Ladies and gentlemen, thank you for standing by. My name is Lisa and I'll be your conference operator today. Welcome to the Fortis Q4 2018 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] At this time, I would like to turn the conference over to Stephanie Amaimo. Please go ahead, Ms. Amaimo.

Thanks Jessica, and good morning, everyone. And welcome to Fortis' 2018 fourth quarter and annual results conference call. I'm joined by Barry Perry, President and CEO; and Jocelyn Perry, Executive VP and CFO; other members of the senior management team, as well as CEOs from certain subsidiaries. Before we begin today's call, I want to remind you that the discussion will include forward-looking information, which is subject to the cautionary statement contained in the supporting slide show. All non-GAAP earnings measures referenced in our prepared remarks are reconciled to the related US GAAP financial measures in our 2018 annual MD&A. Also, unless otherwise specified, all financial information referenced is in Canadian dollars. With that, I will now turn the call over to Barry.

Thank you, Stephanie. And good morning, everyone. 2018 was another successful year at Fortis on many fronts. During the year, we advanced our long-term growth profile by increasing our five year capital plan to CAD 17.3 billion, a 20% increase over the prior year's plan. The plan is driven by regulated investments in grid modernization, the delivery of cleaner energy and natural gas infrastructure. In 2018, we invested CAD 3.2 billion in our systems, marking our biggest capital program to date. This capital was invested at our utilities to enhance the service we provide to our customers, with an eye to delivering energy in a safe, reliable and affordable manner. For our shareholders, this translated into CAD 1.1 billion of earnings, representing CAD 2.59 a share or CAD 2.51 on an adjusted basis. We are also pleased with the progress we've made to enhance our balance sheet. We now have a full year of US tax reform behind us and we have completed the asset sale portion of our five-year funding plan. Beyond our financial accomplishments, we successfully transitioned key leaders, including the appointment of Jocelyn Perry to Executive Vice President and CFO following the planned retirement of Karl Smith; the appointment of Jim Reid to Executive Vice President and Chief legal Officer and Corporate Secretary; and the appointment of David Hutchens to Executive Vice President, Western Utility Operations. These key leadership changes were seamless and a result of the combined efforts of the board and management on succession planning. On the sustainability front, we issued our first sustainability report in 2018, covering our 10 utility operations. Our commitment to sustainable practices has remained front and center, while serving our communities in North America. Lastly, with our 5.9% increase in the dividend paid in fourth quarter, 2018 marks 45 years…

Thank you, Barry. And good morning, everyone. Our fourth quarter and annual financial results reflect strong performance at both the regulated and non-regulated businesses and our continued investment at our utilities. Before speaking to the financial results, I wanted to briefly note that, starting this quarter, we are removing the Aitken Creek unrealized mark-to-market gains and losses from adjusted earnings and EPS. As you may recall, the Aitken Creek business hedges its physical gas inventory with forward financial instruments. US GAAP requires these financial instruments to be valued at market each reporting date. And this creates unrealized gains and losses. As I discussed on previous calls, these accounting adjustments are purely timing. So, all comparative earnings and EPS figures have been restated to remove the unrealized gains and losses from that period. Reported earnings per common share of CAD 0.61 for the fourth quarter improved CAD 0.29 compared to the prior-year while adjusted EPS of CAD 0.56 was down CAD 0.02 compared to the fourth quarter last year. Adjusted EPS for the fourth quarter was negatively impacted by two key drivers – US tax reform and the recognition of the reduced independence incentive adder at IPC. I will get into these impacts on the next couple of slide. For the full year, reported EPS of CAD 2.59 was up CAD 0.27 compared to the previous year and adjusted EPS was higher by CAD 0.04 reaching CAD 2.51. Investments in our regulated subsidiaries, strong performance at the Aitken Creek natural gas storage facility and lower income tax expense drove this increase. Again, US tax reform impacts and the reduction in the independence incentive adder at ITC partially offset this increase on an adjusted EPS basis. Looking at slide 13 and the fourth quarter results, adjusted EPS decreased by CAD 0.02 compared…

Thank you, Jocelyn. Fortis consists of well-run regulated utilities. Our track record of delivering strong performance for the benefit of our customers, shareholders and employees continued in 2018. Our operating assets are virtually all regulated and we are one of the most diversified utility businesses in North America. Our growth profile is strong with over 7% annual rate base growth expected over the next three years and over 6% annual rate base growth over the next five years. This supports our 6% average annual dividend guidance through 2023. We're also working on incremental investment opportunities not yet included in our capital plan that could provide additional growth. As we look ahead to 2019 and beyond, we remain focused on executing our plans to deliver long-term value for customers and shareholders. I'll now turn the call back over to Stephanie.

Thank you, Barry. This concludes the presentation. At this time, we'd like to open the call to address questions from the investment community.

Thank you. [Operator Instructions]. And our first question comes from the line of Robert Kwan from RBC Capital Markets. Please go ahead.

Maybe starting with the TEP rate case, and you had mentioned the amount of capital that's gone in since the last rate case, I'm just wondering, if you normalize for weather and what happened this past year, how far are you behind the allowed ROE? Or is this also about trying to look at rate design and taking a kick at the can at a forward test year?

I don't think the forward test year will be part of it, Robert. That's sort of a bigger statewide issue. This will be – David is on the call. I'll get him to chip in a second. But this will be a pretty normal rate case filing to update our rates for the capital that we've invested since the test year. Clearly, US tax reform has happened in the middle of that as well. And there are various riders at TEP – so, it's not necessarily all the capital – there's not a simple equation to say, well, take out 50% of the capital and that's your equity and multiplied by the return. It's not quite as simple as that to get to the numbers in terms of what the growth year-over-year would be post the rate case. David, maybe you can add some color to that as well?

Sure, definitely. Thanks for the question, Robert. Yeah, this is not going to be a fancy rate case by any means. We're not going after complicated rate design issues. It's really just about trying to get a real heavy capital plan recovered as quick as possible, reset the riders that we have. We're not going down the road of trying to do anything as far as a forward test year as well. So, as Barry mentioned, that's definitely a statewide effort that would actually require some changes in commission rules. So, kind of some of the standard stuff, cost allocation, [indiscernible] as well, but nothing too out-of-the-box.

Robert, I will say that in terms of Arizona, we continue to be very, very optimistic about the growth in the business there as we transition away from coal and add more renewables, transmission to the fleet, and we are starting to really focus on the storage angle as well. So, these are some really positive long-term trends for the business in Arizona.

Got it. Do you have the number as to – on a weather-normalized basis, how far you were behind the allowed ROE?

No, we don't have that available right now, Robert. So, I'll have to get back to you.

Okay. Turning to asset sales and Waneta completing, what you needed to do as part of funding, Barry, you've talked about seeing the US -- more of your peers, and I'm just wondering, strategically, are you looking at other large asset monetizations to drive your leverage lower to more comparable levels with the US names?

Robert, I would say – as we said on our opening remarks that we completed the asset funding portion of the plan. But, really, what drove us to look at the Waneta sale was the valuations that we were in the market for those kinds of asset. As the CEO of Fortis, I guess, any public company CEO, with our dislocations in the market that create scenarios that provide valuations, be it well beyond what you would expect normally, we're going to look at those scenarios. I don't see us exiting any of our assets for creating, like, dilutive transactions. But if there are prices available that we can actually do accretive transactions, we'll be looking at them.

Got it. Maybe if I can just finish, Jocelyn, a question for you. You outlined the US tax reform impact of 2% this year. Just wondering any update thoughts on the impact going forward as well as the fairly recent release of the anti-hybrid proposals?

Yeah. But, Bob, we've looked at that and while some parts of the new legislations will impact Fortis, we don't see, going forward, that it will have any impact on Fortis' EPS.

Okay. I guess, specific to EPS, is there anything material then on the cash flow side that you're looking at?

No, I don't see anything material on the cash flow side.

Okay. That's great. Thank you.

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

Good morning, everyone. Just want to transition over to some of the projects that are not in your capital plan. Just want to get a sense of, if you've discussed the ITC Lake Erie Connector project with the new Ontario government, as well as if there's any updated thinking on the timing of the BC LNG?

So, Rob, thanks for the question. We're pretty excited about the capital plan that we have. Obviously, CAD 17.3 billion and we're already started on next year's iteration, getting ready for our investor day later this year. In terms of those specific projects, I would say LNG, that continues to be a focus for us. But I would say, given the incident in British Columbia in late last year with the rupture of the Enbridge line, I think a focus on gas infrastructure, the resiliencies of all that has taken a bit of priority for us at this point in time. So, I probably see that surging ahead of – in terms of our priorities of making sure that we are comfortable with our situation with gas supply coming into lower mainland. So, that's taken a little bit of precedence. I do believe that, long-term, there will be opportunities on the LNG side as well. In terms of Lake Erie Connector, yes, we've had conversations with Premier Ford's government, officials and we continue to have that dialogue. We're very optimistic. And I just think this is a project that has to be built. They're connecting Ontario to the PJM grid. It's a common sense thing. ITC has a very attractive project that's permitted on both sides of the border. But we're still having those commercial conversation about who's going to use that line and pay for it, frankly. And we're not there yet. But we remain optimistic that common sense will prevail really.

All right. Appreciate it. And then, just to follow-up to your question – on your comments there. Southern Crossing expansion and does the rupture in BC kind of reinvigorate potential expansion there that could actually be quite a material project for BC gas?

I would say, yes, absolutely. We've always wanted to expand that gas line and create a little more redundancy into the lower mainland. There is also the possibility of increased storage facilities. We just built a large new tank at Tilbury. Doing more of that. We're still contracting for substantial storage outside of British Columbia and we really do need to look at these things. And I think that will form part of the future capital plans for our business in British Columbia. I will say, I think our team did an incredible job of managing through that situation. It was touch and go there for a while, especially in those early days. And Roger and his team in British Columbia really did a fabulous job. And hats off to Enbridge as well for quickly restoring the line to a level that allowed us to get through the cold period in British Columbia.

Thank you.

[Operator Instructions]. Our next question comes from the line of David Quezada from Raymond James. Please proceed with your question.

Thanks. Good morning, guys. My first question here, just on Wataynikaneyap, I know you brought on a couple new First Nations communities earlier this year. Are there any other First Nations groups kind of in the neighboring areas that could potentially join on to the project and do you expect your ownership stake there, 39%, to hold on where it is?

I'll let Gary Smith answer. He's overseeing that project for us.

In terms of additional First National communities, we have all the communities in that area already participating. And the inclusion of the last two, Mish and Saugeen, in the very beginning area of the project will complete the First Nation group that we need.

Great. Okay, thank you. That's helpful. And then, maybe just a broader kind of industry question. We're seeing a lot of pretty aggressive state-level renewable power targets, notably, I guess, as it relates you guys in New York. Some news there. Wondering how you see that affecting your business at Central Hudson?

Well, we're big supporters of cleaner energy clearly. And we see it as a big part of our opportunities in Arizona. Also, New York, we're participating a lot in sort of modernizing the grid there to receive a lot of this renewable power. We are also participating in a – with the other utilities in the region in a transco. We're hopeful that we can invest capital in that area as these renewable get hooked up. The other area is electric vehicle charging. We're hopeful we can get involved in that in New York as well. But in terms of actually building windfarms or whatever, I don't see our business in New York doing that. In fact, we'll primarily focus on T&D under the likely construct there. So, getting into generation would be preventive at this point.

Okay, great. Thanks. That's all I had.

As there are no further questions, I would like to turn the call back to Stephanie Amaimo for closing remarks.

Thank you, Lisa. We have nothing further at this time. Thank you for participating in our fourth-quarter and annual 2018 results call. Please don't hesitate to contact investor relations should you have any further questions. Thank you for your time and have a great day.

Thank you for participating, ladies and gentlemen. This concludes today's conference call. You may now disconnect.