Algonquin Power & Utilities (AQN) Status Update summary

Strategic Vision and Transformation

• Leadership is driving a transformation to a premier pure-play regulated utility, emphasizing operational excellence, customer-centric performance, and disciplined financial management.

• The company serves over 1.2 million customer connections across 13 U.S. states, 1 Canadian province, Bermuda, and Chile, with a $7.9B rate base as of 2024.

• A back-to-basics approach and a customer-centric capital plan are being implemented to enhance service, cost efficiency, and stakeholder trust.

• Talent development, accountability, and reshaped culture are prioritized to drive performance and value creation.

• Leadership, including CEO Rod West and Interim CFO Brian Chin, focuses on operational and regulatory execution for near-term performance and medium-term growth.

Operational and Regulatory Initiatives

• Operational efficiencies are targeted through centralized procurement, technology upgrades, and process improvements, aiming to reduce O&M expenses from ~38% to 31-33% of revenue by 2027.

• Constructive regulatory outcomes are pursued via stakeholder engagement, timely rate case filings, and recent legislative changes in key states supporting timely cost recovery.

• Growth opportunities include $780 million in awarded transmission projects, a $100 million gas pipeline expansion in Georgia, and ongoing water and gas utility expansions.

• Filed for approximately $100M in revenue increases in key rate cases, with earned ROE expected to improve by ~300bps to about 8.5% by 2027.

• Rate base is projected to grow from $7.9B in 2024 to $9.1B by 2027, with authorized ROEs ranging from 8.6% to 9.9% across jurisdictions.

Financial Outlook and Capital Allocation

• Adjusted net EPS is forecasted at $0.30-$0.32 in 2025, $0.35-$0.37 in 2026, and $0.42-$0.46 in 2027, driven by efficiency gains and regulatory outcomes.

• $2.5 billion in regulated utility capital expenditures is planned for 2025-2027, with nearly half focused on asset replacement and the rest on system expansion and new generation.

• Dividend payout ratio is expected to decline from 117% in 2024 to 59-70% by 2027, with dividends per share expected to remain flat.

• No equity issuance is anticipated through 2027, as improved returns are expected to support cash flow and credit metrics.

• Committed to maintaining BBB investment grade credit ratings from S&P and Fitch.