Good morning, and thank you for joining us for our quarterly earnings call. Joining me on the call today are our President and CEO, David Lebeter, and our Chief Financial and Regulatory Officer, Harry Taylor.

On the call today, we will provide an overview of our quarterly results, and then we'll answer as many questions as time permits. As a reminder, today's discussion will likely touch on estimates and other forward-looking information.

Listeners should review the cautionary language in today's earnings release and our MD&A, which we filed this morning, regarding the various factors, assumptions, and risks that could cause our actual results to differ, as they all apply to this call. With that, I'll turn the call over to our President and CEO, David Lebeter.

Thank you, Wassem. Good morning, and thank you for joining us for our third quarter 2025 earnings call.

This morning, I'll provide an update on our recent activities and accomplishments during the quarter. Then Harry will take you through the financial results.

Before we begin, as many of I temporarily stepped away from my role as President and CEO on August 25th, 2025, on a compassionate basis to care for a family member. During this time, I continued to support the company on an advisory basis, and as announced in our press release this morning, I reassumed my duties effective November 12th, 2025.

I would like to thank everyone for their understanding, messages, emails, and words of support as my family and I navigated this difficult journey. We are very appreciative and grateful for the support that we received.

I would also like to extend my thanks to Harry Taylor, who in addition to his role as Chief Financial and Regulatory Officer, assumed the role of interim President and CEO during my absence. Under Harry's guidance, the company continued to execute on our stated objectives and deliver on our promise for all Ontarians.

Thank you, Harry. On to the quarter.

As always, safety comes first at Hydro One. Our focus on being an efficient and agile company is supported by our policies and systems that prioritize workplace safety, as well as public health and safety.

By empowering our employees to take actions for their health and safety of ourselves, co-workers, and our communities, together, we can achieve a workplace free of life-altering injuries and fatalities. Ontario is facing historic growth in demand for electricity driven by continued economic growth, the electrification of the transportation and manufacturing sectors, population growth, as well as industrial expansion and evolving technologies.

Over the next 25 years, the Independent Electricity System Operator, or the IESO, anticipates electricity demand to increase 75% by 2050. Hydro One is proud to play a pivotal role in serving the new load.

With our provincial, Indigenous, municipal, and industry partners, we are and will continue to build a reliable, resilient, sustainable, and affordable energy system for generations to come. On September 9th of this year, alongside First Nations partners and provincial and municipal leaders, Hydro One celebrated the ground-breaking of the St.

Clair transmission line project in Southwestern Ontario. The project involves constructing a double-circuit 230-kilovolt transmission line, expanding the existing Chatham Switching Station and Lambton Transfer Station, and converting the existing Wallaceburg Transfer Station to 230 kV.

The total investment of the project is expected to be approximately $472 million with an in-service date in 2028. The transmission line will support improved grid resiliency and reliability, as well as enhance economic growth in the region.

Along with powering homes, businesses, and industry, it will support key industries, including the agriculture sector and electric vehicle technology. Farming and food production are economic cornerstones in this region, and the line will help enable the expansion of farming operations to support a reliable and affordable local food supply chain in Ontario.

The project will also support electric vehicle manufacturing, providing a reliable supply of clean electricity to develop a secure supply chain in Ontario. St.

Clair transmission line is part of a network of projects in the region, including the Chatham to Lakeshore line that was energized in late 2024 and the Longwood to Lakeshore transmission line being developed in collaboration with five First Nation partners. Through Hydro One's 50-50 First Nation equity partnership model, First Nation partners have been offered a 50% equity stake in the transmission line component of the project.

The Integrated Energy Plan released in June of this year highlighted the need for additional transmission capacity in the Red Lake area in Northwestern Ontario. This area is a key region for Ontario's critical minerals, with several mining projects that will create large electricity demands.

In August, the IESO released the Northwest Region Integrated Regional Resource Plan Addendum that recommends the urgent development of the Red Lake transmission line. This line would be a new double-circuit 230 kV transmission line that would run from the Dryden Transformer Station up to the Red Lake Switching Station, along with associated station facilities to meet the growing demand capacity needs after 2028.

On October 29th, 2025, the government announced a proposal to declare the Red Lake transmission line as a priority project and also proposed to designate Hydro One as the transmitter for the project. The proposal is subject to the required approvals and community consultation, including consultation with Indigenous communities.

In response to continued uncertainty surrounding tariffs and trade, Hydro One has been working to identify further actions to limit our exposure and the impact of tariffs. These actions have focused on the diversification of our supplier base beyond the United States and the prioritization of Canadian suppliers to reduce costs and encourage manufacturing within Canada to support a domestic supply chain.

Now, more than ever, we must focus on investing in homegrown businesses to build a strong, secure, and self-reliant supply chain to further reduce risk. Recently, Hydro One was at a ground-breaking ceremony that will see Northern Transformer, a leading Canadian manufacturer of high-voltage power transformers, expand its manufacturing facility in Ontario.

This expansion will support the demand for high-quality, reliable, and timely power transformers to support grid modernization and electrification initiatives across the province. Hydro One is proud to support the growth of a Canadian supply chain and has committed to spend approximately $165 million per year to secure energy infrastructure from Northern Transformer.

Their high-voltage transformers will support a reliable supply of electricity across the province, and like us, their roots are in Ontario. We congratulate Northern Transformer on their expansion and look forward to our continued partnership to develop for the people of Ontario.

The strength of our culture and the way we support each other and our communities shines throughout the year. It is particularly on display during our signature Power to Give campaign that takes place every September.

This year, Hydro One employees once again demonstrated their generosity and community spirit, raising more than $2.1 million. Employees also logged more than 5,200 volunteer hours in support of their communities.

It is a remarkable achievement that will make a real difference in the lives of people and families across the communities where we live and work. I'm incredibly proud of our employees, not only for their efforts in September, but for the way they gave back all year long.

Their compassion and dedication to supporting others embodies one of our key values and reflects the best of who we are at Hydro One. Our vision of building a better and brighter future for all is also reflected in the work that our teams do, and we are pleased that our work and dedication continues to be recognized.

For the second consecutive year, Hydro One has been named Company of the Year by the Ontario Energy Association. This award recognized both our technical contributions to strengthening Ontario's energy grid and the meaningful partnerships that are helping power a brighter future for the province.

We are deeply honored by this recognition of our role in Ontario's energy transition, and proud of the dedication, skill, and resilience of our people. Hydro One continues to grow, adapt, and deliver for the people of Ontario at a time when the energy system is transforming faster than ever before.

With that, I will turn the call to Harry to discuss our financial results. Harry, over to you.

Thank you, David. I am happy to say on behalf of everyone at Hydro One, welcome back.

Good morning to everyone on the call, and thank you for joining us today. In the third quarter, we delivered basic earnings per share of 70 cents compared to 62 cents in the third quarter of 2024.

The key drivers behind the year-over-year change included higher revenues, net of purchased power, due to higher 2025 approved OEB rates and higher average monthly peak demand. These were partially offset by higher depreciation, amortization, and asset removal costs due to the growth in our capital assets, and higher interest expense, primarily due to an increase in long-term debt outstanding, and higher income tax expense, primarily due to higher pre-tax earnings.

Our third quarter revenues, net of purchased power, increased year-over-year by 7%. In the transmission segment, revenues increased by 9.4% year-over-year, primarily due to a higher average monthly peak demand; higher revenues due to OEB-approved rates for 2025, coupled with revenue from our Chatham by Lakeshore transmission line following its in-servicing in Q4 2024; and finally, equity income from Hydro One's investment in the East-West Tie Limited Partnership, which we closed in the first quarter of this year.

Distribution revenues, net of purchased power, increased by 4.2% year-over-year, primarily due to the changes in OEB-approved rates for 2025. We continue to see strong energy consumption within the distribution segment, along with growth in the number of customers we support.

On the cost front, operating, maintenance, and administration expenses in the quarter were higher by 0.7% compared to the same period last year. In the transmission segment, costs were lower by 3.5%, mainly due to lower work program expenditures, including vegetation management expenditures, partially offset by higher corporate support costs.

In the distribution segment, costs were higher by 5.8%, mainly due to higher corporate support costs resulting from lower capitalized overheads, and higher bad debt expense. These were partially offset by lower work program expenditures, including vegetation management expenditures.

Depreciation, amortization, and asset removal expenses for the third quarter were higher by 3.4% year-over-year. This was due to the growth in capital assets as the company continues to place new assets in service, partially offset by lower asset removal costs.

Now with respect to our financing activities, we saw an 8.9% increase in interest expense year-over-year. This was mainly due to a higher amount of long-term debt and a slightly higher weighted average interest rate on our long-term debt.

During the quarter, Hydro One issued $1.1 billion of medium-term notes. The issuance was comprised of $450 million of 3.94% notes due in 2032, $300 million of 4.3% notes due in 2035, and $350 million of 4.95% notes due in 2055.

The issuances were completed under our Sustainable Financing Framework. We continue to be one of the largest issuers of corporate debt in Canada, and Canada continues to be our primary market for debt capital.

However, as our funding needs continue to grow, we need to ensure that we have the financial flexibility to support our development and construction programs. To ensure we have this flexibility, we filed a US debt shelf prospectus in the quarter that will provide us with the ability to issue debt in the US capital markets.

Being able to issue debt in the US will provide us with an additional tool in our toolbox to help finance our capital expenditure programs. We will be responsive to market conditions as we broaden our funding alternatives, and aim to execute our inaugural issue in 2026.

Our balance sheet continues to be in excellent shape, along with our creditworthiness. Our current annualized FFO to net debt metric of 3.6% remains well above the threshold limits the rating agencies use in determining our credit rating.

Turning to taxes, our income tax expense in the quarter was $60 million compared to $56 million in the same quarter last year. The increase was primarily due to a higher pre-tax earnings, which were partially offset by higher deductible timing differences compared to last year.

The effective tax rate this quarter was 12.4% versus an effective tax rate last year of 13%. We continue to expect our effective tax rate to be between 13% and 16% for the remainder of this rate period.

Moving on to capital expenditures, in the third quarter, we invested $779 million, which was an increase of 0.8% over 2024. The increase occurred in the transmission segment as a result of investments in the Waasigan transmission line and the St.

Clair transmission line. These were partially offset by the overlap of investments in the Orillia distribution warehouse last year.

In the distribution segment, we saw a decrease, primarily due to a lower volume of wood pole replacements, lower spend on system capability reinforcement projects, lower investments in the Orillia Operations Centre, the Orleans Operations Centre, and the Orillia distribution warehouse, as well as a lower volume of work on customer connections compared to last year. These were partially offset by investments supporting Ontario's broadband initiative.

Looking at our assets placed in service, in the third quarter, we placed $577 million in service for our customers, which was a decrease of 3.4% compared to the prior year. In the transmission segment, we saw a decrease of 21% year-over-year, primarily due to the timing of assets placed in service for station refurbishments and replacements.

These were partially offset by investments placed in service in Sault Ste. Marie upgrading an existing line.

In the distribution segment, in-service additions increased by 18% from the prior year due to assets placed in service for our second-generation advanced metering system, and timing of investments placed in service for system capability reinforcement projects. These were partially offset by a lower volume of wood pole replacements, a lower volume of work on customer connections, and timing of investments placed in service for information technology initiatives.

Looking ahead, we continue to expect earnings per share to grow between 6% and 8% annually through 2027 using the normalized 2022 EPS of $1.61 as a base. Finally, I'm pleased to report that our Board of Directors declared a dividend of 33.31 cents per share, payable to common shareholders of record on December 10th, 2025.

With that, we'll open the phone lines and be pleased to take questions.

Thank you, David and Harry. We'll now open the call to take questions.

The operator will explain the Q&A polling process. We ask that you limit your questions to one question and one follow-up.

If you have additional questions, we request you rejoin the queue. In case we can't address your questions today, my team and I are always available to respond to follow-up questions.

Please go ahead, Shannon.

Hi, good morning. Thanks for taking my questions, and good to have you back, David.

I'd like to start with the government's pulse panel on the broader environment for LDCs. I guess that's a fair way to characterize that.

Just looking for an early read on that process from you. What does that say about where LDC financing is going in Ontario and at a first blush, could this create more opportunities for your organization or is it maybe an indication that the government's looking for alternatives to the gradual consolidation, I think, it's fair to say, has been pursued historically?

Good morning, John, and it was nice to hear you on the line this morning. I expect that a question on pulse and you're right, it is very early to actually definitively say what is going to happen there.

Ultimately, what the government wants to do is ensure that all the distribution companies in Ontario have a good plan, they understand the investments they need to make going forward, and they're adequately financed and understand where that financing will come from so they can make those investments to support the growth that I talked about by the IESO, the 75% increase in demand for energy in the province by 2050. That is the ultimate goal.

If it was to result in further consolidation, we would certainly be open to that. We're certainly going to be participating, but we'll have to wait to see where it goes.

I haven't actually had a chance to meet with the Minister of Energy on that topic yet, and I look forward to that meeting so I can have a better understanding myself of where they're going.

Okay. Thanks for that color.

Then maybe just one on the US debt shelf. When you think about the next JRP period, and I appreciate you don't want to get ahead of your filings, but just what range of debt financing do you think you might consider drawing from US markets considering the deeper liquidity that's letting you consider that in the first place?

John, this is Harry answering the question. Our first issue needs to be large enough to be meaningful.

We need to build both awareness and our brand, for lack of a better term, with the US fixed-income investors. A, it will not be small.

As I mentioned in the prepared remarks, Canada's always going to be our primary market, but as we look ahead and see the funding needs that we have to support not only our investments in the current period, but as we think the accelerating investments into the next period, we need to have a substantial US program as well. We do need to make sure that we're being prudent, and so we're not just going to slavishly drive in and take a third of our program and put it into the market if on a swapped-back basis, it's more expensive to do so.

The market conditions need to be right. It will be meaningful, but we don't have a specific target or allocation.

We'll see. As certainly as we've studied other utilities as they've gone into other markets, you clearly see them doing two things.

One, building an awareness, being the new kid in town and a new market, but ensuring that on a swapped-back basis, it is still attractive from a financial point of view and hopefully accretive ultimately versus what could otherwise be there in terms of interest expense.

Okay. Thanks very much for that detail.

I'll get back in the queue.

Thank you, and good morning, everyone. Just want to come back to a comment earlier about financial flexibility given the rising growth capital expenditures that your company is experiencing.

Beyond ability to issue USD-denominated debt, what are the options are you exploring and perhaps you weren't looking in the past?

Good morning, Maurice. Everything is on the table, if you will.

There's nothing urgent. Through the next couple of years, we are comfortably able to fund our capital expenditure program through funds from operation and continued borrowing.

As we look ahead, we're assembling our rate application and preparing the financial projections that support that, and we will need to supplement debt with equity investments and/or something like a hybrid or a convertible as well. We're looking at the range of options, could include bringing a financial partner in some specific projects if that is ultimately lowest cost of capital, more attractive.

We are not constraining ourselves to just one lane, but looking for the best alternative or alternatives available to us to keep our overall cost of capital as low as possible and support the investment profile. I do want to reiterate, through the next couple of years, we have no need for anything beyond the funds that we generate from our operations and the debt financing.

Dependent on what happens with the rate application, we'll have clarity around the capital spending program in the next rate period, and we'll be doing the work behind the scenes to get ready so that there's never an issue in terms of funding our capex program.

Just as a quick follow-up, has there been any change in the timing of when you'll file that application? I think fall 2026 was the last [unclear].

No, still planning on fall of 2026. We want to make sure we've got sufficient time to work through the process and not run up against the end of 2027.

Understood. If I could just finish off with back into the expert panel that was launched by the government.

Feels like this review was something that was done in the past. Recall back in 2018 and 2022, I think, there's a similar review being done and doesn't seem like we saw a lot of consolidation after, even though it was recommended.

Any thoughts about what may change this time around to either A, come with a different outcome of a report, or B, even a different outcome in terms of actions and behaviors from the 50 other LDCs?

Good morning, Maurice. It's David speaking.

As I said earlier to a previous question, I don't believe the panel's actually trying to drive consolidation. They want to make sure that the electricity sector in Ontario can support the growth in demand that is going to be coming over the next 25 years.

From that perspective, it's a little bit different than those other reviews that were done in the past that were strictly focused on consolidation. That is not the focus of this panel.

Understood. Thank you.

Hi. Good morning.

Just wanted to go back to your guidance of 6% to 8%. I want to maybe hope to get your comments on your year-to-date earnings per share has been well above that.

Looks like it's 14% or so year-to-date, and just curious really your thoughts on that outperformance and how do you think about the outlook going forward? Is there some puts to think about as you think about that guide through 2027?

Ben, it's Harry. We are definitely generating earnings growth above what our guidance over the entire rate period is.

This performance this year has been a very pleasant favorable variance driven a lot by load. We've seen in both transmission and distribution above what we had put in our own internal budget, what we used in our assumptions for the guidance.

That's given us this favorable variance. Now load giveth and load taketh away.

We've also had years where it's been the other, where weather hasn't been as volatile or as extreme, and we've seen the other trend as well. We're sticking with the 6% to 8% over the period, so that we're not going to push expectations up and then have to come back and say, "Load didn't materialize the way it had in 2025," and end up disappointing.

That's the cold hard facts [unclear] why we are where we are. Yeah.

It sounds like if load doesn't at least decline through 2027, then you're nicely tracking above that range. Or you will be nicely tracking above that range.

It's possible. I don't want to say anything more than that.

Okay. I know and thanks for that, Harry.

My second topic I wanted is on you think about the JRP, the higher capex, and even all the priority transmission projects you have, there's a huge series of them coming ahead. A big topic amongst industry now is human capital and access to it, and maybe just not enough of it.

Is that something that is I don't want to say concerning for you, but how do you think about managing that and labor and parts and all that as you head into the next phase?

Hey, Ben. David Lebeter speaking.

We obviously pay a lot of attention to the resource adequacy. Can we have access to our engineer, procure, and construct contractors?

Do we have access to the appropriate skills within the organization? It hasn't been a problem yet, and to be honest, I don't see a problem on the horizon.

It's something we always pay attention to. We want to make sure we have the right resource available at the right time.

North America is big. There's lots of talk about the growth that's going on, but we've been able to secure really quality individuals to build our transmission lines, and we don't see that changing going forward.

Ben, I'm going to add on, from both a supply chain point of view and a partner point of view, it isn't all our resources who are building or constructing, or even designing, the transmission lines. We rely on internal, but also heavily on external resources, EPC contractors in particular.

With the visibility we have over the next 7, 8 years, we are able to bring partners in early, make it competitive, but bring them in, they can plan, do their human resource planning, and our supply chain team has good visibility. It's not like all of these are going to hit all at once.

They're laddered out through the period, and we have enough visibility now that we can, on the supply chain aside, make commitments for the long-lead-time items with our vendors to ensure we've got production slots, we've got promise of supply. Pricing may still be negotiable, depending on the time frame.

Obviously, we'd like to lock them down as best we can, but if you're committing to something 3 and 4 years out, we may not be locking in the price, but we will lock in the supply. With the visibility we have, we're able to manage some of that risk that others may not be able to manage the same way.

It sounds a little bit counter-intuitive, but actually having a pipeline of projects makes you a more attractive client and actually makes it easier for us to secure the resources and materials we need.

Okay. Got it.

Thank you.

Morning, everyone. The provincial government obviously is very focused on increasing transmission in the north.

The federal government is also equally focused on expanding transmission across the country. Is this an area that you have put any work in, could we see some incremental growth, either connecting additional northern communities or the provinces?

I guess as a final point, is this even needed or do you have enough transmission growth in hand right now?

The last part of your question is interesting, Rob. Is it needed?

I'm a bit greedy, I always like to have lots of growth. Yes, we have had conversations with the federal government.

I know they've got an announcement coming out later on today on some more nation-building projects, we'll see what they decide to do there. I think as a general comment, there is a focus on electrifying northern communities that for too long have been relying on diesel generation, and that has actually hindered growth across the country, not just in Ontario.

I would say both levels of government, and even municipalities at third level of government, are focused on how do we connect all the communities in Canada to the grid with reliable, affordable, and resilient energy.

All right. Appreciate that.

Then maybe just a smaller question. Broadband, there looks like there's been some puts and takes there.

How are we thinking about the timing and overall size of the investment here?

We still think it'll be in the $300 million to $700 million addition of rate base for ourselves. I'm getting a little bit more cautiously optimistic.

I think this last round of negotiations between the Ministry of Energy and Mines, which now has responsibility for the broadband portfolio, and the largest of the internet service providers has finally broken the logjam, and we're going to see things start to move now. I know I've been optimistic before, but this is the most optimistic I've been as we've been on this journey.

I think over the next 6 months when we're having this call, we'll be able to give you a better range estimate and an idea of how well it is moving. The government and the ISPs have finally reached an agreement on how to move forward, and that's going to allow us to get on the work we need to do.

All right. Perfect.

Welcome back, David.

Thank you.

Thank you. Good morning.

Welcome back, David, and great job, Harry, over the last few months. Just wanted to touch base on I know your allowed ROE is still locked in for a couple years, but just given the recent cost of capital update from the OEB, looks like 2026 has shaken out to be about 25 basis points below your current 936.

Just wondering if you've had any discussions or feedback for the OEB that might help to hold the ROE a little bit closer to where you're at today for the next JRP period.

Good morning, Pat. Thanks for those comments.

You're right. I think for next year, 9.11% is the ROE for any rate applications that come through using forecasts for the benchmarks that are used in the formula.

When we're back at this point, it would be 9.33%, 3 basis points below the current approved ROE. As we have earned above that, and so we don't have any real concerns as we go in.

I think our submission, which is a public document in the cost of capital hearing, was for increased equity thickness, some other adjustments. The ruling was a generic ruling that applies to all utilities regulated by the OEB, but they were at pains mentioning over and over if a utility feels their situation is different, they are free to bring proposals in the next rate application.

That's a door that we plan on jumping through as part of the next rate application. At this point, stay tuned.

Got it. Okay.

Thanks for that. Then maybe just back on the effective tax rate range as well.

I think you mentioned Harry, 13% to 16%. Can you just remind us what tools you might have at your disposal to achieve the lower end going forward and perhaps extend that lower end of the level into the next JRP as well?

We don't have a lot of tools ourselves. What primarily drives it is the accelerated CCA and the so-called super-productivity deduction in the budget.

That would certainly help keep us at the low and continue to keep us at the low end. As we continue to invest, we're entitled to use that, and that's what keeps us at the lower end.

We're happy to see that proposal in the budget. It has to be turned into law so that it does continue well into our next rate period.

Okay. Thanks for that.

Last one, I guess for David, maybe on the supply chain front. I appreciate the details on the domestic procurement.

Can you just maybe update us on some of your commitments for transformers and other equipment and components over the next few years as you look to bring some of your transmission developments into the capital budget? Good

morning, Pat. Nice to hear you.

At this point, we have no concerns. We've got locked-up manufacturing capacity.

We anticipate no problems at all getting the materials we need: transformers, switchgear, whatever it is for any of the projects. Our supply chain pays attention to that night and day.

That is one of the big risks we pay attention to. As we're developing new suppliers in Canada, we continue to work with our existing suppliers to make sure that we don't cut off an avenue.

We'd actually like to have more suppliers, not fewer, and that we believe that helps with pricing as well. No concerns at this point in time.

Okay. That's great.

I'll leave it there. Thank you.

Thanks, Shannon. The management team at Hydro One thanks everyone for their time with us this morning.

We appreciate your interest and your continued support. If you have any questions that weren't addressed on the call, please feel free to reach out, and we'll get them answered for you.

Thank you again, and enjoy the rest of your day.