6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

OF THE SECURITIES EXCHANGE ACT OF 1934

For the month of July 2021

Commission File Number: 001-37915

Fortis Inc.

Fortis Place, Suite 1100

5 Springdale Street

St. John's, Newfoundland and Labrador

Canada, A1E 0E4

(Address of Principal Executive Office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40F: Form 20-F o Form 40-F þ

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

INCORPORATION BY REFERENCE

The registrant's unaudited condensed consolidated interim financial statements as at and for the six months ended June 30, 2021, together with the notes thereto, furnished as Exhibit 99.2 to this report on Form 6-K, and the registrant's management discussion and analysis of financial condition and results of operations for the same periods furnished as Exhibit 99.3 to this report on Form 6-K, are incorporated by reference into the following Registration Statements of the Registrant, as amended or supplemented: Form S-8 (File No. 333-215777); Form S-8 (File No. 333-226663); Form S-8 (File No. 333-236213); Form F-3 (File No. 333-249039); and Form F-10 (File No. 333-250996).

EXHIBITS

Exhibit	Description
99.1	Fortis Inc. Press Release dated July 29, 2021
99.2	Unaudited Condensed Consolidated Interim Financial Statements of Fortis Inc. as at and for the six months ended June 30, 2021, together with the notes thereto
99.3	Management Discussion and Analysis of financial condition and results of operations of Fortis Inc. as at and for the six months ended June 30, 2021

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Fortis Inc.<br><br>(Registrant)
Date: July 29, 2021	/s/ Jocelyn H. Perry
	By:	Jocelyn H. Perry
	Title:	Executive Vice President, Chief Financial Officer

Document

Exhibit 99.1

St. John's, NL - July 29, 2021

FORTIS INC. RELEASES SECOND QUARTER 2021 RESULTS AND

SUSTAINABILITY UPDATE

Fortis Inc. ("Fortis" or the "Corporation") (TSX/NYSE: FTS) released its second quarter results1 and 2021 Sustainability Update today.

Highlights

•Second quarter net earnings of $253 million, or $0.54 per common share

•    Adjusted net earnings2 of $0.55 per common share; strong growth over the second quarter of 2020 excluding the impact of foreign exchange

•    Capital expenditures of $1.7 billion in the first half of 2021; $3.8 billion annual capital plan on track

•Fortis has signed on as a supporter of the Task Force on Climate-Related Financial Disclosures

•Sustainability Update released today highlights a 15% reduction in Scope 1 emissions in 2020

"Throughout the quarter our employees remained focused on serving our customers safely and continued to execute our annual capital plan. Financial results for the second quarter, while impacted by a lower foreign exchange rate, reflect the underlying growth of our regulated utility investments and warmer weather in Arizona," said David Hutchens, President and Chief Executive Officer, Fortis. "Our Sustainability Update released today demonstrates our commitment, and ability, to meet our goal of reducing greenhouse gas emissions 75% by 2035. Transitioning to renewables and building the energy delivery infrastructure we need for a cleaner energy future is at the heart of our long-term strategy."

Net Earnings

The Corporation reported net earnings attributable to common equity shareholders ("Net Earnings") of $253 million for the second quarter, or $0.54 per common share, a decrease of $21 million, or $0.05 per common share compared to the same period in 2020. The decrease was mainly due to a lower US-to-Canadian dollar exchange rate, resulting in a $24 million unfavourable variance compared to the same period in 2020. The decrease also reflected significant one-time items totalling $14 million recognized in the second quarter of 2020. The significant items included an adjustment to ITC's base return on common equity ("ROE"), partially offset by the finalization of US tax reform and associated regulations.

Excluding the impact of foreign exchange and the one-time items, Net Earnings for the second quarter of 2021 increased by $17 million, or $0.04 per common share. The increase reflected rate base growth, warmer weather and new customer rates in Arizona, and the ongoing recovery of the tourism industry in the Caribbean. This growth was partially offset by a lower income tax recovery at Corporate, the impact of mark-to-market accounting of natural gas derivatives at Aitken Creek, and higher operating costs at Tucson Electric Power ("TEP"). In addition, earnings per share for the quarter reflected an increase in the weighted average number of common shares outstanding largely associated with the Corporation's dividend reinvestment program.

On a year-to-date basis, Net Earnings were $608 million, or $1.30 per common share, an increase of $22 million, or $0.04 per common share compared to the same period in 2020. Excluding the unfavourable impact of foreign exchange and the above noted one-time items, year-to-date Net Earnings increased by $68 million, or $0.15 per common share. The increase in earnings reflected the same factors discussed for the quarter, as well as the timing of losses recognized in the first half of 2020 on certain investments that support retirement benefits at TEP.

_____________________

1    Financial information is presented in Canadian dollars unless otherwise specified.

2    Non-US GAAP Measures - Fortis uses financial measures that do not have a standardized meaning under generally accepted accounting principles in the United States of America and may not be comparable to similar measures presented by other entities. Fortis presents these non-US GAAP measures because management and external stakeholders use them in evaluating the Corporation's financial performance and prospects. Refer to the Non-US GAAP Reconciliation provided herein.

i

Adjusted Net Earnings2

The Corporation reported adjusted net earnings attributable to common equity shareholders ("Adjusted Net Earnings"), of $259 million for the second quarter, or $0.55 per common share, an increase of $1 million, or a $0.01 per common share decrease compared to the same period in 2020. Adjusted Net Earnings excludes one-time items and the impact of mark-to-market accounting for certain derivatives, as noted below. The variance in Adjusted Net Earnings and adjusted earnings per common share for the second quarter was due to the impact of the lower US-to-Canadian exchange rate, partially offset by strong operating growth at the Corporation's utilities.

Year-to-date Adjusted Net Earnings were $619 million, or $1.32 per common share, an increase of $46 million or $0.09 per common share compared to the same period in 2020. The change in Adjusted Net Earnings and adjusted earnings per common share reflected strong operating growth partially offset by the unfavourable impact of foreign exchange.

Non-US GAAP Reconciliation
Periods ended June 30	Quarter			Year-to-Date
($ millions, except earnings per share)	2021	2020	Variance	2021	2020	Variance
Net Earnings	253	274	(21)	608	586	22
Adjusting items:
Unrealized loss (gain) on mark-to-market of derivatives3	6	(2)	8	11	1	10
FERC base ROE decision4	—	(27)	27	—	(27)	27
US tax reform5	—	13	(13)	—	13	(13)
Adjusted Net Earnings	259	258	1	619	573	46
Adjusted basic earnings per share ($)	0.55	0.56	(0.01)	1.32	1.23	0.09

Sustainability

The Corporation released its 2021 Sustainability Update today including information on the Corporation’s progress to reduce emissions, updated sustainability key performance indicators and an announcement that Fortis is a supporter for the Task Force on Climate-Related Financial Disclosures ("TCFD").

Fortis achieved a 15% reduction in Scope 1 emissions in 2020 compared to 2019, equivalent to taking 400,000 vehicles off the road in one year. In 2021, TEP commissioned the 250-Megawatt ("MW") Oso Grande Wind project and now receives an additional 100-MW of solar power with 30-MW of battery storage. With the addition of these two energy systems, TEP has approximately 1,000-MW of renewable energy on its system and can produce more than 25% of its energy from renewable resources.

The Sustainability Update contains over 50 new key performance indicators including 14 that align with the Sustainability Accounting Standards Board ("SASB") standards. Fortis plans to further align with the SASB standards over time. By becoming a TCFD supporter, the Corporation has also committed to fully implement the TCFD recommendations including a climate scenario analysis to assess resiliency of its energy delivery businesses.

A press release with additional highlights as well as the complete 2021 Sustainability Update can be accessed on the Fortis website at www.fortisinc.com.

Capital Expenditures

The 2021 $3.8 billion capital plan is on track with $1.7 billion invested during the first six months. Higher forecast capital expenditures for the year are expected to offset the impact of a lower foreign exchange rate.

_______________________

3    Represents timing differences related to the accounting of natural gas derivatives at Aitken Creek

4    Represents prior period impacts of the May 2020 FERC base ROE decision

5    Represents income tax expense, reflecting the reversal of income tax recoveries recorded in prior periods, resulting from the finalization of US tax reform and associated with anti-hybrid regulations

ii

Outlook

The Corporation's long-term outlook remains unchanged. Fortis continues to enhance shareholder value through the execution of its capital plan, the balance and strength of its diversified portfolio of utility businesses, and growth opportunities within and proximate to its service territories. While uncertainty exists due to the COVID-19 Pandemic, the Corporation does not currently expect it to have a material financial impact in 2021.

The Corporation's $19.6 billion five-year capital plan is expected to increase midyear rate base from $30.5 billion in 2020 to $36.4 billion by 2023 and $40.3 billion by 2025, translating into three- and five-year compound annual growth rates of approximately 6.5% and 6.0%, respectively, using a constant foreign exchange rate. Beyond the five-year capital plan, Fortis continues to pursue additional energy infrastructure opportunities.

Fortis is transitioning to a cleaner energy future. Its corporate-wide target to reduce carbon emissions by 75% by 2035 represents avoided emissions equivalent to taking approximately 2 million cars off the road in 2035 compared to 2019 levels. Upon achieving this target, 99% of the Corporation's assets will be focused on energy delivery and renewable, carbon-free generation.

Additional opportunities to expand and extend growth include: further expansion of the electric transmission grid in the United States to facilitate the interconnection of cleaner energy including infrastructure investments associated with the proposed American Jobs Plan; natural gas resiliency investments in pipelines and liquefied natural gas infrastructure in British Columbia; the fully permitted, cross-border, Lake Erie Connector electric transmission project in Ontario; and the acceleration of cleaner energy infrastructure investments across our jurisdictions.

Fortis expects long-term growth in rate base will support earnings growth and the annual dividend growth guidance of approximately 6% through 2025. This dividend growth guidance is premised on the assumptions listed under "Forward-Looking Information" below, including no material impact from the COVID-19 pandemic, the expectation of reasonable outcomes for regulatory proceedings and the successful execution of the five-year capital plan.

About Fortis

Fortis is a well-diversified leader in the North American regulated electric and gas utility industry with 2020 revenue of $8.9 billion and total assets of $56 billion as at June 30, 2021. The Corporation's 9,000 employees serve utility customers in five Canadian provinces, nine US states and three Caribbean countries.

Forward-Looking Information

Fortis includes forward-looking information in this media release within the meaning of applicable Canadian securities laws and forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 (collectively referred to as "forward-looking information"). Forward-looking information reflects expectations of Fortis management regarding future growth, results of operations, performance and business prospects and opportunities. Wherever possible, words such as anticipates, believes, budgets, could, estimates, expects, forecasts, intends, may, might, plans, projects, schedule, should, target, will, would and the negative of these terms and other similar terminology or expressions have been used to identify the forward-looking information, which includes, without limitation: forecast capital expenditures for 2021 and 2021-2025; the 2035 carbon emissions reduction target and projected asset mix; the expectation that higher forecast capital expenditures for the year will offset the impact of a lower foreign exchange rate; the expectation that the COVID-19 Pandemic will not have a material financial impact in 2021; forecast rate base and rate base growth for 2023 and 2025; additional growth and expansion opportunities beyond the capital plan, including the Lake Erie Connector Project; targeted average annual dividend growth through 2025; and the expectation that long-term growth in rate base will support earnings and dividend growth.

Forward-looking information involves significant risks, uncertainties and assumptions. Certain material factors or assumptions have been applied in drawing the conclusions contained in the forward-looking information, including, without limitation: no material impact from the COVID-19 pandemic; reasonable outcomes for regulatory proceedings and the expectation of regulatory stability; the successful execution of the five-year capital plan; no material capital project and financing cost overrun; sufficient human resources to deliver service and execute the capital plan; the realization of additional opportunities; the impact of fluctuations in foreign exchange; no significant variability in interest rates; and the Board exercising its discretion to declare dividends, taking into account the business performance and financial condition of the Corporation. Fortis cautions readers that a number of factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking information. For additional information with respect to certain risk factors, reference should be made to the continuous disclosure materials filed from time to time by the Corporation with Canadian securities regulatory authorities and the Securities and Exchange Commission. All forward-looking information herein is given as of the date of this media release. Fortis disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

iii

Teleconference to Discuss Second Quarter 2021 Results

A teleconference and webcast will be held on July 29, 2021 at 8:30 a.m. (Eastern). David Hutchens, President and Chief Executive Officer and Jocelyn Perry, Executive Vice President and Chief Financial Officer, will discuss the Corporation's second quarter 2021 results.

Shareholders, analysts, members of the media and other interested parties in North America are invited to participate by calling 1.877.223.4471. International participants may participate by calling 647.788.4922. Please dial in 10 minutes prior to the start of the call. No pass code is required.

A live and archived audio webcast of the teleconference will be available on the Corporation's website, www.fortisinc.com.

A replay of the conference will be available two hours after the conclusion of the call until August 29, 2021. Please call 1.800.585.8367 or 416.621.4642 and enter pass code 6498584.

Additional Information

This media release should be read in conjunction with the Corporation's Management Discussion and Analysis and Consolidated Financial Statements. This and additional information can be accessed at www.fortisinc.com, www.sedar.com, or www.sec.gov.

For more information, please contact:

Investor Enquiries	Media Enquiries
Ms. Stephanie Amaimo	Ms. Karen McCarthy
Vice President, Investor Relations	Vice President, Communications & Corporate Affairs
Fortis Inc.	Fortis Inc.
248.946.3572	709.737.5323
investorrelations@fortisinc.com	media@fortisinc.com
iv
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fts-20210630_d2

Exhibit 99.2

FORTIS INC.

Condensed Consolidated Interim Financial Statements

For the three and six months ended June 30, 2021 and 2020

(Unaudited)

1	FORTIS INC.	JUNE 30, 2021 QUARTER REPORT
CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS (Unaudited)
---	---	---	---	---
FORTIS INC.
As at	June 30,		December 31,
(in millions of Canadian dollars)	2021		2020
ASSETS
Current assets
Cash and cash equivalents	$	599	$	249
Accounts receivable and other current assets (Note 5)	1,370		1,369
Prepaid expenses	77		102
Inventories	415		422
Regulatory assets (Note 6)	570		470
Total current assets	3,031		2,612
Other assets	706		670
Regulatory assets (Note 6)	3,128		3,118
Property, plant and equipment, net	36,230		35,998
Intangible assets, net	1,274		1,291
Goodwill	11,526		11,792
Total assets	$	55,895	$	55,481
LIABILITIES AND EQUITY
Current liabilities
Short-term borrowings (Note 7)	$	269	$	132
Accounts payable and other current liabilities	2,058		2,321
Regulatory liabilities (Note 6)	430		441
Current installments of long-term debt (Note 7)	723		1,254
Total current liabilities	3,480		4,148
Other liabilities	1,542		1,599
Regulatory liabilities (Note 6)	2,643		2,662
Deferred income taxes	3,436		3,344
Long-term debt (Note 7)	23,942		23,113
Finance leases	330		331
Total liabilities	35,373		35,197
Commitments and contingencies (Note 14)
Equity
Common shares (1)	14,040		13,819
Preference shares (Note 8)	1,623		1,623
Additional paid-in capital	8		11
Accumulated other comprehensive income	(299)		34
Retained earnings	3,581		3,210
Shareholders' equity	18,953		18,697
Non-controlling interests	1,569		1,587
Total equity	20,522		20,284
Total liabilities and equity	$	55,895	$	55,481

(1)    No par value. Unlimited authorized shares. 471.2 million and 466.8 million issued and outstanding as at June 30, 2021 and December 31, 2020, respectively.

See accompanying Notes to Condensed Consolidated Interim Financial Statements

2	FORTIS INC.	JUNE 30, 2021 QUARTER REPORT
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF EARNINGS (Unaudited)
---	---	---	---	---	---	---	---	---
FORTIS INC.
For the periods ended June 30	Quarter				Year-to-Date
(in millions of Canadian dollars, except per share amounts)	2021		2020		2021		2020
Revenue	$	2,130	$	2,077	$	4,669	$	4,468
Expenses
Energy supply costs	593		514		1,442		1,264
Operating expenses	611		599		1,261		1,225
Depreciation and amortization	369		366		741		723
Total expenses	1,573		1,479		3,444		3,212
Operating income	557		598		1,225		1,256
Other income, net (Note 10)	42		47		92		56
Finance charges	255		263		507		519
Earnings before income tax expense	344		382		810		793
Income tax expense	48		58		118		116
Net earnings	$	296	$	324	$	692	$	677
Net earnings attributable to:
Non-controlling interests	$	27	$	33	$	52	$	58
Preference equity shareholders	16		17		32		33
Common equity shareholders	253		274		608		586
	$	296	$	324	$	692	$	677
Earnings per common share (Note 11)
Basic	$	0.54	$	0.59	$	1.30	$	1.26
Diluted	$	0.54	$	0.59	$	1.30	$	1.26
See accompanying Notes to Condensed Consolidated Interim Financial Statements
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
---	---	---	---	---	---	---	---	---
For the periods ended June 30	Quarter				Year-to-Date
(in millions of Canadian dollars)	2021		2020		2021		2020
Net earnings	$	296	$	324	$	692	$	677
Other comprehensive (loss) income
Unrealized foreign currency translation (losses) gains (1)	(188)		(545)		(377)		657
Other (2)	2		(1)		4		(22)
	(186)		(546)		(373)		635
Comprehensive income (loss)	$	110	$	(222)	$	319	$	1,312
Comprehensive income attributable to:
Non-controlling interests	$	7	$	(26)	$	12	$	124
Preference equity shareholders	16		17		32		33
Common equity shareholders	87		(213)		275		1,155
	$	110	$	(222)	$	319	$	1,312

(1)Net of hedging activities and income tax expense of $2 million and $4 million for the three and six months ended June 30, 2021, respectively (three and six months ended June 30, 2020 - income tax (expense) recovery of $(6) million and $6 million, respectively)

(2)Net of income tax expense of $1 million for the three and six months ended June 30, 2021 (three and six months ended June 30, 2020 - income tax recovery of $nil and $9 million, respectively)

See accompanying Notes to Condensed Consolidated Interim Financial Statements

3	FORTIS INC.	JUNE 30, 2021 QUARTER REPORT
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS (Unaudited)
---	---	---	---	---	---	---	---	---	---
FORTIS INC.
For the periods ended June 30		Quarter				Year-to-Date
(in millions of Canadian dollars)		2021		2020		2021		2020
Operating activities
Net earnings		$	296	$	324	$	692	$	677
Adjustments to reconcile net earnings to net cash provided by operating activities:
	Depreciation - property, plant and equipment	322		329		646		650
	Amortization - intangible assets	34		34		68		66
	Amortization - other	13		3		27		7
	Deferred income tax expense	19		60		65		119
	Equity component, allowance for funds used<br><br>during construction (Note 10)	(17)		(21)		(39)		(35)
	Other	47		23		67		70
Change in long-term regulatory assets and liabilities		(14)		—		—		(58)
Change in working capital (Note 12)		40		(27)		(47)		(181)
Cash from operating activities		740		725		1,479		1,315
Investing activities
Capital expenditures - property, plant and equipment		(751)		(725)		(1,515)		(1,836)
Capital expenditures - intangible assets		(39)		(50)		(79)		(101)
Contributions in aid of construction		20		16		34		33
Other		(50)		(49)		(98)		(93)
Cash used in investing activities		(820)		(808)		(1,658)		(1,997)
Financing activities
Proceeds from long-term debt, net of issuance costs		1,032		1,685		1,126		2,044
Repayments of long-term debt and finance leases		(116)		(585)		(122)		(602)
Borrowings under committed credit facilities		1,001		1,251		2,268		3,007
Repayments under committed credit facilities		(1,417)		(1,491)		(2,572)		(2,754)
Net change in short-term borrowings		38		(394)		144		(526)
Issue of common shares, net of costs and dividends reinvested		9		10		44		44
Dividends
	Common shares, net of dividends reinvested	(150)		(211)		(297)		(424)
	Preference shares	(16)		(17)		(32)		(33)
	Subsidiary dividends paid to non-controlling interests	(10)		(9)		(28)		(34)
Other		(14)		(38)		(5)		(35)
Cash from financing activities		357		201		526		687
Effect of exchange rate changes on cash and cash equivalents		5		(10)		3		5
Change in cash and cash equivalents		282		108		350		10
Cash and cash equivalents, beginning of period		317		272		249		370
Cash and cash equivalents, end of period		$	599	$	380	$	599	$	380
Supplementary Cash Flow Information (Note 12)
See accompanying Notes to Condensed Consolidated Interim Financial Statements
4	FORTIS INC.	JUNE 30, 2021 QUARTER REPORT
---	---	---
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY (Unaudited)
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
FORTIS INC.
For the three months ended June 30<br>(in millions of Canadian dollars, except share numbers)	Common Shares<br><br>(# millions)	Common Shares		Preference Shares (Note 8)		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Non-Controlling Interests		Total Equity
As at March 31, 2021	469.4	$	13,944	$	1,623	$	10	$	(133)	$	3,328	$	1,574	$	20,346
Net earnings	—	—		—		—		—		269		27		296
Other comprehensive loss	—	—		—		—		(166)		—		(20)		(186)
Common shares issued	1.8	96		—		—		—		—		—		96
Subsidiary dividends paid to non-controlling interests	—	—		—		—		—		—		(10)		(10)
Dividends on preference shares	—	—		—		—		—		(16)		—		(16)
Other	—	—		—		(2)		—		—		(2)		(4)
As at June 30, 2021	471.2	$	14,040	$	1,623	$	8	$	(299)	$	3,581	$	1,569	$	20,522
As at March 31, 2020	464.2	$	13,688	$	1,623	$	10	$	1,392	$	3,005	$	1,701	$	21,419
Net earnings	—	—		—		—		—		291		33		324
Other comprehensive loss	—	—		—		—		(487)		—		(59)		(546)
Common shares issued	0.4	20		—		—		—		—		—		20
Subsidiary dividends paid to non-controlling interests	—	—		—		—		—		—		(9)		(9)
Dividends on preference shares	—	—		—		—		—		(17)		—		(17)
Other	—	—		—		—		—		—		(8)		(8)
As at June 30, 2020	464.6	$	13,708	$	1,623	$	10	$	905	$	3,279	$	1,658	$	21,183
See accompanying Notes to Condensed Consolidated Interim Financial Statements
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY (Unaudited)
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
FORTIS INC.
For the six months ended June 30<br>(in millions of Canadian dollars, except share numbers)	Common Shares<br><br>(# millions)	Common Shares		Preference Shares (Note 8)		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Non-Controlling Interests		Total Equity
As at December 31, 2020	466.8	$	13,819	$	1,623	$	11	$	34	$	3,210	$	1,587	$	20,284
Net earnings	—	—		—		—		—		640		52		692
Other comprehensive loss	—	—		—		—		(333)		—		(40)		(373)
Common shares issued	4.4	221		—		(2)		—		—		—		219
Subsidiary dividends paid to non-controlling interests	—	—		—		—		—		—		(28)		(28)
Dividends declared on common shares ($0.505 per share)	—	—		—		—		—		(237)		—		(237)
Dividends on preference shares	—	—		—		—		—		(32)		—		(32)
Other	—	—		—		(1)		—		—		(2)		(3)
As at June 30, 2021	471.2	$	14,040	$	1,623	$	8	$	(299)	$	3,581	$	1,569	$	20,522
As at December 31, 2019	463.3	$	13,645	$	1,623	$	11	$	336	$	2,916	$	1,582	$	20,113
Net earnings	—	—		—		—		—		619		58		677
Other comprehensive income	—	—		—		—		569		—		66		635
Common shares issued	1.3	63		—		(2)		—		—		—		61
Subsidiary dividends paid to non-controlling interests	—	—		—		—		—		—		(34)		(34)
Dividends declared on common shares ($0.4775 per share)	—	—		—		—		—		(223)		—		(223)
Dividends on preference shares	—	—		—		—		—		(33)		—		(33)
Other	—	—		—		1		—		—		(14)		(13)
As at June 30, 2020	464.6	$	13,708	$	1,623	$	10	$	905	$	3,279	$	1,658	$	21,183
See accompanying Notes to Condensed Consolidated Interim Financial Statements
5	FORTIS INC.	JUNE 30, 2021 QUARTER REPORT
---	---	---

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 the impact of seasonal weather conditions on customer demand and market pricing and the timing and recognition of regulatory decisions. Earnings of the gas utilities tend to be highest in the first and fourth quarters due to space-heating requirements. Earnings of the electric distribution utilities in the United States 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, UNS Electric, Inc. and UNS Gas, Inc.

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

Energy Infrastructure: Long-term contracted generation assets in Belize and the Aitken Creek natural gas storage facility ("Aitken Creek") in British Columbia.

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, including net corporate expenses of Fortis.

6	FORTIS INC.	JUNE 30, 2021 QUARTER REPORT
Notes to Condensed Consolidated Interim Financial Statements (Unaudited)
---
For the three and six months ended June 30, 2021 and 2020
---

2. REGULATORY DEVELOPMENTS

Regulation of the Corporation's utilities is generally consistent with that disclosed in Note 2 of the Corporation's annual audited consolidated financial statements ("2020 Annual Financial Statements"). A summary of significant regulatory developments year-to-date 2021 follows.

ITC

Transmission Incentives: In April 2021, the Federal Energy Regulatory Commission ("FERC") issued a supplemental notice of proposed rulemaking ("NOPR") on transmission incentives modifying the proposal in the initial NOPR released in March 2020. The supplemental NOPR proposes to eliminate the 50-basis point regional transmission organization ("RTO") return on common equity ("ROE") incentive adder for existing RTO members that have been members longer than three years, like ITC. In June 2021, ITC filed its comments on the supplemental NOPR supporting the continuation of the ROE incentive adder for RTO members. The timeline for FERC to issue a final rule in this proceeding as well as the likely outcome and potential impacts to Fortis cannot be determined at this time.

Central Hudson

General Rate Application: In August 2020, Central Hudson filed a rate application with the New York State Public Service Commission ("PSC") requesting an increase in electric and natural gas delivery revenue of $44 million and $19 million, respectively, effective July 1, 2021. In January 2021, Central Hudson filed a notice of impending settlement negotiations and negotiations began in February 2021. An order from the PSC is expected in 2021.

COVID-19 Proceeding: The generic proceeding initiated by the PSC in June 2020 to identify and address the financial effects of the novel coronavirus ("COVID-19") pandemic and any associated cost recovery is ongoing. The potential impacts of this proceeding are unknown at this time.

FortisBC Energy and FortisBC Electric

Generic Cost of Capital ("GCOC") Proceeding: In January 2021, the British Columbia Utilities Commission announced the initiation of a GCOC proceeding including a review of the common equity component of capital structure and the allowed ROE. The scope and timeline of the proceeding continues to evolve and the effective date of any change in the cost of capital is unknown at this time.

FortisAlberta

GCOC Proceeding: In March 2021, the Alberta Utilities Commission ("AUC") concluded the 2022 GCOC proceeding and extended the existing allowed ROE of 8.5% using a 37% equity component of capital structure through 2022. The Office of the Utilities Consumer Advocate ("UCA") has filed an application seeking permission to appeal the decision to the Alberta Court of Appeal. The Office of the UCA also filed an application with the AUC in April 2021 and a decision on whether the AUC will review, and potentially vary, its 2022 GCOC decision is expected in the third quarter of 2021.

2023 Generic Cost of Service ("COS") Application: The final year of FortisAlberta's second PBR term is 2022. In June 2021, the AUC issued a decision confirming the approach to be adopted by Alberta distribution utilities for the COS rebasing year in 2023. FortisAlberta is required to file its 2023 COS application in the fourth quarter of 2021.

Third Performance-Based Rate-Setting ("PBR") Term: In July 2021, the AUC issued a decision confirming that Alberta distribution utilities will be subject to a third PBR term commencing in 2024 with going-in rates based on the 2023 COS rebasing. The AUC also initiated a new proceeding to consider the design of the third PBR term. FortisAlberta will submit comments with respect to the design of the third PBR term in 2022 and a decision from the AUC is expected in 2023.

Independent System Operator Tariff Proceeding: In April 2021, the AUC issued a decision confirming that distribution facility owners, such as FortisAlberta, will no longer be permitted to earn a return on contributions made to the Alberta Electric System Operator on a prospective basis from the date of the decision. Contributions made prior to that date are not impacted. This decision is not expected to have a material financial impact on the Corporation.

7	FORTIS INC.	JUNE 30, 2021 QUARTER REPORT
Notes to Condensed Consolidated Interim Financial Statements (Unaudited)
---
For the three and six months ended June 30, 2021 and 2020
---

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.

Intercompany transactions have been eliminated, except for transactions between non-regulated and regulated entities in accordance with US GAAP for rate-regulated 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 2020 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 requires 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 and contingencies. Actual results could differ materially from estimates.

The accounting policies applied herein are consistent with those outlined in the Corporation's 2020 Annual Financial Statements.

Future Accounting Pronouncements

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.

4. SEGMENTED INFORMATION

Fortis segments its business based on regulatory jurisdiction and service territory, as well as the information used by its President and Chief Executive Officer in deciding how to allocate resources. Segment performance is evaluated principally on net earnings attributable to common equity shareholders.

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, 2021 and 2020.

The lease of gas storage capacity and gas sales from Aitken Creek to FortisBC Energy of $7 million and $15 million for the three and six months ended June 30, 2021, respectively (three and six months ended June 30, 2020 - $5 million and $12 million, respectively) are inter-company transactions between non-regulated and regulated entities, which were not eliminated on consolidation.

As at June 30, 2021, accounts receivable included approximately $30 million due from Belize Electricity (December 31, 2020 - $28 million).

Fortis periodically provides short-term financing, the impacts of which are eliminated on consolidation, to subsidiaries to support capital expenditures, acquisitions and seasonal working capital requirements. There were inter-segment loans of $135 million outstanding as at June 30, 2021 (December 31, 2020 - nil). Interest charged on inter-segment loans was not material for the three and six months ended June 30, 2021 and 2020.

8	FORTIS INC.	JUNE 30, 2021 QUARTER REPORT
Notes to Condensed Consolidated Interim Financial Statements (Unaudited)
---
For the three and six months ended June 30, 2021 and 2020
---

4. SEGMENTED INFORMATION (cont'd)

								Non-Regulated
								Energy		Inter-
Quarter ended June 30, 2021	UNS	Central	FortisBC	Fortis	FortisBC	Other	Sub	Infra-	Corporate	segment
( millions)	Energy	Hudson	Energy	Alberta	Electric	Electric	Total	structure	and Other	eliminations	Total
Revenue	556	207	317	162	108	353	2,121	9	—	—	2,130
Energy supply costs	204	59	108	—	22	199	592	1	—	—	593
Operating expenses	153	116	88	39	33	48	592	9	10	—	611
Depreciation and amortization	83	22	70	58	16	45	364	4	1	—	369
Operating income	116	10	51	65	37	61	573	(5)	(11)	—	557
Other income, net	11	8	3	—	2	1	37	1	4	—	42
Finance charges	31	11	37	27	18	18	220	—	35	—	255
Income tax expense	13	1	2	2	4	6	69	1	(22)	—	48
Net earnings	83	6	15	36	17	38	321	(5)	(20)	—	296
Non-controlling interests	—	—	—	—	—	4	27	—	—	—	27
Preference share dividends	—	—	—	—	—	—	—	—	16	—	16
Net earnings attributable to common equity shareholders	83	6	15	36	17	34	294	(5)	(36)	—	253
Goodwill	1,713	559	913	228	235	242	11,499	27	—	—	11,526
Total assets	11,218	3,899	7,722	5,157	2,474	4,216	54,993	723	358	(179)	55,895
Capital expenditures	185	72	99	82	30	75	787	3	—	—	790
Quarter ended June 30, 2020
( millions)
Revenue	546	206	249	150	91	345	2,064	13	—	—	2,077
Energy supply costs	184	51	66	—	15	198	514	—	—	—	514
Operating expenses	157	125	76	34	26	49	580	7	12	—	599
Depreciation and amortization	85	24	59	56	15	47	361	4	1	—	366
Operating income	120	6	48	60	35	51	609	2	(13)	—	598
Other income, net	16	8	2	—	1	2	42	—	5	—	47
Finance charges	34	12	35	25	18	21	224	—	39	—	263
Income tax expense	17	—	(2)	2	1	6	79	(1)	(20)	—	58
Net earnings	85	2	17	33	17	26	348	3	(27)	—	324
Non-controlling interests	—	—	1	—	—	2	33	—	—	—	33
Preference share dividends	—	—	—	—	—	—	—	—	17	—	17
Net earnings attributable to common equity shareholders	85	2	16	33	17	24	315	3	(44)	—	274
Goodwill	1,876	612	913	228	235	259	12,455	27	—	—	12,482
Total assets	11,252	3,967	7,291	4,918	2,377	4,272	55,328	740	226	(89)	56,205
Capital expenditures	176	91	95	83	30	65	772	3	—	—	775

All values are in US Dollars.

9	FORTIS INC.	JUNE 30, 2021 QUARTER REPORT
Notes to Condensed Consolidated Interim Financial Statements
---		For the three and six months ended June 30, 2021 and 2020 (Unaudited)
---

4. SEGMENTED INFORMATION (cont'd)

								Non-Regulated
								Energy		Inter-
Year-to-date June 30, 2021	UNS	Central	FortisBC	Fortis	FortisBC	Other	Sub	Infra-	Corporate	segment
( millions)	Energy	Hudson	Energy	Alberta	Electric	Electric	Total	structure	and Other	eliminations	Total
Revenue	1,078	492	903	320	228	766	4,631	38	—	—	4,669
Energy supply costs	404	140	362	—	61	473	1,440	2	—	—	1,442
Operating expenses	330	247	172	78	63	97	1,219	18	24	—	1,261
Depreciation and amortization	166	45	141	115	32	90	731	8	2	—	741
Operating income	178	60	228	127	72	106	1,241	10	(26)	—	1,225
Other income, net	27	17	5	1	3	1	75	1	16	—	92
Finance charges	59	23	73	53	36	36	437	—	70	—	507
Income tax expense	18	9	34	4	6	11	164	2	(48)	—	118
Net earnings	128	45	126	71	33	60	715	9	(32)	—	692
Non-controlling interests	—	—	—	—	—	6	52	—	—	—	52
Preference share dividends	—	—	—	—	—	—	—	—	32	—	32
Net earnings attributable to common equity shareholders	128	45	126	71	33	54	663	9	(64)	—	608
Goodwill	1,713	559	913	228	235	242	11,499	27	—	—	11,526
Total assets	11,218	3,899	7,722	5,157	2,474	4,216	54,993	723	358	(179)	55,895
Capital expenditures	337	133	192	186	58	138	1,590	4	—	—	1,594
Year-to-date June 30, 2020
( millions)
Revenue	1,019	486	715	302	205	793	4,430	38	—	—	4,468
Energy supply costs	351	129	226	—	54	503	1,263	1	—	—	1,264
Operating expenses	315	259	158	72	53	100	1,188	15	22	—	1,225
Depreciation and amortization	166	46	119	111	30	93	713	8	2	—	723
Operating income	187	52	212	119	68	97	1,266	14	(24)	—	1,256
Other income, net	13	17	3	1	2	5	58	—	(2)	—	56
Finance charges	62	24	71	51	36	40	443	—	76	—	519
Income tax expense	25	8	21	4	2	10	168	2	(54)	—	116
Net earnings	113	37	123	65	32	52	713	12	(48)	—	677
Non-controlling interests	—	—	1	—	—	5	58	—	—	—	58
Preference share dividends	—	—	—	—	—	—	—	—	33	—	33
Net earnings attributable to common equity shareholders	113	37	122	65	32	47	655	12	(81)	—	586
Goodwill	1,876	612	913	228	235	259	12,455	27	—	—	12,482
Total assets	11,252	3,967	7,291	4,918	2,377	4,272	55,328	740	226	(89)	56,205
Capital expenditures	685	164	216	204	58	122	1,930	7	—	—	1,937

All values are in US Dollars.

10	FORTIS INC.	JUNE 30, 2021 QUARTER REPORT
Notes to Condensed Consolidated Interim Financial Statements
---		For the three and six months ended June 30, 2021 and 2020 (Unaudited)
---

5. ALLOWANCE FOR CREDIT LOSSES

The allowance for credit losses balance, which is netted against accounts receivable and other current assets, changed as follows.

Periods ended June 30	Quarter		Year-to-Date
($ millions)	2021	2020	2021	2020
Beginning of period	(64)	(44)	(64)	(35)
Credit loss expense	(1)	(5)	(8)	(14)
Credit loss deferral	—	(8)	—	(8)
Write-offs, net of recoveries	3	3	8	6
Foreign exchange	—	1	2	(2)
End of period	(62)	(53)	(62)	(53)

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 2020 Annual Financial Statements. A summary follows.

	As at
	June 30,	December 31,
($ millions)	2021	2020
Regulatory assets
Deferred income taxes	1,732	1,697
Employee future benefits	553	588
Deferred energy management costs	349	334
Rate stabilization and related accounts	277	213
Deferred lease costs	124	122
Manufactured gas plant site remediation deferral	100	107
Derivatives	75	73
AESO charges deferral	52	35
Generation early retirement costs	50	55
Other regulatory assets	386	364
Total regulatory assets	3,698	3,588
Less: Current portion	(570)	(470)
Long-term regulatory assets	3,128	3,118
Regulatory liabilities
Deferred income taxes	1,309	1,361
Asset removal cost provision	1,189	1,206
Renewable energy surcharge	97	100
Rate stabilization and related accounts	94	104
Energy efficiency liability	77	83
Derivatives	55	17
Employee future benefits	16	43
Other regulatory liabilities	236	189
Total regulatory liabilities	3,073	3,103
Less: Current portion	(430)	(441)
Long-term regulatory liabilities	2,643	2,662
11	FORTIS INC.	JUNE 30, 2021 QUARTER REPORT
---	---	---
Notes to Condensed Consolidated Interim Financial Statements
---		For the three and six months ended June 30, 2021 and 2020 (Unaudited)
---

7. LONG-TERM DEBT    As at

	June 30,	December 31,
($ millions)	2021	2020
Long-term debt	24,156	23,534
Credit facility borrowings	659	980
Total long-term debt	24,815	24,514
Less: Deferred financing costs and debt discounts	(150)	(147)
Less: Current installments of long-term debt	(723)	(1,254)
	23,942	23,113
Long-Term Debt Issuances		Interest
---	---	---	---	---	---	---
Year-to-Date June 30, 2021	Month	Rate				Use of
($ millions, except as noted)	Issued	(%)	Maturity	Amount		Proceeds
UNS Energy
Unsecured senior notes	May	3.25	2051	US	325	(1) (2)
Central Hudson
Unsecured senior notes	March	3.29	2051	US	75	(1) (2)
FortisBC Energy
Unsecured debentures	April	2.42	2031	150		(3)
Fortis
Unsecured senior notes	May	2.18	2028	500		(1) (2) (3)

(1)    Repay maturing long-term debt

(2)    General corporate purposes

(3)    Repay credit facility borrowings

In July 2021, ITC priced 30-year US$75 million series A secured senior notes at 2.90% with an expected issuance date in August 2021, with a delayed issuance of another US$75 million series B secured senior notes at 3.05% expected to be issued in May 2022. The net proceeds are expected to fund or refinance a portfolio of eligible green projects, repay credit facility borrowings, fund capital expenditures and be used for other general corporate purposes.

			As at
Credit facilities	Regulated	Corporate	June 30,	December 31,
($ millions)	Utilities	and Other	2021	2020
Total credit facilities	3,556	1,380	4,936	5,581
Credit facilities utilized:
Short-term borrowings (1)	(269)	—	(269)	(132)
Long-term debt (including<br><br>current portion) (2)	(591)	(68)	(659)	(980)
Letters of credit outstanding	(69)	(47)	(116)	(130)
Credit facilities unutilized	2,627	1,265	3,892	4,339

(1)    The weighted average interest rate was 0.3% (December 31, 2020 - 0.8%).

(2)    The weighted average interest rate was 1.1% (December 31, 2020 - 0.9%). The current portion was $162 million (December 31, 2020 - $651 million).

Credit facilities are syndicated primarily with large banks in Canada and the United States, with no one bank holding more than 20% of the total facilities. Approximately $4.7 billion of the total credit facilities are committed facilities with maturities ranging from 2022 through 2026.

See Note 14 in the 2020 Annual Financial Statements for a description of the credit facilities as at December 31, 2020.

In April 2021, the Corporation's unsecured $500 million revolving one-year term committed credit facility expired and was not renewed, and in June 2021, the Corporation extended its unsecured $1.3 billion revolving term committed credit facility to July 2026.

12	FORTIS INC.	JUNE 30, 2021 QUARTER REPORT
Notes to Condensed Consolidated Interim Financial Statements
---
For the three and six months ended June 30, 2021 and 2020 (Unaudited)
---

8. PREFERENCE SHARES

On June 1, 2020, 267,341 First Preference Shares, Series H were converted on a one-for-one basis into First Preference Shares, Series I and 907,577 First Preference Shares, Series I were converted on a one-for-one basis into First Preference Shares, Series H.

Also on June 1, 2020, the annual fixed dividend per share for the First Preference Shares, Series H was reset from $0.6250 to $0.45875 for the five-year period up to but excluding June 1, 2025.

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<br><br>Pension Plans		OPEB Plans
($ millions)	2021	2020	2021	2020
Quarter ended June 30
Service costs	27	25	9	8
Interest costs	24	29	4	5
Expected return on plan assets	(43)	(44)	(4)	(5)
Amortization of actuarial losses (gains)	9	9	—	(2)
Amortization of past service credits/plan amendments	(1)	(1)	—	—
Regulatory adjustments	(1)	(1)	—	1
Net benefit cost	15	17	9	7
Year-to-date June 30
Service costs	55	50	18	16
Interest costs	49	57	9	11
Expected return on plan assets	(88)	(88)	(9)	(10)
Amortization of actuarial losses (gains)	18	17	(1)	(3)
Amortization of past service credits/plan amendments	(1)	(1)	—	(1)
Regulatory adjustments	(1)	(2)	1	2
Net benefit cost	32	33	18	15

Defined contribution pension plan expense for the three and six months ended June 30, 2021 was $10 million and $23 million (three and six months ended June 30, 2020 - $9 million and $22 million, respectively).

10. OTHER INCOME, NET

Periods ended June 30	Quarter		Year-to-Date
($ millions)	2021	2020	2021	2020
Equity component, allowance for funds used during construction	17	21	39	35
Non-service benefit cost	12	9	23	18
Derivative gains	4	7	13	—
Interest income	2	3	4	8
Other	7	7	13	(5)
	42	47	92	56
13	FORTIS INC.	JUNE 30, 2021 QUARTER REPORT
---	---	---
Notes to Condensed Consolidated Interim Financial Statements
---
For the three and six months ended June 30, 2021 and 2020 (Unaudited)
---

11. EARNINGS PER COMMON SHARE

Diluted earnings per share ("EPS") was calculated using the treasury stock method for stock options.

	2021			2020
	Net Earnings	Weighted		Net Earnings	Weighted
	to Common	Average		to Common	Average
	Shareholders	Shares	EPS	Shareholders	Shares	EPS
	($ millions)	(# millions)	($)	($ millions)	(# millions)	($)
Quarter ended June 30
Basic EPS	253	470.2	0.54	274	464.6	0.59
Potential dilutive effect of<br><br>stock options	—	0.4		—	0.6
Diluted EPS	253	470.6	0.54	274	465.2	0.59
Year-to-date June 30
Basic EPS	608	469.0	1.30	586	464.2	1.26
Potential dilutive effect of stock options	—	0.4		—	0.6
Diluted EPS	608	469.4	1.30	586	464.8	1.26

12. SUPPLEMENTARY CASH FLOW INFORMATION

Periods ended June 30	Quarter		Year-to-Date
($ millions)	2021	2020	2021	2020
Change in working capital
Accounts receivable and other current assets	91	69	42	107
Prepaid expenses	26	29	23	25
Inventories	(25)	(45)	—	(1)
Regulatory assets - current portion	—	14	(69)	28
Accounts payable and other current liabilities	(41)	14	(11)	(194)
Regulatory liabilities - current portion	(11)	(108)	(32)	(146)
	40	(27)	(47)	(181)
Non-cash investing and financing activities
Accrued capital expenditures	327	367	327	367
Common share dividends reinvested	87	10	176	18
Contributions in aid of construction	13	8	13	8

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.

The Corporation records all derivatives 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.

14	FORTIS INC.	JUNE 30, 2021 QUARTER REPORT
Notes to Condensed Consolidated Interim Financial Statements
---
For the three and six months ended June 30, 2021 and 2020 (Unaudited)
---

13. FAIR VALUE OF FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

(cont'd)

Cash flow associated with the settlement of all derivatives is included in operating activities on the condensed consolidated interim statements of cash flows.

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.

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 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, 2021, unrealized losses of $75 million (December 31, 2020 - $73 million) were recognized as regulatory assets and unrealized gains of $55 million (December 31, 2020 - $17 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.

Aitken Creek holds gas swap contracts to manage its exposure to changes in natural gas prices, capture natural gas price spreads, and manage the financial risk posed by physical transactions. Fair values are measured using forward pricing from published market sources.

Unrealized gains or losses associated with changes in the fair value of these energy contracts are recognized in revenue. For the three and six months ended June 30, 2021, unrealized losses of $8 million and $13 million, respectively, were recognized in revenue (three and six months ended June 30, 2020 - unrealized gains of $7 million and $4 million, respectively).

Total Return Swaps

The Corporation holds total return swaps to manage the cash flow risk associated with forecast future cash settlements of certain stock-based compensation obligations. The swaps have a combined notional amount of $112 million and terms of one to three years expiring at varying dates through January 2024. Fair value is measured using an income valuation approach based on forward pricing curves. During the three and six months ended June 30, 2021, unrealized gains of $1 million and $3 million, respectively were recognized in other income, net (three and six months ended June 30, 2020 - unrealized losses of $5 million and $9 million, respectively).

Foreign Exchange Contracts

The Corporation holds US dollar denominated foreign exchange contracts to help mitigate exposure to foreign exchange rate volatility. The contracts expire at varying dates through February 2022 and have a combined notional amount of $170 million. Fair value was measured using independent third-party information. During the three and six months ended June 30, 2021, unrealized losses of $4 million and $2 million, respectively were recognized in other income, net (three and six months ended June 30, 2020 - unrealized gains of $11 million and $2 million, respectively).

15	FORTIS INC.	JUNE 30, 2021 QUARTER REPORT
Notes to Condensed Consolidated Interim Financial Statements
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For the three and six months ended June 30, 2021 and 2020 (Unaudited)
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13. FAIR VALUE OF FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (cont'd)

Other Investments

ITC, UNS Energy and Central Hudson hold investments in trust associated with supplemental retirement benefit plans for select employees. These investments include mutual funds and money market accounts, which are recorded at fair value based on quoted market prices in active markets. During the three and six months ended June 30, 2021, unrealized gains of $4 million and $6 million, respectively were recognized in other income, net (three and six months ended June 30, 2020 - unrealized gains of $9 million and unrealized losses of $2 million, respectively).

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, 2021
Assets
Cash equivalents (2)	310	—	—	310
Energy contracts subject to regulatory deferral (3) (4)	—	80	—	80
Energy contracts not subject to regulatory deferral (3)	—	3	—	3
Foreign exchange contracts and total return swaps (3)	17	—	—	17
Other investments (5)	132	—	—	132
	459	83	—	542
Liabilities
Energy contracts subject to regulatory deferral (4) (6)	—	(100)	—	(100)
Energy contracts not subject to regulatory deferral (6)	—	(24)	—	(24)
	—	(124)	—	(124)
As at December 31, 2020
Assets
Energy contracts subject to regulatory deferral (3) (4)	—	38	—	38
Energy contracts not subject to regulatory deferral (3)	—	6	—	6
Foreign exchange contracts and total return swaps (3)	16	—	—	16
Other investments (5)	126	—	—	126
	142	44	—	186
Liabilities
Energy contracts subject to regulatory deferral (4) (6)	—	(94)	—	(94)
Energy contracts not subject to regulatory deferral (6)	—	(12)	—	(12)
	—	(106)	—	(106)

(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)Represents amounts held in money market funds, which approximates fair market value and is included in cash and cash equivalents.

(3)Included in accounts receivable and other current assets or other assets

(4)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 long-term wholesale trading contracts and certain gas swap contracts.

(5)Included in other assets

(6)Included in accounts payable and other current liabilities or other liabilities

16	FORTIS INC.	JUNE 30, 2021 QUARTER REPORT
Notes to Condensed Consolidated Interim Financial Statements
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For the three and six months ended June 30, 2021 and 2020 (Unaudited)
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13. FAIR VALUE OF FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (cont'd)

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
	Amount	Counterparty	Cash
	Recognized	Netting of	Collateral
	on Balance	Energy	Received/
($ millions)	Sheet	Contracts	Posted	Net Amount
As at June 30, 2021
Derivative assets	83	39	6	38
Derivative liabilities	(124)	(39)	(30)	(55)
As at December 31, 2020
Derivative assets	44	26	10	8
Derivative liabilities	(106)	(26)	(9)	(71)

Volume of Derivative Activity

As at June 30, 2021, the Corporation had various energy contracts that will settle on various dates through 2029. The volumes related to electricity and natural gas derivatives are outlined below.

	As at
	June 30,	December 31,
	2021	2020
Energy contracts subject to regulatory deferral (1)
Electricity swap contracts (GWh)	246	522
Electricity power purchase contracts (GWh)	1,673	2,781
Gas swap contracts (PJ)	171	156
Gas supply contract premiums (PJ)	167	203
Energy contracts not subject to regulatory deferral (1)
Wholesale trading contracts (GWh)	883	1,588
Gas swap contracts (PJ)	16	36

(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. As a result of the impact of the COVID-19 pandemic, certain of the Corporation's utilities temporarily suspended non-payment disconnects. While the Corporation has seen an increase in accounts receivable and, accordingly, its allowance for credit losses since the start of the pandemic in March 2020, there has been no material change in credit loss expense for the three and six months ended June 30, 2021 (Note 5).

ITC has a concentration of credit risk as approximately 70% 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.

17	FORTIS INC.	JUNE 30, 2021 QUARTER REPORT
Notes to Condensed Consolidated Interim Financial Statements
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For the three and six months ended June 30, 2021 and 2020 (Unaudited)
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13. FAIR VALUE OF FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (cont'd)

FortisAlberta has a concentration of credit risk as 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.

UNS Energy, Central Hudson, FortisBC Energy, Aitken Creek and the Corporation may be exposed to credit risk in the event of non-performance by counterparties to derivatives. Credit risk is managed by net settling payments, when possible, and dealing only with counterparties that have investment-grade credit ratings. At UNS Energy and Central Hudson, 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 $94 million as at June 30, 2021 (December 31, 2020 - $88 million).

Hedge of Foreign Net Investments

The reporting currency of ITC, UNS Energy, Central Hudson, Caribbean Utilities, FortisTCI, Belize Electric Company Limited and Belize Electricity is, or is pegged to, the US dollar. The earnings and cash flow from, and net investments in, these entities are exposed to fluctuations in the US dollar-to-Canadian dollar exchange rate. The Corporation has limited this exposure through hedging.

As at June 30, 2021, US$2.1 billion (December 31, 2020 - US$2.3 billion) of corporately issued US dollar-denominated long-term debt has been designated as an effective hedge of net investments, leaving approximately US$10.6 billion (December 31, 2020 - US$10.2 billion) unhedged. Exchange rate fluctuations associated with the hedged 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, 2021, the carrying value of long-term debt, including current portion, was $24.8 billion (December 31, 2020 - $24.5 billion) compared to an estimated fair value of $28.1 billion (December 31, 2020 - $29.1 billion).

14. COMMITMENTS AND CONTINGENCIES

Commitments

There were no material changes in commitments from that disclosed in the Corporation's 2020 Annual Financial Statements.

Contingencies

In April 2013, FortisBC Holdings Inc. and Fortis were named as defendants in an action in the British Columbia Supreme Court by the Coldwater Indian Band ("Band") regarding interests in a pipeline right-of-way on reserve lands. The pipeline was transferred by FHI (then Terasen Inc.) to Kinder Morgan Inc. in April 2007. The Band seeks cancellation of the right-of-way and damages for wrongful interference with the Band's use and enjoyment of reserve lands. In May 2016, the Federal Court dismissed the Band's application for judicial review of the ministerial consent. In September 2017, the Federal Court of Appeal set aside the minister's consent and returned the matter to the minister for redetermination. No amount has been accrued in the Interim Financial Statements as the outcome cannot yet be reasonably determined.

18	FORTIS INC.	JUNE 30, 2021 QUARTER REPORT

Document

Exhibit 99.3

Interim Management Discussion and Analysis
CONTENTS
---	---	---	---
About Fortis	1	Liquidity and Capital Resources	12
Key Developments	1	Cash Flow Requirements	12
Performance at a Glance	2	Cash Flow Summary	13
Business Unit Performance	5	Contractual Obligations	14
ITC	5	Capital Structure and Credit Ratings	15
UNS Energy	6	Capital Plan	15
Central Hudson	6	Business Risks	16
FortisBC Energy	7	Accounting Matters	16
FortisAlberta	7	Financial Instruments	17
FortisBC Electric	8	Long-Term Debt and Other	17
Other Electric	8	Derivatives	17
Energy Infrastructure	9	Summary of Quarterly Results	17
Corporate and Other	9	Related-Party and Inter-Company Transactions	18
Non-US GAAP Financial Measures	10	Outlook	19
Regulatory Highlights	10	Forward-Looking Information	19
Financial Position	11	Glossary	21
		Condensed Consolidated Interim Financial Statements (Unaudited)	F-1

Dated July 28, 2021

This Interim MD&A has been prepared in accordance with National Instrument 51-102 - Continuous Disclosure Obligations. It should be read in conjunction with the Interim Financial Statements, the 2020 Annual Financial Statements and the 2020 Annual MD&A and is subject to the cautionary statement and disclaimer provided under "Forward-Looking Information" on page 19. Further information about Fortis, including its Annual Information Form filed on SEDAR, can be accessed at www.fortisinc.com, www.sedar.com, or www.sec.gov.

Financial information herein has been prepared in accordance with US GAAP (except for indicated Non-US GAAP Financial Measures) and, unless otherwise specified, is presented in Canadian dollars based, as applicable, on the following US-to-Canadian dollar exchange rates: (i) average of 1.23 and 1.39 for the quarters ended June 30, 2021 and 2020, respectively; (ii) average of 1.25 and 1.37 year-to-date June 30, 2021 and 2020, respectively; (iii) 1.24 and 1.36 as at June 30, 2021 and 2020, respectively; (iv) 1.27 as at December 31, 2020; and (v) 1.32 for all forecast periods. See "Capital Plan" on page 15 for information regarding foreign exchange sensitivity on forecast capital expenditures. Certain terms used in this Interim MD&A are defined in the "Glossary" on page 21.

ABOUT FORTIS

Fortis (TSX/NYSE: FTS) is a well-diversified leader in the North American regulated electric and gas utility industry, with 2020 revenue of $8.9 billion and total assets of $56 billion as at June 30, 2021. The Corporation's 9,000 employees serve 3.4 million utility customers in five Canadian provinces, nine US states and three Caribbean countries.

For additional information on the Corporation's operations, reportable segments and strategy, refer to the "About Fortis" section of the 2020 Annual MD&A and Note 1 to the Interim Financial Statements.

KEY DEVELOPMENTS

COVID-19 Pandemic

The Corporation's utilities continue to reliably and safely deliver an essential service during the COVID-19 Pandemic. Developments are continuously monitored with commensurate measures being taken. The Corporation's utilities have assessed supply chain risk and other potential impacts of the pandemic to ensure that they can continue to provide safe, reliable service while supporting public health.

1	FORTIS INC.	JUNE 30, 2021 QUARTER REPORT
Interim Management Discussion and Analysis
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The Corporation is continuing to assess economic conditions in its service territories and the associated impacts on: (i) energy sales, particularly for UNS Energy and the Other Electric segment as revenue in these segments is not protected by regulatory mechanisms; (ii) the ability of customers to pay their energy bills and the related impact on Operating Cash Flow; (iii) the progress of regulatory proceedings and the ability to recover costs in a timely manner; and (iv) the execution of the 2021 and five-year capital plan. The COVID-19 Pandemic did not have a significant impact on energy sales, earnings, EPS, Operating Cash Flow or capital expenditures for the six months ended June 30, 2021 and 2020. As well, ongoing regulatory proceedings continue to progress as anticipated.

While public health restrictions continue to ease across our jurisdictions, there continues to be uncertainty surrounding the pandemic, particularly the resurgences of variants of the virus and the efficacy and distribution of COVID-19 vaccines. Potential financial and operating impacts on Fortis are discussed in the "Significant Items" and "Business Risks" sections of the 2020 Annual MD&A.

American Jobs Plan and New Tax Proposals

In March 2021, the "American Jobs Plan" was released which outlined significant intended infrastructure spending, including investments in transmission, electrification and economic development, as well as electrical grid resilience. Fortis continues to review the plan to assess the impact on its forecast capital investments and energy sales.

The US federal government also released the "Made in America Tax Plan" which included proposals, amongst other things, to increase the corporate tax rate, amend rules associated with international taxation, and to introduce a transmission investment tax credit. Draft legislation has not yet been released but may be available in 2021 and could be enacted as early as the end of 2021. In April 2021, the Canadian federal budget was released which proposed changes in relation to interest deductibility and international taxation. Further information is expected to be available in the second half of 2021. Changes in tax legislation could affect the results of operations, financial condition and cash flows of the Corporation. Fortis will continue to assess the impacts as more details become available.

PERFORMANCE AT A GLANCE
Key Financial Metrics
Periods ended June 30			Year-to-Date
( millions, except as indicated)	2020	Variance	2021	2020	Variance
Revenue	2,077	53	4,669	4,468	201
Common Equity Earnings
Actual	274	(21)	608	586	22
Adjusted (1)	258	1	619	573	46
Basic EPS ()
Actual	0.59	(0.05)	1.30	1.26	0.04
Adjusted (1)	0.56	(0.01)	1.32	1.23	0.09
Dividends paid per common share ()	0.4775	0.0275	1.01	0.955	0.055
Weighted average number of common shares outstanding (# millions)	464.6	5.6	469.0	464.2	4.8
Operating Cash Flow	725	15	1,479	1,315	164
Capital Expenditures (2)	827	13	1,720	2,001	(281)

All values are in US Dollars.

(1)See "Non-US GAAP Financial Measures" on page 10.

(2)Includes $50 million and $126 million, which represents Fortis' share of capital spending, for the Wataynikaneyap Transmission Power Project for the three and six months ended June 30, 2021, respectively ($52 million and $64 million for the three and six months ended June 30, 2020, respectively)

Revenue

The $53 million and $201 million increase in revenue for the quarter and year-to-date periods, respectively, was due primarily to: (i) higher flow-through costs in customer rates; (ii) Rate Base growth; (iii) higher electricity sales; and (iv) new customer rates, effective January 1, 2021, at TEP. The increases were partially offset by: (i) unfavourable foreign exchange of $153 million and $227 million, respectively; and (ii) a $40 million favourable base ROE adjustment recognized at ITC in the second quarter of 2020 reflecting the reversal of liabilities accrued in prior periods as a result of the May 2020 FERC Decision.

2	FORTIS INC.	JUNE 30, 2021 QUARTER REPORT
Interim Management Discussion and Analysis
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Earnings and EPS

Common Equity Earnings for the quarter decreased by $21 million compared to the same period in 2020. The decrease was mainly due to a lower US-to-Canadian dollar exchange rate, resulting in a $24 million unfavorable variance, reflecting an average foreign exchange rate of 1.23 in the second quarter of 2021 compared to 1.39 in the same period of 2020. The decrease in earnings also reflected significant one-time items totalling $14 million recognized in the second quarter of 2020. The significant items included an adjustment to ITC's base ROE partially offset by the finalization of US tax reform and associated regulations.

Excluding the impact of foreign exchange and the one-time items, Common Equity Earnings increased by $17 million in the second quarter of 2021 due to: (i) Rate Base Growth; (ii) higher earnings in Arizona driven by warmer weather and new customer rates at TEP, partially offset by higher operating costs; and (iii) higher earnings in the Caribbean, reflecting the continued recovery from economic conditions experienced in 2020 associated with the COVID-19 Pandemic. This growth was partially offset by a lower income tax recovery at Corporate and the impact of mark-to-market accounting of natural gas derivatives at Aitken Creek.

Common Equity Earnings for the year-to-date period increased by $22 million compared to the same period in 2020. Excluding the unfavourable impact of foreign exchange and the above noted one-time items, year-to-date Common Equity Earnings increased by $68 million. The increase in earnings reflected the same factors discussed for the quarter, as well as the timing of earnings associated with losses recognized in the first half of 2020 on retirement investments at UNS Energy.

In addition to the above-noted items impacting earnings, the change in EPS for the quarter and year to date reflected an increase in the weighted average number of common shares outstanding, largely associated with the Corporation's DRIP.

For the quarter and year-to-date periods: (i) Adjusted Common Equity Earnings increased by $1 million and $46 million, respectively; and (ii) Adjusted Basic EPS decreased by $0.01 and increased by $0.09, respectively. Refer to "Non-US GAAP Financial Measures" on page 10 for a reconciliation of these measures. The changes in Adjusted Basic EPS for the quarter and year-to-date periods include the impact of unfavourable foreign exchange, as discussed above, and are illustrated in the following charts.

(1)UNS Energy and Central Hudson. Earnings at UNS Energy reflect higher retail electricity sales driven by warmer weather and the impact of new customer rates at TEP effective January 1, 2021, partially offset by higher operating costs related to planned generation maintenance. Earnings at Central Hudson reflect Rate Base growth and lower operating expenses, reflecting the timing of expenditures as well as a reduction in costs incurred related to the COVID-19 Pandemic

(2)Primarily reflects Rate Base growth

(3)Primarily reflects higher sales and earnings in the Caribbean, related to the continued recovery from economic conditions in 2020 associated with the COVID-19 Pandemic

(4)Average foreign exchange rate of 1.23 in 2021 compared to 1.39 in 2020

(5)Primarily reflects a lower income tax recovery

(6)Weighted average common shares of 470.2 million in 2021 compared to 464.6 million in 2020

3	FORTIS INC.	JUNE 30, 2021 QUARTER REPORT
Interim Management Discussion and Analysis
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(1)UNS Energy and Central Hudson. Earnings at UNS Energy reflect higher retail electricity sales driven by warmer weather, the impact of losses on retirement investments recognized in the first half of 2020 and the impact of new customer rates at TEP, partially offset by higher operating costs related to planned generation maintenance. Earnings at Central Hudson reflect Rate Base growth and lower operating expenses, reflecting the timing of expenditures as well as a reduction in costs incurred related to the COVID-19 Pandemic

(2)Primarily reflects Rate Base growth

(3)FortisBC Energy, FortisAlberta and FortisBC Electric. Primarily reflects Rate Base growth

(4)Primarily reflects higher earnings in the Caribbean, related to the continued recovery from economic conditions in 2020 associated with the COVID-19 Pandemic

(5)Reflects higher hydroelectric production in Belize and higher volumes and margins of natural gas sold at Aitken Creek

(6)Average foreign exchange rate of 1.25 in 2021 compared to 1.37 in 2020

(7)Weighted average common shares of 469.0 million in 2021 compared to 464.2 million in 2020

Dividends and TSR

Dividends paid per common share in the second quarter of 2021 were $0.505, up 5.8% from the same period in 2020.

Fortis has increased its common share dividend for 47 consecutive years. Growth of dividends and the market price of the Corporation's common shares have together yielded a one-year, three-year, five-year, 10-year and 20-year TSR of 10.3%, 13.4%, 8.6%, 9.4% and 13.4%, respectively.

The Corporation's targeted average annual dividend growth of approximately 6% through 2025 remains unchanged.

Operating Cash Flow

The $15 million and $164 million increase in Operating Cash Flow for the quarter and year-to-date periods, respectively, was due to higher cash earnings, reflecting Rate Base growth and new customer rates at TEP effective January 1, 2021, partially offset by higher generation maintenance costs at UNS Energy. Favourable changes in regulatory deferrals due to the timing of flow-through costs in customer rates, as well as lower transmission costs at FortisAlberta also contributed to the increase. The increases were partially offset by the lower US-to-Canadian dollar exchange rate, and for the quarter, the timing of carbon and provincial sales tax payments at FortisBC Energy which were deferred in the second quarter of 2020.

The economic impact of the COVID-19 Pandemic may affect customers' ability to pay their energy bills. Since the start of the pandemic, the Corporation's utilities instituted various customer relief initiatives, including the temporary suspension of non-payment disconnections. Accordingly, the Corporation has seen an increase in accounts receivable as at June 30, 2021 as compared to the same period last year. The impact on Operating Cash Flow for the three and six months ended June 30, 2021 associated with the slower collection of customer balances was offset by other changes in Operating Cash Flow discussed above. There has been no material change in credit loss expense for the three and six months ended June 30, 2021.

4	FORTIS INC.	JUNE 30, 2021 QUARTER REPORT
Interim Management Discussion and Analysis
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Capital Expenditures

Capital Expenditures were $1.7 billion year-to-date June 2021, representing 45% of the 2021 capital plan. Capital Expenditures year to date decreased by $0.3 billion compared to the same period in 2020, largely related to the construction of the Oso Grande Wind Project at UNS Energy, which was completed in May 2021.

The Corporation's annual $3.8 billion capital plan remains on track. Higher forecast capital expenditures for the year are expected to offset the impact of a lower foreign exchange rate.

The Corporation does not expect the COVID-19 Pandemic to impact its 2021 or overall five-year capital plan, although certain planned expenditures may shift within the five years depending on the continued evolution of the pandemic. See "Capital Plan" on page 15.

BUSINESS UNIT PERFORMANCE
Common Equity Earnings	Quarter				Year-to-Date
Periods ended June 30			Variance				Variance
($ millions)	2021	2020	FX (1)	Other	2021	2020	FX (1)	Other
Regulated Utilities
ITC	103	138	(16)	(19)	206	239	(22)	(11)
UNS Energy	83	85	(9)	7	128	113	(11)	26
Central Hudson	6	2	—	4	45	37	(2)	10
FortisBC Energy	15	16	—	(1)	126	122	—	4
FortisAlberta	36	33	—	3	71	65	—	6
FortisBC Electric	17	17	—	—	33	32	—	1
Other Electric (2)	34	24	(1)	11	54	47	(1)	8
	294	315	(26)	5	663	655	(36)	44
Non-Regulated
Energy Infrastructure (3)	(5)	3	—	(8)	9	12	—	(3)
Corporate and Other (4)	(36)	(44)	2	6	(64)	(81)	4	13
Common Equity Earnings	253	274	(24)	3	608	586	(32)	54

(1)    The reporting currency of ITC, UNS Energy, Central Hudson, Caribbean Utilities, FortisTCI and BECOL is the US dollar. The reporting currency of Belize Electricity is the Belizean dollar, which is pegged to the US dollar at BZ$2.00=US$1.00. The Corporate and Other segment includes certain transactions denominated in US dollars

(2)    Consists of the utility operations in eastern Canada and the Caribbean: Newfoundland Power; Maritime Electric; FortisOntario; Caribbean Utilities; FortisTCI; and Belize Electricity.

(3)    Primarily consists of long-term contracted generation assets in Belize and Aitken Creek in British Columbia

(4)    Includes Fortis net corporate expenses and non-regulated holding company expenses

ITC	Quarter				Year-to-Date
Periods ended June 30			Variance				Variance
($ millions)	2021	2020	FX	Other	2021	2020	FX	Other
Revenue (1)	418	477	(56)	(3)	844	910	(81)	15
Earnings (1)	103	138	(16)	(19)	206	239	(22)	(11)

(1)Revenue represents 100% of ITC. Earnings represent the Corporation's 80.1% controlling ownership interest in ITC and reflect consolidated purchase price accounting adjustments.

Revenue

The decrease in revenue, net of foreign exchange, for the quarter reflects a $40 million favourable base ROE adjustment recognized in the second quarter of 2020, related to prior periods as a result of the May 2020 FERC Decision. The decrease was partially offset by higher flow-through costs in customer rates and Rate Base growth.

The increase in revenue, net of foreign exchange, year to date reflects higher flow-through costs in customer rates and Rate Base growth, partially offset by the $40 million favourable base ROE adjustment as a result of the May 2020 FERC Decision, discussed above.

5	FORTIS INC.	JUNE 30, 2021 QUARTER REPORT
Interim Management Discussion and Analysis
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Earnings

The decrease in earnings, net of foreign exchange, for the quarter and year-to-date periods reflected a $27 million favourable base ROE adjustment as a result of the May 2020 FERC Decision. Excluding this one-time impact, earnings increased for the quarter and year-to-date periods reflecting Rate Base growth.

UNS ENERGY	Quarter				Year-to-Date
Periods ended June 30			Variance				Variance
($ millions, except as indicated)	2021	2020	FX	Other	2021	2020	FX	Other
Retail electricity sales (GWh)	2,820	2,735	—	85	4,970	4,903	—	67
Wholesale electricity sales<br><br>(GWh) (1)	1,317	1,201	—	116	3,044	2,531	—	513
Gas sales (PJ)	2	2	—	—	9	8	—	1
Revenue	556	546	(63)	73	1,078	1,019	(91)	150
Earnings	83	85	(9)	7	128	113	(11)	26

(1)    Primarily short-term wholesale sales

Sales

The increase in retail electricity sales for the quarter and year-to-date periods was due primarily to higher cooling load in the second quarter of 2021 due to warmer temperatures as compared to the same periods in 2020.

The increase in wholesale electricity sales for the quarter and year-to-date periods was due primarily to favourable market pricing. Revenue from short-term wholesale sales is primarily credited to customers through regulatory deferral mechanisms and, therefore, does not materially impact earnings.

Gas sales were consistent with the comparable periods in 2020.

Revenue

The increase in revenue, net of foreign exchange, for the quarter and year-to-date periods was due primarily to: (i) new customer rates effective January 1, 2021 at TEP; (ii) higher short-term wholesale electricity sales reflecting favourable pricing and volumes; (iii) higher retail electricity sales driven by warmer weather; and (iv) higher recovery of fuel and non-fuel costs through the normal operation of regulatory mechanisms.

Earnings

The increase in earnings, net of foreign exchange, for the quarter and year-to-date periods was due to higher retail electricity sales driven by warmer weather and the impact of new customer rates at TEP, partially offset by higher operating costs related to planned generation maintenance. The year-to-date increase also reflects losses recognized in the first half of 2020 on certain investments that support retirement benefits.

Changes in 2020 in the market value of investments that support retirement benefits were driven by financial market volatility associated with the COVID-19 Pandemic. The losses recognized through the first half of 2020 were substantially recovered by the end of 2020, but did impact the timing of quarterly earnings.

CENTRAL HUDSON	Quarter				Year-to-Date
Periods ended June 30			Variance				Variance
($ millions, except as indicated)	2021	2020	FX	Other	2021	2020	FX	Other
Electricity sales (GWh)	1,151	1,105	—	46	2,441	2,348	—	93
Gas sales (PJ)	5	4	—	1	14	12	—	2
Revenue	207	206	(24)	25	492	486	(40)	46
Earnings	6	2	—	4	45	37	(2)	10
6	FORTIS INC.	JUNE 30, 2021 QUARTER REPORT
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Interim Management Discussion and Analysis
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Sales

The increase in electricity sales for the quarter and year-to-date periods was due primarily to higher average consumption by commercial customers as the COVID-19 Pandemic caused the temporary closure of non-essential businesses in 2020. Higher average consumption by residential customers, due partly to work-from-home practices associated with the COVID-19 Pandemic, also contributed to the increase in electricity sales year to date.

Gas sales were relatively consistent with the comparable periods in 2020.

Changes in electricity and gas sales at Central Hudson are subject to regulatory revenue decoupling mechanisms and, therefore, do not materially impact earnings.

Revenue

The increase in revenue, net of foreign exchange, for the quarter and year-to-date periods was due primarily to: (i) an increase in gas and electricity delivery rates effective July 1, 2020, reflecting a return on increased Rate Base assets as well as the recovery of higher operating and financing expenses; and (ii) the flow through of higher energy supply costs driven by higher sales and commodity prices.

Earnings

The increase in earnings, net of foreign exchange, for the quarter and year-to-date periods was due primarily to: (i) Rate Base growth, discussed above; and (ii) lower operating expenses, reflecting the timing of expenditures as well as a reduction in credit loss expense and other costs incurred related to the COVID-19 Pandemic as compared to 2020.

FORTISBC ENERGY
Periods ended June 30	Quarter			Year-to-Date
($ millions, except as indicated)	2021	2020	Variance	2021	2020	Variance
Gas sales (PJ)	42	41	1	122	123	(1)
Revenue	317	249	68	903	715	188
Earnings	15	16	(1)	126	122	4

Sales

Gas sales for the quarter and year-to-date periods were relatively consistent with the comparable periods in 2020.

Revenue

The increase in revenue for the quarter and year-to-date periods was due primarily to a higher cost of natural gas recovered from customers, the normal operation of regulatory deferrals, and Rate Base growth.

Earnings

The decrease in earnings for the quarter was due primarily to the timing of operating expenses, partially offset by Rate Base growth.

The increase in earnings year to date was due primarily to Rate Base growth.

FortisBC Energy earns approximately the same margin regardless of whether a customer contracts for the purchase and delivery of natural gas or only for the delivery. Due to regulatory deferral mechanisms, changes in consumption levels and commodity costs do not materially impact earnings.

FORTISALBERTA
Periods ended June 30	Quarter			Year-to-Date
($ millions, except as indicated)	2021	2020	Variance	2021	2020	Variance
Electricity deliveries (GWh)	3,777	3,628	149	8,189	8,181	8
Revenue	162	150	12	320	302	18
Earnings	36	33	3	71	65	6
7	FORTIS INC.	JUNE 30, 2021 QUARTER REPORT
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Interim Management Discussion and Analysis
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Deliveries

The increase in electricity deliveries for the quarter was due to higher average consumption driven by warmer temperatures compared to the same period in 2020, as well as customer additions.

Energy deliveries year to date were relatively consistent with the same period in 2020.

As approximately 85% of FortisAlberta's revenue is derived from fixed or largely fixed billing determinants, changes in quantities of electricity delivered are not entirely correlated with changes in revenue. Revenue is a function of numerous variables, many of which are independent of actual electricity deliveries.

Revenue and Earnings

The increases in revenue and earnings for the quarter and year-to-date periods were due primarily to Rate Base growth and customer additions, as well as higher revenue associated with a long-term energy retailer agreement. Colder-than-normal temperatures in the first quarter of 2021 also contributed to the year-to-date increase in revenue and earnings.

FORTISBC ELECTRIC
Periods ended June 30	Quarter			Year-to-Date
($ millions, except as indicated)	2021	2020	Variance	2021	2020	Variance
Electricity sales (GWh)	771	691	80	1,704	1,606	98
Revenue	108	91	17	228	205	23
Earnings	17	17	—	33	32	1

Sales

The increase in electricity sales for the quarter and year-to-date periods was due primarily to higher average consumption by: (i) residential customers, as a result of warmer temperatures compared to the same periods in 2020; and (ii) commercial and industrial customers, largely reflecting the COVID-19 Pandemic which caused the temporary closure of non-essential businesses in 2020.

Revenue

The increase in revenue for the quarter and year-to-date periods was due to: (i) higher electricity sales, partially offset by the normal operation of regulatory deferrals; (ii) an increase in third-party contract work; and (iii) Rate Base growth.

Earnings

Earnings for the quarter were consistent with the comparable period in 2020 as the impact of Rate Base growth was offset by the timing of operating expenses.

The increase in earnings year to date was due primarily to Rate Base growth.

Due to regulatory deferral mechanisms, changes in consumption levels do not materially impact earnings.

OTHER ELECTRIC	Quarter				Year-to-Date
Periods ended June 30			Variance				Variance
($ millions, except as indicated)	2021	2020	FX	Other	2021	2020	FX	Other
Electricity sales (GWh)	2,164	2,109	—	55	5,006	5,047	—	(41)
Revenue	353	345	(10)	18	766	793	(15)	(12)
Earnings	34	24	(1)	11	54	47	(1)	8

Sales

The increase in electricity sales for the quarter was due primarily to overall higher average consumption across the utilities, reflecting the continued recovery from the impacts of the COVID-19 Pandemic in 2020, including the temporary closure of non-essential businesses and lower tourism-related activities in the Caribbean.

The decrease in electricity sales year to date reflected lower average consumption at Newfoundland Power in the first quarter of 2021, partially offset by higher sales across the other utilities reflecting the continued recovery from the COVID-19 Pandemic, discussed above.

8	FORTIS INC.	JUNE 30, 2021 QUARTER REPORT
Interim Management Discussion and Analysis
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Revenue

The increase in revenue, net of foreign exchange, for the quarter reflected higher sales.

The decrease in revenue, net of foreign exchange, year to date was due to lower sales, partially offset by Rate Base growth.

Earnings

The increase in earnings, net of foreign exchange, for the quarter and year-to-date periods primarily reflected the continued recovery of economic conditions in the Caribbean, as discussed above, as well as Rate Base growth.

ENERGY INFRASTRUCTURE
Periods ended June 30	Quarter			Year-to-Date
($ millions, except as indicated)	2021	2020	Variance	2021	2020	Variance
Electricity sales (GWh)	26	34	(8)	79	50	29
Revenue	9	13	(4)	38	38	—
Earnings	(5)	3	(8)	9	12	(3)

Sales

The change in electricity sales for the quarter and year-to-date periods reflected variations in hydroelectric production in Belize associated with rainfall levels.

Revenue and Earnings

The change in revenue and earnings for the quarter and year-to-date periods reflected unfavourable changes in the mark-to-market accounting of natural gas derivatives at Aitken Creek, with unrealized losses of $6 million during the second quarter of 2021 compared to unrealized gains of $2 million for the same period last year, and unrealized losses of $11 million year to date compared to unrealized losses of $1 million for the same period last year.

Excluding the impact of mark-to-market accounting, revenue and earnings for the quarter were relatively consistent with the comparable period in 2020. Revenue and earnings year to date increased by $10 million and $7 million, respectively, driven by higher hydroelectric production in Belize and higher volumes and margins of natural gas sold at Aitken Creek.

Aitken Creek is subject to commodity price risk, as it purchases and holds natural gas in storage to earn a profit margin from its ultimate sale. Aitken Creek mitigates this risk by using derivatives to materially lock in the profit margin that will be realized upon the sale of natural gas. The fair value accounting of these derivatives creates timing differences and the resultant earnings volatility can be significant.

CORPORATE AND OTHER	Quarter				Year-to-Date
Periods ended June 30			Variance				Variance
($ millions)	2021	2020	FX	Other	2021	2020	FX	Other
Net expenses	(36)	(44)	2	6	(64)	(81)	4	13

The decrease in net expenses, net of foreign exchange, for the quarter and year-to-date periods was primarily due to the reversal of a $13 million tax recovery in 2020, originally recognized in 2019, resulting from the finalization of US tax reform and associated anti-hybrid regulations.

Excluding this impact, net expenses were higher in the quarter due to a lower income tax recovery resulting from a higher consolidated state tax rate associated with changes in regional sales mix. On a year-to-date basis, net expenses were consistent with 2020 as the impact of the lower income tax recovery was offset by mark-to-market gains on total return swaps.

9	FORTIS INC.	JUNE 30, 2021 QUARTER REPORT
Interim Management Discussion and Analysis
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NON-US GAAP FINANCIAL MEASURES

Adjusted Common Equity Earnings and Adjusted Basic EPS are Non-US GAAP Financial Measures and may not be comparable with similar measures used by other entities. They are presented because management and external stakeholders use them in evaluating the Corporation's financial performance and prospects.

Net earnings attributable to common equity shareholders (i.e., Common Equity Earnings) and basic EPS are the most directly comparable US GAAP measures to Adjusted Common Equity Earnings and Adjusted Basic EPS, respectively.

Adjusted Common Equity Earnings and Adjusted Basic EPS reflect the removal of items that management excludes in its key decision-making processes and evaluation of operating results, and are reconciled as follows.

Non-US GAAP Reconciliation
Periods ended June 30	Quarter			Year-to-Date
($ millions, except as indicated)	2021	2020	Variance	2021	2020	Variance
Common equity earnings	253	274	(21)	608	586	22
Adjusting items:
Unrealized loss (gain) on mark-to-market of derivatives (1)	6	(2)	8	11	1	10
May 2020 FERC Decision (2)	—	(27)	27	—	(27)	27
US tax reform (3)	—	13	(13)	—	13	(13)
Adjusted Common Equity Earnings	259	258	1	619	573	46
Adjusted Basic EPS ($)	0.55	0.56	(0.01)	1.32	1.23	0.09

(1)Represents timing differences related to the accounting of natural gas derivatives at Aitken Creek, included in the Energy Infrastructure segment

(2)Represents prior period impacts of the May 2020 FERC Decision, included in the ITC segment

(3)Represents income tax expense, reflecting the reversal of income tax recoveries recognized in prior periods, resulting from the finalization of US tax reform and associated anti-hybrid regulations, included in the Corporate and Other segment

REGULATORY HIGHLIGHTS

ITC

Transmission Incentives: In April 2021, FERC issued a supplemental NOPR on transmission incentives modifying the proposal in the initial NOPR released in March 2020. The supplemental NOPR proposes to eliminate the 50-basis point RTO ROE incentive adder for existing RTO members that have been members longer than three years, like ITC. In June 2021, ITC filed its comments on the supplemental NOPR supporting the continuation of the ROE incentive adder for RTO members. The timeline for FERC to issue a final rule in this proceeding and the likely outcome cannot be determined at this time. Although any potential impact to Fortis remains uncertain, every 10-basis point change in ROE at ITC impacts Fortis' annual EPS by approximately $0.01.

Central Hudson

General Rate Application: In August 2020, Central Hudson filed a rate application with the PSC requesting an increase in electric and natural gas delivery revenue of $44 million and $19 million, respectively, effective July 1, 2021. In January 2021, Central Hudson filed a notice of impending settlement negotiations and negotiations began in February 2021. An order from the PSC is expected in 2021.

COVID-19 Proceeding: The generic proceeding initiated by the PSC in June 2020 to identify and address the financial effects of the COVID-19 Pandemic and any associated cost recovery is ongoing. The potential impacts of this proceeding are unknown at this time.

FortisBC Energy and FortisBC Electric

GCOC Proceeding: In January 2021, the BCUC announced the initiation of a GCOC proceeding including a review of the common equity component of capital structure and the allowed ROE. The scope and timeline of the proceeding continues to evolve and the effective date of any change in the cost of capital is unknown at this time.

10	FORTIS INC.	JUNE 30, 2021 QUARTER REPORT
Interim Management Discussion and Analysis
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FortisAlberta

GCOC Proceeding: In March 2021, the AUC concluded the 2022 GCOC proceeding and extended the existing allowed ROE of 8.5% using a 37% equity component of capital structure through 2022. The Office of the UCA has filed an application seeking permission to appeal the decision to the Alberta Court of Appeal. The Office of the UCA also filed an application with the AUC in April 2021 and a decision on whether the AUC will review, and potentially vary, its 2022 GCOC decision is expected in the third quarter of 2021.

2023 COS Application: The final year of FortisAlberta's second PBR term is 2022. In June 2021, the AUC issued a decision confirming the approach to be adopted by Alberta distribution utilities for the COS rebasing year in 2023. FortisAlberta is required to file its 2023 COS application in the fourth quarter of 2021.

Third PBR Term: In July 2021, the AUC issued a decision confirming that Alberta distribution utilities will be subject to a third PBR term commencing in 2024 with going-in rates based on the 2023 COS rebasing. The AUC also initiated a new proceeding to consider the design of the third PBR term. FortisAlberta will submit comments with respect to the design of the third PBR term in 2022 and a decision from the AUC is expected in 2023.

Independent System Operator Tariff Proceeding: In April 2021, the AUC issued a decision confirming that distribution facility owners, such as FortisAlberta, will no longer be permitted to earn a return on AESO contributions made on a prospective basis from the date of the decision. Contributions made prior to that date are not impacted. This decision is not expected to have a material financial impact on the Corporation.

FINANCIAL POSITION

Significant Changes between June 30, 2021 and December 31, 2020
	Increase (Decrease)
	FX	Other
Balance Sheet Account	($ millions)	($ millions)	Explanation
Cash and cash equivalents	(6)	356	Reflects the issuance of debt at UNS Energy in the second quarter of 2021, for which a portion of the proceeds is expected to be used to repay US$250 million of maturing debt in the second half of 2021.
Regulatory assets (current and long-term)	(32)	142	Due primarily to: (i) the operation of rate stabilization accounts, largely at UNS Energy, reflecting higher energy costs resulting from a severe winter storm in southwestern US in February 2021; and (ii) deferred income taxes.
Property, plant and equipment, net	(578)	810	Due to capital expenditures, partially offset by depreciation.
Goodwill	(266)	—
Short-term borrowings	(3)	140	Reflects the issuance of commercial paper at ITC to finance working capital and capital investment requirements.
Accounts payable and other current liabilities	(30)	(233)	Due to the timing of the declaration of common share dividends, partially offset by higher energy supply costs at UNS Energy.
Deferred income tax liabilities	(49)	141	Due to higher temporary differences associated with ongoing capital investment.
11	FORTIS INC.	JUNE 30, 2021 QUARTER REPORT
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Interim Management Discussion and Analysis
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Significant Changes between June 30, 2021 and December 31, 2020
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	Increase (Decrease)
	FX	Other
Balance Sheet Account	($ millions)	($ millions)	Explanation
Long-term debt (including current portion)	(416)	714	Reflects the issuance of debt at Corporate and the regulated utilities, for which a portion of the proceeds will be used to repay maturing debt in the second half of 2021.
Shareholders' equity	(337)	593	Due primarily to: (i) Common Equity Earnings for the six months ended June 30, 2021, less dividends declared on common shares; and (ii) the issuance of common shares.

LIQUIDITY AND CAPITAL RESOURCES

CASH FLOW REQUIREMENTS

At the subsidiary level, it is expected that operating expenses and interest costs will be paid from Operating Cash Flow, with varying levels of residual cash flow available for capital expenditures and/or dividend payments to Fortis. Remaining capital expenditures are expected to be financed primarily from borrowings under credit facilities, long-term debt offerings and equity injections from Fortis. Borrowings under credit facilities may be required periodically to support seasonal working capital requirements.

Cash required by Fortis to support subsidiary growth is generally derived from borrowings under the Corporation's committed credit facility, the operation of the DRIP, and issuances of common shares, preference equity and long-term debt. The subsidiaries pay dividends to Fortis and receive equity injections from Fortis when required. Both Fortis and its subsidiaries initially borrow through their committed credit facilities and periodically replace these borrowings with long-term financing. Financing needs also arise periodically for acquisitions and to refinance maturing debt.

Credit facilities are syndicated primarily with large banks in Canada and the US, with no one bank holding more than approximately 20% of the total facilities. Approximately $4.7 billion of the total credit facilities are committed with maturities ranging from 2022 through 2026. Available credit facilities are summarized in the following table.

Credit Facilities
As at		Corporate<br>and Other	June 30,	December 31,<br>2020
( millions)	2021
Total credit facilities (1)		1,380	4,936	5,581
Credit facilities utilized:
Short-term borrowings		—	(269)	(132)
Long-term debt (including current portion)		(68)	(659)	(980)
Letters of credit outstanding		(47)	(116)	(130)
Credit facilities unutilized		1,265	3,892	4,339

All values are in US Dollars.

(1)    See Note 14 in the 2020 Annual Financial Statements for a description of the credit facilities as at December 31, 2020.

In April 2021, the Corporation's unsecured $500 million revolving 1-year term committed credit facility expired and was not renewed, and in June 2021, the Corporation extended its unsecured $1.3 billion revolving term committed credit facility to July 2026.

12	FORTIS INC.	JUNE 30, 2021 QUARTER REPORT
Interim Management Discussion and Analysis
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The Corporation's ability to service debt and pay dividends is dependent on the financial results of, and the related cash payments from, its subsidiaries. Certain regulated subsidiaries are subject to restrictions that limit their ability to distribute cash to Fortis, including restrictions by certain regulators limiting annual dividends and restrictions by certain lenders limiting debt to total capitalization. There are also practical limitations on using the net assets of the regulated subsidiaries to pay dividends, based on management's intent to maintain the subsidiaries' regulator-approved capital structures. Fortis does not expect that maintaining such capital structures will impact its ability to pay dividends in the foreseeable future.

As at June 30, 2021, consolidated fixed-term debt maturities/repayments are expected to average $849 million annually over the next five years and approximately 83% of the Corporation's consolidated long-term debt, excluding credit facility borrowings, had maturities beyond five years.

In December 2020, 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. In May 2021, the Corporation issued 7-year $500 million unsecured senior notes at 2.18% and, as at June 30, 2021, $1.5 billion remained available under the short-form base shelf prospectus.

Fortis is well positioned with strong liquidity. The combination of available credit facilities and manageable annual debt maturities/repayments provides flexibility in the timing of access to capital markets. Given current credit ratings and capital structures, the Corporation and its subsidiaries currently expect to continue to have reasonable access to long-term capital in 2021.

Fortis and its subsidiaries were in compliance with debt covenants as at June 30, 2021 and are expected to remain compliant throughout 2021.

CASH FLOW SUMMARY
Summary of Cash Flows
Periods ended June 30	Quarter			Year-to-Date
($ millions)	2021	2020	Variance	2021	2020	Variance
Cash, beginning of period	317	272	45	249	370	(121)
Cash provided from (used in):
Operating activities	740	725	15	1,479	1,315	164
Investing activities	(820)	(808)	(12)	(1,658)	(1,997)	339
Financing activities	357	201	156	526	687	(161)
Effect of exchange rate changes on cash and cash equivalents	5	(10)	15	3	5	(2)
Cash, end of period	599	380	219	599	380	219

Operating Activities

See "Performance at a Glance - Operating Cash Flow" on page 4.

Investing Activities

Cash used in investing activities for the quarter was comparable to the same period in 2020. The decrease in cash used in investing activities year to date reflects higher capital expenditures in the first half of 2020, largely related to the Oso Grande Wind Project at UNS Energy. See "Performance at a Glance - Capital Expenditures" on page 5 and "Capital Plan" on page 15.

Financing Activities

Cash flows related to financing activities will fluctuate largely as a result of changes in the subsidiaries' capital expenditures and the amount of Operating Cash Flow available to fund those capital expenditures, which together impact the amount of funding required from debt and common equity issuances. The increase in cash provided from financing activities for the quarter also reflects debt issuances at Fortis and UNS Energy in the second quarter of 2021, for which a portion of the proceeds is expected to be used to repay maturing debt in the second half of the year.

13	FORTIS INC.	JUNE 30, 2021 QUARTER REPORT
Interim Management Discussion and Analysis
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Debt Financing
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Long-Term Debt Issuances		Interest
Year-to-date June 30, 2021	Month	Rate				Use of Proceeds
($ millions, except as noted)	Issued	(%)	Maturity	Amount
UNS Energy
Unsecured senior notes	May	3.25	2051	US	325	(1) (2)
Central Hudson
Unsecured senior notes	March	3.29	2051	US	75	(1) (2)
FortisBC Energy
Unsecured debentures	April	2.42	2031	150		(3)
Fortis
Unsecured senior notes	May	2.18	2028	500		(1) (2) (3)

(1)    Repay maturing long-term debt

(2)    General corporate purposes

(3)    Repay credit facility borrowings

In July 2021, ITC priced 30-year US$75 million series A secured senior notes at 2.90% with an expected issuance date in August 2021, with a delayed issuance of another US$75 million series B secured senior notes at 3.05% expected to be issued in May 2022. The net proceeds are expected to fund or refinance a portfolio of eligible green projects, repay credit facility borrowings, fund capital expenditures and be used for other general corporate purposes.

Common Equity Financing
Common Equity Issuances and Dividends Paid
Periods ended June 30	Quarter			Year-to-Date
($ millions, except as indicated)	2021	2020	Variance	2021	2020	Variance
Common shares issued:
Cash (1)	9	10	(1)	44	44	—
Non-cash (2)	87	10	77	177	19	158
Total common shares issued ($)	96	20	76	221	63	158
Number of common shares issued<br><br>(# millions)	1.8	0.4	1.4	4.4	1.3	3.1
Common share dividends paid:
Cash	(150)	(211)	61	(297)	(424)	127
Non-cash (3)	(87)	(10)	(77)	(176)	(18)	(158)
Total common share dividends paid ($)	(237)	(221)	(16)	(473)	(442)	(31)
Dividends paid per common share ($)	0.5050	0.4775	0.0275	1.010	0.955	0.055

(1)    Includes common shares issued under stock option and employee share purchase plans

(2)    Common shares issued under the DRIP and stock option plan. The 2% discount offered on common share issuances under the DRIP was reinstated December 1, 2020.

(3)    Common share dividends reinvested under the DRIP

On February 11, 2021 and July 28, 2021, Fortis declared a dividend of $0.505 per common share payable on June 1, 2021 and September 1, 2021, respectively. The payment of dividends is at the discretion of the board of directors and depends on the Corporation's financial condition and other factors.

CONTRACTUAL OBLIGATIONS

There were no material changes to the contractual obligations disclosed in the 2020 Annual MD&A, except issuances of long-term debt and credit facility utilization. See "Cash Flow Summary" on page 13.

Off-Balance Sheet Arrangements

There were no material changes to off-balance sheet arrangements from those disclosed in the 2020 Annual MD&A.

14	FORTIS INC.	JUNE 30, 2021 QUARTER REPORT
Interim Management Discussion and Analysis
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CAPITAL STRUCTURE AND CREDIT RATINGS

Fortis requires ongoing access to capital and, therefore, targets a consolidated long-term capital structure that will enable it to maintain investment-grade credit ratings. The regulated utilities maintain their own capital structures in line with those reflected in customer rates.

Consolidated Capital Structure
As at	June 30,	December 31,
(%)	2021	2020
Debt (1)	54.6	54.8
Preference shares	3.6	3.6
Common shareholders' equity and minority interest (2)	41.8	41.6
	100.0	100.0

(1)    Includes long-term debt and finance leases, including current portion, and short-term borrowings, net of cash

(2)    Includes minority interest of 3.5% as at June 30, 2021 (December 31, 2020 - 3.5%)

Outstanding Share Data

As at July 28, 2021, the Corporation had issued and outstanding 471.2 million common shares and the following First Preference Shares: 5.0 million Series F; 9.2 million Series G; 7.7 million Series H; 2.3 million Series I; 8.0 million Series J; 10.0 million Series K; and 24.0 million Series M.

Only the common shares of the Corporation have voting rights. The Corporation's first preference shares do not have voting rights unless and until Fortis fails to pay eight quarterly dividends, whether or not consecutive or declared.

If all outstanding stock options were exercised as at July 28, 2021, an additional 3.0 million common shares would be issued and outstanding.

Credit Ratings

The Corporation's credit ratings shown below reflect its low risk profile, diversity of operations, the stand-alone nature and financial separation of each regulated subsidiary, and the level of holding company debt.

As at June 30, 2021	Rating	Type	Outlook
S&P	A-	Corporate	Stable
	BBB+	Unsecured debt
DBRS Morningstar	A (low)	Corporate	Stable
	A (low)	Unsecured debt
Moody's	Baa3	Issuer	Stable
	Baa3	Unsecured debt

In April 2021, S&P affirmed the Corporation's credit ratings and revised the ratings outlook to stable from negative, reflecting Fortis' operational and financial stability during the COVID-19 Pandemic and the expectation that this will continue. S&P also revised the ratings outlook for ITC, TEP and FortisAlberta to stable from negative.

In May 2021, DBRS Morningstar upgraded Fortis' corporate and unsecured debt credit ratings to A (low) from BBB (high). The upgrade reflects Fortis' business risk profile, improved credit metrics, financial resiliency during the COVID-19 Pandemic, and the expectation that this will continue.

CAPITAL PLAN

Year-to-date Capital Expenditures of $1.7 billion are consistent with expectations and are on track with the Corporation's annual $3.8 billion capital plan. Currently, the Corporation does not expect any material change in the 2021 capital plan. Higher than anticipated capital expenditures for the year are expected to offset the impact of the lower than forecast US-to-Canadian dollar exchange rate. The composition of the 2021 capital plan remains unchanged with 31% related to growth, 54% sustaining and 15% for other areas.

15	FORTIS INC.	JUNE 30, 2021 QUARTER REPORT
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The Corporation does not expect the COVID-19 Pandemic to impact its 2021 or overall five-year capital plan, although certain planned expenditures may shift within the five years depending on the continued evolution of the pandemic. See "Performance at a Glance - Capital Expenditures" on page 5, "Business Risks" on page 16 and "Outlook" on page 19.

Capital Expenditures (1)
Year-to-date June 30, 2021
( millions)
	Central	FortisBC	Fortis	FortisBC	Other	Total	Non-
ITC	Hudson	Energy	Alberta	Electric	Electric	Regulated	Regulated (2)	Total
546	133	192	186	58	264	1,716	4	1,720

All values are in US Dollars.

(1)    Reflects cash outlay for property, plant and equipment and intangible assets as shown on the consolidated statements of cash flows in the Interim Financial Statements, as well as $126 million representing Fortis' share of capital spending for the Wataynikaneyap Transmission Power Project included in the Other Electric segment.

(2)    Energy Infrastructure segment

Five-Year Capital Plan

The Corporation's five-year 2021-2025 capital plan is targeted at $19.6 billion, which includes $3.8 billion for 2021 and an average of $4.0 billion per year for the remaining four years of the plan. The capital plan is low risk and highly executable, with 99% of planned expenditures to occur at the regulated utilities and only 15% relating to Major Capital Projects.

The current US-to-Canadian dollar exchange rate is lower than the foreign exchange rate of 1.32 assumed in the 2021-2025 capital plan. On average, Fortis estimates that a five-cent increase or decrease in the US dollar relative to the Canadian dollar would increase or decrease capital expenditures by approximately $400 million over the five-year planning period.

Planned capital expenditures are based on detailed forecasts of energy sales, labour and material costs, general economic conditions, foreign exchange rates and other factors. These could change for many reasons, including the COVID-19 Pandemic, and cause actual expenditures to differ from forecast.

Major Capital Project Updates

Oso Grande Wind Project

In May 2021, construction of UNS Energy's 250 MW wind-powered electric generating facility was completed.

Transmission Integrity Management Capabilities Project

This FortisBC Energy project will improve gas line safety and transmission integrity, including gas line modifications and looping. In February 2021, FortisBC Energy filed a CPCN application with the BCUC for the coastal transmission system section of this project.

AMI Project

This FortisBC Energy project includes replacement of residential and small commercial meters and installation of bypass valves to avoid any potential future interruption of gas service. In May 2021, FortisBC Energy filed a CPCN application with the BCUC for this project.

BUSINESS RISKS

The Corporation's business risks remain substantially unchanged from those disclosed in its 2020 Annual MD&A. See "Key Developments" on page 1, "Regulatory Highlights" on page 10 and "Capital Structure and Credit Ratings" on page 15 for applicable updates.

ACCOUNTING MATTERS

Accounting Policies

The Interim Financial Statements have been prepared following the same accounting policies and methods as those used to prepare the 2020 Annual Financial Statements.

16	FORTIS INC.	JUNE 30, 2021 QUARTER REPORT
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Critical Accounting Estimates

The preparation of the Interim Financial Statements requires 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 and contingencies. Actual results could differ materially from estimates.

There were no material changes to the nature of the Corporation's critical accounting estimates or contingencies from that disclosed in the 2020 Annual MD&A.

Allowance for Credit Losses

The amount of estimation and judgment involved in the Corporation's allowance for credit losses has increased as the impact of the COVID-19 Pandemic on forecast economic and other conditions continues to be monitored. In response to the pandemic, certain of the Corporation's utilities temporarily suspended non-payment disconnects. While the Corporation has seen an increase in accounts receivable and, accordingly, its allowance for credit losses since the start of the pandemic in March 2020, there has been no material change in credit loss expense for the three and six months ended June 30, 2021. Additional information on the Corporation's allowance for credit losses and credit risk is provided in Notes 5 and 13 in the Interim Financial Statements.

FINANCIAL INSTRUMENTS

LONG-TERM DEBT AND OTHER

As at June 30, 2021, the carrying value of long-term debt including the current portion, was $24.8 billion (December 31, 2020 - $24.5 billion) compared to an estimated fair value of $28.1 billion (December 31, 2020 - $29.1 billion). Since Fortis does not intend to settle long-term debt prior to maturity, the excess of fair value over carrying value does not represent an actual liability.

The consolidated carrying value of the remaining financial instruments, other than derivatives, approximates fair value, reflecting their short-term maturity, normal trade credit terms and/or nature.

DERIVATIVES

Derivatives are recorded at fair value with certain exceptions including those derivatives that qualify for the normal purchase and normal sale exception.

There were no material changes with respect to the nature and purpose, methodologies for fair value determination, and carrying values of the Corporation's derivatives from that disclosed in the 2020 Annual MD&A. Additional details are provided in Note 13 to the Interim Financial Statements.

SUMMARY OF QUARTERLY RESULTS
		Common Equity
	Revenue	Earnings	Basic EPS	Diluted EPS
Quarter ended	($ millions)	($ millions)	($)	($)
June 30, 2021	2,130	253	0.54	0.54
March 31, 2021	2,539	355	0.76	0.76
December 31, 2020	2,346	331	0.71	0.71
September 30, 2020	2,121	292	0.63	0.63
June 30, 2020	2,077	274	0.59	0.59
March 31, 2020	2,391	312	0.67	0.67
December 31, 2019	2,326	346	0.77	0.77
September 30, 2019	2,051	278	0.64	0.63

Generally, within each calendar year, quarterly results fluctuate primarily in accordance with seasonality. Given the diversified nature of the Corporation's subsidiaries, seasonality varies. Most of the annual earnings of the gas utilities are realized in the first and fourth quarters due to space-heating requirements. Earnings for the electric distribution utilities in the US are generally highest in the second and third quarters due to the use of air conditioning and other cooling equipment.

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Generally, from one calendar year to the next, quarterly results reflect: (i) continued organic growth driven by the Corporation's capital plan; (ii) any significant temperature fluctuations from seasonal norms; (iii) the timing and significance of any regulatory decisions; (iv) changes in the US-to-Canadian dollar exchange rate; (v) any acquisitions and dispositions; (vi) for revenue, the flow through in customer rates of commodity costs; and (vii) for EPS, increases in the weighted average number of common shares outstanding.

June 2021/June 2020

See "Performance at a Glance" on page 2.

March 2021/March 2020

Common Equity Earnings increased by $43 million and basic EPS increased by $0.09, respectively, due primarily to Rate Base growth, new customer rates at TEP effective January 1, 2021 and higher hydroelectric production in Belize. The impact of losses on retirement investments and foreign exchange contracts recognized in March 2020 at UNS Energy and Corporate, respectively, also favourably impacted the year-over-year change. The increase was partially offset by higher operating costs related to planned generation maintenance at UNS Energy and unfavourable foreign exchange. The change in basic EPS also reflected an increase in the weighted average number of common shares outstanding, largely associated with the DRIP.

December 2020/December 2019

Common Equity Earnings decreased by $15 million and basic EPS decreased by $0.06, due mainly to the implementation of the November 2019 FERC decision at ITC in the fourth quarter of 2019 including the reversal of prior period liabilities. This impact was partially offset by: (i) Rate Base growth; (ii) the favourable impact of mark-to-market accounting of natural gas derivatives at Aitken Creek; and (iii) higher hydroelectric production in Belize. An increase in the weighted average number of common shares outstanding, associated with the Corporation's $1.2 billion December 2019 common equity offering, also contributed to the decrease in basic EPS.

September 2020/September 2019

Common Equity Earnings increased by $14 million due mainly to: (i) Rate Base growth; (ii) increased retail sales at UNS Energy, driven largely by weather; and (iii) higher earnings from Belize, mainly from increased hydroelectric production. This growth was tempered by: (i) the delay in TEP's general rate application, resulting in approximately $1 billion of Rate Base not reflected in customer rates; and (ii) lower contributions from ITC, due to the timing of earnings associated with the FERC ROE decisions, and a lower effective tax rate in 2019. The $0.01 decrease in basic EPS was due primarily to an increase in the weighted average number of common shares outstanding, mainly associated with the Corporation's $1.2 billion common equity issuance in the fourth quarter of 2019, partially offset by the above noted factors.

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, 2021 and 2020.

Inter-company transactions between non-regulated and regulated entities not eliminated on consolidation include the lease of gas storage capacity and gas sales by Aitken Creek to FortisBC Energy. These transactions did not have a material impact on consolidated earnings, financial position or cash flows.

As at June 30, 2021, accounts receivable included approximately $30 million due from Belize Electricity (December 31, 2020 - $28 million).

Fortis periodically provides short-term financing, the impacts of which are eliminated on consolidation, to subsidiaries to support capital expenditures, acquisitions and seasonal working capital requirements. There were inter-segment loans of $135 million outstanding as at June 30, 2021 (December 31, 2020 - nil). Interest charged on inter-segment loans was not material for the three and six months ended June 30, 2021 and 2020.

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OUTLOOK

The Corporation's long-term outlook remains unchanged. Fortis continues to enhance shareholder value through the execution of its capital plan, the balance and strength of its diversified portfolio of utility businesses, and growth opportunities within and proximate to its service territories. While uncertainty exists due to the COVID-19 Pandemic, the Corporation does not currently expect it to have a material financial impact in 2021.

The Corporation's $19.6 billion five-year capital plan is expected to increase midyear Rate Base from $30.5 billion in 2020 to $36.4 billion by 2023 and $40.3 billion by 2025, translating into three- and five-year CAGRs of approximately 6.5% and 6.0%, respectively. Beyond the five-year capital plan, Fortis continues to pursue additional energy infrastructure opportunities.

Fortis is transitioning to a cleaner energy future. Its corporate-wide target to reduce carbon emissions by 75% by 2035 represents avoided emissions equivalent to taking approximately 2 million cars off the road in 2035 compared to 2019 levels. Upon achieving this target, 99% of the Corporation's assets will be focused on energy delivery and renewable, carbon-free generation.

Additional opportunities to expand and extend growth include: further expansion of the electric transmission grid in the US to facilitate the interconnection of cleaner energy including infrastructure investments associated with the proposed American Jobs Plan; natural gas resiliency investments in pipelines and liquefied natural gas infrastructure in British Columbia; the fully permitted, cross-border, Lake Erie Connector electric transmission project in Ontario; and the acceleration of cleaner energy infrastructure investments across our jurisdictions.

Fortis expects long-term growth in Rate Base will support earnings growth and the annual dividend growth guidance of approximately 6% through 2025. This dividend growth guidance is premised on the assumptions listed under "Forward-Looking Information" below, including no material impact from the COVID-19 Pandemic, the expectation of reasonable outcomes for regulatory proceedings and the successful execution of the five-year capital plan.

FORWARD-LOOKING INFORMATION

Fortis includes forward-looking information in the MD&A within the meaning of applicable Canadian securities laws and forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, (collectively referred to as "forward-looking information"). Forward-looking information reflects expectations of Fortis management regarding future growth, results of operations, performance, business prospects and opportunities. Wherever possible, words such as anticipates, believes, budgets, could, estimates, expects, forecasts, intends, may, might, plans, projects, schedule, should, target, will, would and the negative of these terms and other similar terminology or expressions have been used to identify the forward-looking information, which includes, without limitation: targeted average annual dividend growth through 2025; the expectation that the COVID-19 Pandemic will not impact the 2021 or five-year capital plan; expected timing and impact of regulatory decisions; the expectation that a portion of the proceeds of debt issuances in the first half of 2021 will be used to repay maturing debt in the second half of 2021; expected or potential funding sources for operating expenses, interest costs and capital plans; the expectation that maintaining the targeted capital structure of the regulated operating subsidiaries will not have an impact on the Corporation's ability to pay dividends in the foreseeable future; expected consolidated fixed-term debt maturities and repayments over the next five years; the expectation that the Corporation and its subsidiaries will continue to have access to long-term capital and will remain compliant with debt covenants in 2021; the expectation that ITC will issue debt in August 2021 and in May 2022 to fund or refinance a portfolio of eligible green projects, repay credit facility borrowings, fund capital expenditures and to be used for other general corporate purposes; forecast capital expenditures for 2021-2025; the expectation that higher than anticipated capital expenditures in 2021 will offset the impact of the lower than forecast US-to-Canadian dollar exchange rate; the nature, timing, benefits and expected costs of certain capital projects including the Transmission Integrity Management Capabilities Project and AMI Project; the expectation that the COVID-19 Pandemic will not have a material financial impact in 2021; forecast Rate Base and Rate Base growth for 2023 and 2025; the 2035 carbon emissions reduction target and projected asset mix; additional opportunities beyond the capital plan, including the expansion of the U.S. transmission grid to facilitate the interconnection of cleaner energy, natural gas resiliency investments in pipelines and liquefied natural gas infrastructure in British Columbia, and the Lake Erie Connector Project; and the expectation that long-term growth in Rate Base will support earnings and dividend growth.

Forward-looking information involves significant risks, uncertainties and assumptions. Certain material factors or assumptions have been applied in drawing the conclusions contained in the forward-looking information including, without limitation: no material impact from the COVID-19 Pandemic; reasonable regulatory decisions and the expectation of regulatory stability; the successful execution of the five-year capital plan; no material capital project or financing cost overrun; sufficient human resources to deliver service and execute the capital plan; the realization of additional opportunities; the Board exercising its discretion to declare dividends, taking into account the financial performance and condition of the Corporation; no significant variability in interest rates; no significant operational disruptions or environmental liability or upset; the continued ability to maintain the performance of the electricity and gas systems; no severe and prolonged economic downturn; sufficient liquidity and capital resources; the ability to hedge exposures to fluctuations in foreign exchange rates, natural gas prices and electricity prices; the continued availability of natural gas,

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fuel, coal and electricity supply; continuation of power supply and capacity purchase contracts; no significant changes in government energy plans, environmental laws and regulations that could have a material negative impact; maintenance of adequate insurance coverage; the ability to obtain and maintain licences and permits; retention of existing service areas; no significant changes in tax laws and the continued tax deferred treatment of earnings from the Corporation's foreign operations; continued maintenance of information technology infrastructure and no material breach of cybersecurity; continued favourable relations with Indigenous Peoples; and favourable labour relations.

Fortis cautions readers that a number of factors could cause actual results, performance or achievements to differ materially from those discussed or implied in the forward-looking information. These factors should be considered carefully and undue reliance should not be placed on the forward-looking information. Risk factors which could cause results or events to differ from current expectations are detailed under the heading "Business Risks" in this Interim MD&A, in the 2020 Annual MD&A and in other continuous disclosure materials filed from time to time with Canadian securities regulatory authorities and the Securities and Exchange Commission. Key risk factors for 2021 include, but are not limited to: uncertainty regarding the outcome of regulatory proceedings at the Corporation's utilities; risks associated with climate change, physical risks and service disruption; the impact of pandemics and public health crises, including the COVID-19 Pandemic; risks related to environmental laws and regulations; risks associated with capital projects and the impact on the Corporation's continued growth; and the impact of weather variability and seasonality on heating and cooling loads, gas distribution volumes and hydroelectric generation.

All forward-looking information herein is given as of July 28, 2021. Fortis disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

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GLOSSARY

2020 Annual Financial Statements: the Corporation's audited consolidated financial statements and notes thereto for the year ended December 31, 2020

2020 Annual MD&A: the Corporation's management discussion and analysis for the year ended December 31, 2020

Adjusted Basic EPS: Adjusted Common Equity Earnings divided by the basic weighted average number of common shares outstanding

Adjusted Common Equity Earnings: net earnings attributable to common equity shareholders adjusted as shown under "Non-US GAAP Financial Measures" on page 10

AMI: Advanced Metering Infrastructure

AESO: Alberta Electric System Operator

Aitken Creek: Aitken Creek Gas Storage ULC, a direct 93.8% owned subsidiary of FortisBC Holdings Inc.

AUC: Alberta Utilities Commission

BECOL: Belize Electric Company Limited, an indirect wholly owned subsidiary of Fortis

Belize Electricity: Belize Electricity Limited, in which Fortis indirectly holds a 33% equity interest

BCUC: British Columbia Utilities Commission

CAGR(s): compound average growth rate of a particular item. CAGR = (EV/BV)1-N-1, where: (i) EV is the ending value of the item; (ii) BV is the beginning value of the item; and (iii) N is the number of periods. Calculated on a constant US-to-Canadian dollar exchange rate

Capital Expenditures: cash outlay for property, plant and equipment and intangible assets as shown on the condensed consolidated statements of cash flows in the Interim Financial Statements

Caribbean Utilities: Caribbean Utilities Company, Ltd., an indirect approximately 60%-owned (as at December 31, 2020) subsidiary of Fortis, together with its subsidiary

Central Hudson: CH Energy Group Inc., an indirect wholly owned subsidiary of Fortis, together with its subsidiaries, including Central Hudson Gas & Electric Corporation

Common Equity Earnings: net earnings attributable to common equity shareholders

Corporation: Fortis Inc.

COS: Cost-of-service

COVID-19 Pandemic: declared by the World Health Organization in March 2020 as a result of a novel coronavirus

CPCN: Certificate of Public Convenience and Necessity

DBRS Morningstar: DBRS Limited

DRIP: dividend reinvestment plan

EPS: earnings per common share

FERC: Federal Energy Regulatory Commission

Fortis: Fortis Inc.

FortisAlberta: FortisAlberta Inc., an indirect wholly owned subsidiary of Fortis

FortisBC Electric: FortisBC Inc., an indirect wholly owned subsidiary of Fortis, together with its subsidiaries

FortisBC Energy: FortisBC Energy Inc., an indirect wholly owned subsidiary of Fortis, together with its subsidiaries

FortisOntario: FortisOntario Inc., a direct wholly owned subsidiary of Fortis, together with its subsidiaries

FortisTCI: FortisTCI Limited, an indirect wholly owned subsidiary of Fortis, together with its subsidiary

FX: foreign exchange associated with the translation of US dollar-denominated amounts

GCOC: Generic Cost of Capital

GWh: gigawatt hour(s)

Interim Financial Statements: the Corporation's unaudited condensed consoli-dated interim financial statements and notes thereto for the three and six months ended June 30, 2021

Interim MD&A: the Corporation's manage-ment discussion and analysis for the three and six months ended June 30, 2021

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ITC: ITC Investment Holdings Inc., an indirect 80.1%-owned subsidiary of Fortis, together with its subsidiaries, including International Transmission Company, Michigan Electric Transmission Company, LLC, ITC Midwest LLC, and ITC Great Plains, LLC

Major Capital Projects: projects, other than ongoing maintenance projects, individually costing $200 million or more

Maritime Electric: Maritime Electric Company, Limited, an indirect wholly owned subsidiary of Fortis

May 2020 FERC Decision: a FERC order issued in May 2020, on rehearing of the FERC's November 2019 decision, increasing the base ROE for ITC's MISO Subsidiaries from that determined in November 2019

Moody's: Moody's Investor Services, Inc.

Newfoundland Power: Newfoundland Power Inc., a direct wholly owned subsidiary of Fortis

Non-US GAAP Financial Measures: financial measures that do not have a standardized meaning prescribed by US GAAP

NOPR: notice of proposed rulemaking

NYSE: New York Stock Exchange

Operating Cash Flow: cash from operating activities

PBR: performance-based rate-setting

PJ: petajoule(s)

PSC: New York Public Service Commission

Rate Base: the stated value of property on which a regulated utility is permitted to earn a specified return in accordance with its regulatory construct

ROE: rate of return on common equity

RTO: regional transmission organization

S&P: Standard & Poor's Financial Services LLC

SEDAR: Canadian System for Electronic Document Analysis and Retrieval

TEP: Tucson Electric Power Company, a direct wholly owned subsidiary of UNS Energy

TSR: total shareholder return, which is a measure of the return to common equity shareholders in the form of share price appreciation and dividends (assuming reinvestment) over a specified time period in relation to the share price at the beginning of the period

TSX: Toronto Stock Exchange

UCA: Utilities Consumer Advocate

UNS Energy: UNS Energy Corporation, an indirect wholly owned subsidiary of Fortis, together with its subsidiaries, including TEP, UNS Electric, Inc. and UNS Gas, Inc.

US: United States of America

US GAAP: accounting principles generally accepted in the US

Wataynikaneyap Partnership: Watayni-kaneyap Power Limited Partnership, in which Fortis indirectly holds a 39% equity interest

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