Algonquin Power & Utilities Corp. Common Shares

Good morning. My name is Emma and I will be your conference operator today. At this time, I would like to welcome everyone to the Algonquin Power and Utilities Corporation 2021 fourth quarter earnings webcast and conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star 1. Thank you. Amelia Tsang, VP, Investor Relations. You may begin your conference.

Good morning, everyone. Thanks for joining us this morning for our fourth quarter and full year 2021 earnings conference call. Presenting on the call today are Reem Basgoda, our President and Chief Executive Officer, and Arthur Kaspersak, our Chief Financial Officer. Also joining us this morning for the Q&A part of the call will be Jeff Normand, our Chief Development Officer, and Johnny Johnson, our Chief Operating Officer. To accompany our earnings call today, we have a supplemental webcast presentation available on our website, algonquinpowerandutilities.com. Our financial statements, management discussion and analysis, and annual information form are also available on the website, as well as on CEDAR and EDGAR. Before continuing the call, we would like to remind you that our discussion during the call will include certain forward-looking information, including but not limited to our expectations regarding future earnings, capital expenditures, and pending acquisitions. At the end of the call, I will read a notice regarding both forward-looking information and non-GAAP measures. Please also refer to our most recent MD&A filed on Cedar and Edgar and available on our website for additional important information on these items. On our call this morning, Arun will provide an overview of our Q4 and annual performance. Arthur will follow with the financial results, and then Arun will conclude with an update on our strategic plan for the business. We will then open the lines for questions. I ask that you restrict your questions to two and then recue if you have any additional questions to allow others the opportunity to participate. And with that, I'll turn it over to Arun.

Thank you, Amelia, and a very good morning to those who have been able to join us on the call and online. Given that this is our year-end earnings call, I want to provide some highlights and speak to performance, both financial and operational, for Q4 and full year 2021. Firstly, on financials, I'm pleased to report steady year-over-year growth in the following key financial metrics. 2021 adjusted EBITDA of nearly $1.1 billion increased 24% year-over-year from $869.5 million, largely from new facilities that came online in 2021 on the renewable side, including Maverick Creek Wind and Alta Vista, as well as contribution of new facilities on the regulated side, including Empire Wind and a full year of contribution from Belco and Esau. Our 2021 adjusted net earnings per share of 71 cents was up 11% from the 64 cents reported in the prior year and came in line with our expectations. Last year, we reported annual dividends per share of 67 cents representing a 10th consecutive year of dividend increases. We also exceeded the year with approximately $16.8 billion in assets, a 27% increase over the $13.2 billion reported in the prior year. Secondly, on execution. The company undertook a number of successful growth initiatives and continue to execute on strategic priorities in 2021, which are positioning us well for the future. We continue to focus our efforts on Algonquin's three strategic pillars, growth, operational excellence, and sustainability. And I will provide more details on each of these pillars. Earlier this year, We closed on the acquisition of New York American Water, which services over 125,000 customer connections across seven counties in southeastern New York, and we officially welcome the New York American Water employees into Liberty. The transition has gone very well as planned. Staying on the topic of growth, I want to provide you an update on our pending $2.8 billion acquisition of Kentucky Power Company and AEP Kentucky Transmission Company. We remain excited and firmly committed to this transaction and look forward to bringing the benefits of our local operating model to Eastern Kentucky. As we previously mentioned, our expectation of enhancing Kentucky Power's local operating model bringing benefits to customers by exploring opportunities to reduce customer rates through investing in green energy, and creating increased local employment are all attributes that are expected to help customers and the local communities while driving value for shareholders. To that end, you are likely aware that we jointly filed with ADP an application with the Kentucky Commission on January 4th for the approval of the acquisition of Kentucky Power. By statute, the Commission must issue an order on the application within 120 days. We expect to close the transaction in mid-2022 after receipt of state and folk level approvals and satisfaction of all other closing conditions. To date, We have already received hard-scarred Rodino and CFIUS approvals. Staying on the regulatory front, our red review at Empire Electric continues to progress well. On February 4th, 2022, a stipulation was reached among Empire Electric, Office of the Public Council, staff of the Missouri Public Service Commission, and other intervenors. Hearings were held on February 7 on rate design, and a hearing on the stipulation was held on February 10, with new rates expected to be implemented in May of 2022. We believe the settlement represents a fair outcome for customers and the company. We continue to invest in our network to deliver mission-critical services to our communities while keeping customer affordability top of mind. Another growth pillar in our regulated business is focused on deploying capital to benefit our customers. In 2021, the regulated services groups invested over $1.9 billion, including the completion of our Midwest Green Initiative, where we brought 600 megawatts of wind generation online. In the coming years, we expect to invest between 800 million and 1.2 billion annually into our rate base to improve safety, security, reliability, resiliency, and customer experience. Turning to the growth levers on our renewable business, in this business, Our ability to originate and execute projects is a critical growth lever. 2021 has been a record year for Algonquin, with nearly 1,200 megawatts of new renewable projects either closing or reaching commercial operations. In December 2021, we completed our latest project to achieve commercial operations, the 24 megawatt EBR wind facility in Quebec. with all of the energy being sold to Hydro-Québec. The 175 megawatt Blue Hill facility in Saskatchewan, with all of the energy under contract with SAS Power, is on track to achieve commercial operations in March 2021. Our construction program continues with the expected start of construction in Q2 2022 of the Deerfield 2 and Sandy Ridge 2 wind projects. Also, we continue to progress our partnership with Chevron and expect to start construction on the first two of these solar projects in mid-year. The fact that we continue to successfully execute on construction in the midst of the COVID pandemic and supply chain challenges is a testament to the hard work, entrepreneurial culture, and experience base of our employees. At our investor day, we discussed our strong development platform, where our ongoing development has resulted in growing our greenfield pipeline of prospective generation projects to 3,800 megawatts by the end of 2021. This growth is net of projects totaling 640 megawatts, which advanced from our greenfield pipeline into our five-year capital plan. The 640 megawatts that advanced includes the Riverbend Wind Project in Michigan, the Blue-Violet Combined Wind Solar Project in Illinois, and four projects being developed in partnership with Chevron in New Mexico and Texas. Two other important initiatives in 2021 to establish a strong foundation for future growth include building a 1,700 megawatt-hour pipeline of prospective energy storage projects and entry into renewable natural gas with the agreement to acquire Sandhill, a developer of RNG projects. Sandhill represents an attractive platform, giving us immediate entry via its portfolio of four projects in the state of Wisconsin, two of which are currently under construction with first production expected around the end of Q1, and two projects which are in late-stage development. According to a U.S. Environment Protection Agency report, Wisconsin represents the state with the second largest universe of renewable natural gas opportunities. And we are excited to utilize Sandhill as an RNG growth platform. This acquisition is expected to close in the first half of 2022. Moving on now to operational excellence. In a mission-critical industry, safety and reliability are always key areas of focus. I'm very pleased to share that we have passed an impressive milestone of over 750 days. That is nearly 11 million work hours without a single lost time injury across our North American business while keeping our customers and community safe. and maintaining our system reliability and resiliency. I want to thank all of our employees for their ongoing focus on safety and preparedness for weather events. I want to particularly call out and thank the electric team in Tahoe as that area received record-breaking snowfall over the Christmas holidays. Liberty crews worked hard throughout the holiday weekend to restore power to our customers and communities as quickly and safely as possible during harsh weather conditions. The hard work and dedication of our employees did not go unnoticed by the customers and local communities we serve. And finally, we remain firmly committed to sustainability through the inclusion of environmental, social, and governance values in our broader corporate strategy and day-to-day operations. In 2021, we announced our target for net zero for scope one and two emissions by 2050 with a critical path supported by our strong decarbonization track record, extensive experience in regulated utility management, and deep expertise in renewable development. On the governance side, We successfully embedded sustainability into our management's compensation model, continuing to enhance how ESG factors are embedded throughout the organization's business goals. And finally, in 2021, AQN's ESG ratings continue to improve in the aggregate, positioning the company as a sustainability leader. More recently, I'm pleased to report the company's inclusion in the 2022 Bloomberg Gender Equality Index for the third year in a row. Our inclusion into the index is a testament to our continued efforts for continued gender equality, improved gender equality, and transparency as we target above-market gender representation at our board and executive levels. With that, I'll pass it over to Arthur, who will speak to our fourth quarter and full year 2021 financial results.