Fourth Quarter 2018 Business Update and Financial Results February 19, 2019
Forward-Looking Information and Non-GAAP Measures Forward-Looking Information This document contains “forward - looking information” and statements which reflect the current view with respect to the Company’s expectations regarding future growth, results of operations, performance, business prospects and opportunities and may not be appropriate for other purposes within the meaning of applicable Canadian securities laws. All such information and statements are made pursuant to safe harbour provisions contained in applicable securities legislation. The words “anticipates”, “believes”, “could”, “estimates”, “expec ts ”, “intends”, “may”, “plans”, “projects”, “schedule”, “should”, “budget”, “forecast”, “might”, “will”, “would”, “targets” and similar expressions are often intended to identify forward -looking information, although not all forward-looking information contains these identifying words. The forward- looking information reflects management’s current beliefs and is based on information currently available to Emera’s management and should not be read as guarantees of future events, performance or results, and will not necessarily be accurate indications of whether, or the time at which, such events, performance or results will be achieved. The forward-looking information is based on reasonable assumptions and is subject to risks, uncertainties and other factors that could cause actual results to differ materially from historical results or results anticipated by the forward-looking information. Factors that could cause results or events to differ from current expectations are discussed in the Business Overview and Outlook section of Management’s Discussion and Analysis (“MD&A”) and may also include: regulatory risk; operating and maintenance risks; changes in economic conditions; commodity price and availability risk; capital market and liquidity risk; future dividend growth; timing and costs associated with certain capital projects; the expected impacts on Emera of challenges in the global economy; estimated energy consumption rates; maintenance of adequate insurance coverage; changes in customer energy usage patterns; developments in technology that could reduce demand for electricity; weather; commodity price risk; unanticipated maintenance and other expenditures; system operating and maintenance risk; derivative financial instruments and hedging; interest rate risk; credit risk; commercial relationship risk; disruption of fuel supply; country risks; environmental risks; foreign exchange; regulatory and government decisions, including changes to environmental, financial reporting and tax legislation; risks associated with pension plan performance and funding requirements; loss of service area; risk of failure of information technology infrastructure and cybersecurity risks; market energy sales prices; labour relations; and availability of labour and management resources. Readers are cautioned not to place undue reliance on forward-looking information as actual results could differ materially from the plans, expectations, estimates or intentions and statements expressed in the forward-looking information. All forward-looking information in this document is qualified in its entirety by the above cautionary statements and, except as required by law, Emera undertakes no obligation to revise or update any forward-looking information as a result of new information, future events or otherwise. Nothing in this document should be construed as an offer or sale of securities of Emera or any other person. Non-GAAP Measures Emera uses financial measures that do not have standardized meaning under USGAAP and may not be comparable to similar measures presented by other entities. Emera calculates the non-GAAP measures by adjusting certain GAAP measures for specific items the Company believes are significant, but not reflective of underlying operations in the period. Refer to the Non-GAAP Financial Measures section of our MD&A for further discussion of these items. 2
Business Update Business Update Scott Balfour President & CEO 3
DELIVERING SOLID GROWTH Our strategic positioning has enabled our businesses to capitalize on earnings growth opportunities which is driving ▪ EMERA NEWFOUNDLAND strong financial results & LABRADOR ▪ EMERA INC ▪ EMERA NEW ▪ NOVA SCOTIA POWER BRUNSWICK ▪ EMERA UTILITY SERVICES ▪ EMERA MAINE $2.88 $1,806 ▪ EMERA ENERGY 2018 adjusted 2018 cash flow (2) EPS (1) 17% ▪ NEW MEXICO GAS 39% annual annual cash ▪ TAMPA ELECTRIC adjusted ▪ PEOPLES GAS ▪ GRAND BAHAMA POWER flow (2)(3) EPS (1)(3) (1) Adjusted EPS is a non-GAAP measure. A reconciliation to the nearest GAAP measure can be found in the appendix. (2) Operating cash flow pre-working capital in millions of dollars (3) Compared to the 2017 annual period 4 ▪ DOMINICA ELECTRICITY SERVICES ▪ ST LUCIA ELECTRICITY SERVICES ▪ BARBADOS LIGHT & POWER
FLORIDA SOLAR Investing approximately US$850 million to install 600 MW of solar generation by 2021 • Tranche 1 (145 MW) – in service September 2018 • Tranche 2 (260 MW) – 175 MW in service; remaining 85 MW to be in service later this spring • Tranche 3 (145 MW) – Q1 2020 • Tranche 4 (50 MW) – Q1 2021 5
BIG BEND MODERNIZATION • Investing approximately US$850 million to repower Unit 1 with natural gas combined-cycle technology and retire Unit 2 • Expect simple-cycle to be operational in 2021 and full combined-cycle in 2023 • Investment will improve land, water and air emissions, generate customer savings of approximately US$750 million and increase plant operating efficiency 6
MARITIME LINK – ON TIME AND ON BUDGET • Invested $1.6 billion to construct a 500 MW, 110 mile HVDC undersea link to connect Nova Scotia to the island of Newfoundland • Placed the link into service on January 15, 2018; rate base of $1.8 billion has an approved ROE of 8.75-9.25% on 30% equity thickness • Investment is generating cash earnings; recovered through NSPI fuel rates 7
Our Strategy in Action MARITIME LINK SOLAR & BIG BEND $1.6B $2.2B Capital Capital Investment Investment $50M $130M Net Income Net Income 30% equity; 9% ROE 54% equity; 10.25% ROE 8
Visible Plan to Invest $6.5B+ in Rate Base Forecasted Capital Spend (1) $3.0 $2.4 $2.3 $1.1 $0.2 $2.3 $2.2 $1.9 2019F 2020F 2021F Baseline Forecast Opportunities Under Development (1) In billions of Canadian dollars. U.S. dollar denominated capex is translated at a forecasted average USD/CAD exchange rate of 1.30 in 2019-2021. Capital spend 9 forecast by affiliate can be found in the appendix. Forecast is subject to change in the normal course of business.
Capital Program Drives Rate Base Growth Forecasted Rate Base (1) $22.3 $21.0 $20.3 $18.7 2018A 2019F 2020F 2021F Florida rate base expected to grow by 9% over the forecast period (1) Average total rate base in billions of Canadian dollars. U.S. dollar denominated rate base is translated at the actual USD/CAD exchange rate of 1.30 in 2018 and a 10 forecasted exchange rate of 1.30 in 2019-2021. Only approved and ordinary course capital projects are included. Details by affiliate can be found in the appendix. Forecast is subject to change in the normal course of business.
Looking Ahead to 2019 • Invest $2.3 billion in accretive rate base investments , primarily in Florida and Nova Scotia • Continue to strengthen our balance sheet as we execute on our funding plan, including closing the NEGG transaction and retiring over $900 million of holdco leverage • Advance our regulatory agenda , including filing for fuel rates in Nova Scotia 11
Financial Results Financial Results Greg Blunden CFO 12
Strong Adjusted Earnings and EPS Growth Adjusted Net Income (1) Adjusted Earnings per Share (1) $671 $2.88 $0.71 $167 $0.64 $2.46 $524 $137 +28% +11% +22% +17% 2017 2018 2017 2018 2017 2018 2017 2018 Q4 2018 Q4 2018 13 (1) Adjusted net income and adjusted EPS are non-GAAP measures. A reconciliation to the nearest GAAP measure can be found in the appendix.
Growing Operating Cash Flow Annual Operating Cash Flow Pre Working Capital +39% $1,806 $1,297 2017 2018 14
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