Fortis Inc. (FTS) Q4 2014 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by. This is the conference call operator. Welcome to the Fortis 2014 Annual Results Conference Call and Webcast. During the call, all participants will be in a listen-only mode. There will be a question-and-answer session following the presentation. [Operator Instructions] And at this time, I would like to turn the conference over to Ms. Donna Hynes, Director, Investor and Public Relations for Fortis. Please go ahead, Ms. Hynes.

Thank you, and good morning, everyone. Welcome to the Fortis, Inc. 2014 earnings call. Fortis participants on the call this morning are Barry Perry, President and CEO; and Karl Smith, Executive Vice President and CFO; as well as additional members of our senior management team. This conference call is webcast, and the supporting PowerPoint slideshow associated with this call is available on the Fortis, Inc. website at www.fortisInc.com. A replay of the call will be available later today, and the transcript will be posted to our website shortly thereafter. Our 2014 earnings release and related materials are also available on our website. I would like to remind you that all forward-looking information provided during this conference call is subject to the forward-looking information disclaimer contained in the supporting PowerPoint slideshow. All non-GAAP financial measures referenced in our prepared remarks are reconciled to the related GAAP financial measures in the PowerPoint slideshow. Also, unless otherwise specified, all financial information referenced is in Canadian dollars. Barry Perry will begin with a corporate update, and then Karl Smith will review the financial results in detail and discuss regulatory matters. The presentation will be approximately 20 minutes, after which time we will turn the call over to the conference operator for your questions. During the question-and-answer period, we will take questions from the investment community first, followed by the media, if time permits. In order to provide everyone with an equal opportunity to participate, we ask that you limit yourself to two questions. If you have additional questions, please re-enter the queue. Also, we would ask that you focus your questions on our industry, our corporate strategy, recent developments and key elements in the Corporation's financial performance. If you have any detailed questions, please follow-up with us after this call and we would be pleased to discuss them with you at that time. I will now turn the call over to Barry Perry.

Thank you, Donna, and good morning, everyone. 2014 was a transformative year for Fortis. The acquisition of UNS Energy Corporation has transformed Fortis from the largest investor owned distribution utility in Canada to a leader in electric and gas utilities in North America. Fortis now owns nine utility, five in Canada; two in the United States and two in the Caribbean and serves more than 3 million electricity and gas customers. We acquired UNS Energy in August 15, 2014, this US$4.5 billion is the largest acquisition in the corporation’s history bolstering assets by approximately one-third. UNS Energy operates in Arizona and serves approximately 658,000 electric and gas customers. Its biggest utility Tucson Electric Power provides electricity to Tucson and surrounding areas. We had initially targeted the UNS Energy closing to occur at the end of 2014. Earnings from the early closing along with one-time acquisition related costs had a significant impact on our 2014 results which Karl will discuss shortly. Excluding one-time acquisition related costs, the acquisition of UNS Energy was immediately accretive to earnings per common share. The total assets of Fortis are now more than $26 billion up almost 50% over the last year and include nearly 7.5 billion at UNS Energy. Regulated utilities comprised approximately 93% of total assets with the approximate breakdown of regulated assets being 55% in Canada, 41% in the United States and 4% in the Caribbean. Our largest regulatory jurisdiction, British Columbia now accounts for 32% of regulated assets down from almost half of our regulated assets prior to the UNS Energy acquisition. Our focus during the fourth quarter of 2014 was primarily in three areas. First, the integration of UNS Energy which is proceeding well and as planned. Second, the completion of our record $1.7 billion capital program which was successfully accomplished and third, the strategic review of Fortis properties. Fortis properties which currently represents approximately 3% of the corporation’s total assets is a successful business that Fortis build from the ground up, it owns and operates 23 hotels and eight Canadian provinces representing over 4400 rooms and 2.8 million square feet of commercial real estate primarily in Atlantic Canada. The strategic review continues to move forward while timelines are inherently difficult to predict we are targeting to complete the process in the second quarter of 2015. 2015 also kicks off a period of significant organic growth for Fortis. The $900 million Waneta Hydroelectric Expansion of which Fortis holds a 51% interest continues on time and on budget. This investment is supported by 40 year power purchase agreements with BC Hydro and the corporation’s wholly owned subsidiary FortisBC. Completion of the Waneta Expansion remain scheduled for spring 2015 and we are targeting our share of 2015 earnings in the range of $20 million to $25 million. The combination of the expected on-time completion of Waneta, a full year of earnings contributions from UNS Energy and the anticipated implementation of new rates at Central Hudson in July after a two year rate free positions forward us for a strong 2015. A reasonable outcome for the capital tracker applications at FortisAlberta would further build on our momentum for 2015. Turning now to our LNG opportunities. Construction of the $400 million Tilbury LNG facility expansion program in British Columbia which commenced in October of last year is proceeding as planned. The expansion will add a second LNG tank and a new liquefier. The project will provide natural gas for the transportation industry for enrolled [ph] community and for the marketplace in general. Investment will be included in FortisBC's regulated rate base and completion is expected before the end of 2016. Earlier this month FortisBC announced that it entered into a liquefied natural gas supply agreement with BC Ferries to provide up to 300,000 gigajoules of LNG annually over the next 10 years for BC Ferries three new intermediate class ferries. The LNG will be supplied from FortisBCs to LNG facilities. Since we initially announced our LNG expansion plans back in 2013 there have been considerable interest for LNG supply from Pacific Northwest, Hawaii, Alaska and other international markets. FortisBC is in a unique position to meet further growing demand for LNG from domestic and form markets by leveraging its existing infrastructure too rapidly and cost effectively increase supply. Our Tilbury site has 35 acres of LNG's own land with ocean access that is suitable for further expansion. FortisBC is working towards a possible second expansion at the site at an estimated cost of approximately $450 million. This expansion would add further liquefaction capacity of 140,000 gigajoules per day a 15 year conditional contract is in place with Hawaiian Electric for most of this liquefaction capacity. The contract is subject to the approval by the Hawaii Public Utilities Commission. FortisBC also continue to move forward with an opportunity to expand its pipeline and compression infrastructure to the Woodfibre LNG site near Squamish, British Colombia. Woodfibre is a privately owned LNG processing export facility that is expected to be operational in 2018. Pipeline and design permitting are underway and FortisBC is currently negotiating a transportation service agreement with the owner of the facility. This estimated project costs is approximately $600 million. In the fourth quarter of 2014 FortisBC received an Order in Council from the government of British Columbia that positions the company to further progress the potential second phase of the Tilbury expansion and the Woodfibre project. The Order in Council effectively approve the estimated capital expenditures of over $1 billion that I just noted and a further 200 million to upgrade the existing coastal gas transmission system in support of the projects. The Tilbury approval is conditional upon having long term energy supply contracts in place for 70% of the additional liquefaction capacity. Our no further regulatory approval by the BC Utilities Commission is required for either project expenditures would be included in FortisBC’s regulated rate base. We continue to invest prudently in our existing electric and gas networks to ensure the safe and reliable delivery of energy to our customers, our record $1.7 billion capital expenditure program in 2014 represents an increase of almost 50% over 2013 and included $444 million at UNS Energy from the date of acquisition. In particular I note that UNS Energy closed the purchase of its 550 megawatt gas-fired combined cycle unit at the Gila River Generating Station for US$219 million in December 2014. This purchase will reduce UNS Energy’s reliance on coal and wholesale energy market purchases. Our capital expenditure program is projected to further grow by nearly 30% to $2.2 billion in 2015. Over the five year period through 2019, capital expenditures are expected to approach $9 billion driving a 36% increase in forecast midyear rate base from $14 billion in 2014 to $19 billion in 2019. This would represent a combined five year compound annual growth rate of approximately 6.5% to 2019. Including the potential second Tilbury Expansion and the Woodfibre project, this growth rate rises to 7.5%. We are excited about our opportunities, which we expect will drive growth in earnings and cash flow, and support increasing dividends to our common shareholders. Our Q1 2015 dividend has been declared at $0.34 per common share, which represents an annualized dividend up $1.36 for 2015 and increase of 6.25% over last year. Fortis has increased its annualized dividends to common shareholders for 42 consecutive years, the record for a public corporation in Canada. Looking forward our key message remains unchanged from our last earnings call mainly now that our initial approach into the US, utility market has been accomplished our focus for the next 12 to 18 months will be on the full integration of UNS Energy, execution of the corporation’s capital expenditure program, progressing our LNG opportunities and the completion of the strategic review of Fortis properties. And as always the number one priority of Fortis will be the provision of safe, reliable and cost-efficient energy service to our customers. In all, I am very optimistic about our prospects for 2015 and beyond. And with that update, I’ll now turn things over Karl who will discuss the financial results and key regulatory matters.

Thanks, Barry and good morning, everyone. Let me begin with earnings and earnings per share. Earnings attributable to common equity shareholders for the fourth quarter of 2014 were $113 million or $0.44 per common share, compared to $100 million or $0.47 per common share for the fourth quarter of 2013. For the year earnings attributable to common equity shareholders were $317 million or $1.41 per common share, compared to $353 million or $1.74 per common share for 2013. As Barry mentioned, the acquisition of UNS Energy had a major impact on our 2014 financial results. Additionally when comparing these results to 2013, several significant non-recurring items must be considered. The slide now being webcast provides an analysis of fourth quarter and annual adjusted earnings and earnings per share, it removes from our results pre-material non-recurring items which are acquisition related costs pertaining to the acquisition of UNS Energy and Central Hudson including interest on the convertible debentures, customer benefits associated with the transactions and professional fees, 2013 positive tax adjustments associated with prior 6.1 tax and an extraordinary gain recognized in 2013 in connection with the appropriation settlement for the Exploits River Hydro partnership. On this basis, adjusted earnings for the fourth quarter were $118 million or $0.46 per common share compared to $104 million or $0.49 per common share for the same quarter last year. While adjusted fourth quarter earnings were up $14 million adjusted earnings per share declined by $0.03. Both these results were driven largely by UNS Energy which had a slightly dilutive impact on earnings per common share on the fourth quarter due to the seasonality of its earnings. On a 13% of the annual 2014 earnings for UNS energy occurred in the fourth quarter. Our fourth quarter results also reflect the continuous impact of the two year post-acquisition rate increase as well as higher storm restoration costs and other non-recurring expenses at Central Hudson. Adjusted earnings for the year were $407 million or a $1.81 per common share up $63 million or $0.11 per share per common share over the last year. The increase in adjusted annual results was due primarily to the acquisition of UNS Energy. Annual results also reflect the fact that we own Central Hudson for a full year in 2014 versus approximately one half year in 2013. These positive impacts were partially offset by increased corporate costs due largely to financing costs for both acquisitions and higher operating expenses. The UNS Energy's earnings were $23 million in the fourth quarter and $60 million for the period August 15th to December 31, 2014. These results reflect seasonality in sales as the third quarter is the largest contributor to annual earnings for UNS Energy whereas the fourth quarter is smallest contributor. Going forward, given that approximately 38% of our total assets are now in the United States. We estimate that on an average each $0.05 or 5% change in the US dollar to Canadian dollar exchange rate would have an approximate $0.04 impact on annual earnings per common share. Future corporate costs were naturally reflect the fact that Fortis is now a much larger company. We are currently projecting corporate cost in the range of $125 million to $130 million for 2015 which will include a full year of financing cost for UNS Energy. Turning now to our financing highlights, in 2014 Fortis and its regulated subsidiaries raised over $1 billion of long-term debt financing at attractive rates. This included US $500 million issued by Fortis, Inc., $275 million issued by FortisAlberta and $200 million issued by FortisBC Electric. Net proceeds were used primarily to refinance maturing debt and to fund capital and expenditure programs. In the third quarter of 2014, Fortis issued $600 million of preference shares with the coupon of 4.1% as a part of the permanent financing for the UNS Energy acquisition. In the fourth quarter of 2014 Fortis received $1.2 billion related to the final installment under the convertible debentures that were issued in connection with the acquisition of UNS Energy. Fortis subsequently issued approximately 58.5 million common shares in connection with the conversion of those debentures and this completes the common equity financing related to the transactions. Net proceeds were used to pay down the related acquisition grades facilities. We expect to apply the net proceeds of any transactions associated with the strategic review of Fortis properties towards the remaining permanent financing required for the UNS energy acquisition. Cash flow from operating activities was $982 million for 2014 and increase of approximately 9% from 2013. This increase was driven by higher cash earnings associated with the acquisition of UNS Energy and a full year of earnings from Central Hudson in 2014 compared to approximately one half year in 2013. Fortis has a relatively light debt maturity profile with an average of $240 million maturing annually over the next five years excluding credit facility borrowings. Additionally, at December 31, 2014, Fortis and its subsidiaries had unutilized committed credit facilities of $2.2 billion providing the corporation of ample liquidity. Fortis continues to have strong access to the capital. In October 2014 following the completion of the equity financing associated with the UNS Energy transaction, S&P confirmed the corporations A minus credit rating and reinstated its outlook to stable. DBRS followed suit in December 2014 confirming our A low rating and reinstating the stable outlook. Additionally S&P upgraded this credit rating for Tucson Electric Power from BBB to BBB plus. We expect this will have a positive impact on the future cost of capital for that utility which will benefit its customers. Moving on to the regulatory front, in July 2014 Central Hudson filed a general rate application to establish new rate effective July 1, 2015. These rates should provide the revenue required to support the US$215 million of expected capital expenditures during the two year rate increase agreed to by Fortis. A Joint Settlement Proposal was filed on February 6, 2015 to set new rates for a three-year period beginning July 1, 2015. This proposal provides for rate of return on common equity of 9% and common equity thickness of 48%. Earnings above an ROE of 9.5%, but less than or equal to 10% will be shared 50-50 between customers in Central Hudson. Public statement hearings are expected to be held in March or April with the Joint Settlement Proposal targeted to go to the regulator in June for consideration and approval. Proceedings referred to as reforming the energy vision has started in New York State. These are generic proceedings aimed at redefining the role of distribution utilities, and aligning their investments and earnings with New York State policy goals. In September 2014, a decision was received on multi-year performance-based rate-setting applications in British Columbia. The decision covers the period 2014 through 2019, and incorporated incentive mechanisms for improving operating efficiencies and provided for 50-50 sharing of variances formerly-driven expenditures over the PBR term, the decision did not have a significant impact in 2014 earnings. In October, a hearing was held regarding FortisAlberta’s Capital Tracker application for 2015 through, sorry 2013 through 2015. This application seeks revenue increases related to FortisAlberta’s capital expenditure program. FortisAlberta has recognized Capital Tracker revenue in 2013 and 2014 based on an interim decision by its regulator granting 60% of the amounts applied for. In December 2014, FortisAlberta received a decision granting it on an interim basis 90% of the applied for 2015 Capital Tracker amount. A decision on the Capital Tracker application is expected in the first quarter of 2015. The difference between the applied for revenue amounts if granted and the amounts received on an interim basis for 2013 and 2014 that would be recognized as a true-up to revenue in 2015 is approximately $26 million. Lastly, we expect our decision on the generic cost of capital proceeding in Alberta in the first quarter of 2015. That concludes my prepared remarks and I’ll now turn things back to Donna.

This concludes the Fortis, Inc. 2014 earnings presentation. I will now ask the conference operator to please open the phone lines for the question-and-answer segment of the call.

Thank you. [Operator Instructions]. Your first question comes from Linda Ezergailis with TD Securities. Please go ahead.

Thank you. Good morning.

Good morning, Linda.

I have question about the settlement for CH Energy. With there any key this centers or abstainer and participation that might influence how the regulator looks at this settlement and what would you perceive to be the most conscious issue?

Linda really we had strong support for the settlement from commission staff from the industrial interveners, they sign on and said that they supported the settlement. They were couple of parties that certainly would not oppose the settlement, it’s actually a standard way of sort of not signing on to anything there has a rate increased attached to it. So Jim Laurito, can you offer any other comment on the status of party? Jim is a CEO of Central Hudson.

Yes, good morning. As Barry said strong support those that are filing in support and signed on to the joint proposal or the state department of public service staff. As Barry mentioned, the multiple interveners, the large industrial, the retail energy supply association, which typically does not sign on, signed on to this settlement. And importantly two environmental groups PACE Energy and Climate Center and the Savant [ph] Center for climate change law at Columbia Law School. So we think there is wide spread support for this settlement and I am very pleased with those parties that signed on.

Thank you Jim.

Congratulations on that I guess we'll see in June. With respect to the just a cleanup question on your 2015 CapEx the consolidated CapEx of $2 billion that would include a $100 million of Waneta or just what is the share.

That would be a 100%.

Okay. Thank you.

Our next question comes from the line of Paul Lechem with CIBC. Please proceed with your question.

Thank you good morning I have a couple of questions on the BC gas pipeline transmission pipeline. I think it was mentioned that the expansion of the coastal transmission system. I think you mentioned the number of $200 million. Is that in your CapEx budget at this point in time and then also in the write-up in the MD&A. it was mentioned that there might be an additional expansion required on the southern crossing pipeline and I'm wondering what that could entail and how much that could be when that might come in.

Thanks Paul the answer to your first question is yes it is included. And the southern crossing pipeline is an interesting opportunity really as we used more gas in our L&G facilities there is a need to increase the ability to get gas to the sort of southern part of the province. So there is some opportunity to expand and it's a bit early yet but that's one of the ones we're pursuing.

Do you at least given order of magnitude of what would be involved there.

John Walker is here John and he synthesize.

It's probably in broad range of about $400 million to $500 million.

Thanks John.

Thanks. And also on the Tilbury 1B expansion. The estimate you put out there is $450 million. In the right up that you've given on the Order in Council proposed an upper limit of $400 million on each Phase B of the expansion. So how does that how does those two numbers square away?

Yeah I think if you read a closely an OIC uses were as related to carrying cost AFUDC and development cost. And so when you add all those together Paul that's where the number comes from.

So you will still be on site with the ordering council even if the cost cutting...

Yeah we would expect to be it's obviously at the start of the project. So it's - but we would expect that the 450 is a good number.

Okay just lastly on the Tilbury 1B expansion. Is the gazing factor here and approval by the Hawaiian regulator on the Y Electric proposal? Is that really the big - what you're looking for to move forward on that expansion.

That would be a really good thing. We're really obviously hoping that that will happen. But there are a lot of other interest in that site. So there are potential other parties that we could work with on the site. We are focused obviously on the eco contract and very hopeful that that will proceed in Hawaii.

Okay, thank you.

Thanks Paul.

Our next question comes from the line of Andrew Kuske with Credit Suisse. Please proceed with your question.

Thank you. Good morning. You've gone through a pretty pain sticking efforts to have individual operating utilities on a utility by utility basis across the jurisdictions. But I'm just wondering as you get bigger, do you really revisit part of that strategy and have say consolidated call center outside of the core utilities as there was in the old tariffs with the Customer Works JV. Do you planned on going down that path as things get bigger and do you have more scale.

I would say no Andrew really our company is been built on the concept of standalone businesses in each of the regulatory jurisdictions. The regulator support that approach anytime you start to share services we believe introduces complexity in the business and you spend a lot of time justifying in front of particular regulator for whose benefit did you do it was it the other jurisdiction or was it the shareholder. So that's not to the strategy of Fortis would pursue. I will say though if there is any one jurisdiction that we're operating in and say we buy a multiple utilities in that jurisdictions we would look to so integrate those businesses like we did in British Columbia with our gas and electric business. We do believe they're having one management team in each jurisdiction is sort of important.

Okay that's helpful. And then just on your FX how do you think about just the US dollar exposure do you how much cash you planned on effective or repatriating back into Canada that the US operation versus keeping in the US to fund those businesses and then to fund maybe potential future opportunities in the US.

Well I think you've hit it nicely there and the growths that's happening in the US businesses well require investment on the part of Fortis and that's why we are so excited about the New York and Arizona that these two utilities are going to continue to grow clearly the company has more FX exposure at this point in time with 40% of our assets in the US with this trend strengthening US dollar I guess that is positive it is one area that we are going to consider going forward we really traditionally have only use US dollar debt as sort of natural hedge against our US dollar assets we will look to explore other ways of managing that risk going forward but at this point in time we are on the positive side obviously.

Okay, thank you.

Thank you, Andrew.

Our next question comes from the line of Robert Kwan with RBC Capital Markets. Please proceed with your question.

Good morning. Just in terms of the PBR and the Western Canadian jurisdictions I think you made a comment that it was not a material driver in 2014 I am just wondering as you head into second years there and often you can try to get some of these cost eagerly on just your expectation for our PBR performance in 2014 at BC and Alberta.

I would say Robert there is more opportunity probably in Alberta than in BC you know the BC mechanism if you dig through it really limits the company’s ability to sort of put the earnings on the bottom-line to really operating cost only and you have taken a lot of the risk out of that business it is just every other line item on a P&L is really subject to a the deferral account essentially and a sharing mechanism in BC also says the first dollar above your allowed return is basically shared equally between the customer and the shareholder so in order to get a million dollar of earnings you got actually get 2 million essentially so there are some ability to improve our earnings in British Columbia from the base business our bigger opportunity lie in the expansion of LNG facility there for sure. In case of Alberta, I think our continued opportunities once we get this Capital Tracker issue behind us there are also some real opportunities I think to expand to consolidate some rule of electric associations as well so we are looking forward to focusing on that in Alberta.

Is it just on Alberta in terms of in terms of PBR anything you might be able to get directionally on dollars for PBR or even just kind of percentage over the base ROE?

No, I wouldn’t traditionally the utility has done better than its allowed ROE we do expect that will continue going forward I just feel that we do have slightly more opportunities to improve in Alberta and there is not the sharing mechanism a little more favorable from a shareholder perspective.

Okay. I guess if my second question is on the UNS performance whether it is the quarter a year, the quarterly number you booked is significantly higher than you announced has typically reported in the fourth quarter. So I am just wondering, is there anything the relocations that you've done into the corporate segment or is there some sort of amortization in the purchase price hat positively impacted the way fourth quarter is falling?

No, I think what you have to really look to Robert is the really results of the outcome of the last rate case at Tucson Electric Power that really was reflected fully in the fourth quarter. So UNS had the best year ever I think last year because of the outcome of the rate case and getting the revenues needed for all the CapEx that put into the business. So as we look forward to 2015 we do expect UNS to deliver earnings in the range that they were indicating to the market when they were a public company which in that sort of 150 million or so U.S. dollar range and we still see that as a very much possibility.

Okay. So put differently the 144 million U.S. that you had in your release on a fully year basis the year-over-year pretty much all completely well into the fourth quarter? When you look at that number versus the 2013 which was about 10 million lower?

David is on the phone our present CEO of UNS. David did you get that question?

Yeah, I got it but I don’t really have a good answer for your Barry I think the earnings release seen year-over-year have been pretty even across the year. The pick-up was probably a little bit more from a year-over-year perspective in the first two quarters, because the rate impact was full year, this year, but only July through the end of the year in 2013. So I wouldn’t say there was anything really big or specific it set out in the fourth quarter. Although sometime the exchange rates through me up a little bit comparison in comparing what we had down here in our K and what is published up in Fortis.

Sure, okay. Thank you very much.

Thanks Robert.

Our next question comes from the line of Ben Pham with BMO Capital Markets. Please proceed with your question.

Thanks. Good morning everybody. I just wanted to go back to the Tilbury Expansion and I’m assuming that ROE it's going to be the BC generic. But I was wondering just with other utilities on PBR. Just how does Tilbury Expansions work from a regulatory perspective once it is in rate base?

The answer to the first question on ROE, yes it will be just this is the same ROE. In terms of the expansions, they are going to go in the right base. Maybe you can repeat your second part of your question there Ben?

Does it get effectively consolidated into FortisBC Energy and you're operating that or you’re going to go back and follow separate cost of service application?

No, it just get consolidated into the overall rate base of FortisBC Energy. So that’s the beauty of these project with these regulatory orders that we’ve gotten Order in Council we just roll it into our regular structure.

Okay. So it’s going to be affecting PBR then?

Effectively.

Okay. And then I just wanted to switch over to the Caribbean Utilities and I am just noticing the capital spending for that segment, it’s quite small overall and it's becoming a small part of your business. I do know that Caribbean Utilities they issue equity at some point and you did backstopped them at the last offering. Just curious what your appetite is in terms of backstopping them again or would you rather just one to dilute yourself overtime?

We would backstop any need for equity at Caribbean Utilities.

Okay.

But consistent with our past practice.

Okay. So no thoughts what getting out of the Caribbean overall?

Nothing to report.

Okay. Alright, thank you. That’s it for me.

Thanks Ben.

Our next question comes from the line of Matthew Akman with Scotiabank. Please proceed with your question.

My first question was actually kind of leading or let into just now is as you come to the end of the strategic review process and finalize your decision on real estate and properties. Would you consider looking at any other assets that might be non-core as a follow-on to that and Caribbean obviously could be one of those, I’m not asking you to speculate on Caribbean necessarily, but just generically is that a process that you plan to undertake more regularly going forward?

I would say yes, Matthew we’re always going to be looking at our non-core assets and deciding what path we want to go with them. So we don’t really when you look past the properties business those very few assets that remain I would think that our non-core in terms of assets that are not in the utility business or say long-term contracted energy infrastructure. So I think this work we’re doing reviewing properties is really key and once we get through that I don’t see any other material transactions in the near future.

In Caribbean, I mean obviously if that ever did come as non-core. I mean you wouldn’t want to sell unless things we’re going well or as well as you’d expect them. What is your kind of multi-year outlook for Caribbean now it seems to be improving again a little bit, but it’s been pretty choppy? How do you see things best you can unfolding over the next few years there?

I actually, I’m very positive right now on those two jurisdictions Turks and Caicos and Grand Cayman, Cayman we just received our approval to build new generation on the Ireland and we’re happy about that and we’re getting really digging into that at this point in time. Turks and Caicos we’re starting to see some real lift in sales there so the outlook largely related to strengthening U.S. economy is pretty good right now so we are opening that we will start to see more contributions to the company from those jurisdictions.

So, it feels like you think Fortis can still improve the operations with the assets in your own hands at this time?

If that will my position right now. Matthew but obviously we look at things on a sort of when we look at our strategy we'll continue to review but we're pretty excited about the prospects in Turks and Caicos and Cayman right now.

Okay, thank you very much. Those are my questions.

[Operator Instructions]. Our next question comes from the line of Winfred Fruhe [ph] with Fruhe Consulting Limited. Please proceed with your question.

In the fourth quarter of last year what was the currency impact on Fortis A from the Caribbean B from the United States?

It wasn’t only material Winfred we don’t have the number but we can get the number for you and we will send it you.

It wouldn’t be more than a penny or two Winfred.

Thanks very much.

Thank you Win.

Thank you. And as there are no further questions I would like to turn the call back to Mr. Barry for any closing remarks.

Thank you, everyone for joining the call. Again we are very excited about 2015 and look forward to talking you all when we release our first quarter results. Thank you.

And thank you for participating ladies and gentlemen. This concludes today’s conference. You may disconnect.