CANADIAN UTILITIES REPORTS 2025 EARNINGS

Executive Summary

• Adjusted earnings for 2025 increased to $658 M ($2.42 per share), up $11 M from 2024, indicating modest growth despite headwinds.
• IFRS earnings fell sharply to $119 M ($0.15 per share) due to non‑cash impairments and write‑offs, resulting in a fourth‑quarter IFRS loss of $(328) M.
• The company announced a $500 M fixed‑rate subordinate note issuance and $200 M preferred‑share raise to pre‑fund equity contributions for the Yellowhead pipeline project.

Key Details

• 2025 Adjusted Earnings: $658 M ($2.42/sh), +$11 M vs. 2024.
• 2025 Q4 Adjusted Earnings: $197 M ($0.72/sh), –$6 M vs. Q4‑2024.
• 2025 IFRS Earnings (attributable to equity owners): $119 M ($0.15/sh), down $361 M YoY.
• 2025 Q4 IFRS Loss: $(328) M ($(1.28)/sh), down from a $164 M profit in Q4‑2024.
• Impairments: $471 M (mainly Alberta Renewables Portfolio, hydrogen assets, and ATCO Gas Australia).
• Capital Expenditures 2025: $2.015 B total ($415 M Q4), 94 % invested in regulated utilities (ATCO Energy Systems & ATCO Australia).
• Financing Activity: Raised $500 M fixed‑rate subordinate notes + $200 M preferred shares to pre‑fund equity contribution for Yellowhead project; further regulated debt expected via CU Inc. debentures in 2026‑27.
• Yellowhead Pipeline Project: ~235 km, estimated spend $2.9 B (Class III estimate ±20 %). 100 % contracted, construction slated to start 2026 pending AUC and corporate approvals; AUC need‑assessment approved Q3‑2025, facility application filed Nov 4 2025, decision expected Q3‑2026.
• CETO Project: 135 km 240 kV line; CU’s Electricity Transmission building 85 km, AltaLink LP 50 km. Expected energization June 2026; spend approx. $255 M. Supports >1,500 MW renewable integration.
• Dividend Declaration (Jan 8 2026): First‑quarter dividend of 46.23 cents per share ($1.85 per Class A/B), continuing a 54‑year streak of annual increases.
• Five‑Year Capital Plan (2026‑2030): Approx. $12 B regulated capex; projected consolidated mid‑year rate‑base CAGR 6.9 % (from $16.6 B in 2025 to $23.2 B in 2030).

Notable Quotes

• “Our continued adjusted earnings growth in the face of 2025 headwinds highlights the strength and resiliency of the Company's portfolio and its people.” – Bob Myles, CEO

Materiality Assessment: Material – Positive (earnings release with detailed financial performance, significant impairments, major financing activity, and forward‑looking capital investment plans).