Mr. Barry Perry reports

FORTIS DELIVERS RECORD SECOND QUARTER EARNINGS OF $244 MILLION

Fortis Inc. has released its second quarter results. Net earnings attributable to common equity shareholders for the second quarter were $244-million, or 88 cents per common share, compared with $47-million, or 22 cents per common share, for the second quarter of 2014.

"Performance in the second quarter was bolstered by one-time gains associated with the sale of Fortis Properties' commercial real estate assets and non-regulated hydroelectric generation assets in New York," said Barry Perry, president and chief executive officer, Fortis.

In June, 2015, the corporation completed the sale of the commercial real estate assets of Fortis Properties Corp. for gross proceeds of $430-million and non-regulated generation assets in upstate New York for gross proceeds of approximately $77-million ($63-million (U.S.)). In July, 2015, the corporation closed the sale of its non-regulated generation assets in Ontario for gross proceeds of $16-million and signed an agreement with a private investor group for the sale of the hotel assets of Fortis Properties for $365-million. The hotel transaction is subject to typical closing conditions and is expected to be completed in the fall of 2015. As a result of these sale transactions, the corporation recognized an overall aftertax gain of approximately $123-million, net of expenses. Net proceeds from the sales will be used by the corporation to repay credit facility borrowings, largely associated with the acquisition of UNS Energy Corp., and for other general corporate purposes.

"The sale of the commercial real estate and hotel assets, and non-regulated generation assets in New York and Ontario, is consistent with the corporation's focus on its core utility business," said Mr. Perry. "Postclosing of the hotel transaction, virtually all of the corporation's assets will comprise regulated utilities and long-term contracted energy infrastructure."

Excluding the impact of the sale transactions and other one-time items, adjusted net earnings attributable to common equity shareholders for the second quarter were $123-million, or 44 cents per common share, an increase of $58-million, or 14 cents per common share, from the second quarter of 2014. Performance was driven by UNS Energy and contribution from the Waneta expansion hydroelectric generating facility in British Columbia. UNS Energy contributed $52-million to earnings for the second quarter and, after considering the common share offering and finance charges associated with the acquisition, had a nine-cent accretive impact on earnings per common share. The Waneta expansion came on-line early April, 2015, and contributed $12-million to the corporation's earnings for the second quarter. The corporation's other regulated utilities also reported strong results.

"Fortis has come through a period of transformative change. Our successful expansion into the U.S. regulated utility market through the acquisitions of Central Hudson and UNS Energy, and the completion of the Waneta expansion, have positioned Fortis for a strong 2015," said Mr. Perry. "Performance for the second quarter demonstrates the benefits of these changes."

The second quarter of 2015 marked the completion of the $900-million, 335-megawatt Waneta expansion in British Columbia, the corporation's largest capital project to date, six weeks ahead of schedule and on budget, while maintaining an excellent safety and environmental protection record. Construction continues on FortisBC's Tilbury liquefied natural gas expansion (known as Tilbury 1A), at an estimated total cost of approximately $440-million, which is the largest continuing capital project. Tilbury 1A will add 950 billion British thermal units of storage and 34 billion British thermal units daily of liquefaction when the second LNG tank and new liquefier come in service, which is expected to occur by the end of 2016.

In June, the New York State Public Service Commission issued a rate order for Central Hudson covering a three-year period, with new electricity and gas delivery rates effective July 1, 2015. Central Hudson's approved rate order reflects an allowed rate of return on common shareholders' equity of 9.0 per cent and a 48-per-cent common equity component of capital structure, and includes continuation of revenue decoupling and earnings sharing mechanisms. It also includes a major storm reserve for electric operations and provides for continuation of recovery of various operating expenses, including environmental site investigation and remediation costs. The rate order includes capital investments of approximately $490-million (U.S.) during the three-year period targeted at making the electric and gas systems stronger.

Later this year, Tucson Electric Power Company (TEP), UNS Energy's largest utility, will file a general rate application requesting new retail rates to be effective Jan. 1, 2017, using June 30, 2015, as a historical test year. Since its last approved rate order in 2013, which used a 2011 historical test year, TEP's total rate base has increased by approximately $800-million (U.S.).

Fortis continues to be one of the highest-rated utility holding companies in North America, with its corporate debt rated A- by Standard and Poor's and A (low) by DBRS, which helps ensure efficient access to capital. In the first half of 2015, the corporation's regulated utilities raised more than $600-million in long-term debt at attractive interest rates. Net proceeds from the debt offerings were primarily used to repay maturing long-term debt and credit facility borrowings and to finance capital expenditures.

In June, 2015, Fortis injected $180-million (U.S.) of equity into TEP. Proceeds were used to repay credit facility borrowings and the balance will be used to repay upcoming debt maturities. This equity injection fulfilled one of the commitments made by Fortis in order to receive regulatory approval for the acquisition of UNS Energy and increased TEP's equity thickness to almost 50 per cent, which is comparable with other regulated utilities in Arizona.

"We are more than halfway towards our enterprise-wide capital program for the year, with almost $1.2-billion invested in energy infrastructure in the first half of 2015," said Mr. Perry. "Our consolidated capital program is expected to surpass $2-billion this year."

Over the five-year period through 2019, the corporation's capital program is expected to exceed $9-billion. This investment in energy infrastructure is expected to increase midyear rate base by approximately 40 per cent from $14-billion in 2014 to approximately $19.5-billion in 2019 and produce a five-year compound annual growth rate (CAGR) of approximately 6.5 per cent. Two new natural gas infrastructure investments in British Columbia that Fortis is pursuing -- Tilbury 1B and the pipeline expansion to the Woodfibre LNG site -- could increase the five-year CAGR in rate base to 7.5 per cent.

"Looking out over the five-year horizon, we expect our capital investment to support continuing growth in earnings and dividends," concluded Mr. Perry.

                                                                                                        
                     CONSOLIDATED STATEMENTS OF EARNINGS
                       (In millions, except per share)

                                        Quarter ended       Six months ended
                                              June 30,               June 30,
                                      2015       2014        2015       2014

Revenue                         $    1,538 $    1,056  $    3,453 $    2,511
Expenses
Energy supply costs                    531        403       1,364      1,082
Operating                              458        307         931        626
Depreciation and amortization          220        149         435        297
                                     1,209        859       2,730      2,005
Operating income                       329        197         723        506
Other income (expenses), net           166         (1)        183          6
Finance charges                        141        124         275        247
Earnings before income taxes
and discontinued operations            354         72         631        265
Income tax expense                      76          9         133         48
Earnings from continuing
operations                             278         63         498        217
Earnings from discontinued
operations, net of tax                   -          -           -          5
Net earnings                    $      278 $       63  $      498 $      222
Net earnings attributable to
Non-controlling interests       $       15 $        3  $       17 $        5
Preference equity
shareholders                            19         13          39         27
Common equity shareholders             244         47         442        190
                                $      278 $       63  $      498 $      222
Earnings per common share from
continuing operations
Basic                           $     0.88 $     0.22  $     1.59 $     0.87
Diluted                         $     0.87 $     0.22  $     1.58 $     0.86
Earnings per common share
Basic                           $     0.88 $     0.22  $     1.59 $     0.89
Diluted                         $     0.87 $     0.22  $     1.58 $     0.88

We seek Safe Harbor.