Canadian Utilities Limited

Thank you for standing by. This is the conference operator. Welcome to the fourth quarter 2025 results conference call and webcast for Canadian Utilities Limited. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then zero. I would now like to turn the conference over to Mr. Colin Jackson, Senior Vice President, Financial Operations. Please go ahead, Mr. Jackson.

Thank you, and good morning, everyone. We are pleased you could join us for Canadian Utilities' fourth quarter 2025 conference call. On the line today, we have Bob Miles, Chief Executive Officer, Katie Patrick, Chief Financial and Investment Officer. Before we move into today's remarks, I would like to take a moment to acknowledge the numerous additional territories and homelands on which our global facilities are located. Today, I am speaking to you from our Akko Park head office in Calgary, which is located in the Treaty 7 region. This is the ancestral territory of the Blackfoot Confederacy, comprised of the Siksika, the Kainai, and the Pagani Nations, the Tsutina Nation, and the Stoati-Nakota Nations. which includes the Taniki, Berespa, and Good Stoney First Nations. I also want to recognize that the City of Calgary is home to the Métis Nation of Calgary, Districts 5 and 6. We honor and respect the diverse history, languages, and ceremonies and cultures of the Indigenous people who call these areas home. Today's remarks will include forward-looking statements that are subject to important risks and uncertainties. For more information on these risks and uncertainties, please refer to our filings with the Canadian securities regulators. During today's presentation, we may refer to certain non-GAAP and other financial measures, including adjusted earnings, adjusted earnings per share, and capital investment. These measures do not have any standardized meaning under IFRS, and as a result, they may not be comparable to similar measures presented by other entities. Please refer to our filings of the Canadian Securities Regulator for further information. And now, I'll turn the call over to Bob for his opening remarks.

Thank you, Colin, and good morning, everyone. To begin, I'm really pleased to tell you about Notably, we overcame $57 million of headwinds last year. This is a major feat, highlighting our ability to deliver earnings growth in the phases of challenges. This is a testament to our strong work ethic, discipline, and resiliency. Katie will speak to this more in the financial update. I want to reiterate the key pillars driving our strategy and where we will focus our efforts in 2026. First, we have growth and prosperity. This is reflective of our project pipeline across all of our business segments. Next, we have operational excellence, which includes continuous modernization of our operating model with safety, reliability, and resiliency at the forefront. And lastly, we remain focused on financial leadership, which includes our funding strategy and financial performance. Beginning with our first pillar, growth and prosperity. 2025 was a transformational year at Canadian Utilities. The team at Akko Energy Systems saw significant growth with over 19,600 new gas connections. This is the largest number of gas connections we've had in a decade, and we are projecting to continue this momentum into 2026. With our largest assets located in Alberta, we remain optimistic for the year ahead. Throughout 2025, Alberta experienced the strongest population growth, leading the country amongst all provinces. As shown on this slide, this population growth, along with industrial development, is also driving the increasing electricity load forecast for Alberta. We continue to believe that significant investment will be required in our service territory reinforcing our view that Alberta is leading Canada's energy future. Aligned with Alberta's growth forecast, we are spurring investment and capitalizing on growth opportunities in front of us. Today, we announced the $12 billion five-year capital expenditure plan across all of our regulated utilities, which I'm proud to say is our most ambitious plan in the history of Canadian utilities. As shown on this graph, you can see a significant increase in our natural gas transmission spending in 2026 and 2027. This is directly correlated with the Yellowhead Pipeline project, which I will expand upon later in my remarks. Although 2028 will see a year-over-year decline in capital spend following the completion of the Yellowhead project, I want to highlight on this slide that our 2028 to 2030 plan will still be significantly above historical levels as we focus on three key areas, customer growth, system reliability and safety, and climate and technology. I will also note that the forecast does not account for any prospective major projects that may be approved to alleviate existing capacity constraint on the natural gas or electric transmission systems. nor does it reflect the possible approval of new interprovincial electric transmission lines. These potential projects would be additional growth not currently recognized in the forecast. Our strategic capital plan is driving our five-year compound annual growth rate, or CAGR, of 6.9%. an increase from our previously announced three-year forecast of 5.4%. This CAGR includes our regulated utility businesses and the impact from the Yellowhead Pipeline project. I would like to remind everyone that it does not include the growth ambitions from our non-regulated assets and only reflects regulated distribution and transmission, allowing for further growth for our organizations. We are pleased to confirm that our Central East Transfer Out project, or CETO, continues to progress on time and on budget with our 85 kilometers of the transmission line on track to be energized by June of this year. This $255 million investment directly mitigates grid congestion challenges and remains a critical piece of energy infrastructure in the province, improving the efficiency of our grid. Beyond CETO, further opportunities exist to improve congestion of the electricity system as our transmission lines are located in key areas that will bring generation to consumers, including industrial development. Opportunities that we expect will drive long-term growth include the Northwest Area Transmission Development. This is one area where the ISO has initiated needs identification development work for transmission reinforcements in the Grand Prairie area of Alberta to support existing demand, future load growth, and reliability. The size of this opportunity will be clear as we progress through 2026 with a preliminary cost estimate of $500 million. The McNeil converter station is another opportunity we continue to progress. As shown on the map, the McNeil converter station is currently the only intertied point between Alberta and Saskatchewan. Currently the ISO-led work is being undertaken for an end-of-life replacement of the McNeil converter. Once complete, this will enable more generation to flow between Alberta and Saskatchewan, representing the next step in addressing regional congestion and supporting system reliability. Due to the scope involved with this opportunity, Preliminary cost estimates are approximately $1 billion, and we would expect the majority of the costs to fall outside of our five-year capital plan. And finally, we believe there are a number of opportunities for us related to substations and interties. On substations, I'm proud to announce we recently had two new substations approved by the AUC in Fort McMurray and in Northwest Alberta. which will be in service in late 2026 and the first half of 2027, respectively. Beyond these projects, we continue to work on other substation development opportunities throughout the province of Alberta. As it relates to interties, we are optimistic about the collaboration referenced in the Alberta-Canada MOU, which is expected to significantly increase the intertie transfer capability between the western provinces. which we expect will be an opportunity for our utilities. Moving to our largest infrastructure opportunity, the Yellowhead Pipeline project. This project will be a key conduit to connecting supply to demand growth while de-bottlenecking Alberta's existing natural gas network. Ultimately, the Yellowhead Pipeline will relieve pressure on the entire Alberta integrated system making it a key infrastructure investment in the province. The Yellowhead pipeline is fully situated in Alberta, running through Treaty 6 territory. We continue to pursue partnership arrangements with Indigenous partners, First Nations and Métis, as meaningful participation remains essential and closely linked to our company values. In 2025, the project reached several milestones, including the approval of the needs application from the AUC. In late 2025, we also filed a facility application with the AUC. This facility application includes a detailed technical and environmental plan, along with our consultation data, a requirement for construction approval. We expect to receive approval of the facility application by the third quarter of this year, which will enable us to commence construction. Other Yellowhead milestones accomplished in the last quarter include the procurement of steel pipe, the securing of major equipment for compressor facilities, and the advancement in the selection of a number of service providers. We continue to work collaboratively with the AUC to progress this project, and I'm proud to share that the Yellowhead Pipeline project is now 100% contracted. reinforcing the need for this natural gas pipeline in Alberta. Moving to Australia, I'm also proud to say that Atco Gas Australia continues to deliver strong results, particularly under the new access arrangement, AA6. For the five-year AA6 period, the return on equity is 8.23%. Coupled with the arrangement, the Australia government forecast significant population increases, from which we will benefit and expect to grow by 80,000 new customers during the AA6 period. Our five-year capital plan has $500 million of investment in our Australian gas business, and we remain confident that we will continue to see growth in Australia in the years ahead. As I look at the non-reg side of the business, we have a strong base of assets that align with our strategic pillars of energy storage, generation, and cleaner fuels. Notwithstanding the challenges renewable generation is facing in Alberta, we remain committed to the long-term strategic potential of power generation. In the fourth quarter, we acquired a 100% ownership interest in Northstone Power Corporation. an independent 18.6 megawatt power producer located near Grand Prairie, Alberta. Northstone primarily operates as a gas peaking facility, supplying power during periods where there is low renewable generation. This acquisition provides differentiated economics and follows a distinct operating strategy, complementing our existing assets and strengthening our generation profile. As you can see on the slide, we have a balanced portfolio of gas fired, wind, solar, and hydro generation assets. As previously mentioned, and based on our inability to get Government of Canada support for rail infrastructure expansion, we've made the decision to pause further work on the Alberta Hydrogen Hub project. We did stage-gate this cleaner fuel project opportunity, and we will reevaluate the project at a later date should investment in cleaner fuels like hydrogen become more economically feasible and market conditions become more favorable. The project remains part of the portfolio and our long-term cleaner fuel strategy, but in the near term, we require appropriate policy frameworks to make the project investable. As part of our cleaner fuel strategy, we continue to move ahead with the first phase of the Atlas Carbon Storage Hub in partnership with Shell Canada. This project serves as a centralized storage facility for carbon emissions in Alberta's industrial heartland region. Construction has begun, and once it reaches commercial operations in late 2028, Atlas will be another key non-regulated asset within our portfolio. Optionality allows us to choose growth opportunities we wish to pursue. Natural gas storage remains a valuable asset for our business, generating consistent and predictable cash flow based on long-term secure contracts. The growth in our storage business has allowed us the ability to offset the reduction in our generation earnings and still achieve our overall non-regulated financial targets. We remain on track to expand the capacity of our carbon and Alberta hub assets from 117 petajoules today to 130 petajoules by the end of 2026. This expansion will support future natural gas storage financial performance. Outside of these accretive organic growth opportunities, we continue to review strategic opportunities for additional growth in both natural gas storage capacity and power generation, including M&A. We are well positioned to capitalize on these market fundamentals, and I look forward to sharing further updates as we progress through 2026. Our second pillar, operational excellence, is anchored on safety, reliability, and operational outperformance. Despite a challenging wildfire season with the number of fires in 2025 well above the five-year average, we were able to maintain strong operational performance, reinforcing the strength and reliability of our infrastructure and systems. As evident by the year-over-year performance on this slide, we saw significant improvement in the overall reliability of our Alberta distribution utilities. despite headwinds caused by wildfires. These results can be directly attributed to the teams across our company who seamlessly coordinated their efforts while responding with remarkable efficiency and unwavering dedication to the safety of our people. As we look at safety across Canadian utilities, we were able to achieve zero recordable incidents across our non-regulated businesses in 2025. a wonderful accomplishment. Throughout 2025, our team members continue to show their commitment to continuous improvement, and as we enter 2026, safety, reliability, and operational outperformance will continue to be at the forefront of our operations. Our third pillar is financial leadership, and with that, I'll pass the call to Katie to discuss this in further detail.