Document

Exhibit 99.2


Interim Financial Statements

FORTIS INC.

Condensed Consolidated Interim Financial Statements

For the three and nine months ended September 30, 2026 and 2025

(Unaudited)


			FORTIS INC.			SEPTEMBER 30, 2026 QUARTER REPORT			1


Interim Financial Statements


CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS (Unaudited)

FORTIS INC.

	September 30,		December 31,
As at (in millions of Canadian dollars)	2026		2025

ASSETS
Current assets
Cash and cash equivalents	$	1,883	$	367
Accounts receivable and other current assets (Note 5)	2,042		1,695
Prepaid expenses	262		179
Inventories	724		649
Regulatory assets (Note 6)	914		915

Total current assets	5,825		3,805
Other assets	1,846		1,782
Regulatory assets (Note 6)	4,380		4,107
Property, plant and equipment, net	54,952		50,886
Intangible assets, net	1,782		1,723
Goodwill	12,937		12,527
Total assets	$	81,722	$	74,830

LIABILITIES AND EQUITY
Current liabilities
Short-term borrowings (Note 7)	$	27	$	412
Accounts payable and other current liabilities	3,912		3,503
Regulatory liabilities (Note 6)	510		452
Current installments of long-term debt (Note 7)	3,967		3,146


Total current liabilities	8,416		7,513
Regulatory liabilities (Note 6)	4,259		3,810
Deferred income taxes	5,713		5,292
Long-term debt (Note 7)	33,568		30,723
Finance leases	354		348
Other liabilities	1,335		1,275
Total liabilities	53,645		48,961
Commitments and contingencies (Note 15)
Equity
Common shares (Note 8) (1)	16,754		16,112
Preference shares	1,623		1,623
Additional paid-in capital	3		5
Accumulated other comprehensive income	1,812		1,101
Retained earnings	5,687		4,969
Shareholders' equity	25,879		23,810
Non-controlling interests	2,198		2,059
Total equity	28,077		25,869
Total liabilities and equity	$	81,722	$	74,830

(1) No par value. Unlimited authorized shares. 515.8 million and 507.3 million issued and outstanding as at September 30, 2026 and December 31, 2025, respectively.

See accompanying Notes to Condensed Consolidated Interim Financial Statements


			FORTIS INC.			SEPTEMBER 30, 2026 QUARTER REPORT			2


Interim Financial Statements


CONDENSED CONSOLIDATED INTERIM STATEMENTS OF EARNINGS (Unaudited)

FORTIS INC.

	Quarter				Year-to-Date
For the periods ended September 30 (in millions of Canadian dollars, except per share amounts)	2026		2025		2026		2025

Revenue	$	3,115	$	2,938	$	9,449	$	9,091

Expenses
Energy supply costs	(821)		(759)		(2,611)		(2,513)
Operating expenses	(804)		(790)		(2,515)		(2,409)
Depreciation and amortization	(553)		(518)		(1,627)		(1,545)
Total expenses	(2,178)		(2,067)		(6,753)		(6,467)
Operating income	937		871		2,696		2,624
Other income, net (Note 10)	95		78		305		274
Finance charges	(395)		(370)		(1,154)		(1,109)
Earnings before income tax expense	637		579		1,847		1,789
Income tax expense	(92)		(105)		(280)		(313)
Net earnings	$	545	$	474	$	1,567	$	1,476

Net earnings attributable to:
Non-controlling interests	$	49	$	43	$	131	$	121
Preference equity shareholders	22		22		65		63
Common equity shareholders	474		409		1,371		1,292
	$	545	$	474	$	1,567	$	1,476

Earnings per common share (Note 12)
Basic	$	0.92	$	0.81	$	2.69	$	2.57
Diluted	$	0.92	$	0.81	$	2.69	$	2.57

See accompanying Notes to Condensed Consolidated Interim Financial Statements


CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

	Quarter				Year-to-Date
For the periods ended September 30 (in millions of Canadian dollars)	2026		2025		2026		2025

Net earnings	$	545	$	474	$	1,567	$	1,476

Other comprehensive income (loss)
Unrealized foreign currency translation gains (losses) (1)	60		450		776		(661)
Other (2)	6		—		14		(23)
	66		450		$	790	$	(684)
Derecognition of foreign currency translation amount on disposition (Note 10)	—		(52)		—		(52)
	66		398		790		(736)
Comprehensive income	$	611	$	872	$	2,357	$	740

Comprehensive income attributable to:
Non-controlling interests	$	57	$	87	$	210	$	53
Preference equity shareholders	22		22		65		63
Common equity shareholders	532		763		2,082		624
	$	611	$	872	$	2,357	$	740

(1)Net of hedging activities and income tax (expense) recovery of $(3) million and $8 million for the three and nine months ended September 30, 2026, respectively (three and nine months ended September 30, 2025 - income tax recovery (expense) of $2 million and $(6) million, respectively).

(2)Net of income tax expense of $1 million and $2 million for the three and nine months ended September 30, 2026, respectively (three and nine months ended September 30, 2025 - income tax recovery of $4 million and $10 million, respectively).

See accompanying Notes to Condensed Consolidated Interim Financial Statements


			FORTIS INC.			SEPTEMBER 30, 2026 QUARTER REPORT			3


Interim Financial Statements


CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS (Unaudited)

FORTIS INC.

		Quarter				Year-to-Date
For the periods ended September 30 (in millions of Canadian dollars)		2026		2025		2026		2025

Operating activities
Net earnings		$	545	$	474	$	1,567	$	1,476
Adjustments to reconcile net earnings to net cash provided by operating activities:
	Depreciation - property, plant and equipment	480		451		1,409		1,362
	Amortization - intangible assets	44		40		132		118
	Amortization - other	29		27		86		65
	Deferred income tax expense	82		45		147		169

	Equity component, allowance for funds used during construction (Note 10)	(53)		(42)		(148)		(123)
	Sale of investment tax credits	64		—		127		—
	Other	(42)		41		(1)		60
Change in long-term regulatory assets and liabilities		81		(51)		76		(70)
Change in working capital (Note 13)		71		42		138		(13)
Cash from operating activities		1,301		1,027		3,533		3,044

Investing activities
Additions to property, plant and equipment		(1,758)		(1,362)		(4,862)		(4,324)
Additions to intangible assets		(35)		(91)		(143)		(216)
Contributions in aid of construction		491		175		1,072		487
Contribution to equity-accounted investee		—		—		—		(27)
Proceeds on disposition, net (Note 11)		—		298		—		298
Other		(6)		(101)		(87)		(234)
Cash used in investing activities		(1,308)		(1,081)		(4,020)		(4,016)

Financing activities
Proceeds from long-term debt, net of issuance costs (Note 7)		2,479		1,179		4,619		2,310
Repayments of long-term debt and finance leases		(175)		(4)		(1,116)		(66)
Borrowings under committed credit facilities		2,153		2,089		9,639		8,479
Repayments under committed credit facilities		(2,925)		(2,822)		(10,312)		(9,180)
Net change in short-term borrowings		(12)		(16)		(389)		261


Issue of common shares, net of costs and dividends reinvested (Note 8)		268		11		300		45

Dividends
	Common shares, net of dividends reinvested	(217)		(198)		(637)		(581)
	Preference shares	(22)		(22)		(65)		(63)
	Subsidiary dividends paid to non-controlling interests	(27)		(5)		(75)		(49)
Other		(18)		8		15		—
Cash from financing activities		1,504		220		1,979		1,156
Effect of exchange rate changes on cash and cash equivalents		2		2		24		(15)
Change in cash and cash equivalents		1,499		168		1,516		169

Cash and cash equivalents, beginning of period		384		221		367		220
Cash and cash equivalents, end of period		$	1,883	$	389	$	1,883	$	389

Supplementary Cash Flow Information (Note 13)

See accompanying Notes to Condensed Consolidated Interim Financial Statements


			FORTIS INC.			SEPTEMBER 30, 2026 QUARTER REPORT			4


Interim Financial Statements


CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY (Unaudited)

FORTIS INC.

For the quarter ended September 30 (in millions of Canadian dollars, except share numbers)	Common Shares (# millions)	Common Shares		Preference Shares		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Non-Controlling Interests		Total Equity
As at June 30, 2026	510.9	$	16,376	$	1,623	$	4	$	1,754	$	5,540	$	2,167	$	27,464
Net earnings	—	—		—		—		—		496		49		545
Other comprehensive income	—	—		—		—		58		—		8		66

Common shares issued	4.9	378		—		—		—		—		—		378

Subsidiary dividends paid to non-controlling interests	—	—		—		—		—		—		(27)		(27)
Dividends declared on common shares ($0.64 per share)	—	—		—		—		—		(327)		—		(327)
Dividends on preference shares	—	—		—		—		—		(22)		—		(22)
Other	—	—		—		(1)		—		—		1		—
As at September 30, 2026	515.8	$	16,754	$	1,623	$	3	$	1,812	$	5,687	$	2,198	$	28,077

As at June 30, 2025	503.6	$	15,857	$	1,623	$	6	$	1,045	$	5,095	$	1,968	$	25,594
Net earnings	—	—		—		—		—		431		43		474
Other comprehensive income	—	—		—		—		406		—		44		450
Derecognition of foreign currency translation amount on disposition	—	—		—		—		(52)		—		—		(52)
Common shares issued	1.8	123		—		(1)		—		—		—		122

Subsidiary dividends paid to non-controlling interests	—	—		—		—		—		—		(5)		(5)
Dividends declared on common shares ($0.615 per share)	—	—		—		—		—		(309)		—		(309)
Dividends on preference shares	—	—		—		—		—		(22)		—		(22)
Other	—	—		—		(1)		—		—		2		1
As at September 30, 2025	505.4	$	15,980	$	1,623	$	4	$	1,399	$	5,195	$	2,052	$	26,253

See accompanying Notes to Condensed Consolidated Interim Financial Statements


			FORTIS INC.			SEPTEMBER 30, 2026 QUARTER REPORT			5


Interim Financial Statements


CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY (Unaudited)

FORTIS INC.

For the nine months ended September 30 (in millions of Canadian dollars, except share numbers)	Common Shares (# millions)	Common Shares		Preference Shares		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Non-Controlling Interests		Total Equity
As at December 31, 2025	507.3	$	16,112	$	1,623	$	5	$	1,101	$	4,969	$	2,059	$	25,869
Net earnings	—	—		—		—		—		1,436		131		1,567
Other comprehensive income	—	—		—		—		711		—		79		790

Common shares issued	8.5	642		—		(1)		—		—		—		641



Subsidiary dividends paid to non-controlling interests	—	—		—		—		—		—		(75)		(75)

Dividends declared on common shares ($1.28 per share)	—	—		—		—		—		(653)		—		(653)
Dividends on preference shares	—	—		—		—		—		(65)		—		(65)
Other	—	—		—		(1)		—		—		4		3
As at September 30, 2026	515.8	$	16,754	$	1,623	$	3	$	1,812	$	5,687	$	2,198	$	28,077

As at December 31, 2024	499.3	$	15,589	$	1,623	$	8	$	2,067	$	4,521	$	2,045	$	25,853
Net earnings	—	—		—		—		—		1,355		121		1,476
Other comprehensive loss	—	—		—		—		(616)		—		(68)		(684)
Derecognition of foreign currency translation amount on disposition	—	—		—		—		(52)		—		—		(52)


Common shares issued	6.1	391		—		(2)		—		—		—		389


Subsidiary dividends paid to non-controlling interests	—	—		—		—		—		—		(49)		(49)

Dividends declared on common shares ($1.23 per share)	—	—		—		—		—		(618)		—		(618)
Dividends on preference shares	—	—		—		—		—		(63)		—		(63)
Other	—	—		—		(2)		—		—		3		1
As at September 30, 2025	505.4	$	15,980	$	1,623	$	4	$	1,399	$	5,195	$	2,052	$	26,253

See accompanying Notes to Condensed Consolidated Interim Financial Statements


			FORTIS INC.			SEPTEMBER 30, 2026 QUARTER REPORT			6


Notes to Condensed Consolidated Interim Financial Statements (Unaudited)


For the three and nine months ended September 30, 2026 and 2025

1. DESCRIPTION OF BUSINESS

Nature of Operations

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

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

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

Regulated Utilities

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

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

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

FortisBC Energy: FortisBC Energy Inc.

FortisAlberta: FortisAlberta Inc.

FortisBC Electric: FortisBC Inc.

Other Electric: Eastern Canadian and Caribbean utilities, as follows: Newfoundland Power Inc.; Maritime Electric Company, Limited; FortisOntario Inc.; a 39% equity investment in Wataynikaneyap Power Limited Partnership; and an approximate 60% controlling interest in Caribbean Utilities Company, Ltd. ("Caribbean Utilities"). Also included FortisTCI Limited and Turks and Caicos Utilities Limited (collectively, "FortisTCI") until the September 2, 2025 date of disposition and the 33% equity investment in Belize Electricity Limited ("Belize Electricity") until the October 31, 2025 date of disposition (Note 11).

Non-Regulated

Corporate and Other: Captures expenses and revenues not specifically related to any reportable segment and those business operations that are below the required threshold for segmented reporting. Consists of non-regulated holding company expenses, and included non-regulated long-term contracted generation assets in Belize until the October 31, 2025 date of disposition (Note 11).

2. REGULATORY MATTERS

Regulation of the Corporation's utilities is generally consistent with that disclosed in Note 2 of the Corporation's annual audited consolidated financial statements ("2025 Annual Financial Statements"). A summary of significant outstanding regulatory matters follows.

ITC

Transmission Incentives: In 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 by FERC in 2020. The supplemental NOPR proposes to eliminate the 50-basis point regional transmission organization ("RTO") return on common equity ("ROE") incentive adder for RTO members that have been members for longer than three years. The timing and outcome of this proceeding are unknown.

UNS Energy

TEP General Rate Application: In October 2026, an Arizona Corporation Commission ("ACC") Administrative Law Judge issued a Recommended Opinion and Order with respect to TEP's rate application, recommending an allowed ROE of 9.65% and a 55.5% common equity component of capital structure. The order also included an annual formulaic rate adjustment mechanism with a range of +/- 50 basis points around the allowed ROE, the inclusion of post-test year adjustments, the elimination of certain adjustor mechanisms, and the deferral of certain costs associated with owning and operating the Roadrunner Reserve II battery storage project for future recovery. The Recommended Opinion and Order proposes implementation of new rates by December 1, 2026. The rate application remains subject to ACC approval which is anticipated in November 2026.

The ACC approved a formula rate policy statement in 2024. The Residential Utility Consumer Office has challenged the ACC's authority to implement a formula rate framework through a policy statement, and in November 2025, the Arizona Court of Appeals ruled that the Residential Utility Consumer Office may proceed with its challenge. The timing and outcome of these regulatory and legal proceedings are unknown. The ACC has previously approved adjustor mechanisms, including formula-based mechanisms, in rate cases.


			FORTIS INC.			SEPTEMBER 30, 2026 QUARTER REPORT			7


Notes to Condensed Consolidated Interim Financial Statements (Unaudited)


For the three and nine months ended September 30, 2026 and 2025

2. REGULATORY MATTERS (cont'd)

UNS Gas General Rate Application: In February 2026, the ACC issued an order approving an allowed ROE of 9.61% and a 56% common equity component of capital structure. The order also approved an annual formulaic rate adjustment mechanism with a range of +/- 50 basis points around the allowed ROE and the inclusion of post-test year adjustments. New rates became effective March 1, 2026.

FortisAlberta

Third Performance-based Rate-setting ("PBR") Term Decision: FortisAlberta filed an appeal with respect to the Alberta Utilities Commission ("AUC") decision establishing the parameters for the third PBR term for the period of 2024 through 2028. The appeal was largely focused on the AUC's use of historical capital additions rather than forecast capital investments approved in the 2023 cost of service proceeding. In the third quarter of 2026, the Court of Appeal of Alberta dismissed the appeal.

Depreciation Study: In May 2026, the AUC approved the negotiated settlement agreement that had been reached with respect to FortisAlberta's depreciation study. The corresponding reduction in FortisAlberta's depreciation rates has resulted in a true-up of approximately $130 million. FortisAlberta has proposed that the true-up be returned to customers over multiple years in order to moderate future increases in the distribution component of customer rates. A decision from the AUC is expected in the fourth quarter of 2026. No impact to earnings is anticipated as the related updates to revenue and depreciation expense are expected to be neutral.

3. ACCOUNTING POLICIES

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

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

These Interim Financial Statements do not include all of the disclosures required in the annual financial statements and should be read in conjunction with the Corporation's 2025 Annual Financial Statements. In management's opinion, these Interim Financial Statements include all adjustments that are of a normal recurring nature, necessary for fair presentation.

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

The Corporation considers the applicability and impact of all Accounting Standards Updates ("ASUs") issued by the Financial Accounting Standards Board. Any ASUs not included in these Interim Financial Statements were assessed and determined to be either not applicable to the Corporation or are not expected to have a material impact on the Interim Financial Statements.

The accounting policies applied herein are consistent with those outlined in the Corporation's 2025 Annual Financial Statements.

Future Accounting Pronouncements

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

Internal-Use Software: ASU No. 2025-06, Targeted Improvements to the Accounting for Internal-Use Software, is effective for Fortis on January 1, 2028. The ASU may be adopted prospectively, retrospectively, or using a modified transition approach, and early adoption is permitted. The ASU removes references to development stages and requires capitalization of software costs once funding is authorized and project completion is probable, including assessment of whether significant development uncertainty exists. The guidance also clarifies that all capitalized internal-use software costs must follow the disclosure requirements in Subtopic 360-10, Property, Plant and Equipment. Fortis is assessing the impact on its consolidated financial statements and disclosures.


			FORTIS INC.			SEPTEMBER 30, 2026 QUARTER REPORT			8


Notes to Condensed Consolidated Interim Financial Statements (Unaudited)


For the three and nine months ended September 30, 2026 and 2025

4. SEGMENTED INFORMATION

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

Related-Party and Inter-Company Transactions

Related-party transactions are in the normal course of operations and are measured at the amount of consideration agreed to by the related parties. There were no material related-party transactions for the three and nine months ended September 30, 2026 and 2025. Fortis periodically provides short-term financing to subsidiaries to support capital expenditures and seasonal working capital requirements, the impacts of which are eliminated on consolidation. As at September 30, 2026 and December 31, 2025, there were no material inter-segment loans outstanding. Interest charged on inter-segment loans was not material for the three and nine months ended September 30, 2026 and 2025.



										Inter-
		UNS	Central	FortisBC	Fortis	FortisBC	Other	Sub	Corporate	segment
($ millions)	ITC	Energy	Hudson	Energy	Alberta	Electric	Electric	Total	and Other	eliminations	Total
Quarter ended September 30, 2026
Revenue	666	919	449	308	221	132	420	3,115	—	—	3,115
Energy supply costs	—	(310)	(161)	(64)	—	(38)	(248)	(821)	—	—	(821)
Operating expenses	(152)	(208)	(191)	(110)	(48)	(36)	(57)	(802)	(2)	—	(804)
Depreciation and amortization	(131)	(122)	(43)	(103)	(79)	(21)	(53)	(552)	(1)	—	(553)

Operating income	383	279	54	31	94	37	62	940	(3)	—	937
Other income, net	30	15	15	16	2	1	9	88	7	—	95
Finance charges	(145)	(44)	(25)	(38)	(37)	(21)	(20)	(330)	(65)	—	(395)
Income tax expense	(62)	(25)	(11)	(3)	(1)	(2)	(5)	(109)	17	—	(92)
Net earnings	206	225	33	6	58	15	46	589	(44)	—	545
Non-controlling interests	(39)	—	—	—	—	—	(10)	(49)	—	—	(49)
Preference share dividends	—	—	—	—	—	—	—	—	(22)	—	(22)
Net earnings attributable to common equity shareholders	167	225	33	6	58	15	36	540	(66)	—	474

Additions to property, plant and equipment and intangible assets	573	257	136	512	162	54	99	1,793	—	—	1,793

As at September 30, 2026
Goodwill	8,734	1,966	642	913	231	235	216	12,937	—	—	12,937
Total assets	30,006	16,194	7,204	11,296	6,829	3,086	5,441	80,056	1,676	(10)	81,722

Quarter ended September 30, 2025
Revenue	625	893	388	281	213	133	393	2,926	12	—	2,938
Energy supply costs	—	(311)	(138)	(59)	—	(42)	(209)	(759)	—	—	(759)
Operating expenses	(160)	(209)	(166)	(103)	(46)	(33)	(58)	(775)	(15)	—	(790)
Depreciation and amortization	(121)	(106)	(39)	(95)	(75)	(23)	(57)	(516)	(2)	—	(518)

Operating income	344	267	45	24	92	35	69	876	(5)	—	871
Other income, net	21	16	16	13	2	2	5	75	3	—	78
Finance charges	(129)	(42)	(21)	(39)	(34)	(20)	(22)	(307)	(63)	—	(370)
Income tax expense	(53)	(32)	(9)	2	(6)	(2)	(2)	(102)	(3)	—	(105)
Net earnings	183	209	31	—	54	15	50	542	(68)	—	474
Non-controlling interests	(34)	—	—	—	—	—	(9)	(43)	—	—	(43)
Preference share dividends	—	—	—	—	—	—	—	—	(22)	—	(22)
Net earnings attributable to common equity shareholders	149	209	31	—	54	15	41	499	(90)	—	409

Additions to property, plant and equipment and intangible assets	435	385	121	215	136	50	110	1,452	1	—	1,453

As at September 30, 2025
Goodwill	8,543	1,923	628	913	231	235	213	12,686	—	—	12,686
Total assets	27,455	15,136	6,337	10,515	6,385	2,907	5,251	73,986	530	(13)	74,503


			FORTIS INC.			SEPTEMBER 30, 2026 QUARTER REPORT			9


Notes to Condensed Consolidated Interim Financial Statements (Unaudited)


For the three and nine months ended September 30, 2026 and 2025

4. SEGMENTED INFORMATION (cont'd)



										Inter-
		UNS	Central	FortisBC	Fortis	FortisBC	Other	Sub	Corporate	segment
($ millions)	ITC	Energy	Hudson	Energy	Alberta	Electric	Electric	Total	and Other	eliminations	Total
Year-to-date September 30, 2026
Revenue	1,973	2,221	1,416	1,396	642	410	1,391	9,449	—	—	9,449
Energy supply costs	—	(733)	(528)	(392)	—	(107)	(851)	(2,611)	—	—	(2,611)
Operating expenses	(502)	(642)	(562)	(333)	(150)	(113)	(181)	(2,483)	(32)	—	(2,515)
Depreciation and amortization	(385)	(343)	(128)	(309)	(239)	(64)	(157)	(1,625)	(2)	—	(1,627)
Operating income	1,086	503	198	362	253	126	202	2,730	(34)	—	2,696
Other income, net	83	58	58	43	5	4	27	278	27	—	305
Finance charges	(420)	(126)	(75)	(113)	(108)	(62)	(61)	(965)	(189)	—	(1,154)
Income tax expense	(169)	(45)	(44)	(65)	(8)	(7)	(24)	(362)	82	—	(280)
Net earnings	580	390	137	227	142	61	144	1,681	(114)	—	1,567
Non-controlling interests	(108)	—	—	(1)	—	—	(22)	(131)	—	—	(131)
Preference share dividends	—	—	—	—	—	—	—	—	(65)	—	(65)
Net earnings attributable to common equity shareholders	472	390	137	226	142	61	122	1,550	(179)	—	1,371

Additions to property, plant and equipment and intangible assets	1,591	774	346	1,368	490	152	284	5,005	—	—	5,005

As at September 30, 2026
Goodwill	8,734	1,966	642	913	231	235	216	12,937	—	—	12,937
Total assets	30,006	16,194	7,204	11,296	6,829	3,086	5,441	80,056	1,676	(10)	81,722

Year-to-date September 30, 2025
Revenue	1,870	2,267	1,208	1,298	621	412	1,386	9,062	29	—	9,091
Energy supply costs	—	(816)	(399)	(378)	—	(120)	(800)	(2,513)	—	—	(2,513)
Operating expenses	(477)	(606)	(518)	(314)	(148)	(105)	(190)	(2,358)	(51)	—	(2,409)
Depreciation and amortization	(361)	(319)	(117)	(274)	(228)	(63)	(177)	(1,539)	(6)	—	(1,545)
Operating income	1,032	526	174	332	245	124	219	2,652	(28)	—	2,624
Other income, net	60	55	53	37	5	4	17	231	43	—	274
Finance charges	(387)	(127)	(69)	(115)	(101)	(60)	(68)	(927)	(182)	—	(1,109)
Income tax expense	(163)	(60)	(37)	(51)	(17)	(11)	(19)	(358)	45	—	(313)
Net earnings	542	394	121	203	132	57	149	1,598	(122)	—	1,476
Non-controlling interests	(100)	—	—	(1)	—	—	(20)	(121)	—	—	(121)
Preference share dividends	—	—	—	—	—	—	—	—	(63)	—	(63)
Net earnings attributable to common equity shareholders	442	394	121	202	132	57	129	1,477	(185)	—	1,292

Additions to property, plant and equipment and intangible assets	1,363	1,128	330	792	424	127	373	4,537	3	—	4,540

As at September 30, 2025
Goodwill	8,543	1,923	628	913	231	235	213	12,686	—	—	12,686
Total assets	27,455	15,136	6,337	10,515	6,385	2,907	5,251	73,986	530	(13)	74,503


			FORTIS INC.			SEPTEMBER 30, 2026 QUARTER REPORT			10


Notes to Condensed Consolidated Interim Financial Statements (Unaudited)


For the three and nine months ended September 30, 2026 and 2025

5. ALLOWANCE FOR CREDIT LOSSES

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


	Quarter		Year-to-Date
($ millions)	2026	2025	2026	2025
Periods ended September 30
Balance, beginning of period	(77)	(74)	(80)	(78)
Credit loss expense	(10)	(11)	(34)	(25)
Credit loss deferral	(13)	(19)	(20)	(36)
Write-offs, net of recoveries	24	19	60	51
Disposition (Note 11)	—	6	—	6
Foreign exchange	—	(1)	(2)	2
Balance, end of period	(76)	(80)	(76)	(80)

See Note 14 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 2025 Annual Financial Statements. A summary follows.


	As at
	September 30,	December 31,
($ millions)	2026	2025
Regulatory assets
Deferred income taxes	2,596	2,424
Deferred energy management costs	702	701
Rate stabilization and related accounts	590	552
Employee future benefits	193	192
Deferred lease costs	177	145
Deferred restoration costs	113	109
Derivatives	112	135
Manufactured gas plant site remediation deferral	91	84
Roadrunner Reserve 1 cost deferral	62	23
Renewable natural gas account	61	28
Generation early retirement costs	49	49
Business development deposit tax	41	58
Meter cost recovery	32	37
Other regulatory assets	475	485
Total regulatory assets	5,294	5,022
Less: Current portion	(914)	(915)
Long-term regulatory assets	4,380	4,107

Regulatory liabilities
Future cost of removal	1,994	1,853
Deferred income taxes	1,521	1,349
Employee future benefits	444	467
Rate stabilization and related accounts	329	183
Renewable energy surcharge	190	164
Energy efficiency liability	77	68



Other regulatory liabilities	214	178
Total regulatory liabilities	4,769	4,262
Less: Current portion	(510)	(452)
Long-term regulatory liabilities	4,259	3,810


			FORTIS INC.			SEPTEMBER 30, 2026 QUARTER REPORT			11


Notes to Condensed Consolidated Interim Financial Statements (Unaudited)


For the three and nine months ended September 30, 2026 and 2025

7. LONG-TERM DEBT


	As at
	September 30,	December 31,
($ millions)	2026	2025
Long-term debt	36,893	32,542

Credit facility borrowings	861	1,515
Total long-term debt	37,754	34,057
Less: Deferred financing costs and debt discounts	(219)	(188)
Less: Current installments of long-term debt	(3,967)	(3,146)
	33,568	30,723


Significant Long-Term Debt Issuances		Interest
Year-to-date September 30, 2026	Month	Rate		Amount	Use of
($ millions, except as noted)	Issued	(%)	Maturity	($ millions)	Proceeds
ITC
Secured senior notes	January	5.08	2036	US $125	(1) (2) (3)
Secured senior notes	January	5.71	2046	US $125	(1) (2) (3)
First mortgage bonds	March	4.78	2034	US $175	(1) (2) (3)
First mortgage bonds	March	4.86	2035	US $175	(1) (2) (3)
Unsecured senior notes	April	4.88	2031	US $500	(1) (3) (4)
Unsecured senior notes	April	5.50	2036	US $400	(1) (3) (4)
First mortgage bonds	July	5.41	2044	US $50	(1) (2) (3)
First mortgage bonds	July	5.53	2047	US $100	(1) (2) (3)
UNS Energy
Unsecured senior notes	August	5.74	2038	US $60	(1) (3) (4)

Central Hudson


Unsecured senior notes	April	(5)	(5)	US $70	(1) (3)
FortisBC Energy
Unsecured debentures	August	5.17	2056	300	(1) (3)
FortisAlberta
Unsecured senior debentures	July	4.92	2056	200	(1) (2) (3)
FortisBC Electric
Unsecured debentures	August	5.37	2056	150	(1) (3)








Caribbean Utilities
Unsecured senior notes	August	(6)	(6)	US $100	(1) (2) (3)
Fortis
Unsecured junior subordinated notes	September	6.63	2057	US $500	(3) (4)
Unsecured junior subordinated notes	September	6.88	2057	US $500	(3) (4)

(1) Repay short-term and/or credit facility borrowings

(2) Fund capital expenditures

(3) General corporate purposes

(4) Repay maturing long-term debt

(5) Comprised of US$25 million at 5.51% due in 2036, US$35 million at 5.86% due in 2041 and US$10 million at 6.01% due in 2046

(6) Comprised of US$70 million at 6.09% due in 2041 and US$30 million at 6.34% due in 2051

As shown in the table above, Fortis issued two tranches of fixed-to-fixed rate junior subordinated notes in 2026. The interest rate on the first tranche will reset on March 30, 2032, and every five years thereafter, equal to the then five-year U.S. treasury bond yield plus 2.02% provided that the interest rate will not be below the initial interest rate of 6.63%. The interest rate on the second tranche will reset on March 30, 2037, and every five years thereafter, equal to the then five-year U.S. treasury bond yield plus 2.04% provided that the interest rate will not be below the initial interest rate of 6.88%. The subordinated notes receive 50% equity treatment from credit rating agencies.

In August 2026, Caribbean Utilities issued US$60 million of 16-year, 6.24% unsecured senior notes. Proceeds will be drawn in May 2027 and will be used to repay credit facility borrowings, fund capital expenditures, and for general corporate purposes.

In March 2026, Fortis redeemed US$115 million of its U.S. dollar-denominated unsecured senior notes with original maturities ranging from 2029 to 2044, and in August 2026, Fortis redeemed US$75 million of its U.S. dollar-denominated unsecured senior notes with an original maturity in 2040.


			FORTIS INC.			SEPTEMBER 30, 2026 QUARTER REPORT			12


Notes to Condensed Consolidated Interim Financial Statements (Unaudited)


For the three and nine months ended September 30, 2026 and 2025

7. LONG-TERM DEBT (cont'd)

In December 2024, Fortis filed a short-form base shelf prospectus with a 25-month life under which it may issue common or preference shares, subscription receipts, or debt securities in an aggregate principal amount of up to $2.0 billion. Fortis re-established the at-the-market equity program ("ATM Program") pursuant to the short-form base shelf prospectus, which allows the Corporation to issue up to $500 million of common shares from treasury to the public from time to time, at the Corporation's discretion, effective until January 10, 2027. As at September 30, 2026, $237 million remained available under the ATM Program and $98 million remained available under the short-form base shelf prospectus. Fortis intends to file a new short-form base shelf prospectus, including an ATM Program in early 2027.


			As at
Credit facilities	Regulated	Corporate	September 30,	December 31,
($ millions)	Utilities	and Other	2026	2025
Total credit facilities	4,313	1,586	5,899	5,773
Credit facilities utilized:
Short-term borrowings (1)	(27)	—	(27)	(412)
Long-term debt (including current portion) (2)	(654)	(207)	(861)	(1,515)
Letters of credit outstanding	(76)	(22)	(98)	(105)
Credit facilities unutilized	3,556	1,357	4,913	3,741

(1) The weighted average interest rate was 4.5% (December 31, 2025 - 4.2%).

(2) The weighted average interest rate was 3.5% (December 31, 2025 - 3.8%). The current portion was $674 million (December 31, 2025 - $707 million).

Credit facilities are syndicated primarily with large banks in Canada and the U.S., with no one bank holding more than approximately 20% of the Corporation's total revolving credit facilities. Approximately $5.5 billion of the total credit facilities are committed with maturities ranging from 2027 through 2031.

See Note 14 in the 2025 Annual Financial Statements for a description of the credit facilities as at December 31, 2025. In May 2026, the Corporation amended its $1.3 billion revolving term committed credit facility to extend the maturity to July 2031, and in October 2026, UNS Energy increased its operating credit facilities from US$375 million to US$500 million with maturities extended to October 2031.

8. COMMON SHARES

During the third quarter of 2026, the Corporation issued approximately 3.4 million common shares under its ATM Program at an average price of $77.17 per share for gross proceeds of $263 million ($260 million net of commissions). The proceeds were used to repay credit facility borrowings and for general corporate purposes.

9. EMPLOYEE FUTURE BENEFITS

Fortis and each subsidiary maintain one or a combination of defined benefit pension plans and defined contribution pension plans, as well as other post-employment benefit ("OPEB") plans, including health and dental coverage and life insurance benefits, for qualifying members. The net benefit cost is detailed below.


	Defined Benefit Pension Plans		OPEB Plans
($ millions)	2026	2025	2026	2025
Quarter ended September 30

Service costs	18	17	5	6
Interest costs	44	42	7	8
Expected return on plan assets	(58)	(53)	(8)	(7)
Amortization of actuarial gains	(7)	(4)	(6)	(6)
Amortization of past service credits/plan amendments	1	(1)	—	(1)
Regulatory adjustments	—	—	—	2
Net benefit cost	(2)	1	(2)	2

Year-to-date September 30
Service costs	54	53	16	17
Interest costs	132	128	22	23
Expected return on plan assets	(172)	(160)	(23)	(21)
Amortization of actuarial gains	(20)	(12)	(19)	(18)
Amortization of past service credits/plan amendments	4	(1)	—	(1)
Regulatory adjustments	(1)	(1)	—	6
Net benefit cost	(3)	7	(4)	6

Defined contribution pension plan expense for the three and nine months ended September 30, 2026 was $16 million and $53 million (three and nine months ended September 30, 2025 - $15 million and $50 million, respectively).


			FORTIS INC.			SEPTEMBER 30, 2026 QUARTER REPORT			13


Notes to Condensed Consolidated Interim Financial Statements (Unaudited)


For the three and nine months ended September 30, 2026 and 2025

10. OTHER INCOME, NET


	Quarter		Year-to-Date
($ millions)	2026	2025	2026	2025
Periods ended September 30
Equity component, allowance for funds used during construction	53	42	148	123
Non-service component of net periodic benefit cost	19	19	70	58
Interest income	16	9	46	31

Equity income	5	3	14	10
(Loss) gain on derivatives, net	(10)	7	(4)	39



Other	12	(2)	31	13
	95	78	305	274

11. DISPOSITIONS

In September 2025, Fortis sold FortisTCI which contributed net earnings of $7 million in the third quarter of 2025 and $19 million for the eight-month period through the September 2, 2025 disposition date.

In October 2025, Fortis sold Fortis Belize and its 33% ownership in Belize Electricity which combined to contribute net earnings of $8 million and $16 million for the three and nine months ended September 30, 2025, respectively, and $17 million for the ten-month period through the October 31, 2025 disposition date.

12. EARNINGS PER COMMON SHARE


	2026			2025
	Net Earnings	Weighted		Net Earnings	Weighted
	to Common	Average		to Common	Average
	Shareholders	Shares	EPS	Shareholders	Shares	EPS
	($ millions)	(# millions)	($)	($ millions)	(# millions)	($)
Quarter ended September 30
Basic EPS	474	513.1	0.92	409	504.5	0.81
Potential dilutive effect of stock-based compensation	—	0.2		—	0.3
Diluted EPS	474	513.3	0.92	409	504.8	0.81

Year-to-date September 30
Basic EPS	1,371	510.4	2.69	1,292	502.5	2.57
Potential dilutive effect of stock-based compensation	—	0.2		—	0.3
Diluted EPS	1,371	510.6	2.69	1,292	502.8	2.57

13. SUPPLEMENTARY CASH FLOW INFORMATION


	Quarter		Year-to-Date
($ millions)	2026	2025	2026	2025
Periods ended September 30
Change in working capital
Accounts receivable and other current assets	32	50	97	132
Prepaid expenses	(40)	(48)	(79)	(68)
Inventories	(43)	(9)	(53)	(41)
Regulatory assets - current portion	8	1	(27)	21
Accounts payable and other current liabilities	72	40	126	—
Regulatory liabilities - current portion	42	8	74	(57)
	71	42	138	(13)

Non-cash financing activity
Common share dividends reinvested	111	112	342	345

As at September 30			2026	2025
Non-cash investing activities
Accrued capital expenditures			1,014	708
Accrued contributions in aid of construction			18	16


			FORTIS INC.			SEPTEMBER 30, 2026 QUARTER REPORT			14


Notes to Condensed Consolidated Interim Financial Statements (Unaudited)


For the three and nine months ended September 30, 2026 and 2025

14. FAIR VALUE OF FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Derivatives

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

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

Energy Contracts Subject to Regulatory Deferral

UNS Energy holds electricity power purchase contracts, gas 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 price curves.

Unrealized gains or losses associated with changes in the fair value of these energy contracts are deferred as a regulatory asset or liability for recovery from, or refund to, customers in future rates, as permitted by the regulators. As at September 30, 2026, unrealized losses of $112 million (December 31, 2025 - $135 million) were recognized as regulatory assets and unrealized gains of $21 million (December 31, 2025 - $37 million) were recognized as regulatory liabilities.

Energy Contracts Not Subject to Regulatory Deferral

UNS Energy holds wholesale trading contracts to fix power prices and realize potential margin, of which 10% of any realized gains is shared with customers through rate stabilization accounts. Fair values are measured using a market approach incorporating, where possible, independent third-party information. Gains or losses associated with changes in the fair value of these energy contracts are recognized in revenue. During the three and nine months ended September 30, 2026, gains of $10 million and $34 million were recognized in revenue, respectively (three and nine months ended September 30, 2025 - gains of $4 million and $36 million, respectively).

Total Return Swaps

The Corporation holds total return swaps to manage the cash flow risk associated with forecast future cash and/or share settlements of certain stock-based compensation obligations. The swaps have a combined notional amount of $92 million and terms up to three years expiring at varying dates through January 2028. Fair value is measured using an income valuation approach based on forward pricing curves. Gains and losses associated with changes in fair value are recognized in other income, net. During the three and nine months ended September 30, 2026, losses of $9 million and gains of $9 million were recognized in other income, net, respectively (three and nine months ended September 30, 2025 - gains of $13 million and $22 million, respectively).

Foreign Exchange Contracts

The Corporation holds U.S. dollar denominated foreign exchange contracts to help mitigate exposure to foreign exchange rate volatility. The contracts expire at varying dates through March 2029 and have a combined notional amount of US$518 million. Fair value was measured using independent third-party information. Gains and losses associated with changes in fair value are recognized in other income, net. During the three and nine months ended September 30, 2026, losses of $1 million and $13 million were recognized in other income, net, respectively (three and nine months ended September 30, 2025 - losses of $7 million and gains of $12 million, respectively).

Interest Rate Contracts

ITC has entered into five-year interest rate swap contracts with a combined notional value of US$200 million which will be used to manage interest rate risk associated with forecasted debt issuances. Fair value was measured using a discounted cash flow method based on secured overnight financing rates ("SOFR"). Gains and losses associated with the changes in fair value are recognized in other comprehensive income, and are expected to be reclassified to earnings as a component of interest expense over the first 5 years of the related debt. Gains of US$6 million and US$8 million were recorded in other comprehensive income for the three and nine months ended September 30, 2026, respectively (three and nine months ended September 30, 2025 - losses of less than US$1 million and US$8 million, respectively).

During the first quarter of 2026, ITC settled interest rate swap contracts with a combined notional value of US$705 million. Gains of US$4 million were recognized in other comprehensive income, which will be reclassified to earnings as a component of interest expense over 5 years.


			FORTIS INC.			SEPTEMBER 30, 2026 QUARTER REPORT			15


Notes to Condensed Consolidated Interim Financial Statements (Unaudited)


For the three and nine months ended September 30, 2026 and 2025

14. FAIR VALUE OF FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (cont'd)

Cross-Currency Interest Rate Swaps

The Corporation holds cross-currency interest rate swaps, maturing in 2029, to effectively convert its $500 million, 4.43% unsecured senior notes to US$391 million, 4.34% debt. The Corporation has designated this notional U.S. debt as an effective hedge of its foreign net investments and gains and losses associated with exchange rate fluctuations on the notional U.S. debt are recognized in other comprehensive income, consistent with the translation adjustment related to the foreign net investments. Other changes in the fair value of the swaps are also recognized in other comprehensive income but are excluded from the assessment of hedge effectiveness. Fair value is measured using a discounted cash flow method based on SOFR. During the three and nine months ended September 30, 2026, losses of $nil and $13 million, respectively, were recorded in other comprehensive income (three and nine months ended September 30, 2025 - losses of $12 million and gains of $5 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 September 30, 2026
Assets

Energy contracts subject to regulatory deferral (2) (3)	—	45	—	45
Energy contracts not subject to regulatory deferral (2)	—	18	—	18
Total return swaps and interest rate contracts (2)	—	38	—	38
Other investments (4)	266	—	—	266
	266	101	—	367
Liabilities
Energy contracts subject to regulatory deferral (3) (5)	(2)	(134)	—	(136)
Energy contracts not subject to regulatory deferral (5)	—	(2)	—	(2)
Cross-currency interest rate swaps and foreign exchange contracts (5)	—	(43)	—	(43)

	(2)	(179)	—	(181)
As at December 31, 2025
Assets
Energy contracts subject to regulatory deferral (2) (3)	—	51	—	51
Energy contracts not subject to regulatory deferral (2)	—	4	—	4

Total return swaps and foreign exchange contracts (2)	—	37	—	37
Other investments (4)	190	—	—	190
	190	92	—	282
Liabilities
Energy contracts subject to regulatory deferral (3) (5)	—	(149)	—	(149)
Energy contracts not subject to regulatory deferral (5)	—	(2)	—	(2)
Interest rate contracts and cross-currency interest rate swaps (5)	—	(23)	—	(23)
	—	(174)	—	(174)

(1)Under the hierarchy, fair value is determined using: (i) level 1 - unadjusted quoted prices in active markets; (ii) level 2 - other pricing inputs directly or indirectly observable in the marketplace; and (iii) level 3 - unobservable inputs, used when observable inputs are not available. Classifications reflect the lowest level of input that is significant to the fair value measurement.

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

(3)Gains and losses arising from changes in the fair value of these contracts are deferred as a regulatory asset or liability for recovery from, or refund to, customers in future rates as permitted by the regulators, with the exception of wholesale trading contracts and certain gas swap contracts.

(4)UNS Energy holds investments in money market accounts, and ITC and Central Hudson hold investments in trust associated with supplemental retirement benefit plans for select employees, which include mutual funds and money market accounts. The fair value of these investments is included in cash and cash equivalents and other assets, with gains and losses recognized in other income, net.

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


			FORTIS INC.			SEPTEMBER 30, 2026 QUARTER REPORT			16


Notes to Condensed Consolidated Interim Financial Statements (Unaudited)


For the three and nine months ended September 30, 2026 and 2025

14. 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
	Recognized in	Netting of	Cash Collateral
($ millions)	Balance Sheet	Energy Contracts	Posted/(Received)	Net Amount
As at September 30, 2026
Derivative assets	63	(21)	11	53
Derivative liabilities	(138)	21	—	(117)

As at December 31, 2025
Derivative assets	55	(29)	15	41
Derivative liabilities	(151)	29	—	(122)

Volume of Derivative Activity

As at September 30, 2026, the Corporation had various energy contracts that will settle on various dates through 2032. The volumes related to electricity and natural gas derivatives are outlined below.


		As at
	September 30,		December 31,
	2026		2025
Energy contracts subject to regulatory deferral (1)
Electricity swap contracts (GWh)	879		890
Electricity power purchase contracts (GWh)	302		395
Gas swap contracts (PJ)	151		183
Gas supply contracts (PJ)	197		147
Energy contracts not subject to regulatory deferral (1)
Wholesale trading contracts (GWh)	5,283		1,430
Gas swap contracts (PJ)	3		2

(1)GWh means gigawatt hours and PJ means petajoules.

Credit Risk

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

ITC has a concentration of credit risk as approximately 70% of its revenue is derived from three customers. The customers have investment-grade credit ratings and credit risk is further managed by the Midcontinent Independent System Operator by requiring a letter of credit or cash deposit equal to the credit exposure, which is determined by a credit-scoring model and other factors.

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

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

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

The value of derivatives in net liability positions under contracts with credit risk-related contingent features that, if triggered, could require the posting of a like amount of collateral was $85 million as at September 30, 2026 (December 31, 2025 - $99 million).


			FORTIS INC.			SEPTEMBER 30, 2026 QUARTER REPORT			17


Notes to Condensed Consolidated Interim Financial Statements (Unaudited)


For the three and nine months ended September 30, 2026 and 2025

14. FAIR VALUE OF FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (cont'd)

Hedge of Foreign Net Investments

The reporting currency of ITC, UNS Energy, Central Hudson, and Caribbean Utilities is the U.S. dollar. The earnings and cash flow from, and net investments in, these entities are exposed to fluctuations in the U.S. dollar-to-Canadian dollar exchange rate. The Corporation has reduced this exposure through hedging.

As at September 30, 2026, US$1.7 billion (December 31, 2025 - US$1.9 billion) of corporately issued U.S. dollar-denominated long-term debt has been designated as an effective hedge of net investments, leaving approximately US$13.8 billion (December 31, 2025 - US$13.2 billion) unhedged. Exchange rate fluctuations associated with the net investment in foreign subsidiaries and the debt serving as the hedge are recognized in accumulated other comprehensive income.

Financial Instruments Not Carried at Fair Value

Excluding long-term debt, the consolidated carrying value of the Corporation's remaining financial instruments approximates fair value, reflecting their short-term maturity, normal trade credit terms and/or nature.

As at September 30, 2026, the carrying value of long-term debt, including current portion, was $37.8 billion (December 31, 2025 - $34.1 billion) compared to an estimated fair value of $34.2 billion (December 31, 2025 - $32.3 billion).

15. COMMITMENTS AND CONTINGENCIES

Commitments

There were no material changes in commitments from that disclosed in the Corporation's 2025 Annual Financial Statements, except as detailed below.

In April 2026, TEP entered into a 20-year gas transportation precedent agreement and amended a previously signed 25-year gas transportation precedent agreement. The agreements support the development of new pipelines, expected to be in service in 2029, which will be owned and operated by third-parties. The purchase commitments are expected to begin in 2029, and are estimated to be US$1.0 billion over the 20-year agreement and an incremental US$1.1 billion over the 25-year agreement. The purchase commitments are conditional on the construction and commercial operation of the new pipelines.

In March 2026, UNS Electric signed a 20-year renewable power purchase agreement for US$279 million of solar energy, pending commercial operation which is expected in 2028.

In July 2026, FortisBC Electric entered into a 30-year power purchase agreement to acquire capacity and energy from the Brilliant Expansion, a 120 megawatt hydroelectric generating facility in British Columbia. The agreement, which was accepted by the British Columbia Utilities Commission in June 2026, reflects total purchase commitments of $1.2 billion and allows FortisBC Electric to purchase capacity and energy beginning in September 2027.

Contingency

During the third quarter of 2026, Central Hudson settled substantially all plaintiff claims associated with an explosion and fire that occurred at a residence located in Wappingers Falls, New York in 2023. As at September 30, 2026, an accrual of US$214 million has been recorded associated with the settlement agreements, as well as an insurance receivable of the same amount as Central Hudson's insurance is expected to satisfy its liability arising from the incident and related lawsuits.


			FORTIS INC.			SEPTEMBER 30, 2026 QUARTER REPORT			18