Mr. Arun Banskota reports

ALGONQUIN POWER & UTILITIES CORP. ANNOUNCES 2023 FIRST QUARTER FINANCIAL RESULTS

Algonquin Power & Utilities Corp. has released financial results for the first quarter ended March 31, 2023. All amounts are shown in United States dollars, unless otherwise noted.

"In the first quarter of 2023, we achieved operational milestones in line with our targets," said Arun Banskota, president and chief executive officer of Algonquin. "In our regulated business, we achieved an increased operating profit reflecting planned execution and constructive rate case outcomes. In our renewables business, we advanced our project pipeline and achieved overall financial performance consistent with our expectations."

First quarter financial highlights:

• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $341-million, an increase of 3 per cent;
• Adjusted net earnings of $119.9-million, a decrease of 15 per cent;
• Adjusted net earnings per common share of 17 cents, a decrease of 19 per cent, in each case on a year-over-year basis.

Quarterly results:

• Solid regulated growth from new rate implementations -- operating profit for the regulated services group increased to $255.3-million from $231.2-million, up $24.1-million from the prior year. The year-over-year increase in operating profit was primarily driven by new rates at a number of the company's utilities, most notably at the Empire Electric and Park Water systems.
• Stable year-over-year renewable operating performance reduced by HLBV rolloffs -- operating profit, excluding hypothetical liquidation at book value (HLBV) income, for the renewable energy group during the three months ended March 31, 2023, was effectively flat year-over-year. Total operating profit for the renewable energy group was $106.5-million, down $11.4-million from the prior year. The decline was driven by lower HLBV income primarily as a result of the end of production tax credit eligibility on 2012 vintage facilities, as previously experienced in the latter half of 2022. Additionally, modestly lower production from the company's renewable assets was offset by improved results at its Texas coastal wind facilities.
• Higher interest expenses reflect growth financing and macro environment -- interest expense increased by $24-million year-over-year, with approximately two-thirds of this increase attributable to higher short-term borrowing costs and approximately one-third attributable to financings to support growth initiatives.

Other recent highlights:

• Termination of acquisition of Kentucky Power Company and AEP Kentucky Transmission Company Inc. -- on April 17, 2023, the company announced it had mutually agreed with American Electric Power Company Inc. and AEP Transmission Company LLC to terminate the stock purchase agreement regarding the acquisition of Kentucky Power Company and AEP Kentucky Transmission Company.
• Key California rate case resolved; settlement approved -- on April 27, 2023, the company received a final order in its CalPeco Electric system rate case, with an annual revenue increase of $27-million, including approximately $7.1-million due to increases in rate base. The order approved an authorized return on equity (ROE) of 10 per cent and an equity ratio of 52.5 per cent. A one-time net earnings benefit of approximately $11.4-million is expected in the second quarter of 2023.
• New rate cases filed by New York Water and Empire Electric Arkansas -- on May 4, 2023, the company filed a New York Water rate application seeking a revenue increase of $39.7-million, based on an ROE of 10 per cent and an equity ratio of 50 per cent. Similarly, on Feb. 14, 2023, the company filed an Empire Electric (Arkansas) rate application seeking a revenue increase of $7.3-million based on an ROE of 10.25 per cent and an equity ratio of 56 per cent to be phased in over three years.
• Completion of the Deerfield II wind facility -- on March 23, 2023, the company achieved full commercial operations at its 112-megawatt Deerfield II wind facility, located in Huron county, Michigan. The Deerfield II wind facility has agreed to sell all of its output to Siculus Inc., a subsidiary of Meta, pursuant to a renewable energy purchase agreement.
• Sustainable financing activity and ratings improvements reflect Algonquin's environmental, social, government commitment -- on March 31, 2023, the company completed an amendment and restatement of its senior unsecured revolving credit facility, which increased from $500-million to $1-billion and now includes sustainability-linked performance targets. Separately, on March 10, 2023, MSCI upgraded Algonquin to an AAA ESG rating, placing Algonquin among the top 13 per cent of companies reviewed.
• Credit rating affirmed at BBB with outlook improved to stable -- in April, 2023, each of DBRS, Fitch, S&P, and Moody's made announcements regarding the credit ratings of the company and its subsidiaries. DBRS and Fitch both affirmed their ratings and stable outlook, S&P revised its outlooks from negative to stable, and Moody's affirmed its Baa2 ratings and stable outlooks of Liberty Utilities Co. and Liberty Utilities Finance GP1. These actions follow a similar improvement in outlook to stable from DBRS in February, 2023.
• Atlantica strategic review -- on Feb. 21, 2023, Atlantica Sustainable Infrastructure PLC announced that its board of directors had commenced a strategic review process. Algonquin, which owns approximately 42 per cent of Atlantica, supports the commencement of that process.

Outlook:

• Reiterate Estimated 2023 adjusted net earnings per common share -- the company reiterates its previously disclosed estimate of adjusted net earnings per common share for the 2023 fiscal year within a range of 55 to 61 cents.
• Organic capital investment expectations maintained -- with the Kentucky Power transaction termination, the company expects to spend approximately $1-billion on capital investment opportunities in the 2023 fiscal year. Of this amount, approximately $700-million is expected to be spent by the regulated services group and approximately $300-million is expected to be spent by the renewable energy group.
• Remain focused on optimizing balance sheet -- the company remains committed to a BBB credit rating and does not expect any new equity financings through 2024.

Algonquin's management discussion and analysis for the three months ended March 31, 2023, and unaudited interim consolidated financial statements for the three months ended March 31, 2023, will be available on its website and in its corporate filings on SEDAR (for Canadian filings) and EDGAR (for U.S. filings).

Earnings conference call

Algonquin will hold an earnings conference call at 8:30 a.m. Eastern Time on Thursday, May 11, 2023, hosted by president and chief executive officer Mr. Banskota and chief financial officer Darren Myers.

Date: Thursday, May 11, 2023

Time: 8:30 a.m. ET

Conference call

Toll-free dial-in number: 1-800-806-5484

Toll dial-in number: 416-340-2217

Event passcode: 8220700 followed by pound key

Presentation also available on the Algonquin website.

About Algonquin Power & Utilities Corp. and Liberty

Algonquin Power & Utilities, parent company of Liberty, is a diversified international generation, transmission and distribution utility with over $17-billion of total assets. Through its two business groups, the regulated services group and the renewable energy group, Algonquin is committed to providing safe, secure, reliable, cost-effective and sustainable energy and water solutions through its portfolio of electric generation, transmission and distribution utility investments to over one million customer connections, largely in the United States and Canada. Algonquin is a global leader in renewable energy through its portfolio of long-term contracted wind, solar and hydroelectric generating facilities, together with its pipeline of renewable energy development projects. Algonquin owns, operates and/or has net interests in over four gigawatts of installed renewable energy capacity.

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