Northland Power Inc.

Welcome to the Northland Power Conference call to discuss the third quarter 2025 results. As a reminder, this conference is being recorded on Thursday, November 13th, 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.

Good morning, everyone. Thank you for joining us today. I will begin with our business update and then Jeff will provide more details on the financial results. Just a quick note that with our 2025 investor day coming up next week, today's remarks will focus on Q3 results and details behind the change to the dividend. We will share more detail on strategy and growth priorities on November 20th and we hope to see you there. After our prepared remarks, we'll open the line for questions. So I'll start with health and safety, because as always, safety remains a core value and top priority at Northland. This quarter, Northland and our partners at the Oneida Battery Storage Project received an Ontario Electrical Safety Award, recognizing the project's safety practices. With nearly 300,000 worker hours and zero lost time incidents, Oneida has set a new standard for field safety on large-scale builds. We're very proud of that. And during my visit to site, I saw firsthand the team's strong commitment to safety and performance. The executive team and I are looking forward to sharing our new strategy at Investor Day next week. We'll be presenting a plan that capitalizes on the growing demand for power globally, and particularly in our core markets of Canada and Europe. And this is driven by electrification, energy security, data center, and decarbonization trends. This demand for power, particularly in our core markets, offers a number of organic opportunities and value enhancement opportunities within our existing fleet. Northland's strong capability as a global power operator across multiple solutions allows the company to execute on this strategy. I will add that as part of our new strategy, we have been assessing growth opportunities in our core markets. and we have line of sight to multiple value accretive opportunities where Northland's capabilities can be deployed to deliver long-term value for shareholders. To provide greater financial flexibility for self-funded growth and maintain an investment grade balance sheet, the board of directors, including me, has decided to adjust Northland's dividend to 72 cents per share on an annual basis. We are committed to this sustainable dividend And it remains an important component of our long-term value proposition. So I'm going to pause here because as you know from my previous comments and from my history, changing the dividend is not something I wanted to do. In my career, I have always resisted this. And I can tell you that I have resisted it here at Northland too. But my goal and our goal at Northland is always to deliver best value for shareholders. And after much analysis and assessment, I'm convinced that this is the best way to do that. Since arriving at Northland, I've had hundreds of meetings with investors, partners, suppliers, governments, and competitors. I brought Jeff in and I tasked him with analyzing where we are with our current assets and our pipeline. And he and the teams have done a great job to give us a clear picture of what's happening. We've also completed our strategy deep dive and our planning cycle now for 2026 to 2030. I also stood up this task force and we've been screening hundreds of opportunities large and small in Europe and in Canada. And they have found several value accretive opportunities and you're going to be hearing more about these in the coming weeks and months. These opportunities are better than any we've seen in the last five years and indicate to me that having the flexibility to move on those opportunities is important. And so I contrast that against the backdrop that we've seen in 2025, which I would refer to as a year of volatility. We saw historically low winds in the North Sea in more than the front half of the year. We saw a dramatic shift in sentiment in the United States related to renewables. We've seen a softening of corporate PPA activity in Europe. And we see in many of our core markets increasing divergence in electricity pricing forecasts. In parallel, we have two very large projects in construction. And while they remain on track and our teams are delivering, in the words of Robert Frost, there are miles to go before we sleep. So when I'm looking ahead at how are we going to deliver best value to shareholders over the five and ten year horizon, We established some financial guardrails. We will maintain an investment grade balance sheet. We will provide flexibility to deploy on value accretive growth that is self-funding without reliance on equity markets. And we will maintain a sustainable dividend, all of which is achieved with this change. We believe this recalibration brings the payout ratio to a level that is prudent for a capital intensive growth company. This plan does not rely on external common equity, and it enables us to fund a project pipeline that will generate highly attractive risk-adjusted returns. And I will reiterate that the dividend remains an important component of Northland's capital allocation framework. Turning to our third quarter results, they were strong. Our global operations performed again to a high availability, over 95%. and the stronger wind in September led results to surpass last year in the same quarter. That good wind has carried into October, which we were happy to see. Turning to our projects in construction, at Heilong, our 1.1 gigawatt offshore wind project in Taiwan, over half of the wind turbines have now been installed. As you will note from the press release though, pre-completion revenues have been lower than expected, due to longer commissioning times for installed wind turbines and certain technical components of the onshore substation needing to be replaced. We expect this to be resolved and it will enable us to remain on track. And so the overall message is that the project remains on track for full commercial operations in 2027. In Poland, our 1.1 gigawatt Baltic power project installed both offshore substations each weighing over 2,500 tons and located about 20 kilometers offshore. These substations will collect energy from our 76 turbines and transfer it to the onshore grid. That project also remains on track with full commercial operations expected in the back half of 2026. Turning to development and growth, We continue to advance and refine our development pipeline, pursuing opportunities in our core markets of Canada and Europe that meet our investment criteria and deliver shareholder value. In Canada, we see opportunities across all our generation and storage technologies, leveraging our strong domestic platform and brand. In Europe, we're evaluating several renewable power and battery storage projects where we can apply our project execution and operational expertise. In Scotland, the 1.4 gigawatt floating foundation project, Hebride, has been de-prioritized as part of our disciplined capital approach. At the same time, our 900 megawatt fixed bottom offshore wind project, Spirit Numera, has completed community consultation and is progressing toward consent submission with the government. Global demand for reliable, affordable, sustainable power continues to rise, and Northland is well positioned to capitalize on this trend. I also reiterate that we have access to a growing number of opportunities, including what we call value enhancement projects that offer short cycle opportunities to deliver higher returns from our existing fleet. We see organic growth opportunities within our own pipeline and opportunities for acquisition of projects in mid to late stage on attractive terms. So with that, I'm going to turn it over to Jeff for a detailed update on our financial results. Jeff?

All right. Thanks, Christine. And good morning, everyone. I'll take some time to discuss our third quarter results, which were positively impacted by strong wind resource in September. And as Christine mentioned earlier, our strong availability of over 95% allowed us to capture much of the benefit. The quarter also benefited from the Oneida Battery Facility operations commencing in May. That performance was partially offset by a planned grid outage at Debu and lower solar and wind resource at our operations in Spain. Northland generated adjusted EBITDA of $257 million, a 13% increase compared to the same quarter of 2024, which was mainly a result of higher production at our three offshore wind assets and an outage last year at Gemini and the additional contributions from Oneida, which came on earlier this year. During the third quarter, We generated free cash flow of $45 million, which was approximately 130% higher than the same quarter last year. And on a per share basis, free cash flow in the third quarter of this year was 17 cents compared to 8 cents in the third quarter of 24. The increase to free cash flow was primarily related to the higher adjusted EBITDA that I mentioned earlier. And the net loss for the quarter was $456 million compared to a net loss of $191 million in 24. And this is primarily due to a $527 million non-cash impairment that was recognized for the Nord C1 offshore wind facility, resulting from the transition from the initial subsidy pricing regime to market pricing by May, 2027. We have also updated our long-term production forecasts and anticipate an increase in operating and maintenance costs. Turning to our investment program at the Heilong and Baltic Power projects, as of the end of the third quarter of 2025, We've spent approximately $12 billion to date with remaining expected gross capital expenditures for the two projects to be $5 billion. At high long, we've started to see the first revenues post-first power, although lower than we expected, as Christine mentioned, impacting the pre-completion revenues by approximately $150 to $200 million Northland share. Overall, the project is continuing on track and on budget. At Baltic Power, we continue to advance to first power in 26 when grid connection is planned. Our financial guidance for 25 is unchanged, with adjusted EBITDA expected to be in the range of $1.2 to $1.3 billion, and free cash flows projected to be between $1.15 and $1.35 per share. Now turning to the balance sheet and updated capital allocation plan. As Christine mentioned, the announcement of the decision to recalibrate the dividend was not easy. but provides the company a sustainable financial framework and provides funds to make accretive investments, which are underpinned by the cash flows of our business and an investment-grade balance sheet. Our plan is expected to be self-funded with no reliance on common equity issuances. I'll be happy to share further details with you and lay it out at Investor Day next week. I'll hand it back to Christine to conclude the call.