior notes | October | 3.02 | 2055 | US | 150 | (2)(3)(7)(8) | |||||||||||||||||
UNS Energy | |||||||||||||||||||||||
Unsecured senior notes | April | 4.00 | 2050 | US | 350 | (2)(3) | |||||||||||||||||
Unsecured senior notes | August | 1.50 | 2030 | US | 300 | (7) | |||||||||||||||||
Unsecured senior notes | September | 2.17 | 2032 | US | 50 | (2)(3) | |||||||||||||||||
Central Hudson | |||||||||||||||||||||||
Unsecured senior notes | May | 3.42 | 2050 | US | 30 | (3) | |||||||||||||||||
Unsecured senior notes | July | 3.62 | 2060 | US | 30 | (3)(7) | |||||||||||||||||
Unsecured senior notes | September | 2.03 | 2030 | US | 40 | (8) | |||||||||||||||||
Unsecured senior notes | November | 2.03 | 2030 | US | 30 | (3)(7) | |||||||||||||||||
FortisBC Energy | |||||||||||||||||||||||
Unsecured debentures | July | 2.54 | 2050 | 200 | (7) | ||||||||||||||||||
FortisAlberta | |||||||||||||||||||||||
Unsecured senior debentures | December | 2.63 | 2051 | 175 | (2) | ||||||||||||||||||
FortisBC Electric | |||||||||||||||||||||||
Unsecured debentures | May | 3.12 | 2050 | 75 | (2) | ||||||||||||||||||
Newfoundland Power | |||||||||||||||||||||||
First mortgage sinking fund bonds | April | 3.61 | 2060 | 100 | (2)(3) | ||||||||||||||||||
FortisTCI | |||||||||||||||||||||||
Unsecured senior notes | June/October | 5.30 | 2035 | US | 30 | (7)(8) | |||||||||||||||||
Unsecured senior notes | October/December | 3.25 | 2030 | US | 10 | (3) |
MANAGEMENT DISCUSSION AND ANALYSIS | 21 | December 31, 2020 |
Common Equity Issuances and Dividends Paid | |||||||||||
Years ended December 31 | |||||||||||
($ millions, except as indicated) | 2020 | 2019 | Variance | ||||||||
Common shares issued: | |||||||||||
Cash (1) | 58 | 1,442 | (1,384) | ||||||||
Non-cash (2) | 116 | 314 | (198) | ||||||||
Total common shares issued | 174 | 1,756 | (1,582) | ||||||||
Number of common shares issued (# millions) | 3.5 | 34.8 | (31.3) | ||||||||
Common share dividends paid: | |||||||||||
Cash | (786) | (494) | (292) | ||||||||
Non-cash (3) | (114) | (299) | 185 | ||||||||
Total common share dividends paid | (900) | (793) | (107) | ||||||||
Dividends paid per common share ($) | 1.9375 | 1.8275 | 0.1100 |
Contractual Obligations | |||||||||||||||||||||||
As at December 31, 2020 | Due | ||||||||||||||||||||||
($ millions) | Total | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Thereafter | ||||||||||||||||
Long-term debt: | |||||||||||||||||||||||
Principal (1) | 24,514 | 1,254 | 823 | 1,786 | 1,088 | 484 | 19,079 | ||||||||||||||||
Interest | 16,113 | 980 | 949 | 919 | 859 | 824 | 11,582 | ||||||||||||||||
Finance leases (2) | 1,225 | 33 | 34 | 34 | 34 | 34 | 1,056 | ||||||||||||||||
Other obligations | 557 | 184 | 112 | 97 | 37 | 37 | 90 | ||||||||||||||||
Other commitments: (3) | |||||||||||||||||||||||
Waneta Expansion capacity agreement | 2,576 | 52 | 53 | 54 | 55 | 56 | 2,306 | ||||||||||||||||
Gas and fuel purchase obligations | 2,355 | 679 | 453 | 312 | 192 | 124 | 595 | ||||||||||||||||
Power purchase obligations | 1,867 | 249 | 208 | 188 | 191 | 180 | 851 | ||||||||||||||||
Renewable PPAs | 1,380 | 102 | 102 | 101 | 101 | 101 | 873 | ||||||||||||||||
ITC easement agreement | 381 | 13 | 13 | 13 | 13 | 13 | 316 | ||||||||||||||||
Debt collection agreement | 112 | 3 | 3 | 3 | 3 | 3 | 97 | ||||||||||||||||
Renewable energy credit purchase agreements | 97 | 15 | 14 | 16 | 9 | 7 | 36 | ||||||||||||||||
Other | 116 | 48 | 5 | 4 | 4 | 3 | 52 | ||||||||||||||||
51,293 | 3,612 | 2,769 | 3,527 | 2,586 | 1,866 | 36,933 |
MANAGEMENT DISCUSSION AND ANALYSIS | 22 | December 31, 2020 |
Consolidated Capital Structure (%) | ||||||||
As at December 31 | 2020 | 2019 | ||||||
Debt (1) | 54.8 | 53.1 | ||||||
Preference shares | 3.6 | 3.8 | ||||||
Common shareholders' equity and minority interest (2) | 41.6 | 43.1 | ||||||
100.0 | 100.0 |
MANAGEMENT DISCUSSION AND ANALYSIS | 23 | December 31, 2020 |
Credit Ratings | |||||||||||||||||
As at December 31, 2020 | Rating | Type | Outlook | ||||||||||||||
S&P | A- | Corporate | Negative | ||||||||||||||
BBB+ | Unsecured debt | ||||||||||||||||
DBRS Morningstar | BBB (high) | Corporate | Positive | ||||||||||||||
BBB (high) | Unsecured debt | ||||||||||||||||
Moody's | Baa3 | Issuer | Stable | ||||||||||||||
Baa3 | Unsecured debt |
2020 Capital Expenditures (1) | |||||||||||||||||||||||||||||||||||
Regulated Utilities | |||||||||||||||||||||||||||||||||||
($ millions, except %) | ITC | UNS Energy | Central Hudson | FortisBC Energy | Fortis Alberta | FortisBC Electric | Other Electric | Total Regulated Utilities | Non-Regulated (2) | Total | (%) | ||||||||||||||||||||||||
Generation | — | 639 | — | — | — | 26 | 42 | 707 | 5 | 712 | 17 | ||||||||||||||||||||||||
Transmission | 1,070 | 84 | 48 | 138 | — | 34 | 165 | 1,539 | — | 1,539 | 37 | ||||||||||||||||||||||||
Distribution | — | 330 | 188 | 207 | 333 | 46 | 167 | 1,271 | — | 1,271 | 30 | ||||||||||||||||||||||||
Other (3) | 112 | 147 | 103 | 126 | 87 | 29 | 37 | 641 | 14 | 655 | 16 | ||||||||||||||||||||||||
Total | 1,182 | 1,200 | 339 | 471 | 420 | 135 | 411 | 4,158 | 19 | 4,177 | 100 | ||||||||||||||||||||||||
(%) | 29 | 29 | 8 | 11 | 10 | 3 | 10 | 100 | — | 100 |
Forecast 2021 Capital Expenditures (1) | |||||||||||||||||||||||||||||||||||
Regulated Utilities | |||||||||||||||||||||||||||||||||||
($ millions, except %) | ITC | UNS Energy | Central Hudson | FortisBC Energy | Fortis Alberta | FortisBC Electric | Other Electric | Total Regulated Utilities | Non-Regulated | Total | (%) | ||||||||||||||||||||||||
Generation | — | 117 | 1 | — | — | 24 | 189 | 331 | 53 | 384 | 10 | ||||||||||||||||||||||||
Transmission | 949 | 191 | 41 | 168 | — | 23 | 310 | 1,682 | — | 1,682 | 44 | ||||||||||||||||||||||||
Distribution | — | 270 | 167 | 184 | 266 | 81 | 173 | 1,141 | — | 1,141 | 30 | ||||||||||||||||||||||||
Other | 51 | 171 | 97 | 115 | 80 | 25 | 49 | 588 | 18 | 606 | 16 | ||||||||||||||||||||||||
Total | 1,000 | 749 | 306 | 467 | 346 | 153 | 721 | 3,742 | 71 | 3,813 | 100 | ||||||||||||||||||||||||
(%) | 26 | 20 | 8 | 12 | 9 | 4 | 19 | 98 | 2 | 100 |
MANAGEMENT DISCUSSION AND ANALYSIS | 24 | December 31, 2020 |
Five-Year Capital Plan (1) | ||||||||||||||||||||
($ billions) | 2021 | 2022 | 2023 | 2024 | 2025 | Total | ||||||||||||||
3.8 | 3.9 | 3.9 | 4.0 | 4.0 | 19.6 |
Nature of Capital Expenditures | Actual | Forecast | Five-Year Plan | ||||||||
(%) | 2020 | 2021 | 2021-2025 | ||||||||
Growth (1) | 21 | 31 | 26 | ||||||||
Sustaining (2) | 65 | 54 | 58 | ||||||||
Other (3) | 14 | 15 | 16 | ||||||||
Total | 100 | 100 | 100 |
Midyear Rate Base (1) | |||||||||||
($ billions) | 2020 | 2021 | 2025 | ||||||||
ITC | 9.5 | 9.9 | 12.5 | ||||||||
UNS Energy | 5.7 | 6.2 | 7.6 | ||||||||
Central Hudson | 2.1 | 2.3 | 3.2 | ||||||||
FortisBC Energy | 5.1 | 5.2 | 6.8 | ||||||||
FortisAlberta | 3.7 | 3.8 | 4.2 | ||||||||
FortisBC Electric | 1.4 | 1.5 | 1.7 | ||||||||
Other Electric | 3.0 | 3.3 | 4.3 | ||||||||
Total | 30.5 | 32.2 | 40.3 |
MANAGEMENT DISCUSSION AND ANALYSIS | 25 | December 31, 2020 |
Major Capital Projects (1) | Forecast | |||||||||||||||||||
Pre- | Actual | 2022- | Expected | |||||||||||||||||
($ millions) | Project | 2020 | 2020 | 2021 | 2025 | Completion | ||||||||||||||
ITC (2) | Multi-Value Regional Transmission Projects | 625 | 17 | 75 | 186 | 2023 | ||||||||||||||
34.5 to 69 kV Transmission Conversion Project | 352 | 93 | 41 | 107 | Post-2025 | |||||||||||||||
UNS Energy | Vail-to-Tortolita Project | — | — | 54 | 190 | 2023 | ||||||||||||||
Oso Grande Wind Project | 65 | 509 | 24 | — | 2021 | |||||||||||||||
FortisBC Energy | Lower Mainland Intermediate Pressure System Upgrade | 388 | 23 | 18 | — | 2021 | ||||||||||||||
Eagle Mountain Woodfibre Gas Line Project (3) | — | — | — | 350 | 2025 | |||||||||||||||
Transmission Integrity Management Capabilities Project | 13 | 8 | 7 | 434 | Post-2025 | |||||||||||||||
Inland Gas Upgrades Project | 9 | 50 | 53 | 177 | 2025 | |||||||||||||||
Tilbury 1B | 8 | 12 | 1 | 375 | 2025 | |||||||||||||||
Tilbury LNG Resiliency Tank | — | 10 | 11 | 198 | Post-2025 | |||||||||||||||
AMI Project | — | — | 4 | 243 | Post-2025 | |||||||||||||||
Other Electric | Wataynikaneyap Transmission Power Project (4) | 40 | 138 | 330 | 206 | 2023 | ||||||||||||||
Total | 860 | 618 | 2,466 |
MANAGEMENT DISCUSSION AND ANALYSIS | 26 | December 31, 2020 |
MANAGEMENT DISCUSSION AND ANALYSIS | 27 | December 31, 2020 |
MANAGEMENT DISCUSSION AND ANALYSIS | 28 | December 31, 2020 |
MANAGEMENT DISCUSSION AND ANALYSIS | 29 | December 31, 2020 |
MANAGEMENT DISCUSSION AND ANALYSIS | 30 | December 31, 2020 |
MANAGEMENT DISCUSSION AND ANALYSIS | 31 | December 31, 2020 |
MANAGEMENT DISCUSSION AND ANALYSIS | 32 | December 31, 2020 |
MANAGEMENT DISCUSSION AND ANALYSIS | 33 | December 31, 2020 |
MANAGEMENT DISCUSSION AND ANALYSIS | 34 | December 31, 2020 |
MANAGEMENT DISCUSSION AND ANALYSIS | 35 | December 31, 2020 |
Key Estimates and Assumptions | Defined Benefit Pension Plans | OPEB Plans | ||||||||||||
Years ended December 31 | 2020 | 2019 | 2020 | 2019 | ||||||||||
Funded status: (1) ($ millions) | ||||||||||||||
Benefit obligation (2) | (3,995) | (3,632) | (789) | (712) | ||||||||||
Plan assets | 3,528 | 3,208 | 391 | 343 | ||||||||||
(467) | (424) | (398) | (369) | |||||||||||
Net benefit cost (2) ($ millions) | 67 | 65 | 32 | 28 | ||||||||||
Key assumptions: (weighted average %) | ||||||||||||||
Discount rate: (3) | ||||||||||||||
During the year | 3.16 | 4.05 | 3.22 | 4.10 | ||||||||||
As at December 31 | 2.63 | 3.20 | 2.64 | 3.25 | ||||||||||
Expected long-term rate of return on plan assets (4) | 5.52 | 5.78 | 5.28 | 5.50 | ||||||||||
Rate of compensation increase | 3.34 | 3.33 | — | — | ||||||||||
Health care cost trend increase rate (5) | — | — | 4.61 | 4.62 |
MANAGEMENT DISCUSSION AND ANALYSIS | 36 | December 31, 2020 |
Sensitivity Analysis Year ended December 31, 2020 | Rate of Return - 1% change | Discount Rate - 1% change | Health Care Costs Trend Rate - 1% change | |||||||||||||||||
($ millions) | Increase | Decrease | Increase | Decrease | Increase | Decrease | ||||||||||||||
Defined benefit pension plans: | ||||||||||||||||||||
Net benefit cost | (30) | 25 | (45) | 63 | n/a | n/a | ||||||||||||||
Projected benefit obligation | 44 | (82) | (541) | 691 | n/a | n/a | ||||||||||||||
OPEB plans: | ||||||||||||||||||||
Net benefit cost | (4) | 4 | (9) | 13 | 29 | (21) | ||||||||||||||
Accumulated benefit obligation | — | — | (113) | 144 | 106 | (84) |
MANAGEMENT DISCUSSION AND ANALYSIS | 37 | December 31, 2020 |
MANAGEMENT DISCUSSION AND ANALYSIS | 38 | December 31, 2020 |
MANAGEMENT DISCUSSION AND ANALYSIS | 39 | December 31, 2020 |
($ millions) | Level 1 (1) | Level 2 (1) | Level 3 (1) | Total | ||||||||||
As at December 31, 2020 | ||||||||||||||
Assets (2) | ||||||||||||||
Energy contracts subject to regulatory deferral | — | 38 | — | 38 | ||||||||||
Energy contracts not subject to regulatory deferral | — | 6 | — | 6 | ||||||||||
Foreign exchange contracts and total return swaps | 16 | — | — | 16 | ||||||||||
Other investments | 126 | — | — | 126 | ||||||||||
142 | 44 | — | 186 | |||||||||||
Liabilities (3) | ||||||||||||||
Energy contracts subject to regulatory deferral | — | (94) | — | (94) | ||||||||||
Energy contracts not subject to regulatory deferral | — | (12) | — | (12) | ||||||||||
— | (106) | — | (106) | |||||||||||
As at December 31, 2019 | ||||||||||||||
Assets (2) | ||||||||||||||
Energy contracts subject to regulatory deferral | — | 22 | — | 22 | ||||||||||
Energy contracts not subject to regulatory deferral | — | 8 | — | 8 | ||||||||||
Foreign exchange contracts, interest rate and total return swaps | 14 | 4 | — | 18 | ||||||||||
Other investments | 121 | — | — | 121 | ||||||||||
135 | 34 | — | 169 | |||||||||||
Liabilities (3) | ||||||||||||||
Energy contracts subject to regulatory deferral | (1) | (138) | — | (139) | ||||||||||
Energy contracts not subject to regulatory deferral | — | (12) | — | (12) | ||||||||||
(1) | (150) | — | (151) |
MANAGEMENT DISCUSSION AND ANALYSIS | 40 | December 31, 2020 |
As at December 31 | 2020 | 2019 | ||||||
Energy contracts subject to regulatory deferral (1) | ||||||||
Electricity swap contracts (GWh) | 522 | 628 | ||||||
Electricity power purchase contracts (GWh) | 2,781 | 3,198 | ||||||
Gas swap contracts (PJ) | 156 | 168 | ||||||
Gas supply contract premiums (PJ) | 203 | 241 | ||||||
Energy contracts not subject to regulatory deferral (1) | ||||||||
Wholesale trading contracts (GWh) | 1,588 | 1,855 | ||||||
Gas swap contracts (PJ) | 36 | 43 |
Years ended December 31 | |||||||||||
($ millions, except as indicated) | 2020 | 2019 | 2018 | ||||||||
Revenue | 8,935 | 8,783 | 8,390 | ||||||||
Net earnings | 1,389 | 1,852 | 1,286 | ||||||||
Common Equity Earnings | 1,209 | 1,655 | 1,100 | ||||||||
EPS: ($) | |||||||||||
Basic | 2.60 | 3.79 | 2.59 | ||||||||
Diluted | 2.60 | 3.78 | 2.59 | ||||||||
Total assets | 55,481 | 53,404 | 53,051 | ||||||||
Long-term debt (excluding current portion) | 23,113 | 21,501 | 23,159 | ||||||||
Dividends declared: ($) | |||||||||||
Per common share | 1.965 | 1.855 | 1.750 | ||||||||
Per first preference share: | |||||||||||
Series F | 1.2250 | 1.2250 | 1.2250 | ||||||||
Series G (1) | 1.0983 | 1.0983 | 1.0345 | ||||||||
Series H (2) | 0.5003 | 0.6250 | 0.6250 | ||||||||
Series I (3) | 0.4987 | 0.7771 | 0.7116 | ||||||||
Series J | 1.1875 | 1.1875 | 1.1875 | ||||||||
Series K (4) | 0.9823 | 0.9823 | 1.0000 | ||||||||
Series M (5) | 0.9783 | 1.0133 | 1.0250 |
MANAGEMENT DISCUSSION AND ANALYSIS | 41 | December 31, 2020 |
Sales | 2020 | 2019 | Variance | ||||||||
Regulated utilities | |||||||||||
UNS Energy | |||||||||||
Retail Electricity (GWh) | 2,345 | 2,223 | 122 | ||||||||
Wholesale Electricity (GWh) | 1,871 | 1,814 | 57 | ||||||||
Gas (PJ) | 5 | 5 | — | ||||||||
Central Hudson | |||||||||||
Electricity (GWh) | 1,200 | 1,188 | 12 | ||||||||
Gas (PJ) | 7 | 6 | 1 | ||||||||
FortisBC Energy (PJ) | 67 | 71 | (4) | ||||||||
FortisAlberta (GWh) | 4,138 | 4,279 | (141) | ||||||||
FortisBC Electric (GWh) | 894 | 888 | 6 | ||||||||
Other Electric (GWh) | 2,362 | 2,427 | (65) | ||||||||
Non-regulated | |||||||||||
Energy Infrastructure (GWh) | 103 | 14 | 89 |
MANAGEMENT DISCUSSION AND ANALYSIS | 42 | December 31, 2020 |
Revenue and Common Equity Earnings | Revenue | Earnings | |||||||||||||||||||||
($ millions, except as indicated) | 2020 | 2019 | Variance | 2020 | 2019 | Variance | |||||||||||||||||
Regulated utilities | |||||||||||||||||||||||
ITC | 419 | 500 | (81) | 109 | 171 | (62) | |||||||||||||||||
UNS Energy | 525 | 510 | 15 | 45 | 38 | 7 | |||||||||||||||||
Central Hudson | 242 | 226 | 16 | 35 | 30 | 5 | |||||||||||||||||
FortisBC Energy | 476 | 428 | 48 | 74 | 77 | (3) | |||||||||||||||||
FortisAlberta | 139 | 150 | (11) | 33 | 33 | — | |||||||||||||||||
FortisBC Electric | 117 | 112 | 5 | 13 | 12 | 1 | |||||||||||||||||
Other Electric | 381 | 381 | — | 32 | 22 | 10 | |||||||||||||||||
Non-regulated | |||||||||||||||||||||||
Energy Infrastructure | 47 | 19 | 28 | 27 | 6 | 21 | |||||||||||||||||
Corporate and Other | — | — | — | (37) | (43) | 6 | |||||||||||||||||
Total | 2,346 | 2,326 | 20 | 331 | 346 | (15) | |||||||||||||||||
Weighted average number of common shares outstanding (millions) | 465.8 | 447.1 | 18.7 | ||||||||||||||||||||
Basic EPS ($) | 0.71 | 0.77 | (0.06) |
Cash Flows | |||||||||||
($ millions) | 2020 | 2019 | Variance | ||||||||
Cash, beginning of period | 494 | 228 | 266 | ||||||||
Cash from (used in): | |||||||||||
Operating activities | 700 | 634 | 66 | ||||||||
Investing activities | (1,235) | (1,104) | (131) | ||||||||
Financing activities | 308 | 627 | (319) | ||||||||
Foreign exchange | (18) | (15) | (3) | ||||||||
Cash, end of period | 249 | 370 | (121) |
MANAGEMENT DISCUSSION AND ANALYSIS | 43 | December 31, 2020 |
Common Equity | ||||||||||||||
Revenue | Earnings | Basic EPS | Diluted EPS | |||||||||||
Quarter Ended | ($ millions) | ($ millions) | ($) | ($) | ||||||||||
December 31, 2020 | 2,346 | 331 | 0.71 | 0.71 | ||||||||||
September 30, 2020 | 2,121 | 292 | 0.63 | 0.63 | ||||||||||
June 30, 2020 | 2,077 | 274 | 0.59 | 0.59 | ||||||||||
March 31, 2020 | 2,391 | 312 | 0.67 | 0.67 | ||||||||||
December 31, 2019 | 2,326 | 346 | 0.77 | 0.77 | ||||||||||
September 30, 2019 | 2,051 | 278 | 0.64 | 0.63 | ||||||||||
June 30, 2019 | 1,970 | 720 | 1.66 | 1.66 | ||||||||||
March 31, 2019 | 2,436 | 311 | 0.72 | 0.72 |
MANAGEMENT DISCUSSION AND ANALYSIS | 44 | December 31, 2020 |
MANAGEMENT DISCUSSION AND ANALYSIS | 45 | December 31, 2020 |
MANAGEMENT DISCUSSION AND ANALYSIS | 46 | December 31, 2020 |
MANAGEMENT DISCUSSION AND ANALYSIS | 47 | December 31, 2020 |
MANAGEMENT DISCUSSION AND ANALYSIS | 48 | December 31, 2020 |
MANAGEMENT DISCUSSION AND ANALYSIS | 49 | December 31, 2020 |
8=%\0_$WXA::XCUG0?
M!_DK;:5,1D07-W*V%FY&8XDE92_Q>\3ZQX(^$WBCQGX=LA 21
M&&V\.S1ZI:K9P'@Q(EOJ)C V\$QB(-T*@5]B_P#!''_@A?\ #_@D=\-O%&D
M:;XRN?B%XP\=PQ0>,?%.LZ8EO#<6L8?;9P6N^0109D=G#/(TA(W-A450#\*]
M2_X*A_LJ?LN>)/V#;6_P!0_P"%
M@:3KVJ^,[RW>P(M!I3_V=:*PGS@R>:P&S&<Z/9^)8/"-O,^F23Q,BW 1?+9BI.4?\$BO^"0F
MF?\ !+O]C;7_ -E^]^*>F^,M8UW6-3NG\:6_A-=/FC@NX((A;E#/*SJC0[\>
M8 2W08S0!]D6VJZ-JD$K6FI6MQ&B_OC',KJH(_BP>.,]:_./_@NS\'/^"X/Q
M)T'Q&G_!.OXW> M!^$!^$L]MXS\,ZHD$>M7]WNO3>"UFFLY%C5[-K>-3Y\1#
M*Y&P_,;G_!*[_@WZL/\ @FQ^S/\ ';]FS5?VK9O'-K\;]%&FW.JV_@D:3)I$
M?V*\M694-Y ]^'FK>$O#,E^LT$26;EI805G5F%] !&D;R;MRE0PP0#[ HKY-_P""
M=7_!9;]DS_@IAX^\:?"3X->'O'?A?Q?X"2.77?"GQ%\-KIE^+=WV"=(TEE&P
M-M!5BKKYB90;A7UE0 4444 %%%% !17CO[67_, _[>O_ &C7CM?AO&/C/_JG
MQ'7RKZA[3V?+[WM>6_-",_A]G*UN:V[VOY'VN4\'_P!J9?#%>WY>:^G+>UFU
MOS+MV/L2BO'?V3?^8_\ ]NO_ +6KV*OTS@[B+_6SARAFOLO9^TYO=YN:W+.4
M/BM&]^6^RWMYGSF;9?\ V7F$\+S(;/3?&]CX?U6#4+*"\LY('74X_WUM_I,C%XU*,40A\9!
M^B= _P""7'["?A?]MJ]_X*,:%\#/(^,NH^9]L\8_\)-JC>9YEH+-_P#1&N3:
MC, "<0C'WA\W->,_M3?\&Y'_ 23_:_^+FL_'?XK?L[WT'BSQ'J,E]X@U;0?
M%^HVG]H7#G+RO"LQB5B222B*2>3F@#\M?^#&QMS+!>&_@023P^=BVVEV@9IA+$J;^?Z+Z^?/V$
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M\#4Q'M^;E5[
PF2Y/GE1T
&=-TRZU*_$+$A99(;2*0P(V#M:78&VG;NQ7YH_\&RNC_P#!%NP_
M:#T7QY^QG^T1XZTOXSZG\)3HWC;X6>-F"6NI76+2YN[VP8Q8E,&?^$QU+1]'\5:
M='>VT3VFMV6DV:20S!D?R;2;8H8':44C!4$ '[>_L/\ _!2G]B7_ (*-^%=0
M\6_L=_'G3O%L>CNB:UIXMI[.^T\OG89K6YCCF16*L%DV[&*MM8X->Z5_/!^P
M]X7\/?L5?\'D'BW]FO\ 9]TBV\/^#?$\FL65UH.DH(;2&UG\-?V[Y"1+A4C2
MZA38@ 5 H50 *_H?H ^4?VW?^"W'_!,S_@GGX\3X4?M/_M*VFF>+&@2>7PS
MH^D7FIWEM&ZAD:=;2*06^Y2K*LI5F5@R@@YKTC]BO_@H-^QU_P %#OA_=_$O
M]CWXXZ9XQT[3IT@U:&WAFMKO3I7!*+<6MPD $O" ?%47Q;T?XN6=IX0O?$7BC2+OQG?>$)[.
MYN)+:*6&9_.U!&@CDW$& 8R2D1^83E) NY8V( /L^JTNBZ
M/-JD>N3:3;/>PQF.&\:!3+&AZJ'QD Y/ ->5_L4_MF_#?]NGX.2?&7X:^#/&
M/AN*TUNYTC5?#WCWP\VEZKIM[ $,D,]NS-L8"1#PQ'S5XG^V5_P6F^$_[%?Q
M1\4?#?Q;^QC^TCXQLO!5I!=>+/&_P\^%)U'P_I<,EJEUOFOGN(T54BD4N<84
M@@]#0!]DT5\8_&;_ (+S_P#!/SX)_LE?"S]MO6/$7B?6/A]\7M9;2_"^HZ!X
M>,TT-PAE69;B!W1X_*>&6-PH=MT9"AN"9OV(_P#@N7^QC^W;^TIXC_9-^'_A
M[XA^$?&OA[2)-533?B1X1.D'4[%"FZXMPTK.%"RQOMF6)RC;@I"L0 ?9%%?C
M#_P57_X.9/!>O?L@?$EO^"8S_%:W\0>%O$=AIUE\;;3X;Q7'A,RB]A%Q;K>7
M'FH'DA+;/-A7>'4H"Z@2YMIDDCD0-'(C JRD9!!'4$4 .
MHJCK?BCPUX:6-_$?B*QT\3-MA-[=I$'/H-Q&3]*NQR)*@EB<,K %64Y!'K0
MM%%% !116'\3/&G_ KKP!J_CG^S?MG]E6+W'V7SO+\W:,[=V&V_7!JH0E4F
MHQW>A,I*$7)[(W**^5?^'FG_ %1/_P N3_[FH_X>:?\ 5$__ "Y/_N:O6_L#
M-O\ GW^,?\SSO[8RW^?\'_D?55%?*O\ P\T_ZHG_ .7)_P#:?\
M5$__ "Y/_N:C_AYI_P!43_\ +D_^YJ/[ S;_ )]_C'_,/[8RW^?\'_D?55%?
M*O\ P\T_ZHG_ .7)_P#:?]43_ /+D
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M /=-']OY3_S\_"7^0?V/F7\GXK_,^5:*^JO^'9?_ %6S_P MO_[IH_X=E_\
M5;/_ "V__NFC^W\I_P"?GX2_R#^Q\R_D_%?YGRK17U5_P[+_ .JV?^6W_P#=
M-'_#LO\ ZK9_Y;?_ -TT?V_E/_/S\)?Y!_8^9?R?BO\ ,^5:*^JO^'9?_5;/
M_+;_ /NFC_AV7_U6S_RV_P#[IH_M_*?^?GX2_P @_L?,OY/Q7^9\JU^JE?*O
M_#LO_JMG_EM__=-?55?-\0X_"8[V7L)7MS7T:WMW2['N9+@\3A/:>UC:]K:I
M[7[!1117S9[H4444 %%%% !1110 4444 %%%% !1110 5S_Q7_Y)MK?_ I
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MBBB@ HHHH **** "BBB@ K^=/_@M[_P5_P#VS?CY^VI\>/\ @FEX:_:*\)?
MWX5^#/!NM6>J0>(;"/[3XV\G3?->Q^T2Q.R2WGF&.".-H5*.N6=RH;^BROP!
M_P"#@S]LW_@E5XR^+7QK^!'[:G_!-/QGIOQC\/\ AR]TSX2_&;1H#';ZO??V
M;OTZYN95FM6E@2=T38Z7:!$;'H #ZW_X-_O O_!4G0-+\'>)OC3^WM\/_C%^
MS[?_ @M1X?T;P]]D;4O"^J^78M;6,[Q6ROB*W,\3 SOAH_F13@GX%M?ACJ/
M_!Q7_P '$7Q=_9Q_:C^+_BJV^%/PE3Q#_87A[P_JJPK#9:7?P:5']G$B21Q/
M//.EQ+)L9V!9<@!-O$?\&VWP,^*_B7_@K;X/^-W[ GA7XF:+\$M(\)Q1_%;7
M/%Z!+&^N3I!CN[0/#^YN$?4FWVT1+2HBK*P'EMCL_#GQ:_XAX?\ @XS^,'QT
M_:R^&7B7_A6/Q8C\1'0/$.B:7YRRZ?JFH6^JQ26^YD68P30);2H)AFP1M#
M '=_\$5?$OQ,_P""67_!PSX__P""-N@?%77=?^%FMRZE#H>DZW=>8+::+3/[
M9M+P*H"1S_95>&5HU192P8K\J!?Z"J_GN_X(NZ7X]_X*I?\ !QC\0?\ @K[X
M.^&NMZ/\+O#LNI3:7J^L6OEB:672O[&L[,E24:X-J[SR(C.(]F"WS(6_0K]C
M[_@N5JO[5'_!7OXI?\$M;C]FFWT.W^'']M[/&R>+6N'U#^S[N&W&;0VJ"+?Y
MV[_6MMVXYSD 'Y:?LP? (_\ !RS_ ,%I_CD_[9WQ<\91_#CX=P:F_A/0O#NJ
M+#]AM4U!;*QM8?-CDCA4Q!YI65 TLJDG[QQZU_P;J_%#XM_L'?\ !9SXU_\
M!&W4OBAJ_B+X;Z?/K:^%+35[DM]EN["X5X+F-/NPM-9M)YRQA5=UC;^ 5Y'^
MR+^T-8?\&W'_ 6O^.VD?MM?#;Q9!\/_ !_!J:^%==T32O/^VVKZBMY87D0=
MT6:,PEXI C,T
*VENV
MC+*PR-X8>QKZ _9U_8>_9=_9.\??$CXH?L__ P_L#7?BYXHD\1?$*^_MJ]N
MO[6U)Y9YFGV7,TB09>YF.R%8T^?&W 4 _#VP\8?\%$/VK/#'_!13XJ6?_!4
M[XS>#+#]F[Q_X@U'P?X:\.ZZT<4\=I/JTL=HTX83PVZQ6@B$43*GS!F5]BBO
MUS_X(E_M$?%7]J[_ ()6_!?X]_&[Q$VL>*M<\,2)K.K2(JO>R6]W/:B9]H ,
MCK"K,0!EBQ[UU'@O_@EQ^PG\/?#?QG\(^#_@9]CT[]H6XO)_C!;_ /"3:I)_
M;\ET+@3G<]R6M=WVNXXMC$!YGRXVKCT?]F[]G#X,?LC?!+0/V<_V>?!O_"/>
M#?"]O)!H6C?VC
.W'AZX\ _%71=,\ :!!$\$ITVYT.=U>
$O@O\ LO>+(]3\=_&W0-"MM+L=;NX;FTN8](TTQ(@NE0VJ
MJCC*K]HDE $80S_J'\$O^"3O[ /[/'[*/BK]BGX3?L^6FE_#SQS:7%OXSTQ-
M6O&NM:2>+RI3/>F;[224RH*R#8"0FVO#K3_@U\_X(7V-W%>VO[#NR6&17C;_
M (67XF.&!R#@ZECK0!\H?L?>#O@W\4?^#F?]MO3_ -LCPWH&KR67P[C72[3Q
MA;0RP0Z((--621!/PBBT,&74#"2/R QSWG_!FA?>)KG_ ()?^,[34)KJ31+7
MXWZM'X8-UGY;8Z?ICN$S_!YK2'CC>TG?-?8?[<'_ 12_P"";O\ P40^(UI\
M8/VHOV?QJ?BJUL%L6U_2->O=,N;JU7.V&
?';PK#&,E9%;"E60>\?\%B_VAOAG\3?^"OOC?\
M9#^/7@CX&_"K3-+^&FGG1/BU\3_@%+XZUWQ+,79\5RZY;KIOV #=!\W2].E8A+S49Y4MK.!R#D(]S-"K
M$