Northland Power Inc.

Welcome to the Northland Power Conference call to discuss the second quarter 2025 results. As a reminder, this conference is being recorded on Thursday, August 14th, 2025 at 10 a.m. Eastern. Conducting this call for Northland Power are Christine Healy, President and CEO, Jeff Hart, Chief Financial Officer, and Adam Beaumont, Senior Vice President of Capital Markets. 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 subject to various risks. Actual results may differ materially from management's expected or forecasted results please read the forward-looking statement section in yesterday's news release announcing Northland Power's results and be guided by its contents when making investment decisions or recommendations. The release is available at www.northlandpower.com. I will now turn the call over to Ms. Christine Healy.

Thanks, DeeDee. Good morning, everyone, and thank you for joining us today. I'll begin with a business update that will include some key construction milestones and development progress. I'm going to turn it over to Jeff to walk us through then our financial results. Following our remarks, we'll open the line for questions. So I'll start with a moment on health and safety, which, as you know, is of the highest importance at Northland. And I've been doing site visits at our locations around the world where I continue to observe firsthand our team's strong safety commitment. And that's across all of our project sites and our operating facilities. But I did want to take a moment to tell you about something a little bit special that happened recently when our utility EBSA hosted the 16th annual Colombian Electrical Rodeo. So the Electrical Rodeo is an initiative that was started by EBSA in Colombia, where multiple companies come together and line worker teams compete at the national level. So this initiative showcases and rewards safe work practices in the field and elevates those safe practices to make sure that we're sharing the information across the industry. I'm pleased to advise that not only did we host this year's event, but we also took first place. So EBSA showcased the company's technical excellence and strong safety culture. So very proud of the work that the team has done there. So to start the quarter, A quick update on construction. I know it's top of mind for many of you, but the first of our three major construction projects was completed ahead of schedule and under budget. The 250 megawatt Oneida battery storage project in Ontario became Canada's largest operating storage facility and one of the largest in the world. I'm pleased to say Oneida has performed well in its first month. It's delivered capacity and capturing market revenue upside as a first mover in the grid. The grid operator has praised Oneida's rapid response during recent high demand periods. For any of you who are living in the Toronto area, you know we've had some quite hot weather and heat waves, and Oneida was pressed into service and responded very well. So during those high demand periods, Oneida reinforced grid reliability and I think was certainly a benefit in the system. So learnings from Oneida now are being applied on our 80 megawatt Jurassic battery storage project in Alberta. That project secured financing and began construction with the installation of the foundations for the battery packs. And we are preparing for key electrical equipment deliveries in the coming months. That project Jurassic is expected to be completed by the second half of 2026. So I will turn then to our other two major construction projects, High Long and Baltic Power. And it's worth reminding you that together these projects will add 2.1 gigawatts of gross capacity, and they will expand our offshore wind portfolio to five projects. More importantly, we'll diversify our exposure beyond the North Sea for wind conditions. So let's start with Heilong. In the quarter, Heilong, which is our one gigawatt offshore wind project in Taiwan, that project achieved first power. This is a major milestone because it confirms successful grid connection and turbine commissioning. We also completed installation of all of the pin piles. This is a very important step in terms of de-risking our interface with the seabed. and de-risking the rest of the construction process. So the completed installation of those pin piles is an important milestone for the project as well. In addition, the team has worked hard to install 72 out of 73 jacket foundations as of today, and the last jacket foundation should be installed in the coming days. So overall, Heilong remains on track for full commercial operations by 2027. So then we turn then to Baltic Power, our 1.1 gigawatt project in Poland. In the quarter, Baltic Power installed its first turbine, and that's an important milestone in the construction progress. You will recall that first power on that project will follow grid interconnection, which is expected in 2026, and that's in line with our construction schedule. Offshore construction progress has included installation of both offshore substation main foundations, mechanical completion of the topside structure with electrical outfitting underway, and installation of 38 monopile foundations and two substation monopiles in the water. So overall, Baltic Power remains on track for full commercial operations in the second half of 2026. In addition to our construction program, we're advancing our development pipeline. We continue to identify and pursue new opportunities in our core markets of Canada and Europe, aligning with our investment criteria and projects that offer strong value creation for shareholders. So, I'll say a few notes on that because we're focusing more time and attention on our home market of Canada lately, where we do see some near-term opportunities to leverage our existing platform and our strong domestic brand, and we see those opportunities in storage, onshore renewables, and gas power generation. During the quarter, we've advanced several development projects in Canada, As an example, we are actively evaluating opportunities for Ontario's LT2 process, and these are opportunities within our gas power generation and onshore renewables groups, and we see our ability to deploy multi-technologies brings a strong capability to the process because we can adapt to what the system operator is looking for. As part of our continuous process and focus on projects with best risk-adjusted returns, We've been looking at those Ontario opportunities and we've decided to high-grade those opportunities and focus on the projects we see having the highest probability of success. And we'll continue to monitor the procurement details to make sure that we're targeting the right risk-reward balance. Some of the projects that are being deprioritized for LT2 will still remain in the pipeline because they can be contenders in future years. We're also sharpening our focus in Europe where we see positive momentum around grid build-outs and industrial resilience, and that creates opportunities for Northland. As an example, we're looking at several onshore power and battery storage opportunities in Europe, and we see that there's space here for Northland to deploy our strong project execution and operational expertise and drive value for shareholders. So we've also been working on our international project pipeline and assessing where and when we want to allocate capital. In offshore winds, a permit came due in one of our South Korean projects, and having looked very carefully at that opportunity, we chose not to renew the permit. Given the evolving regulatory framework and the uncertainty around development terms in that jurisdiction, we decided this was the right step for Northland. So this decision, I think, is a positive example of our efforts to focus our development work on our markets that we know and understand where we have lower early-stage risks. So we do see that there are ample opportunities, and we're evaluating opportunities in high potential regions of Europe, particularly Central Europe, where we see positive policy support for offshore wind and financial structures that support the way Northland does business. So that's just an example of the type of strategic decision we're taking to ensure we're focused on the right opportunities, the ones that will deliver long-term value to shareholders. And I look forward to sharing more with you about that later this year at our Investor Day. Before I turn it over to Jeff to walk through the financials, I did want to provide a brief overview of our second quarter performance. As you've seen, low offshore wind resources in the North Sea persisted into the second quarter and have continued the trend from Q1. We view this as natural variability, especially when you compare it to the record high output we had in some of our assets in 2024. So unfortunately, our offshore assets in the North Sea have had the lowest wind half year since we started production 10 years ago. Our global operations, however, remain strong. And as I talked to you last quarter, the thing for me that I always ask the teams to focus on is the things within our control. We had solid performance in terms of reliability, and we had excellent performance in our onshore and natural gas business. You can see overall fleet availability exceeded 95% in the quarter. Our wind park availability improved in Q2, and that's a testament to the effectiveness of our asset management teams and our proactive asset management strategy. Our teams are continuing to implement predictive maintenance approaches, and we apply learnings from past events to reduce our downtime. Maintaining our assets in optimal conditions positions us well to capitalize when favorable wind conditions occur. So as a final note, I'll say our global offshore wind diversification strategy is advancing. And one of the things we talked about last quarter, and I'll repeat again, that when Baltic Power and Heilong come online soon, this will change the profile of the wind resource for the company. So expanding into the Baltic Sea and the Taiwan Strait balances our production profile across geographies. So 2025 continues to be a year of key milestones for Northland, and our long-term value proposition is strong. Our dedicated teams are bringing deep expertise across the full project lifecycle from origination through development, construction, and operations. Strong market fundamentals throughout highlight that the global demand for sustainable, affordable, secure power continues to rise, and Northland is well-positioned to capture this momentum. So with that, I'm going to turn it over to Jeff for a detailed update on the financial results.

Thanks, Christine, and good morning, everyone. This quarter, we achieved a number of key construction milestones, continued to maintain strong operations with commercial availability of 95%, and completed planned maintenance outages. Looking at our second quarter results, Northland generated adjusted EBITDA of $245 million, a 9% decrease compared to the same quarter of 2024. This was predominantly due to the low offshore wind resource and higher unpaid curtailments related to negative prices at our German offshore wind facilities, The low offshore wind resource was partly offset by the contribution from the Oneida Battery Facility, which achieved commercial operations this quarter, and good wind conditions across our North American onshore wind fleet. During the second quarter, we generated free cash flow of $58 million, which was approximately 15% lower than the same quarter last year. And on a per share basis, free cash flow in the second quarter of this year was 22 cents compared to $0.27 in the second quarter of 2024. The decrease to free cash flow was primarily related to the lower adjusted EBITDA that I mentioned earlier. That was offset by a decrease in income taxes due to that lower EBITDA and a one-time tax benefit following the German Federal Fiscal Court's recently released ruling for offshore wind farms. The net loss for the quarter was $53 million compared to a net income of $246 million in 2024. And this is primarily due to the lower operating income and non-cash mark-to-market losses on foreign currency hedges. And turning to our investment program at Heilong and Baltic Power, as of the end of the second quarter of 25, we spent $9 billion to date with remaining gross capital expenditures for the two projects expected to be $6 billion. And at Heilong, we have started to see the first pre-completion revenues and at Baltic we continue to advance to first power in 2026 when grid connection is planned. Now I'll turn to our updated guidance. Which is primarily a result of lower offshore wind resource year to date and debut having a schedule or grid outage in the third quarter. We've adjusted our full year forecast for adjusted EBITDA to be in the range of 1.2 to $1.3 billion compared to the previous guidance of 1.3 to $1.4 billion. We also revised free cash flow, which is now projected to be between $1.15 and $1.35 per share. And that compares to $1.30 to $1.50 per share in previous guidance. And I'll hand it back to Christine to conclude the call.