Northland Power Inc.

Welcome to the Northland Power Conference call to discuss the first quarter 2024 results. As a reminder, this conference is being recorded on Thursday, May 16th, 2024 at 10 a.m. Eastern Standard Time. Conducting this call for Northland Power are Mike Crawley, President and Chief Executive Officer, John Brace, Executive Chair, and Adam Beaumont, Interim Chief Financial Officer. Before we begin, Northland's management has asked me to remind listeners that all figures presented are in Canadian dollars, and to caution that certain information presented and responses to questions may contain forward-looking statements that include assumptions and are not subject to various risks. Actual results may differ materially from management's expected or forecasted results. Please read the forward-looking statements section in yesterday's press release announcing Northland Power's results and be guided by its content when making investment decisions or recommendations. The release is available at www.northlandpower.com. I will now turn the call over to Mr. Mike Crawley. Please begin, sir.

Okay. Thank you very much, and thanks to everybody for joining us this morning. As always, I'd like to start by taking a moment to emphasize that the health and safety of our people is our top priority at Northland. We have three construction projects now well underway, and we have now close to 50 well-trained health and safety professionals working closely with our project teams, our contractors, and our partners to ensure that our health and safety program is best in class. So now jumping to our quarterly updates, we have a strong start in 2024 with first quarter financial results better than expected. Our results were higher than last year, primarily due to higher wind resources. across all offshore wind facilities, as well as the contribution from our New York onshore wind facilities, which began operating in October of 2023. All our operating offshore wind facilities experienced strong electricity production in the first quarter, with our Deutsche Buch offshore wind farm in Germany achieving an all-time high production level. The strong operating performance results in our first quarter adjusted EBITDA of over $450 million. It's an increase of close to 30% or approximately $100 million compared to the same quarter of 2023. On adjusted free cash flow and free cash flow per share, they were $0.88 and $0.85 per share respectively in the quarter compared to $0.72 and $0.62 per share respectively during the same period a year earlier. As noted in our press release yesterday, we're reaffirming our 2024 financial guidance and outlook. Adam Beaumont will provide more details on financial information later in the call. So moving into construction updates, we continue to make good progress on our construction program for the two large offshore wind projects in Taiwan and Poland and the battery storage project in Canada. As you recall, in our investor day, we provided a great level of detail on what has been done and what are some of the critical milestones for all our three construction projects. To illustrate how advanced the projects were, we gave a percentage of completion as we wanted to outline what had already been achieved as of December 31st, 2023 as a baseline. Moving forward, we'll report on the status of our key milestones on each of the three projects. This will give our investors and stakeholders a very good and ongoing overview of our construction progress. With that, I'm going to start with our Heilong project in Taiwan. This one gigawatt offshore wind project, which is 30.6% owned by Northland, continues to progress well. The project continues to make progress with fabrication of foundations, cables, and the onshore and offshore substations well underway. Turbine component manufacturing has also commenced. Offshore construction work has continued to advance with the installation of both offshore substation jacket foundations. and pin piles, which was used to anchor in the jacket foundations at multiple turbine locations. Other major components of the wind park are arriving in Taiwan, including turbine jackets and the first offshore substation topside, which is a substantial structure. Full commercial operations are expected to commence in 2026-2027, according to the schedule. Overall cost continues to be aligned with original expectations. Once operational, Heilong will be one of the largest offshore wind facilities in Asia and will provide enough clean energy to power more than one million Taiwanese households. Standard metric used to measure output from a wind farm or renewable energy facility. And of course, a lot of the demand growth and demand for energy in Taiwan is actually fueled by the technology sector there. Moving to Baltic Power, our 1.1 gigawatt offshore wind project in Poland, which is 49% owned by Northland. On that project, Baltic Power is one of the first large-scale offshore wind projects, indeed it's the first offshore wind project to go to construction in Poland, and it will play a key role in the country's energy transition and in the country's decarbonization program. The project continues to make progress on the fabrication of onshore and offshore substations, foundations, export cables, and inter-array cables. Turbine manufacturing as well has commenced, and the onshore substation construction is well underway. The full commercial operations are expected to commence in the latter half of 2026, which is according to the schedule, and overall project cost continues to be aligned with the original expectations. So lastly, the Oneida Battery Energy Storage Project in Ontario, which is 72% owned by Northland. This project is one of the largest battery storage projects in the world and will provide essential grid services and reliability to the Ontario electricity system. It's also important to note that this is an asset class that is expected to see lots of growth over the next decade as grids seek to balance intermittent renewables. project continues to make progress with its construction activities all foundations for the battery packs and transformers have been installed all battery packs this is important have been delivered to site and medium voltage transformers have started to arrive as well full commercial operations are expected to commence in 2025 which again is according to the schedule overall project costs continues to be aligned with original expectations for this project. As you can tell, we have good momentum on our construction program, but we do continue to be vigilant, disciplined, and focused on these programs to ensure that these projects come in on time on budget and deliver the material boost in cash flow that NPI is expecting. As such, project execution for the company does remain our number one priority. Moving on to other significant first quarter events, in March, we entered into an agreement to sell 100% of the 130 megawatt La Lucha solar facility in Mexico. The sale is expected to close in 2024 upon satisfaction of customary closing conditions. Now, this transaction is all about rationalization of the markets that we're in, as well as recycling capital. And as we said at investor day recently, we remain disciplined and prudent in managing our capital and financing needs. And we have no further requirement to access equity or debt markets for additional growth. And we will continue to be highly disciplined and selective in pursuit of any new opportunities and only move forward on such opportunities that demonstrate value accretion to shareholders. Now, before I finish, as most of you are aware from our announcement At the end of March, the board and I came to a decision in March that Northland would undergo a well-planned leadership transition over the next several months. So as such, I will be transitioning out of my role as president and CEO effective September 30th. Now, it's not goodbye quite yet, but I do want to say on this call that it has been a great honor to work with such a talented and dedicated team at Northland over the last nine years, including six as CEO. We've all achieved a lot working together. And I'd like to thank all of our shareholders, partners, lenders, and employees for their trust and support over the years. All of these projects, these investments, and the strong availability that we've been able to deliver consistently from our operating facilities, that involves not just the employees of Northland, but a lot of our partners and suppliers as well. As part of the transition plan, John Brace, many of you know, has served as CEO of Northland from 2003 to 2018 and as board chair since 2019, will take on the role of executive chairman until the next CEO is selected and starts. Now I've known John for over 20 years and I think a number of you on the call would know John well as well. He's been a key figure in Northland's history and will provide strong leadership and guidance as interim executive chair during this transition period to act as a bridge between myself and the next president and CEO. It's almost like a relay race with me handing a baton to John and then John handing that off to the next president and CEO, all to ensure that this transition moves as smoothly as possible with no impact on the business, no impact on employees. So on that note, I'll hand things over to John.

Thank you, Mike, and good morning, everyone. I would like to start by expressing my gratitude to Mike for his outstanding leadership and immense contribution to Northland. As the board and I continue to attest, Mike has been instrumental in expanding our global presence, diversifying our portfolio, and developing our long-term growth pipeline. As Mike mentioned, the company is in a position of strength with growth locked in through 2027 in our major construction programs for high, long, Alta Power and Oneida well underway and all progressing according to schedule. As mentioned already, there are no changes to guidance or outlook for the year. And Northland remains extremely well placed for the future as governments and corporations globally work towards their energy transition targets. And as Mike mentioned, through discussions between him and the board about the future, we felt that this was the right time to initiate a leadership transition given the strong position of the company. As we go through this transition period, I want to emphasize that we remain committed to our strategy and priorities as presented at our recent investor day. We will continue to focus on enhancing shareholder value and fostering strategic accretive growth and builds on Mike's many successes. We are progressing with a comprehensive global search for our new president and CEO with a top-tier executive search firm actively leading these efforts. We are targeting a leader who align with our company's values, complement the exceptional talent that we have at Northland, and drive shareholder value as we prepare for our next phase of growth. On behalf of the board and everyone at Northland, I would once again like to thank Mike for his dedication and service and wish him all the very best. Northland has a best-in-class leadership team who I've known for some time in my role as chairman and who I have now had the pleasure of working more closely with over the past month. Supplementing our leadership strength, we've welcomed our newest addition to the executive team earlier this week, Toby Edmonds. Toby is the new executive vice president of our offshore wind business unit, whose primary focus will be on the successful project execution of High Long and Baltic Power. Toby has an outstanding track record in offshore wind, and we are both fortunate and delighted to have him aboard. With that, I will now turn the call over to Adam, who will provide a more detailed review of our financial results.