Fortis Inc. (NYSE:FTS) Q2 2020 Earnings Conference Call - Final Transcript

Jul 30, 2020 • 08:30 am ET

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Fortis Inc. (NYSE:FTS) Q2 2020 Earnings Conference Call - Final Transcript

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Operator
Operator

Ladies and gentlemen, thank you for standing by. My name is Michelle, and I will be your conference operator today. Welcome to the Fortis Q2 2020 Conference Call and Webcast.

[Operator Instructions] At this time, I would like to turn the conference over to Stephanie Amaimo. Please go ahead, Ms. Amaimo.

Executive
Stephanie Amaimo

Thanks, Michelle, and good morning, everyone. And welcome to Fortis' Second Quarter 2020 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.

Actual results can differ materially from the forecast projections included in the forward-looking information presented today. All non-GAAP financial measures referenced in our prepared remarks are reconciled to the related U.S. GAAP financial measures in our second quarter 2020 MD&A. Also unless otherwise specified, all financial information references in Canadian dollars.

With that, I will turn the call over to Barry.

Executive
Barry Perry

Thank you, Stephanie, and good morning, everyone. When we spoke last quarter, we were just starting to understand the challenging impacts of the COVID-19 pandemic on North America and the world. Three months later, we continue to see the effects of the virus on our people and the communities we serve. At Fortis, we have lived with spikes in COVID-19 cases in some of our jurisdictions like New York and Michigan. Currently, the people of Arizona, our UNS employees and their families are facing the consequences of the spread of the disease. Our hearts go out to everyone affected. Our utilities remain vigilant during these uncertain times.

We are focused on ensuring our employees, customers and communities are safe. Nothing is more important to us. We also know the responsibility we hold as an essential service provider. I am heartened to see the commitment of our employees at home and in the field as they keep the lights on and the natural gas flowing. Thank you to each and every one of you. From a financial perspective, the pandemic impacts have been manageable to date and relate primarily to reduced sales in the Caribbean as well as higher direct costs and credit losses. Together, these represented about $0.03 of EPS during the quarter. Last quarter, we disclosed that 82% of our annual revenues are either protected by regulatory mechanisms or are from residential sales, which were expected to increase during the pandemic.

As expected, we did see higher residential sales and lower commercial and industrial sales. We recognize that the pandemic is ongoing, and we intend to continue to take the necessary measures to protect our employees, customers and communities, all while delivering safe, reliable and affordable service. Now I'd like to update you on the progress made on several fronts in our business in the second quarter. First, on the regulatory front, FERC