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.

Thank you, Jeff. I'm also looking forward to our investor day next week, and we will then be providing deeper insight into our focus areas, the progress we're making across the business, and our growth plans. That concludes our prepared remarks, so I'll turn the call over to the operator. Operator, please open the line for questions.

Thank you. As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by while we compile the Q&A roster. And our first question comes from Baltaj Tudu of National Bank of Canada. Your line is open.

Hey, good morning, and thank you for taking my question here. Could you set some color on the magnitude of the impairment at Nord Sea 1, and what are the factors that led to the recalibration of the write-down? was prior market expectations and market prices elevated and how are conversations evolving with respect to recontracting opportunities?

Yeah, no, you know, thanks. And it's Jeff here. Yeah, the impairment has been, it was primarily related to the pricing that we've gone out and we're, I'll remind you, we're stepping down from the initial contract period from 194 euros per megawatt hour to And ultimately there's a phase step down to 154 megawatt euros per megawatt hour and then ultimately we go to market pricing in 2027. Now we've been out in the market on the PPAs and I would expect something in the weeks and actually days we're fairly close. And so we really with those benchmarking as Christine alluded to in the script. uh you know the ppa markets and so we've triangulated i'll i'll say broadly i'd say into a market price in in around the ppas of of 60 to 70 uh euros per megawatt hour and and so really it's a reflection of that step down and and this is the only asset we have in the five years in the offshore that's stepping down okay and then um just as a follow-up that and and then just appreciating um the last comment that you made on the five years uh for the assets that are stepping down

We're looking at Deutsche Bucht, which is still recalculated until, I believe, the early 2030s. Are there similar assumptions that were made prior, given the pricing dynamic and curtailments that are evident as well?

No, I think you alluded to curtailments in the German market. And I think, you know, I think here to date, we've probably seen a 7.5% negative price curtailment. I think our long-term assumptions aren't really far off of that, plus or minus a half to a percent on it. You know, we've really focused on where we have contract renewals coming here in the first five years, and that's where we look at the PPA market isn't really, I'd say, a longer-term market. It would be more into the five-year frame, and that's really what's setting it and impacting N1. Great. Thanks for that, Connor Jeff. I'll hop it back into the queue.

Thanks.

Thank you. And our next question comes from Sean Stewart of TD Cowen. Your line is open.

Thanks. Good morning, everyone. Christine, on the rationale for the dividend cut, you touched on a few points. I guess a part of it here is freeing up more capital to feed an expanding investment opportunity set and the risk of front running the investor day next week. Can you give perspective on the eight and a half gigawatt pipeline beyond the under-construction stuff, any perspective over the next five years how much of that might be advanced? And I ask only because it seemed like there was a line of sight on this payout ratio coming down as Heilong and Baltic Power reach commercial operation. Just trying to gauge how much of that growth opportunity set you might expect to come into the midterm development pipeline and, you know, how much of this is just aligning the payout ratio with industry norms.

Thanks for the question, Sean, and I, you know, I do want to make sure that you come to Investor Day, so I don't want to give too much of it right now, but I think it's, you know, part of it is that we have, I would say, a couple of types of projects. First of all, I alluded to the fact that we've been looking externally at what other people have, and, you what projects are for sale in the market. And there's a real opportunity set there that did not exist even a year ago, but certainly not a couple of years ago. And from a pricing perspective, very attractive if you can buy now. So that's interesting to us. And if we can high grade through that, we like to. We also have a set of initiatives that we've been working on through our existing fleet that we call value enhancement initiatives. And these are things that we would do that are near-term, short cycle, and that deliver a demonstrable rate of return in the existing fleet. And it's just getting more out of what we already have. And so some of those projects require capital, and we've been doing a lot of work to understand the capital those projects require. But this is, from my perspective, it's value lying on the ground, and we would be foolish not to take it. So we wanted to find a way that we could invest in those projects and ensure that we have still, we keep the balance sheet flexibility given the projects that we have still in construction. So the idea that we would pass up on all of these opportunities or push them well out into the future, when we modeled it, it was just a poorer use of funds than investing in them sooner.

Okay, understood. I guess we'll get more detail next week. Jeff, can you give any perspective on, I guess, discussions with the rating agencies and, you know, appreciating investment grade is paramount to what you guys are focused on. Did those discussions have any bearing on the dividend decision?

Yeah, so, you know, thanks for the question. You know, we're obviously in constant communication with our rating agencies. uh and and have open dialogue with them i'll kind of go back to what christine said and reiterate for us it's making sure uh and reinforcing from our perspective uh the best use of you know of resources on a risk adjusted basis and so for us An investment-grade balance sheet is important, I think, ultimately to ensure funding through cycles, number one. And then number two is with the opportunities laid in front of us, rebalancing to capture those in a growing market is really the drive here, and so it's all of it together. you know, it's really from our perspective of reinforcing the investment grade balance sheet and ensuring that funding certainty there. And then I think capturing the market opportunities is really the main driver of, and we felt this was the best use of shareholder resources.

I guess I'll add on to that, Jeff, to say that this was very much a Northland decision and it was driven by an enormous amount of work that's been done. And we looked at many different options of how we could deliver best value for shareholders. So, yeah, That was the driver for this decision, full stop.

Okay, understood. I'll get back in the queue. Thanks very much. Thank you.

Thank you.

And our next question comes from Robert Hope of Scotiabank. Your line is open.

Morning, everyone. Can you add a little bit more color on the specifics? Thanks. Can you add a little bit more color on the specific issue driving the delayed pre-completion revenue on the onshore substation and when you expect it to be rectified and if you have any recourse through insurance or warranty with the manufacturer on both the cost and lost revenues?

Sure. Thanks very much for the question. I love the technical and detailed questions. Uh, basically with the onshore substation, uh, when we were installing some cabling, we were doing normal course testing and we were dissatisfied with, uh, some of, we were seeing some, uh, Uh, we were dissatisfied with the results of some of the tests. And when we investigated further, we saw that there was a bushing that, um, we felt could create problems for us over the longterm. So it was functioning effectively, but it created a risk for longterm reliability. So we, in fact, insisted that that get changed out. So the supplier for that component is a subcontractor to one of our suppliers. And so we don't have a direct contractual relationship with them, but we've been working with them to make sure we're satisfied with the replacement. So in order to do that replacement work, though, we have to shut down the onshore substation for 20 days-ish, I think. I can't remember the exact number, so don't quote me on that. but we have to turn off the onshore substation in order to complete that. But then we can be assured that the solution is there for the long haul. So I think it's the right thing to do. The question of insurance and the rest, I think that it would be more a question for our supplier because this is part of what our supplier has to deliver for us.

I appreciate that. And then maybe just one more follow-up question there. Just given the long lead times on some equipment items, when would you expect the 20-day outage to occur? And just given it's onshore, I guess you don't have to wait for any weather windows and that can be done at any time?

Yeah, no weather windows and that's going to be done before the end of the year. And we already have all of the components. We have those in our hot little hands at our warehouse as we speak.

Okay, so is the impact then just in 2025 then?

So we have, there's two things going on at High Long. So we have this issue at the onshore substation. The commissioning of the turbines that both Jeff and I referred to, that is an issue that is continuing into 2026. And in fact, we see the financial impact results of that in 2026 instead of in 2025. But basically this is a situation again managed within the perimeter of our supplier for the turbines. They have an obligation to deliver turbines to us that have been installed and commissioned and in fact they've passed a reliability test and they've been running for a number of days before we accept them in the handover. So the planning for that commissioning was based on typical North Sea performance, which would be they would typically commission two to three a week. But I think in the Taiwan Strait, the weather conditions have been more challenging and it has been slower than anticipated. So our supplier has, I think, a robust plan in order to improve on that. But right now we are in the poor weather time, so they will be delivering on that in 2026. And hopefully they will be able to start delivering the commissioning pace that we expect to see. But right now we've seen disappointing performance on the commissioning. And so they are not where they were meant to be at this point in time. Again, it's fully within their contract. So it doesn't have an impact for us on the budget. And we have enough flow still in the schedule that it does still fit within our schedule. but it does affect on pre-completion revenues and pre-completion revenues were part of our funding model for the project and we're still working through that thank you thank you and our next question comes from nelson ng of rbc capital markets your line is open great thanks i had a quick follow-up question on the high long um

commissioning of the turbine. So, I think you mentioned that, Christine, you mentioned over half of the turbines are now installed, and I believe you stopped installing turbines like early October or late September. So, how many of the installed turbines are currently commissioned?

So, thanks for the question, Nelson. I'm the, you know what, I'm fully commissioned right now, the challenge that we're having is that they have to do what we call a soak test. And so they have to run continually over a period of time with no alarms. And so quite a few of them have started the test and then alarms go off. And this is, again, a difference with the weather impact, because in the North Sea, if you have those alarms, it's pretty quick. You can go out, you can check it, you can remedy it. And typically it's not anything wrong with the turbine. It's often something wrong with the sensor. So that gets calibrated, that gets fixed, it's a really quick turnaround. Right now, because the weather conditions have been very tough, getting out to check those alarms has been quite difficult. So in terms of maybe the better answer, we have, so 14 of them have been commissioned, but they've continued to have alarms. So in terms of energized, right now we have only two that are energized. Energized is probably, for me, that's the most important one. Those are the ones that are generating revenues. So right now we have two that are energized and producing revenues.

Okay, so 30-something installed, four commissioned, but two feeding power to the grid. Is that the right way of thinking about it?

We have 14 that are commissioned, but they're under warranty as well. So just because they're commissioned doesn't mean that the supplier is off the hook with them. So Right now, of the 14 commissioned, two of them are energized and functioning the way that we expect them to.

Okay, but over half of the turbines are installed, so that's like 30-something turbines installed.

Yes, 37 turbines installed. So the installation went very well, and this is, I would say, a learning for our supplier about commissioning activities. So they have a good recovery plan. So I just want to be clear about that. They have a very strong recovery plan. They've got their A-team on this. They will do a good job of this, but we probably won't see a huge amount of progress until the weather window opens up again in the new year.

Okay. And then I know in the past you talked about the winter, obviously the weather isn't great, but you have the option to work during the winter, right? So Is that supplier pretty much like if they see a window of opportunity during the winter, they would go and try to commission more, energize more projects? Is that what you're referring to in terms of the plan?

So, yes. They have a team in-country, and they are available to go when the weather window opens. So, whether it's open for a day or 10 days, and they can do that in short bursts of time. But the reality is that the weather has been pretty harsh the last couple of weeks, and there's only been one day in the last, I think, I want to say maybe as much as three weeks now, but there's only been one day that they've been able to get out there.

Okay. And then just overall, I think in terms of the guidance, you guys talked about how the pre-completion revenues might be $150 to $200 million lower than expected next year. Can you just talk about what the new assumption is? I think in the financing plan, roughly one, there was an estimate of, I think roughly a billion of pre-completion revenues.

Yeah, that's right, Nelson, right? So where we're at is, you're right, is a billion CAD at 100%. And the reason we're talking about the impact into 2026 is any PCRs we would generate this year would actually be collected in the cash generated next year in conjunction with effectively Q1 and Q2 PCRs as well. And so that's why we're talking about the 2026. And the 150 to 200 is our share, and that's 31%. So you can kind of back into the range there on a gross basis.

Okay, so I guess less than half,

Yeah, you're anywhere from half to, you know, 60% impact give or take on the current expectation. And as Christine said, is this, you know, obviously the supplier weather windows and to see how we could, you know, potentially close the gap and other alternatives, right? But that's effectively the good way to think about it.

And as a result, then there'll just be a larger draw on the non-recourse debt or...

Well, we're evaluating what we could do. Number one is the recovery plan and then looking at what we can do on the project side of it as well. And then obviously we've got the financial capability to manage it as well. So we're looking at all the different avenues there and monitoring the technical situation. So we'll obviously keep everyone abreast as that's updated.

Okay. And then switching gears a bit, in terms of the dividend, so the decision, like in terms of the sizing of the dividend cut, so is the main target to internally fund all equity requirements going forward for the next five years? Is that how the dividend was sized?

Yeah, so it's Jeff here. Absolutely. I think our view, and I think I've reiterated this, is I believe in self-funding model, and I think it's an effective way to execute the plan and creates what we view as solid accretion and shareholder value. So that is the intent, is self-funded plan, and that's what we intend on delivering. Great. Thanks, Jeff.

I'll leave it there.

Thank you. And our next question comes from Mark Jarvie of CIBC. Your line is open.

Thanks. So, Jeff, you talked about maybe compensation on the pre-completions, contingencies in the project funding. How would you handicap the likelihood that Northland would have to put some incremental capital into high long at this point?

Look, I'm not going to get into hypotheticals and percentages. What I will say is, you know, I will always make sure as a CFO, you need to make sure that you've got the liquidity and capital resources and the funding strategy to manage contingencies like this. And so we have the capability to manage it corporately. We'll continue to progress it. But I always have to manage on the view that I need and have to have the liquidity to manage it. But we're looking at avenues within number one on the technical recovery plan. number two and other things we can do at the project level. But I'm not going to give percentages on that right now, but I have to make sure we've got the resources to handle it.

Well, and I'll just add to that, Mark, that this is back to the whole idea of we have to be prudent. These are large projects, and they're being delivered very, very well. And we stand head and shoulders above many others who are delivering similar projects. But there are bumps in the road in every project I've ever been involved in in my career. So that's why we have to be ready to adjust to that when they come.

And maybe I can, I'll word it this way. From my perspective is we'll look to mitigate and manage impacts and look at the best alternative. But I also have to make sure that I can manage it as if there is an ejection required.

Got it. So like this as a component of the dividend cut would be sort of a minor element, kind of the messaging?

Yeah, I mean, I'll go back to what Christine and I reiterated is this number one, it's rebalancing, I think, you know, the payout to a capital intensive industry. And we also see lots of opportunity, both organic and inorganic in the markets we're focusing on. And so it's really to capture that opportunity rebalance to, you know, I'd say a sustainable financial framework that allows us to capture those opportunities. And then ultimately with that, it's the virtuous circle. It gives you a balance of protection and resources to handle contingencies as well.

And then just going back in terms of the timing announcement, we can debate about when it should happen, but it sounds like you're trying to position this that you have a use of capital for new growth that's showing up on short cycle projects and other opportunities. Any consideration was put into whether or not you should have announced this concurrent with new investments? And how close are you on things like those short cycle needs or potentially acquiring advanced stage projects?

Oh, Mark, we had a lot of debate about that. And I can tell you, you know, there's no right time because I can honestly say that if we waited to investor day, then I would have expected somebody would have asked me the question then of why didn't you tell us this a week ago when you had your quarter closed? Because, you know, so they, I think, you know, what we're being transparent, there's never a good time for this. So we decided to to disclose the decision when the decision was made and the decision was literally just made. So we want to make sure that we're transparent about that. But I think you should not be surprised to hear some new announcements in coming days.

Okay. And then last one, just Jeff, in terms of the IG rating, is there a view that you'll use a little bit more on balance sheet debt going forward versus how much non-recourse debt you used? And is that sort of factored in the decision on the dividend level?

No, look, I think, you know, obviously we'll get more color on it at Investor Day here and on details on overall funding, but I would still expect the majority of our, I'll say, leverage or debt funding to be in the project finance realm. Clearly, the corporate balance sheet's an option for different opportunities, but that balance won't materially change. It's just to reiterate the point is as the execution, the opportunity in front of us go forward and setting up the guardrails and framework that we're sustainable through cycles.

Got it. Thanks for taking the questions and see you next week.

Thanks. Yeah, look forward to it.

Thank you.

And our next question comes from Benjamin Pham of BMO. Your line is open.

Hi, Martin. I just want to go back to the dividend side, because obviously the market's quite perturbed today with the messaging, and more to come next week on some of the rationale. But I'm curious, do you think with the payout ratio, it's 60% this year on your guide, and it's reasonable to think it's going to come down through 2027. What do you think is the appropriate payout ratio for you? Because the way we were thinking about it is you're generating $200 million of incremental free cash flow, based on your guidance, and you can lever that up, you can still sell fund growth under that alternative.

Yeah, no, and thanks for the question. Ultimately, we'll provide colour on the funding and then, correspondingly, we'll read through the payout at investor day and to provide that colour. And I'll reiterate back, this is to give a financial framework and foundation that we feel is balanced through the cycle and has guardrails, but we'll provide more color on that next week then.

Okay, got it. And I'm also, I mean, 40% seems to be a magic number for a lot of folks that have cut dividends in the past. I mean, when you did your analysis, can you talk about the other alternatives you were looking at? I think you mentioned that earlier. And then How do you kind of think about just, there's a lot of history, too, from compensation cut dividends, and same thing. There's more growth coming, and it just doesn't seem the public markets really care for a few years. Can you just talk about that as you think about your, I guess, your own patience with this, and how do you maybe differ from those case studies? Because there's been a lot out there.

Look, and we, I'm not going to, and Christine will obviously add on to this, is We've looked at several different scenarios, looked at the best options that we felt in aggregate balancing growth, cash returns to shareholders, and felt the plan that we'll be putting forward in balance and coming to this is the best value creation and value proposition on balance. And really, for me, it's about being disciplined through this. We need to keep strength on the balance sheet. We need to have a sustainable payout ratio and then ultimately be able to capture opportunities in a growing demand market and be disciplined on returns. We won't chase returns down and all of that kind of goes together. We looked at a bunch of different modeling and analysis on this and feel we've landed in the best path forward for the company.

So Ben, I do want to take the opportunity to add on to that because I can tell you that all those things that you say are very much on my mind as we've been having this discussion this big internal review and assessment of what the best thing to do in this circumstances. And frankly, there are there are easier things that we could do, but they would not have been as value accretive to shareholders. So fundamentally, then I had to take a very hard look into the abyss and say, what is the right thing to do here? And fundamentally, I believe that this company is very, very good at building and operating projects. And the world has a huge demand for what it is that we do. And the idea that we would hunker down and not grow for a big chunk of time doesn't make a lot of sense to me. And in fact, when you model it out on the numbers, it doesn't make sense on the numbers either. And then when you look at the different ways you could fund that growth, the most value accretive way for shareholders is to do it the way that we're doing it. So there's no question that we take the pain now. And I am a shareholder too. And I got to tell you, I'm a shareholder who really likes dividends. So I can say that I am definitely in the camp right there with people who are unhappy about that. But I have to say again, what are we trying to do here? And we're trying to build long-term value for shareholders. And that's what this plan does. So I will be talking more about that at Investor Day. But I can say hand on heart that if there was a better way to do it, I was definitely looking for it.

Yeah, no, absolutely. And it seems like the, the, the old, old, uh, school model of high payout and issue equity. That's, that's kind of old days and high growth companies yourself should have a lower payout ratio from a longterm perspective. So I could appreciate that. I mean, just one quick one for me. Um, I get the PCR situation I haul along and the tech issues. Um, And you've got to manage that. These are large projects that can go sideways. But is there a scenario there where you're thinking about that there could be even more impact from this technical issue where you have to actually repair the station, there's more cat-backs, there's delays? Is that a scenario that could be in the realm of possibility?

So, Ben, this particular issue that we're having with the onshore substation is completely contained. And in fact, it gives me more confidence in the project team that they spotted this and were able to respond to it so effectively and so quickly. So in fact, I view it as a very positive thing because it was through very, very good work at the onshore substation and very good inspection work from our teams that we found the issue. So I don't see it as indicative of a bigger problem. I think it's a very discrete problem related to a very small bushing. And so it has been addressed and remedied and no indication of any kind of larger problem there at all. In fact, I think it was well-contained and well-managed.

Okay, got it. Thank you.

Thank you. Thank you. I'm showing no further questions at this time. I'd like to turn it back to Christine Healy for closing remarks.

Well, I just want to say thank you to everyone for your great questions and your engagement in joining us today, and hopefully we will see you at Investor Day. Thanks very much.

This concludes today's conference call.

Thank you for participating, and you may now disconnect.