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Interim Financial Statements











FORTIS INC.

Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2025 and 2024
(Unaudited)
1
FORTIS INC.JUNE 30, 2025 QUARTER REPORT
Interim Financial Statements
CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS (Unaudited)
FORTIS INC.
June 30,December 31,
As at (in millions of Canadian dollars)20252024
ASSETS
Current assets
Cash and cash equivalents$221 $220 
Accounts receivable and other current assets (Note 5)1,714 1,886 
Prepaid expenses195 182 
Inventories 679 685 
Regulatory assets (Note 6)757 823 
Total current assets3,566 3,796 
Other assets 1,732 1,653 
Regulatory assets (Note 6)3,865 3,808 
Property, plant and equipment, net49,505 49,456 
Intangible assets, net 1,638 1,661 
Goodwill 12,483 13,112 
Total assets$72,789 $73,486 
LIABILITIES AND EQUITY
Current liabilities
Short-term borrowings (Note 7)$363 $98 
Accounts payable and other current liabilities 2,914 3,353 
Regulatory liabilities (Note 6)502 595 
Current installments of long-term debt (Note 7)2,383 1,990 
Total current liabilities6,162 6,036 
Regulatory liabilities (Note 6)3,722 3,696 
Deferred income taxes 4,973 5,020 
Long-term debt (Note 7)30,723 31,224 
Finance leases341 343 
Other liabilities 1,274 1,314 
Total liabilities47,195 47,633 
Commitments and contingencies (Note 14)
Equity
Common shares (1)
15,857 15,589 
Preference shares1,623 1,623 
Additional paid-in capital6 8 
Accumulated other comprehensive income1,045 2,067 
Retained earnings5,095 4,521 
Shareholders' equity23,626 23,808 
Non-controlling interests 1,968 2,045 
Total equity25,594 25,853 
Total liabilities and equity$72,789 $73,486 
(1)    No par value. Unlimited authorized shares. 503.6 million and 499.3 million issued and outstanding as at June 30, 2025 and December 31, 2024, respectively.
See accompanying Notes to Condensed Consolidated Interim Financial Statements
2
FORTIS INC.JUNE 30, 2025 QUARTER REPORT
Interim Financial Statements
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF EARNINGS (Unaudited)
FORTIS INC.
QuarterYear-to-Date
For the periods ended June 30 (in millions of Canadian dollars, except per share amounts)
2025 2024 2025 2024 
Revenue $2,815 $2,670 $6,153 $5,788 
Expenses
Energy supply costs714 713 1,754 1,722 
Operating expenses789 739 1,619 1,505 
Depreciation and amortization512 480 1,027 947 
Total expenses2,015 1,932 4,400 4,174 
Operating income800 738 1,753 1,614 
Other income, net (Note 10)105 65 196 138 
Finance charges 369 347 739 683 
Earnings before income tax expense536 456 1,210 1,069 
Income tax expense92 69 208 170 
Net earnings$444 $387 $1,002 $899 
Net earnings attributable to:
Non-controlling interests$40 $38 $78 $73 
Preference equity shareholders (Note 8)20 18 41 36 
Common equity shareholders384 331 883 790 
$444 $387 $1,002 $899 
Earnings per common share (Note 11)
Basic$0.76 $0.67 $1.76 $1.60 
Diluted$0.76 $0.67 $1.76 $1.60 
See accompanying Notes to Condensed Consolidated Interim Financial Statements

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
QuarterYear-to-Date
For the periods ended June 30 (in millions of Canadian dollars)
2025 2024 2025 2024 
Net earnings$444 $387 $1,002 $899 
Other comprehensive (loss) income
Unrealized foreign currency translation (losses) gains (1)
(1,116)182 (1,111)564 
Other (2)
(17)(1)(23)3 
(1,133)181 (1,134)567 
Comprehensive (loss) income$(689)$568 $(132)$1,466 
Comprehensive (loss) income attributable to:
Non-controlling interests$(72)$56 $(34)$132 
Preference equity shareholders20 18 41 36 
Common equity shareholders(637)494 (139)1,298 
$(689)$568 $(132)$1,466 
(1)Net of hedging activities and income tax expense of $8 million for the three and six months ended June 30, 2025, respectively (three and six months ended June 30, 2024 - income tax recovery of $2 million and $8 million, respectively)
(2)Net of income tax recovery of $4 million and $6 million for the three and six months ended June 30, 2025, respectively (three and six months ended June 30, 2024 - income tax expense of $nil)
See accompanying Notes to Condensed Consolidated Interim Financial Statements
3
FORTIS INC.JUNE 30, 2025 QUARTER REPORT
Interim Financial Statements
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS (Unaudited)
FORTIS INC.
QuarterYear-to-Date
For the periods ended June 30 (in millions of Canadian dollars)
2025 2024 2025 2024 
Operating activities
Net earnings$444 $387 $1,002 $899 
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation - property, plant and equipment454 421 911 830 
Amortization - intangible assets39 39 78 77 
Amortization - other19 20 38 40 
Deferred income tax expense58 21 124 51 
Equity component, allowance for funds used during construction (Note 10)
(42)(32)(81)(62)
Other7 22 19 22 
Change in long-term regulatory assets and liabilities(43)(20)(19)(100)
Change in working capital (Note 12)(132)(44)(55)(175)
Cash from operating activities804 814 2,017 1,582 
Investing activities
Additions to property, plant and equipment(1,479)(1,064)(2,962)(2,135)
Additions to intangible assets(65)(48)(125)(90)
Contributions in aid of construction144 24 312 51 
Contribution to equity-accounted investee(27)— (27)— 
Other(83)(59)(133)(112)
Cash used in investing activities(1,510)(1,147)(2,935)(2,286)
Financing activities
Proceeds from long-term debt, net of issuance costs (Note 7)96 1,071 1,131 1,418 
Repayments of long-term debt and finance leases(27)(692)(62)(696)
Borrowings under committed credit facilities3,332 1,824 6,390 3,728 
Repayments under committed credit facilities (2,985)(1,593)(6,358)(3,330)
Net change in short-term borrowings230 (59)277 (52)
Issue of common shares, net of costs and dividends reinvested9 8 34 21 
Dividends

Common shares, net of dividends reinvested(191)(184)(383)(363)

Preference shares(20)(18)(41)(36)

Subsidiary dividends paid to non-controlling interests(17)(24)(44)(54)
Other10 (14)(8)(13)
Cash from financing activities437 319 936 623 
Effect of exchange rate changes on cash and cash equivalents(20)6 (17)17 
Change in cash and cash equivalents(289)(8)1 (64)
Cash and cash equivalents, beginning of period510 569 220 625 
Cash and cash equivalents, end of period$221 $561 $221 $561 
Supplementary Cash Flow Information (Note 12)
See accompanying Notes to Condensed Consolidated Interim Financial Statements

4
FORTIS INC.JUNE 30, 2025 QUARTER REPORT
Interim Financial Statements
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY (Unaudited)
FORTIS INC.
For the quarter ended June 30
(in millions of Canadian dollars, except share numbers)
Common Shares
(# millions)
Common SharesPreference Shares Additional Paid-In CapitalAccumulated Other Comprehensive Income (Loss)Retained EarningsNon-Controlling InterestsTotal Equity
As at March 31, 2025501.6 $15,729 $1,623 $6 $2,066 $4,711 $2,058 $26,193 
Net earnings— — — — — 404 40 444 
Other comprehensive loss— — — — (1,021)— (112)(1,133)
Common shares issued2.0 128 — — — — — 128 
Subsidiary dividends paid to non-controlling interests— — — — — — (17)(17)
Dividends on preference shares— — — — — (20)— (20)
Other— — — — — — (1)(1)
As at June 30, 2025503.6 $15,857 $1,623 $6 $1,045 $5,095 $1,968 $25,594 
As at March 31, 2024493.0 $15,232 $1,623 $8 $998 $4,279 $1,875 $24,015 
Net earnings— — — — — 349 38 387 
Other comprehensive income— — — — 163 — 18 181 
Common shares issued2.2 114 — — — — — 114 
Subsidiary dividends paid to non-controlling interests— — — — — — (24)(24)
Dividends on preference shares— — — — — (18)— (18)
Other— — — — — 1 1 2 
As at June 30, 2024495.2 $15,346 $1,623 $8 $1,161 $4,611 $1,908 $24,657 
See accompanying Notes to Condensed Consolidated Interim Financial Statements
5
FORTIS INC.JUNE 30, 2025 QUARTER REPORT
Interim Financial Statements
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY (Unaudited)
FORTIS INC.
For the six months ended June 30
(in millions of Canadian dollars, except share numbers)
Common Shares
(# millions)
Common SharesPreference SharesAdditional Paid-In CapitalAccumulated Other Comprehensive Income (Loss)Retained EarningsNon-Controlling InterestsTotal Equity
As at December 31, 2024
499.3 $15,589 $1,623 $8 $2,067 $4,521 $2,045 $25,853 
Net earnings— — — — — 924 78 1,002 
Other comprehensive loss— — — — (1,022)— (112)(1,134)
Common shares issued4.3 268 — (1)— — — 267 
Subsidiary dividends paid to non-controlling interests— — — — — — (44)(44)
Dividends declared on common shares ($0.615 per share)
— — — — (309)— (309)
Dividends on preference shares— — — — — (41)— (41)
Other— — — (1)— — 1 — 
As at June 30, 2025503.6 $15,857 $1,623 $6 $1,045 $5,095 $1,968 $25,594 
As at December 31, 2023
490.6 $15,108 $1,623 $9 $653 $4,112 $1,827 $23,332 
Net earnings— — — — — 826 73 899 
Other comprehensive income— — — — 508 — 59 567 
Common shares issued4.6 238 — — — — — 238 
Subsidiary dividends paid to non-controlling interests— — — — — — (54)(54)
Dividends declared on common shares ($0.59 per share)
— — — — — (291)— (291)
Dividends on preference shares— — — — — (36)— (36)
Other— — — (1)— — 3 2 
As at June 30, 2024495.2 $15,346 $1,623 $8 $1,161 $4,611 $1,908 $24,657 
See accompanying Notes to Condensed Consolidated Interim Financial Statements
6
FORTIS INC.JUNE 30, 2025 QUARTER REPORT
Notes to Condensed Consolidated Interim Financial Statements (Unaudited)
For the three and six months ended June 30, 2025 and 2024
1. DESCRIPTION OF BUSINESS

Nature of Operations
Fortis Inc. ("Fortis" or the "Corporation") is a well-diversified North American regulated electric and gas utility holding company.

Earnings for interim periods may not be indicative of annual results due to: (i) the impact of seasonal weather conditions on customer demand; (ii) the impact of market conditions, particularly with respect to wholesale sales at UNS Energy; (iii) changes in the U.S. dollar-to-Canadian dollar exchange rate; and (iv) the timing and significance of regulatory decisions. Earnings for utilities in Canada and New York tend to be highest in the first and fourth quarters due to space-heating requirements. Earnings for UNS Energy tend to be highest in the second and third quarters due to the use of air conditioning and other cooling equipment.

Entities within the reporting segments that follow operate with substantial autonomy.

Regulated Utilities
ITC: ITC Investment Holdings Inc., ITC Holdings Corp. and the electric transmission operations of its regulated operating subsidiaries, which include International Transmission Company, Michigan Electric Transmission Company, LLC, ITC Midwest LLC and ITC Great Plains, LLC. Fortis owns 80.1% of ITC and an affiliate of GIC Private Limited owns a 19.9% minority interest.

UNS Energy: UNS Energy Corporation, which primarily includes Tucson Electric Power Company ("TEP"), UNS Electric, Inc. ("UNS Electric") and UNS Gas, Inc. ("UNS Gas").

Central Hudson: CH Energy Group, Inc., which primarily includes Central Hudson Gas & Electric Corporation.

FortisBC Energy: FortisBC Energy Inc.

FortisAlberta: FortisAlberta Inc.

FortisBC Electric: FortisBC Inc.

Other Electric: Eastern Canadian and Caribbean utilities, as follows: Newfoundland Power Inc.; Maritime Electric Company, Limited; FortisOntario Inc.; a 39% equity investment in Wataynikaneyap Power Limited Partnership; an approximate 60% controlling interest in Caribbean Utilities Company, Ltd. ("Caribbean Utilities"); FortisTCI Limited and Turks and Caicos Utilities Limited (collectively "FortisTCI"); and a 33% equity investment in Belize Electricity Limited ("Belize Electricity").

Non-Regulated
Corporate and Other: Captures expenses and revenues not specifically related to any reportable segment and those business operations that are below the required threshold for segmented reporting. Consists of non-regulated holding company expenses, as well as non-regulated long-term contracted generation assets in Belize.


2. REGULATORY MATTERS

Regulation of the Corporation's utilities is generally consistent with that disclosed in Note 2 of the Corporation's annual audited consolidated financial statements ("2024 Annual Financial Statements"). A summary of significant outstanding regulatory matters follows.

ITC
MISO Base ROE: In October 2024, the Federal Energy Regulatory Commission ("FERC") issued an order that revised the base rate of return on common equity ("ROE") for transmission owners operating in the Midcontinent Independent System Operator, Inc. ("MISO") region, including ITC, from 10.02% to 9.98%, with a maximum ROE inclusive of incentives not to exceed 12.58%. The order also directed the payment of certain refunds, with interest, by December 2025, for the 15-month period from November 2013 through February 2015, and prospectively from September 2016. Certain MISO transmission owners, including ITC, filed a request for rehearing with FERC in November 2024, and filed an appeal of the order with the U.S. Court of Appeals for the District of Columbia Circuit ("D.C. Circuit Court") in January 2025, with particular focus on the refund period and related interest. In March 2025, FERC addressed the request for rehearing but made no changes to the order. The timing and outcome of the appeal filed with the D.C. Circuit Court are unknown.

Transmission Incentives: In 2021, FERC issued a supplemental notice of proposed rulemaking ("NOPR") on transmission incentives modifying the proposal in the initial NOPR released by FERC in 2020. The supplemental NOPR proposes to eliminate the 50-basis point regional transmission organization ("RTO") ROE incentive adder for RTO members that have been members for longer than three years. The timing and outcome of this proceeding are unknown.


7
FORTIS INC.JUNE 30, 2025 QUARTER REPORT
Notes to Condensed Consolidated Interim Financial Statements (Unaudited)
For the three and six months ended June 30, 2025 and 2024
2. REGULATORY MATTERS (cont'd)

UNS Energy
TEP General Rate Application: In June 2025, TEP filed a general rate application with the Arizona Corporation Commission ("ACC") requesting new rates effective September 1, 2026 using a December 31, 2024 test year, with post-test year adjustments through June 30, 2025. The application requests an allowed ROE of 10.5%, a common equity component of capital structure of approximately 55%, and rate base of US$4.3 billion. The application includes a US$172 million net increase in retail revenue including savings associated with fuel costs. It also proposes to phase-out or eliminate certain adjustor mechanisms, and requests an annual formulaic rate adjustment mechanism consistent with the ACC's approval of a formula rate policy statement in 2024.

UNS Gas General Rate Application: In November 2024, UNS Gas filed a general rate application with the ACC requesting an increase in gas delivery rates effective February 1, 2026. In January 2025, UNS Gas filed supplemental material proposing an annual formulaic rate adjustment mechanism. The outcome of this proceeding is unknown.

Central Hudson
2025 General Rate Application: In August 2024, Central Hudson filed a general rate application with the New York State Public Service Commission ("PSC") requesting an increase in electric and gas delivery rates effective July 1, 2025. In May 2025, Central Hudson filed a joint proposal with the PSC, which provides for a three-year rate plan with retroactive application to July 1, 2025, and continuation of a 9.5% allowed ROE and a 48% common equity component of capital structure. An order is expected in the second half of 2025.

Enforcement Proceeding: Following a Show Cause Order issued in 2024, the PSC issued an order in March 2025 to commence an enforcement proceeding in connection with a gas-related explosion that occurred in November 2023. The timing and outcome of this proceeding are unknown.

FortisBC Energy and FortisBC Electric
2025-2027 Rate Framework: In March 2025, the British Columbia Utilities Commission issued a decision on FortisBC's application with respect to the rate framework for 2025 through 2027. The rate framework builds upon the previous multi-year rate plan and includes, amongst other items, updates to depreciation and capitalized overhead rates, a revised level of operation and maintenance expense per customer indexed for inflation less a fixed productivity adjustment factor, a similar approach to growth capital, a forecast approach to sustaining and other capital, continued collection of an innovation fund recognizing the need to accelerate investment in clean energy innovation, and the continued sharing with customers of variances from the allowed ROE. The rate framework also includes the continuation of deferral mechanisms included in the previous multi-year rate plan.

FortisAlberta
Generic Cost of Capital ("GCOC") Decision: FortisAlberta filed an appeal with respect to the Alberta Utilities Commission's ("AUC") decision on the 2024 GCOC proceeding based on FortisAlberta's business and regulatory risks associated with Rural Electrification Associations located in its service area. In March 2025, the Court of Appeal of Alberta ("Court of Appeal") dismissed the appeal.

Third Performance-based Rate-setting ("PBR") Term Decision: In 2023, the AUC issued a decision establishing the parameters for the third PBR term for the period of 2024 through 2028. FortisAlberta sought permission to appeal the decision to the Court of Appeal on the basis that the AUC erred in its decision to determine capital funding using 2018-2022 historical capital investments without consideration for funding of new capital programs included in the company's 2023 cost of service revenue requirement as approved by the AUC. In March 2025, the Court of Appeal granted FortisAlberta permission to appeal, and a decision is expected in the first quarter of 2026.


3. ACCOUNTING POLICIES

These condensed consolidated interim financial statements ("Interim Financial Statements") have been prepared and presented in accordance with accounting principles generally accepted in the United States of America for rate-regulated entities and are in Canadian dollars unless otherwise indicated.

The Interim Financial Statements include the accounts of the Corporation and its subsidiaries and reflect the equity method of accounting for entities in which Fortis has significant influence, but not control, and proportionate consolidation for assets that are jointly owned with non-affiliated entities.

These Interim Financial Statements do not include all of the disclosures required in the annual financial statements and should be read in conjunction with the Corporation's 2024 Annual Financial Statements. In management's opinion, these Interim Financial Statements include all adjustments that are of a normal recurring nature, necessary for fair presentation.

The preparation of the Interim Financial Statements required management to make estimates and judgments, including those related to regulatory decisions, that affect the reported amounts of, and disclosures related to, assets, liabilities, revenues, expenses, gains, losses and contingencies. Actual results could differ materially from estimates.

The Corporation considers the applicability and impact of all Accounting Standards Updates ("ASUs") issued by the Financial Accounting Standards Board. Any ASUs not included in these Interim Financial Statements were assessed and determined to be either not applicable to the Corporation or are not expected to have a material impact on the Interim Financial Statements. The accounting policies applied herein are consistent with those outlined in the Corporation's 2024 Annual Financial Statements, except as described below.
8
FORTIS INC.JUNE 30, 2025 QUARTER REPORT
Notes to Condensed Consolidated Interim Financial Statements (Unaudited)
For the three and six months ended June 30, 2025 and 2024
3. ACCOUNTING POLICIES (cont'd)

New Accounting Policy
Income Taxes: The Corporation adopted ASU No. 2023-09, Improvements to Income Tax Disclosures, effective January 1, 2025. The ASU requires additional disclosure of income tax information by jurisdiction to reflect an entity's exposure to potential changes in tax legislation, and associated risks and opportunities. The guidance is to be applied on a prospective basis with the option to apply the standard retrospectively. The updated disclosure will be reflected in the Corporation's annual consolidated financial statements. Fortis does not expect the ASU to materially impact its disclosures.

Future Accounting Pronouncement
Expense Disaggregation: ASU No. 2024-03, Disaggregation of Income Statement Expenses, is effective for Fortis on January 1, 2027 for annual periods and on January 1, 2028 for interim periods, on a prospective basis, with retrospective application and early adoption permitted. The ASU requires detailed disclosure of certain expense categories included on the consolidated statements of earnings, including energy supply costs, operating expenses, and depreciation and amortization expense. Fortis is assessing the impact on its disclosures.


4. SEGMENTED INFORMATION

Fortis' President and Chief Executive Officer is considered the chief operating decision maker ("CODM") for purposes of reviewing segment performance. Fortis segments its business based on regulatory jurisdiction and service territory, as well as the information used by the CODM in deciding how to allocate resources. Segment performance is evaluated principally on net earnings attributable to common equity shareholders, and this measure is used consistently in the evaluation of actual segment performance as well as in the Corporation’s business plan and forecasting processes.

Related-Party and Inter-Company Transactions
Related-party transactions are in the normal course of operations and are measured at the amount of consideration agreed to by the related parties. There were no material related-party transactions for the three and six months ended June 30, 2025 and 2024.

As of June 30, 2025, accounts receivable included $27 million due from Belize Electricity (December 31, 2024 - $18 million).

Fortis periodically provides short-term financing to subsidiaries to support capital expenditures and seasonal working capital requirements, the impacts of which are eliminated on consolidation. As at June 30, 2025 and December 31, 2024, there were no material inter-segment loans outstanding. Interest charged on inter-segment loans was not material for the three and six months ended June 30, 2025 and 2024.

9
FORTIS INC.JUNE 30, 2025 QUARTER REPORT
Notes to Condensed Consolidated Interim Financial Statements (Unaudited)
For the three and six months ended June 30, 2025 and 2024
4. SEGMENTED INFORMATION (cont'd)

RegulatedNon-Regulated
Inter-
UNSCentralFortisBCFortisFortisBCOtherSubCorporatesegment
($ millions)ITCEnergyHudsonEnergyAlbertaElectricElectricTotaland OthereliminationsTotal
Quarter ended June 30, 2025
Revenue614 694 347 372 207 126 447 2,807 8 —2,815 
Energy supply costs— 246 104 97 — 25 242 714 — —714 
Operating expenses154 203 166 105 52 36 63 779 10 —789 
Depreciation and amortization119 105 38 90 77 20 61 510 2 —512 
Operating income341 140 39 80 78 45 81 804 (4)—800 
Other income, net18 21 17 13 2 1 4 76 29 —105 
Finance charges128 43 23 36 34 20 24 308 61 —369 
Income tax expense56 14 8 10 5 5 8 106 (14)—92 
Net earnings175 104 25 47 41 21 53 466 (22)—444 
Non-controlling interests32 — — 1 — — 7 40 — —40 
Preference share dividends— — — — — — — — 20 —20 
Net earnings attributable to common equity shareholders143 104 25 46 41 21 46 426 (42)—384 
Additions to property, plant and equipment and intangible assets419 454 110 240 148 43 129 1,543 1 —1,544 
As at June 30, 2025
Goodwill8,351 1,880 614 913 231 235 259 12,483 — —12,483 
Total assets26,566 14,496 6,065 10,253 6,317 2,856 5,830 72,383 417 (11)72,789 
Quarter ended June 30, 2024
Revenue556 710 303 336 204 120 433 2,662 8 —2,670 
Energy supply costs— 272 96 77 — 21 247 713 — —713 
Operating expenses129 189 167 101 50 34 62 732 7 —739 
Depreciation and amortization111 101 31 84 75 22 55 479 1 —480 
Operating income 316 148 9 74 79 43 69 738 — —738 
Other income, net26 9 16 10 3 1 2 67 (2)—65 
Finance charges120 37 18 39 34 20 23 291 56 —347 
Income tax expense 51 16 2 13 8 4 5 99 (30)—69 
Net earnings 171 104 5 32 40 20 43 415 (28)—387 
Non-controlling interests32 — — 1 — — 5 38 — —38 
Preference share dividends— — — — — — — — 18 —18 
Net earnings attributable to common equity shareholders139 104 5 31 40 20 38 377 (46)—331 
Additions to property, plant and equipment and intangible assets309 209 98 221 135 33 106 1,111 1 —1,112 
As at June 30, 2024
Goodwill8,395 1,890 617 913 228 235 260 12,538 — —12,538 
Total assets25,437 13,454 5,637 9,612 6,120 2,744 5,388 68,392 422 (42)68,772 

10
FORTIS INC.JUNE 30, 2025 QUARTER REPORT
Notes to Condensed Consolidated Interim Financial Statements (Unaudited)
For the three and six months ended June 30, 2025 and 2024
4. SEGMENTED INFORMATION (cont'd)

RegulatedNon-Regulated
Inter-
UNSCentralFortisBCFortisFortisBCOtherSubCorporatesegment
($ millions)ITCEnergyHudsonEnergyAlbertaElectricElectricTotaland OthereliminationsTotal
Year-to-date June 30, 2025
Revenue1,245 1,374 820 1,017 408 279 993 6,136 17 —6,153 
Energy supply costs— 505 261 319 — 78 591 1,754 — —1,754 
Operating expenses317 397 352 211 102 72 132 1,583 36 —1,619 
Depreciation and amortization240 213 78 179 153 40 120 1,023 4 —1,027 
Operating income688 259 129 308 153 89 150 1,776 (23)—1,753 
Other income, net39 39 37 24 3 2 12 156 40 —196 
Finance charges258 85 48 76 67 40 46 620 119 —739 
Income tax expense110 28 28 53 11 9 17 256 (48)—208 
Net earnings359 185 90 203 78 42 99 1,056 (54)—1,002 
Non-controlling interests66 — — 1 — — 11 78 — —78 
Preference share dividends— — — — — — — — 41 —41 
Net earnings attributable to common equity shareholders293 185 90 202 78 42 88 978 (95)—883 
Additions to property, plant and equipment and intangible assets928 743 209 577 288 77 263 3,085 2 —3,087 
As at June 30, 2025
Goodwill8,351 1,880 614 913 231 235 259 12,483 — —12,483 
Total assets26,566 14,496 6,065 10,253 6,317 2,856 5,830 72,383 417 (11)72,789 
Year-to-date June 30, 2024
Revenue1,106 1,465 678 897 401 266 960 5,773 15 —5,788 
Energy supply costs— 598 218 239 — 70 597 1,722 — —1,722 
Operating expenses265 395 338 196 97 67 125 1,483 22 —1,505 
Depreciation and amortization220 199 61 168 144 44 108 944 3 —947 
Operating income 621 273 61 294 160 85 130 1,624 (10)—1,614 
Other income, net54 21 30 19 5 3 10 142 (4)—138 
Finance charges233 72 36 78 67 40 47 573 110 —683 
Income tax expense 102 30 13 57 13 8 12 235 (65)—170 
Net earnings 340 192 42 178 85 40 81 958 (59)—899 
Non-controlling interests63 — — 1 — — 9 73 — —73 
Preference share dividends— — — — — — — — 36 —36 
Net earnings attributable to common equity shareholders277 192 42 177 85 40 72 885 (95)—790 
Additions to property, plant and equipment and intangible assets666 423 187 423 263 60 201 2,223 2 —2,225 
As at June 30, 2024
Goodwill8,395 1,890 617 913 228 235 260 12,538 — —12,538 
Total assets25,437 13,454 5,637 9,612 6,120 2,744 5,388 68,392 422 (42)68,772 

11
FORTIS INC.JUNE 30, 2025 QUARTER REPORT
Notes to Condensed Consolidated Interim Financial Statements (Unaudited)
For the three and six months ended June 30, 2025 and 2024
5. ALLOWANCE FOR CREDIT LOSSES

The allowance for credit losses, which is recorded in accounts receivable and other current assets, changed as follows.

QuarterYear-to-Date
($ millions)2025 2024 2025 2024 
Periods ended June 30
Balance, beginning of period(77)(69)(78)(68)
Credit loss expense(7)(8)(14)(16)
Credit loss deferral(12)(9)(17)(20)
Write-offs, net of recoveries19 17 32 36 
Foreign exchange3 — 3 (1)
Balance, end of period(74)(69)(74)(69)

See Note 13 for disclosure on the Corporation's credit risk.


6. REGULATORY ASSETS AND LIABILITIES

Detailed information about the Corporation's regulatory assets and liabilities is provided in Note 8 to the 2024 Annual Financial Statements. A summary follows.
As at
June 30,December 31,
($ millions)
2025 2024 
Regulatory assets
Deferred income taxes 2,280 2,248 
Deferred energy management costs 623 591 
Rate stabilization and related accounts 427 453 
Employee future benefits 231 235 
Deferred lease costs 144 142 
Deferred restoration costs122 133 
Derivatives119 175 
Manufactured gas plant site remediation deferral 80 82 
Generation early retirement costs57 66 
Renewable natural gas account 47 58 
Other regulatory assets 492 448 
Total regulatory assets4,622 4,631 
Less: Current portion(757)(823)
Long-term regulatory assets3,865 3,808 
Regulatory liabilities
Future cost of removal1,779 1,728 
Deferred income taxes1,319 1,329 
Employee future benefits434 459 
Rate stabilization and related accounts196 208 
Renewable energy surcharge148 155 
Energy efficiency liability85 88 
Electric and gas moderator account43 61 
Alberta Electric System Operator charges deferral34 58 
Other regulatory liabilities186 205 
Total regulatory liabilities4,224 4,291 
Less: Current portion(502)(595)
Long-term regulatory liabilities3,722 3,696 

12
FORTIS INC.JUNE 30, 2025 QUARTER REPORT
Notes to Condensed Consolidated Interim Financial Statements (Unaudited)
For the three and six months ended June 30, 2025 and 2024
7. LONG-TERM DEBT
As at
June 30,December 31,
($ millions)2025 2024 
Long-term debt31,131 31,189 
Credit facility borrowings 2,187 2,216 
Total long-term debt33,318 33,405 
Less: Deferred financing costs and debt discounts(212)(191)
Less: Current installments of long-term debt(2,383)(1,990)
30,723 31,224 

Significant Long-Term Debt IssuancesInterest
Year-to-date June 30, 2025MonthRateUse of
($ millions, except as noted)
Issued

(%)
MaturityAmountProceeds
UNS Energy
Unsecured senior notesFebruary5.90 2055US $300 
(1) (2) (3)
Central Hudson
Senior notesApril5.61 2035US $20 
(1) (3)
Senior notesApril5.81 2040US $30 
(1) (3)
Senior notesApril6.01 2045US $20 
(1) (3)
Fortis
Unsecured senior notesMarch4.09 2032600 
(1) (3)
(1)    Repay credit facility borrowings
(2)    Fund capital expenditures
(3)    General corporate purposes

In July 2025, FortisAlberta issued $200 million of 30-year, 4.76% senior unsecured debentures. Proceeds will be used to repay credit facility borrowings, fund capital expenditures and for general corporate purposes.

In July 2025, Maritime Electric issued $120 million of 30-year, 4.94% first mortgage bonds. Proceeds will be used to repay credit facility borrowings and to fund capital expenditures.

In December 2024, Fortis filed a short-form base shelf prospectus with a 25-month life under which it may issue common or preference shares, subscription receipts, or debt securities in an aggregate principal amount of up to $2.0 billion. Fortis re-established the at-the-market equity program ("ATM Program") pursuant to the short-form base shelf prospectus, which allows the Corporation to issue up to $500 million of common shares from treasury to the public from time to time, at the Corporation's discretion, effective until January 10, 2027. As at June 30, 2025, $500 million remained available under the ATM Program and $1.5 billion remained available under the short-form base shelf prospectus.
As at
Credit facilitiesRegulatedCorporateJune 30,December 31,
($ millions)Utilitiesand Other2025 2024 
Total credit facilities4,277 1,916 6,193 6,342 
Credit facilities utilized:
Short-term borrowings (1)
(363)— (363)(98)
Long-term debt (including current portion) (2)
(1,476)(711)(2,187)(2,216)
Letters of credit outstanding(89)(22)(111)(102)
Credit facilities unutilized2,349 1,183 3,532 3,926 
(1)    The weighted average interest rate was 5.0% (December 31, 2024 - 6.1%).
(2)    The weighted average interest rate was 4.5% (December 31, 2024 - 4.6%). The current portion was $1,544 million (December 31, 2024 - $1,860 million).

Credit facilities are syndicated primarily with large banks in Canada and the U.S., with no one bank holding more than approximately 20% of the Corporation's total revolving credit facilities. Approximately $5.7 billion of the total credit facilities are committed with maturities ranging from 2025 through 2030.

See Note 14 in the 2024 Annual Financial Statements for a description of the credit facilities as at December 31, 2024.

In April 2025, FortisAlberta increased its operating credit facility from $250 million to $300 million and extended the maturity to April 2030.

In April 2025, the Corporation extended the maturity on its unsecured US$250 million non-revolving term credit facility to May 2026. The facility is repayable at any time without penalty. In May 2025, the Corporation amended its $1.3 billion revolving term committed credit facility to extend the maturity to July 2030.
13
FORTIS INC.JUNE 30, 2025 QUARTER REPORT
Notes to Condensed Consolidated Interim Financial Statements (Unaudited)
For the three and six months ended June 30, 2025 and 2024
8. PREFERENCE SHARES

On June 1, 2025, the annual fixed dividend per share for the First Preference Shares, Series H reset from $0.4588 to $1.0458 for the five-year period up to but excluding June 1, 2030. Also on June 1, 2025, 11,298 First Preference Shares, Series H were converted on a one-for-one basis into First Preference Shares, Series I and 248,830 First Preference Shares, Series I were converted on a one-for-one basis into First Preference Shares, Series H.


9. EMPLOYEE FUTURE BENEFITS

Fortis and each subsidiary maintain one or a combination of defined benefit pension plans and defined contribution pension plans, as well as other post-employment benefit ("OPEB") plans, including health and dental coverage and life insurance benefits, for qualifying members. The net benefit cost is detailed below.
Defined Benefit
Pension Plans
OPEB Plans
($ millions)2025 2024 2025 2024 
Quarter ended June 30
Service costs18 19 5 6 
Interest costs43 40 7 8 
Expected return on plan assets(53)(55)(7)(7)
Amortization of actuarial gains(4)— (6)(5)
Amortization of past service credits/plan amendments— (1)— — 
Regulatory adjustments— — 2 1 
Net benefit cost4 3 1 3 
Year-to-date June 30
Service costs36 37 11 12 
Interest costs86 80 15 15 
Expected return on plan assets(107)(110)(14)(13)
Amortization of actuarial gains(8)— (12)(9)
Amortization of past service credits/plan amendments— (1)— — 
Regulatory adjustments(1)— 4 1 
Net benefit cost6 6 4 6 

Defined contribution pension plan expense for the three and six months ended June 30, 2025 was $16 million and $35 million, respectively (three and six months ended June 30, 2024 - $14 million and $31 million, respectively).


10. OTHER INCOME, NET

QuarterYear-to-Date
($ millions)2025 2024 2025 2024 
Periods ended June 30
Equity component, allowance for funds used during construction42 32 81 62 
Non-service component of net periodic benefit cost20 18 39 36 
Gain (loss) on derivatives, net19 (1)32 (6)
Interest income10 16 22 32 
Equity income1 (1)7 4 
Other13 1 15 10 
105 65 196 138 

14
FORTIS INC.JUNE 30, 2025 QUARTER REPORT
Notes to Condensed Consolidated Interim Financial Statements (Unaudited)
For the three and six months ended June 30, 2025 and 2024
11. EARNINGS PER COMMON SHARE

20252024
Net EarningsWeightedNet EarningsWeighted
to CommonAverageto CommonAverage
ShareholdersSharesEPSShareholdersSharesEPS
($ millions)(# millions)($)($ millions)(# millions)($)
Quarter ended June 30
Basic EPS384 502.6 0.76 331 494.0 0.67 
Potential dilutive effect of stock-based compensation— 0.3 — 0.2 
Diluted EPS384 502.9 0.76 331 494.2 0.67 
Year-to-date June 30
Basic EPS883 501.5 1.76 790 492.8 1.60 
Potential dilutive effect of stock-based compensation— 0.3 — 0.4 
Diluted EPS883 501.8 1.76 790 493.2 1.60 


12. SUPPLEMENTARY CASH FLOW INFORMATION

QuarterYear-to-Date
($ millions)2025 2024 2025 2024 
Periods ended June 30
Change in working capital
Accounts receivable and other current assets106 128 82 63 
Prepaid expenses(25)(27)(20)(29)
Inventories(36)(44)(32)(14)
Regulatory assets - current portion24 42 20 134 
Accounts payable and other current liabilities(173)(160)(40)(347)
Regulatory liabilities - current portion(28)17 (65)18 
(132)(44)(55)(175)
Non-cash financing activity
Common share dividends reinvested118 107 233 218 
As at June 302025 2024 
Non-cash investing activities
Accrued capital expenditures664 469 
Contributions in aid of construction10 9 


13. FAIR VALUE OF FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Derivatives
The Corporation generally limits the use of derivatives to those that qualify as accounting, economic or cash flow hedges, or those that are approved for regulatory recovery.

Derivatives are recorded at fair value with certain exceptions including those derivatives that qualify for the normal purchase and normal sale exception. Fair values reflect estimates based on current market information about the derivatives as at the balance sheet dates. The estimates cannot be determined with precision as they involve uncertainties and matters of judgment and, therefore, may not be relevant in predicting the Corporation's future consolidated earnings or cash flow.

Energy Contracts Subject to Regulatory Deferral
UNS Energy holds electricity power purchase contracts, customer supply contracts and gas swap contracts to reduce its exposure to energy price risk. Fair values are measured primarily under the market approach using independent third-party information, where possible. When published prices are not available, adjustments are applied based on historical price curve relationships, transmission costs and line losses.
15
FORTIS INC.JUNE 30, 2025 QUARTER REPORT
Notes to Condensed Consolidated Interim Financial Statements (Unaudited)
For the three and six months ended June 30, 2025 and 2024
13. FAIR VALUE OF FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (cont'd)

Central Hudson holds swap contracts for electricity and natural gas to minimize price volatility by fixing the effective purchase price. Fair values are measured using forward pricing provided by independent third-party information.

FortisBC Energy holds gas supply contracts to fix the effective purchase price of natural gas. Fair values reflect the present value of future cash flows based on published market prices and forward natural gas price curves.

Unrealized gains or losses associated with changes in the fair value of these energy contracts are deferred as a regulatory asset or liability for recovery from, or refund to, customers in future rates, as permitted by the regulators. As at June 30, 2025, unrealized losses of $119 million (December 31, 2024 - $175 million) were recognized as regulatory assets and unrealized gains of $49 million (December 31, 2024 - $41 million) were recognized as regulatory liabilities.

Energy Contracts Not Subject to Regulatory Deferral
UNS Energy holds wholesale trading contracts to fix power prices and realize potential margin, of which 10% of any realized gains is shared with customers through rate stabilization accounts. Fair values are measured using a market approach incorporating, where possible, independent third-party information. Gains or losses associated with changes in the fair value of these energy contracts are recognized in revenue. During the three and six months ended June 30, 2025, gains of $1 million and $32 million were recognized in revenue, respectively (three and six months ended June 30, 2024 - gains of $nil million and $36 million, respectively).

Total Return Swaps
The Corporation holds total return swaps to manage the cash flow risk associated with forecast future cash and/or share settlements of certain stock-based compensation obligations. The swaps have a combined notional amount of $136 million and terms up to three years expiring at varying dates through January 2028. Fair value is measured using an income valuation approach based on forward pricing curves. Unrealized gains and losses associated with changes in fair value are recognized in other income, net. During the three and six months ended June 30, 2025, unrealized losses of $1 million and unrealized gains of $9 million, respectively were recognized in other income, net (three and six months ended June 30, 2024 - unrealized losses of $1 million and $4 million, respectively).

Foreign Exchange Contracts
The Corporation holds U.S. dollar denominated foreign exchange contracts to help mitigate exposure to foreign exchange rate volatility. The contracts expire at varying dates through September 2027 and have a combined notional amount of US$449 million. Fair value was measured using independent third-party information. Unrealized gains and losses associated with changes in fair value are recognized in other income, net. During the three and six months ended June 30, 2025, unrealized gains of $18 million and $19 million, respectively were recognized in other income, net (three and six months ended June 30, 2024 - unrealized losses of $2 million and $5 million, respectively).

Interest Rate Contracts
ITC has entered into 5-year interest rate swap contracts with a combined notional value of US$560 million which will be used to manage interest rate risk associated with forecasted debt issuances. Fair value was measured using a discounted cash flow method based on secured overnight financing rates ("SOFR"). Unrealized gains and losses associated with the changes in fair value are recognized in other comprehensive income, and will be reclassified to earnings as a component of interest expense over the life of the debt. Unrealized losses of US$4 million and US$8 million were recorded in other comprehensive income for the three and six months ended June 30, 2025 (three and six months ended June 30, 2024 - realized losses of US$3 million).

Cross-Currency Interest Rate Swaps
The Corporation holds cross-currency interest rate swaps, maturing in 2029, to effectively convert its $500 million, 4.43% unsecured senior notes to US$391 million, 4.34% debt. The Corporation has designated this notional U.S. debt as an effective hedge of its foreign net investments and unrealized gains and losses associated with exchange rate fluctuations on the notional U.S. debt are recognized in other comprehensive income, consistent with the translation adjustment related to the foreign net investments. Other changes in the fair value of the swaps are also recognized in other comprehensive income but are excluded from the assessment of hedge effectiveness. Fair value is measured using a discounted cash flow method based on SOFR. During the three and six months ended June 30, 2025, unrealized gains of $21 million and $17 million, respectively were recorded in other comprehensive income (three and six months ended June 30, 2024 - unrealized losses of $2 million and $15 million, respectively).

16
FORTIS INC.JUNE 30, 2025 QUARTER REPORT
Notes to Condensed Consolidated Interim Financial Statements (Unaudited)
For the three and six months ended June 30, 2025 and 2024
13. FAIR VALUE OF FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (cont'd)

Recurring Fair Value Measures
The following table presents assets and liabilities that are accounted for at fair value on a recurring basis.

($ millions)
Level 1 (1)
Level 2 (1)
Level 3 (1)
Total
As at June 30, 2025
Assets
Energy contracts subject to regulatory deferral (2) (3)
— 73 — 73 
Energy contracts not subject to regulatory deferral (2)
— 29 — 29 
Foreign exchange contracts and total return swaps(2)
— 24 — 24 
Other investments (4)
133 — — 133 
133 126 — 259 
Liabilities
Energy contracts subject to regulatory deferral (3) (5)
— (143)— (143)
Energy contracts not subject to regulatory deferral (5)
— (1)— (1)
Cross-currency interest rate swaps and interest rate contracts (5)
— (19)— (19)
— (163)— (163)
As at December 31, 2024
Assets
Energy contracts subject to regulatory deferral (2) (3)
— 63 — 63 
Energy contracts not subject to regulatory deferral (2)
— 7 — 7 
Total return swaps and interest rate contracts (2)
— 16 — 16 
Other investments (4)
150 — — 150 
150 86 — 236 
Liabilities
Energy contracts subject to regulatory deferral (3) (5)
— (197)— (197)
Energy contracts not subject to regulatory deferral (5)
— (2)— (2)
Foreign exchange contracts and cross-currency interest rate swaps (5)
— (45)— (45)
— (244)— (244)
(1)Under the hierarchy, fair value is determined using: (i) level 1 - unadjusted quoted prices in active markets; (ii) level 2 - other pricing inputs directly or indirectly observable in the marketplace; and (iii) level 3 - unobservable inputs, used when observable inputs are not available. Classifications reflect the lowest level of input that is significant to the fair value measurement.
(2)Included in accounts receivable and other current assets or other assets
(3)Unrealized gains and losses arising from changes in fair value of these contracts are deferred as a regulatory asset or liability for recovery from, or refund to, customers in future rates as permitted by the regulators, with the exception of wholesale trading contracts and certain gas swap contracts
(4)UNS Energy holds investments in money market accounts, and ITC and Central Hudson hold investments in trust associated with supplemental retirement benefit plans for select employees, which include mutual funds and money market accounts. The fair value of these investments is included in cash and cash equivalents and other assets, with gains and losses recognized in other income, net
(5)Included in accounts payable and other current liabilities or other liabilities

Energy Contracts
The Corporation has elected gross presentation for its derivative contracts under master netting agreements and collateral positions, which apply only to its energy contracts. The following table presents the potential offset of counterparty netting.

Gross AmountCounterparty
Recognized inNetting ofCash Collateral
($ millions)Balance SheetEnergy ContractsPosted/(Received)Net Amount
As at June 30, 2025
Derivative assets102 (36)15 81 
Derivative liabilities(144)36 — (108)
As at December 31, 2024
Derivative assets70 (30)15 55 
Derivative liabilities(199)30 — (169)


17
FORTIS INC.JUNE 30, 2025 QUARTER REPORT
Notes to Condensed Consolidated Interim Financial Statements (Unaudited)
For the three and six months ended June 30, 2025 and 2024
13. FAIR VALUE OF FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (cont'd)

Volume of Derivative Activity
As at June 30, 2025, the Corporation had various energy contracts that will settle on various dates through 2030. The volumes related to electricity and natural gas derivatives are outlined below.
As at
June 30,December 31,
2025 2024 
Energy contracts subject to regulatory deferral (1)
Electricity swap contracts (GWh)
966 774 
Electricity power purchase contracts (GWh)
557 430 
Gas swap contracts (PJ)
218 236 
Gas supply contracts (PJ)
147 105 
Energy contracts not subject to regulatory deferral (1)
Wholesale trading contracts (GWh)
4,229 1,499 
Gas swap contracts (PJ)
1 3 
(1)GWh means gigawatt hours and PJ means petajoules.

Credit Risk
For cash equivalents, accounts receivable and other current assets, and long-term other receivables, credit risk is generally limited to the carrying value on the consolidated balance sheets. The Corporation's subsidiaries generally have a large and diversified customer base, which minimizes the concentration of credit risk. Policies in place to minimize credit risk include requiring customer deposits, prepayments and/or credit checks for certain customers, performing disconnections and/or using third-party collection agencies for overdue accounts.

ITC has a concentration of credit risk as approximately 65% of its revenue is derived from three customers. The customers have investment-grade credit ratings and credit risk is further managed by MISO by requiring a letter of credit or cash deposit equal to the credit exposure, which is determined by a credit-scoring model and other factors.

FortisAlberta has a concentration of credit risk as its distribution service billings are to a relatively small group of retailers. Credit risk is managed by obtaining from the retailers either a cash deposit, letter of credit, an investment-grade credit rating, or a financial guarantee from an entity with an investment-grade credit rating.

Central Hudson has seen an increase in accounts receivable since the suspension of collection efforts initially required in response to the COVID-19 pandemic. Central Hudson continues to contact customers regarding past-due balances and collection efforts continue to expand. Under its regulatory framework, Central Hudson can defer uncollectible write-offs above the amounts collected in customer rates for future recovery.

UNS Energy, Central Hudson, FortisBC Energy, and Fortis may be exposed to credit risk in the event of non-performance by counterparties to derivative contracts. Credit risk is managed by net settling payments, when possible, and dealing only with counterparties that have investment-grade credit ratings. At UNS Energy, Central Hudson and FortisBC Energy, certain contractual arrangements require counterparties to post collateral.

The value of derivatives in net liability positions under contracts with credit risk-related contingent features that, if triggered, could require the posting of a like amount of collateral was $73 million as at June 30, 2025 (December 31, 2024 - $117 million).

Hedge of Foreign Net Investments
The reporting currency of ITC, UNS Energy, Central Hudson, Caribbean Utilities, FortisTCI, Fortis Belize Limited and Belize Electricity is, or is pegged to, the U.S. dollar. The earnings and cash flow from, and net investments in, these entities are exposed to fluctuations in the U.S. dollar-to-Canadian dollar exchange rate. The Corporation has reduced this exposure through hedging.

As at June 30, 2025, US$2.2 billion (December 31, 2024 - US$2.2 billion) of corporately issued U.S. dollar-denominated long-term debt has been designated as an effective hedge of net investments, leaving approximately US$12.8 billion (December 31, 2024 - US$12.6 billion) unhedged. Exchange rate fluctuations associated with the net investment in foreign subsidiaries and the debt serving as the hedge are recognized in accumulated other comprehensive income.

Financial Instruments Not Carried at Fair Value
Excluding long-term debt, the consolidated carrying value of the Corporation's remaining financial instruments approximates fair value, reflecting their short-term maturity, normal trade credit terms and/or nature.

As at June 30, 2025, the carrying value of long-term debt, including current portion, was $33.3 billion (December 31, 2024 - $33.4 billion) compared to an estimated fair value of $31.4 billion (December 31, 2024 - $31.3 billion).
18
FORTIS INC.JUNE 30, 2025 QUARTER REPORT
Notes to Condensed Consolidated Interim Financial Statements (Unaudited)
For the three and six months ended June 30, 2025 and 2024
14. COMMITMENTS AND CONTINGENCIES

There were no material changes in commitments and contingencies from that disclosed in the Corporation's 2024 Annual Financial Statements, except as detailed below.

In May 2025, UNS Electric entered into a US$233 million Engineering, Procurement, and Construction Agreement for the development of four gas engine turbines at Black Mountain Generating Station, which are expected to be placed in service in 2028.

Subsequent to the end of the second quarter of 2025, TEP entered into an agreement to serve a data center expected to be located in TEP's service territory. The agreement, requiring potential power demand of approximately 300 MW, is subject to approval by the ACC and other contractual contingencies. The initial phase of the data center is expected to be operational as early as 2027, with a ramp schedule through 2029. TEP currently expects to serve this customer from its existing and planned capacity, including solar and battery storage projects currently in development.
19
FORTIS INC.JUNE 30, 2025 QUARTER REPORT