Ladies and gentleman, thank you for standing by. This is the conference call operator. Welcome to the Fortis Q3 2016 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 Janet Craig, Vice President, Investor Relations, Fortis Incorporated. Please go ahead, Ms. Craig.

Thanks, Chris, and good morning, everyone. And welcome to Fortis’ third quarter results conference call. I am joined by Barry Perry, President and CEO and Karl Smith, Executive VP and CFO, other members of the senior management team as well as various CEOs of our certain subsidiaries - or actually all of our subsidiaries today. Before I begin today’s call, I want to remind you that the discussion will include forward-looking information, which is subject to the forward-looking statement contained in the supporting slide show. All non-GAAP financial measures referenced in our prepared remarks are reconciled to the related U.S. GAAP financial measures in our Q3 MD&A. Also, unless otherwise specified, all financial information referenced is in Canadian dollars. With that, I will turn the call over to Barry.

Thank you, Janet, and good morning, everyone. We have accomplished a lot this quarter and so far this year. On February 9, we announced the acquisition of ITC and 248 days later we closed the ITC acquisition on October 14. In fact, we close the transaction just 132 days after all state regulatory filings were made. This transaction further diversifies our business and positions us for continued growth. The acquisition of ITC is the largest in the history of Fortis dramatically increasing our North American footprint. We remain confident that the transaction will be nicely accretive to earnings per share in 2017. I have been asked lately about the timing of another acquisition. We are proud of our acquisition record and the value creation has bought to our shareholders. We have a well accepted business model and strong acquisition framework and we’ll consider and pursue utilities that align with this. Having said that you shouldn’t expect another acquisition anytime soon. We need to integrate ITC and have a full-year of earnings to illustrate the benefits of the transaction. M&A activity in the medium to long-term will need of course to complement our portfolio and be accretive to earnings per share. A condition in our agreement to acquire ITC was to list our shares on the New York stock exchange. We had been considering listing on the New York stock exchange for sometime and the structure of this transaction with shares forming a portion of the consideration gave us that opportunity. On October 14, under the ticker symbol FTS Fortis listed on NYSE. It was the largest international listing by market cap on the exchange and the second largest listing overall so far this year. We did hold a number of activities around our listing with a few different objectives including…

Thanks Barry. Good morning, everyone. As Barry mentioned, our third quarter 2016 financial results were strong and also in line with our expectations. Adjusted earnings for the quarter of $154 million was higher by $9 million or 6% compared to the same quarter last year. Adjusted earnings per share of $0.54 for the quarter was higher by $0.02 or nearly 4%. On a year-to-date basis, adjusted earnings of $475 million was higher by $28 million or over 6% and earnings per share was higher by $0.06 reaching a $1.67. Cash flow from operations of $1.4 billion year-to-date increased approximately 10% over the same period in 2015 due to higher cash earnings and favorable changes in working capital. During the quarter, our subsidiaries raised $225 million of long-term debt including $150 million of unsecured debentures at FortisAlberta at a rate of 3.34%. In October, we issued approximately $114 million Fortis common shares in connection with the ITC acquisition and now have approximately 400 million common shares outstanding. Debt financing from the transaction included US$2 billion of unsecured notes issued in October comprised of $500 million at five-year notes at 2.1% and US$1.5 billion at 10-year notes at 3.055%. As you can see from the waterfall chart, adjusted earnings per share for the quarter reflects strong performance from most of our regulated utilities and contribution from Aitken Creek. Performance was driven by favorable contribution from UNS largely due to the settlement of Springerville Unit 1 matters in the third quarter. That resulted in $10 million in after tax operating cost reimbursements which equates to about $0.03 per common share. These operating costs has been expensed in prior quarters. Earnings were tempered this quarter at FortisAlberta reflecting the economic downturn in the province and $2 million negative adjustments related to the recent generic…

Thank you, Karl. While we are very pleased with our progress this year, we remain firmly focused on continuing to achieve strong operational and financial performance in 2016 and we will continue to execute on our strategy, integrate ITC and maintain investment grade credit ratings. In closing, Fortis is well positioned to deliver on our commitments to customers and shareholders given our highly diversified virtually 100% regulated business. We will continue to advance our highly executable base capital program against a backdrop of a period of regulatory stability. This coupled with our 6% average annual dividend growth guidance through 2021 and strong track record of growth both organically and by acquisition will position Fortis to maintain its track record of superior returns to shareholders. And I'll now turn the call back over to Janet.

Thanks Barry. This concludes the presentation. And at this time, we’d like to open the call to address questions from the investment community. So Chris?

Thank you. Ladies and gentlemen, we will now conduct the question-and-answer period. [Operator Instructions] Our first question comes from the line of Ben Pham of BMO Capital Markets. Your line is open.

Thanks. Good morning.

Good morning.

I wanted to ask about your commentary on acquisitions and your focuses on ITC integration and it seems like unless something really compelling comes up, we won’t be seeing anything for at least a year. I’m just wondering in terms of potential acquisitions. Other than EPS accretion, are you thinking about something maybe more strategic that could benefit you or you think when you look at your footprint today from our strategic perspective here you are well-positioned going forward?

I think we are well-positioned Ben we've created a very diversified company with primarily wires business plus a big gas LDC business. That's what we've done here. There's obviously in the future once we're comfortable with the ITC transaction opportunities to continue to grow the company. Our model is pretty scalable model where we have this very small head office and substantially autonomous subsidiary. So I would think that we would start to look at the regions that we already have businesses in an ideal world that's where you focus your attention. It's not necessary, but just from a simplicity perspective that that's we would look initially, but there are very few opportunities remaining. I continue to stress that is less than 40 investor on utilities remaining in the United States. Some of them are very large, some are very small. So there's only a handful that make some sense for Fortis. We're not going to be spending a whole lot of time on that in the next little while, but just people have to keep that in context that there are not a lot of opportunities remaining in North America.

Okay. And you mentioned TND is the focus and really limited commentary on generation are there maybe some rate base opportunities? Does that more the returns aren't as attractive over different risk profiles or is that maybe perhaps more of competitive issues that could come up later on when we're looking at additional acquisitions in the future?

I just think Fortis is started with a distribution business in new plan power, electricity business. Clearly our Canadian utilities are mostly wires businesses and we have a large gas LDC in British Columbia obviously, so a lot of it's the history of the company and our expertise in that area. We like being close to the customer frankly and wires business gets a little closer to the customer. So that doesn't mean that we won't look at a vertically integrated utility in the future that has a rate generation embedded in rate base, but if we had a choice I think we'd be buying a wires business or a gas LDC. And those are the businesses that attract the highest valuation in our sectors, so are the most expensive the buy for the downside of that, but it also shows the value of what we would already own at Fortis as well.

Okay. Thanks. Thank you. That’s helpful.

Thanks Ben.

Our next question comes from the line of Robert Kwan of RBC Capital Markets. Your line is open.

Good morning. Just with respect to the future growth and citing things like the various infrastructure opportunities across North America. Outside of some of the things that you listed, can you just talk about maybe the top three most likely things taking into account and also your ability to compete and execute?

Rob. I really would just want to focus on the things that we are focused on. I'm not running after every opportunity in North America. We've got a lot going on in our service territories and work at ITC is doing around Erie Connector some other work in the Midwest. A lot of new win generation is being installed and I would expect we'll have incremental growth that will come from transmission perspective from that. We're very excited about our BC business both the Woodfibre opportunity as well as our Tilbury site there. We were unsuccessful with Hawaii, obviously because of next Erie deal falling apart there and the governor really not wanting LNG in Hawaii, but we were having conversation with a number of parties to look at expansion of our Tilbury site in the BC. And over the next number of years I could see us putting some significant capital work there. And finally, the other project I would highlight is the Wataynikaneyap project in Ontario. This is a $1.2 billion approximately project, it's a partnership between the First Nations, ourselves and another party and we are very optimistic about that project proceeding to go through its various steps. So we have lots on our plate, we are running a good base business, big capital project, but also pursuing these other opportunities that can add to our overall growth rate. So I really say that’s where our focus is and clearly pushing our Arizona team to continue to look at solar, utility scale solar and hopefully we'll get some positive progress there in the future as well. But other than that, we're just hunkered down.

So that fair to say Barry. Outside of things that you’ve identified on the map obviously the world can change as we go forward here, but it's unlikely that there's something that's going to be particularly material that that would come up outside of kind of…

Something that happens in one of – I’ll let this something that happens Robert in one of our service territories that is exciting to us that maybe government privatize assets and we compete for those within the service territories that we operate in - maybe regulated pipelines become available in BC for example that will be interesting to us on the gas side. These are things we'll pursue that are within our footprint of the utilities that we already own. So but it's very unlikely that we go to another jurisdiction to buy a pipeline that we don't have already existing franchise in for example right.

For sure, okay and if I can just finish on acquisitions broadly whether it's of utility assets or contracted type assets. Just as you get larger though it becomes harder to grow and with ITC especially with this strong ROE even with some of the MISO changes in the equity thickness. With all of that being so high it's also tough to improve the return on invested capital. So I'm just wondering is there any thought of recycling capital i.e. monetizing say slower growing assets in your total portfolio?

No, no. We like the utilities that we own, clearly if anyone not to make an offer for any part of our business. We’re a big public company we've got to consider these things, but we won't be listing for sale any of our utility businesses, hard enough to buy utility these days. I can imagine selling one, but again that there are acquirers out there were out looking for businesses and I'm sure other utilities are looking for businesses as well. So I wouldn't be surprised if someone make us an offer at some point in time that will have to consider but it won't be initiated by Fortis.

Maybe a minority interest sell down, would that be of interest.

I don’t think so, it would have to be part of some larger transaction that we would like to do in the future beyond the sort of integration of ITC if a transaction of a size that we needed to bring in a minority partner to make it work, we would consider that again our experience with GIC so far has been fabulous. So I'll tell you that we're very impressed by those folks and so that model could be employed again in the future if the transaction required it.

That's great. Thank you very much.

Thanks Robert.

Our next question comes from on line of Linda Ezergailis of TD Securities. You may proceed with your question.

Good morning. I have a bit of a more specific question this morning with respect to one of your existing jurisdictions Alberta. As you're probably aware the first renewable procurement details have now been released. And instead of including some merchant component and it's a contract for differences so effectively that would be contracted power. Is that something that - at first blush Fortis might be interested in and can you just comment on your appetite for participating in Alberta?

Well, I will say that Linda, renewable generation for example is something that we'd like to do a little more off. It’s not going to be a large part of our portfolio because of the - some of the focus on wires and gas LDC, but it would be an area that we would like to go. So for example with contracted gas generation in Alberta is not something we like we would do, but if we could find a way to do contracted win for example we would have a look at although I would say is very competitive and getting into that business initially given how mature it’s become, it’s going to be tough for a company like ourselves to be competitive in that area.

Would you consider then buying our partnering or I'm assuming you don’t have any…

I must say it’s not a big part of our strategy Linda. We'll look at things, but our primary strategy really is around that regulated utility business and yes we like to see some progress on our sort of renewable portfolio, things like the Waneta hydroelectric plant. Those kind of things will run at pretty hard, if they can come up in our service territory. But we are spending a little timing exploring the possibilities in Alberta I would say that.

Okay, great. Thank you.

Our next question comes from Robert Catellier of CIBC World Markets. Please proceed with your question.

Hi. Just like a little bit more clarity on the messaging surrounding your rate base growth rates. On Page 20, you've illustrated three and five-year CAGR’s, but you also have common shares that holding the base capital steady and what impact that has in lifting your CAGR? So my question really is, if you could help quantify how much of the projects that aren't included already in your rate base, you’d have to secure to achieve those higher numbers and some of the key sensitivities and actually getting there. I know larger projects are lumpy and maybe have a little bit more subjectivity to them. But can you just help us to get from the existing CAGR’s to maybe the upper end?

Yes. Well, I'll take a stab initially and Karl can jump in behind me. If you look at our capital chart on Slide 9, it shows a five-year bar chart on CapEx and the first two years are at $2.9 billion and then we drop off to $2.4 billion in year three. So that 5.3% CAGR is reflective of what the impact of that CapEx is on our rate base, okay. What we're saying is that, if that curve was held for the three years if the bars were all showing $2.9 billion, so additional $500 million of CapEx essentially in year three then we’d have that 5.3% would be 5.7%. And I pointed out in my note that for example, if we secure the Woodfibre opportunity, the pipeline expansion that’s a $600 million project and that completed, for example mostly completed by the end of 2019 that would mean that our rate base growth for the three years would be 5.7% approximately close to 6%.

Yes. I think we're talking the same line, but that's actually what I'm getting at, you identified the capital associated with one project, but I wondered if there was an aggregate on risk bucket or bucket of capital.

We are trending out there, we’re sort of like some other company put all the list of CapEx down of all the potential projects we're pursuing and then do a probability weighted outcome. We tend to just say this is our CapEx that our utilities are telling us. That’s the base program that shows 5.3% growth in the next three years. And then we work hard on other projects and that would add to that. So this sort of base program is highly executable, very unlikely that it comes in maybe less than that and then hopefully we can secure some of these other project. And as we get down to the other years, our utilities will also be reforecasting and likely there is going to be an increase in their CapEx. If you look at historically, we’ve always under estimated our capital forecast in those outer years and because of the nature of planning and how the budgets all come together. So base plan, low risk almost countonable numbers and then you add to it the reforecasting plus the new projects that we secure.

So Robert, once you get this fast sit down doing the math, you’ll find it’s relatively straightforward and this is our attempt to assist you with some sensitivities around our rate base growth. That’s why we’re giving you some impression of the size of these other potential projects. So Woodfibre we've got the $600 million number, Barry mentioned Wataynikaneyap have $1.2 billion, Lake Erie ITC you talk about something in the area of a $1 billion. So rather than get into the probabilistic approach that some others use, we’re just attempting to help you with the math a little bit.

Fair enough. It does seem though like I mean clearly the base plan was highly executable, but it also doesn't seem like much of a stretch to get to that $2.9 billion further opening in the planning horizon?

Yes. Rob, you said it.

We’ll let you drive your own conclusions there.

And then just sort of a housekeeping thing here, I didn't quite catch the sustaining capital percentage of your capital plan, was it 58%?

58%.

Yes. Okay, thank you.

You’re welcome.

Our next question comes from Robe Hope of ScotiaBank. Please proceed with your question.

Good morning. Thank you. Just two questions. First, a little housekeeping, your rate base forecast showed the election of bonus depreciation, is this something that you look to potentially challenge and if so what are the steps there?

We're looking at it. Yes, mostly utilities in the U.S. have elected to do it, some as not, but we wanted to show you the conservative position clearly and that what we shown there.

All right. Thank you. And then as a follow-up just back on the M&A theme, if there was a municipally owned utility that could sell potentially a minority stake would you look to potentially look at that if rather than a whole stake, trying harder if you will?

Idea unlikely, I think the bigger they are they would be very unlikely that we would look at a minority position. Smaller utilities in our footprint that we already have in Ontario I think we'd be open to – if you're looking at something like a large city owned utility you would like to have control to move forward with that.

And then if you were able to have control would that be something you'd be interested in?

I wouldn't want to say at this point.

All right. That's it for me. Thank you.

Our next question comes from David Quezada of Raymond James. You may proceed with your question.

Just I guess FortisAlberta I think there is a dimension of higher operating expenses in the quarter, just wondering do you have any color on what drove that and it's that something we should expect going forward?

Yes, there's no one items that stands out David to be honest with you and I mean in context because the revenue was sort of flat lining. I mean generally speaking in the last several years the increases in revenue and operating cost would have been in tandem, but it’s not significant, they continue to focus on because they're in the PBR regime to keep their cost well managed and they are doing that. And the amount in the quarter is not that significant year-over-year in terms of decline anyway.

Okay, great. That’s helpful. Thank you. And then I guess maybe a follow-up to the renewable procurement going on in Alberta right now. Appreciate that you are largely a distribution in Alberta right now I think entirely. Do you see any opportunities there outside of the generation aspect already connecting those renewable sources into the grid? And how do you envision the I guess increased variability from those renewable sources impacting your business there?

I think there's a little bit maybe Phonse -- are you on the line? Phonse, so you just can comment on that?

Yes. I can give few comments on that. Just a little bit of color to the first question with respect to operating costs. A good portion of the third quarter operating cost being over last year was driven by and we've had a pretty bad lightning seasonal here sort of summer, so drove up some of our overtime costs as well the timing on our vegetation management program this year lumped a fair amount of our vegetation management expense into the third quarter. So these things will even out over the course of the years. With respect to the renewables in Alberta, we're pursuing a few opportunities mostly on the distribution and trends we are working with the government to the microgen regulation ends this year and under that regulation distribution companies are to invest in new renewable generating sources that are less than one megawatt. We did full investment. And so we're working with the government to look at that microgen regulation for renewables and see whether it can be extended to a larger removeable sources something up to say around five megawatts as well. We're working with some of the wind turbine companies and looking at the distribution systems that they have under sites and whether we could partner with them to operate those systems or perhaps even eventually own those systems and as well on the energy efficiency side of the covenants initially seen Alberta where we have a fairly extensive LED street lighting program happening right now we see extending into the future. So those are sort of angles we're coming at.

Okay, great. That’s very helpful. Thank you. That's all I had.

Our next question comes from the line of Jeremy Rosenfield of Industrial Alliance. Your line is open.

Thanks. I think the question that Barry you’ve addressed previously off the top though you mentioned about the limited number of future M&A opportunities in North America. And so I’m thinking you now have a very big financial partner GIC as interest globally. Do you think that there's an opportunity or a play for Fortis to become more of a global utility holding company and looking for opportunities outside of North America and other jurisdictions?

Yes, that probably is, but it's not one that I'm taking frankly. We believe over there the near medium-term we're going to continue to be able to execute our model in North America despite the fact that there's only a handful of opportunities, but frankly I think we believe our model will be able to attract a couple more of those opportunities going forward. So I'm not adverse to doing more business with GIC or other firms like that, some of the large Canadian pension funds are also good partners to have and that's a possibility. But I don't think at this point, we need to extend our reach beyond North America.

Okay. Great. Thanks.

[Operator Instructions] Our next question comes from the line of Andrew Kuske of Credit Suisse. You may proceed with your question.

Thank you. Good morning.

Good morning.

I guess the question is to Barry and just ahead of Edison next week. How do you think about just your profile given the magnitude of the ITC deal when you look year-over-year just the level of interest you anticipate next week for us to say what you've seen in past years?

I think we have dramatically increased our profile. Having $5 billion of common equity put into the market related to the share exchange with ITC, it's been significant. We are having a lot of good discussions with ITC’s shareholders. We are all anxious obviously to see the shareholdings come out, post the transaction. And one thing is in the U.S. is a much more visible approach than we have in Canada. It’s hard to know who owns a stock in Canada, but the U.S. model is much more transparent and we're looking forward to seeing that data. But we have a good slat to meeting set up and really kudos to Janet and her team frankly for increasing our exposure on the IR side in North America and we're going to continue doing that going forward. And I think ITC helps that tremendously frankly.

Okay. That's helpful. And then maybe a question for Karl. Could you just maybe give us a bit of a breakdown on your debt on the fixed versus floating and then the amount of the debt that just passed through, I mean passed through by way of your regulated asset basis and…

Andrew, the vast majority of our debt is fixed term and that's always been our approach. I mean obviously scale matters what it comes to when you translate your variable debt into your fixed debt. And again with respect to the regulatory nature of that other than the holding company level. Practically all of our debt is a flow through for regulator rate purposes, I mean the timing in terms of the true up and catch up maybe take a year not much longer than that to actually get trued up for the regulators. And we'll continue down that path. We have to do a little bit of financing over the next year I suspect by explaining few things up, but it won’t be material and our approach will always be to have a fixed as much as we possibly can.

I would say Andrew just our maturity schedule should give you a sense that we're in really good shape because on average – and this is consolidated entire company regulated and non-regulated debt I'll call it and $450 million a year for the next five years. So we're in really good place in terms of a maturity schedule on a long-term debt. And we tend to wait around with our short-term debt. We just push it out the doors very quickly once we get it up to a certain level that we can get a sizable economic transaction out there.

That's great. Thank you.

Thank you. End of Q&A

Thank you. As there are no further questions, I would like to turn the call back to Mr. Perry for any closing remarks.

I just want to say thank you for everyone for participating today and I will talk to you on the next call. Thank you.