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Sales of $232 million for the three months ended September 30, 2023, decreased 16% or $46 million compared to the same quarter of 2022, primarily due to the non-recurrence of the unprecedented spike in market prices realized in 2022 of $75 million. This decline was partially offset by higher turbine availability at Nordsee One following the completion of the RSA replacement campaign in 2022, and the effect of foreign exchange fluctuations due to the strengthening of the Euro and other items by $30 million.

Adjusted EBITDA of $126 million for the three months ended September 30, 2023, decreased 28% or $50 million compared to the same quarter of 2022, due to the same factors as noted above.

An important indicator for performance of offshore wind facilities is the current and historical average power production of the facility. The following tables summarize actual electricity production and the historical average, high and low, for the applicable operating periods of each offshore facility:

Onshore renewable facilities

Electricity production was 12% or 59GWh lower than the same quarter of 2022, primarily due to lower wind resource across the Canadian and Spanish onshore wind facilities, partially offset by higher solar resource at these facilities.

Sales of $118 million were 25% or $23 million higher than the same quarter of 2022, primarily due to the increase in band adjustments by $47 million as a result of the regulated posted price being higher than the merchant pool price in 2023, partially offset by the aggregate decrease in merchant revenue and return on investment (“Ri”) by $24 million from the Spanish portfolio. Please refer to the MD&A for further breakdown of Spanish portfolio revenue by component.

Adjusted EBITDA of $88 million was 45% or $27 million higher than the same quarter of 2022, due to the same factors as above.

Adjusted EBITDA from the Spanish portfolio of $54 million for the three months ended September 30, 2023, increased 116% or $29 million compared to the same quarter of 2022, due to the same factors discussed above. Free Cash Flow from the Spanish portfolio of $16 million for the three months ended September 30, 2023, increased by $22 million compared to the same quarter of 2022, due to the same factors discussed above.

Efficient natural gas facilities

Electricity production increased 10% or 88GWh compared to the same quarter of 2022, mainly due to higher market demand for dispatchable power.

Sales of $81 million decreased 27% or $31 million compared to the same quarter of 2022, primarily due to lower natural gas prices resulting in lower energy rates affecting revenue, and lower margins triggered by unplanned outages.

Adjusted EBITDA of $46 million for the three months ended September 30, 2023, decreased 12% or $6 million, compared to the same quarter of 2022, primarily due to lower management fee income from Kirkland Lake, in addition to the same factors as above.

Utility

Sales of $78 million for the three months ended September 30, 2023, increased 12% or $8 million compared to the same quarter of 2022, primarily due to the foreign exchange fluctuations as a result of the strengthening of the Colombian Peso.

Adjusted EBITDA of $30 million for the three months ended September 30, 2023, remained in line with the same quarter of 2022.

Consolidated statement of income (loss)

General and administrative (“G&A”) costs of $22 million in the third quarter increased $3 million compared to the same quarter of 2022, primarily due to increased costs and resources to support Northland’s projects and global platform and additional projects entering operation during the period, including La Lucha.

Development costs of $35 million increased $13 million compared to the same quarter of 2022, primarily due to timing of spending to advance development projects.

Net finance costs of $72 million in the third quarter decreased $5 million compared to the same quarter of 2022, primarily due to scheduled repayments on facility-level loans and higher loan repayments related to loan restructurings that occurred in 2022.

Fair value loss on derivative contracts was $46 million compared to a $43 million loss in the same quarter of 2022, primarily due to net movement in the fair value of derivatives related to commodity, interest rate and foreign exchange contracts.

Foreign exchange gain of $12 million in the third quarter was primarily due to unrealized gain from fluctuations in the closing foreign exchange rates.

Other income of $20 million increased by $19 million compared to the same quarter of 2022, primarily due to the gains associated with the partial sell-down of development assets in the third quarter of 2023.

Net income of $43 million in the third quarter decreased by $33 million compared to the same quarter of 2022, primarily as a result of the factors described above.

Adjusted EBITDA

The following table reconciles net income (loss) to Adjusted EBITDA:

Adjusted EBITDA of $267 million for the three months ended September 30, 2023, decreased 8% or $23 million compared to the same quarter of 2022. The significant factors decreasing Adjusted EBITDA include:

• $50 million decrease in operating results at the offshore wind facilities primarily due to the non-recurrence of the unprecedented spike in market prices realized in 2022. This decline was partially offset by higher turbine availability at Nordsee One following the completion of the RSA replacement campaign in 2022 and the effect of foreign exchange fluctuations due to the strengthening of the Euro and other items; and

• $14 million increase in G&A costs and development expenditures, primarily due to higher administrative costs to support the sustainable operations and the latter driven by timing of spend.

The factors partially offsetting the decrease in the Adjusted EBITDA were:

• $29 million increase in the contribution from the Spanish renewables portfolio, as discussed above; and

• $19 million in gains from partial sell-down of development assets.

Adjusted Free Cash Flow and Free Cash Flow

The following table reconciles cash flow from operations to Adjusted Free Cash Flow and Free Cash Flow:

Adjusted Free Cash Flow of $64 million for the three months ended September 30, 2023, was 4% or $2 million lower than the same quarter of 2022.

The significant factors decreasing Adjusted Free Cash Flow were:

• $23 million decrease in contribution from the operating facilities leading to lower Adjusted EBITDA primarily due to the factors described above; and

• $10 million decrease primarily as a result of higher net proceeds from the Empresa de Energía de Boyacá S.A E.S.P (“EBSA”) refinancing recognized in 2022.

The factors partially offsetting the decrease in Adjusted Free Cash Flow were:

• $16 million gains from partial asset sales of offshore wind development assets and foreign exchange hedge settlements; and

• $18 million decrease in net finance costs primarily due to scheduled repayments on facility-level loans and higher loan repayments related to loan restructurings in 2022.

Free Cash Flow, which is reduced by growth expenditures, totaled $36 million for the three months ended September 30, 2023, and was 19% or $8 million lower than the same quarter of 2022, due to the same factors as Adjusted Free Cash Flow.

The following table reconciles Adjusted EBITDA to Adjusted Free Cash Flow.

Significant Events and Updates

Balance Sheet:

• At-The-Market Equity Program – The Company’s “at-the-market” equity program (“ATM program”) was terminated in accordance with its terms upon the expiry of the Company’s short form base shelf prospectus on July 16, 2023. During the third quarter of 2023, there was no activity under the ATM program.
  

Renewables Growth:

• Hai Long Offshore Wind Project – During the third quarter, Northland successfully closed its NTD117 billion (equivalent to $5 billion) long term, over 20-year non-recourse green financing, which will be provided by international and local lenders with support from multiple Export Credit Agencies (“ECAs”). The Hai Long project’s total cost is projected to be approximately $9 billion, with funding from $5 billion of non-recourse debt by the project lenders, approximately $1 billion of pre-completion revenues and the remaining equity investment contributed by the project’s partners. Northland’s interest (post targeted sell-down to Gentari International Renewables Pte. Ltd. (“Gentari”)) in Hai Long is expected to generate a five-year average of approximately $230 to $250 million of Adjusted EBITDA and $75 to $85 million of Free Cash Flow per year once operational, delivering significant long-term value for Northland’s shareholders. The weighted average all-in interest cost for the term of the financing is approximately 5% per annum. Northland’s equity investment has and will be funded through proceeds raised under its ATM program in 2022 and the anticipated sale of its 49% interest to Gentari, which is discussed below, and in the Outlook sections of this press release.
  
  On December 14, 2022, Northland signed an agreement with Gentari to sell 49% of its current 60% ownership stake in Hai Long (the “Gentari Sell-Down”). Northland is targeting to close Gentari Sell-Down in the fourth quarter of 2023, subject to the satisfaction of certain closing conditions, which also include meeting requirements under the existing multi-party project finance agreements. Subject to closing, the transaction will result in Gentari holding a 29.4% indirect equity interest in Hai Long. The proposed sell-down is consistent with Northland’s long-term financing strategy and will allow Northland to share development costs for Hai Long with its joint venture partners. Northland will hold a 30.6% interest in the project upon closing of the transaction and will continue to take the lead role in the construction and operation phases of the project.
  
  The Hai Long project continues to advance its construction activities. Completion of construction activities and full commercial operations are expected in 2026/2027.

• Baltic Power Offshore Wind Project – During the third quarter, Northland closed an equivalent of $5.2 billion, 20-year non-recourse green financing, which will be supported by a consortium of international and local commercial banks, and multiple ECAs and multi-lateral agencies. The Baltic Power project’s total cost is projected to be approximately $6.5 billion, with funding from its $5.2 billion of non-recourse debt by the project lenders and remaining capital to be contributed by the project partners. Northland’s share of equity for the project was fully funded through the $500 million of Fixed-to-Fixed Rate Green Subordinated Notes, Series 2023-A, due June 30, 2083 (the “Green Notes”) issuance in June 2023 and existing corporate liquidity. Northland’s interest in Baltic Power is expected to generate a high quality, inflation-protected five-year average Adjusted EBITDA of approximately $300 to $320 million and $95 to $105 million of Free Cash Flow per year once operational, delivering significant long-term cash flow for Northland’s shareholders.
  
  The weighted average all-in interest cost for the term of the financing is approximately 5% per annum. In addition, Northland has entered into currency hedges to stabilize the Canadian dollar equivalent for the majority of its projected distributions through 2038 and will enter into additional hedges on an ongoing basis, in line with the Northland’s risk management policies.
  

• New York Onshore Wind Projects – On October 31, 2023, the 112MW Bluestone and 108MW Ball Hill onshore wind projects have commenced earning revenue under the 20-year PPA with the New York State Energy Research and Development Authority (“NYSERDA”). These projects are expected to contribute an aggregate of $42 million and $15 million of Adjusted EBITDA and Free Cash Flow, respectively, towards Northland’s 2024 financial results.

• NorthWind and CanWind Offshore Wind Projects – During the third quarter of 2023, Northland executed an investment partnership agreement with Gentari resulting in the completion of a 49% stake sell-down in early-stage offshore wind development projects in Taiwan: NorthWind and CanWind. The partnership with Gentari is an extension of the agreement formed in December 2022, as related to Hai Long, as discussed above. The transaction resulted in Gentari holding a 49% indirect equity interest in these projects, and Northland holding a 51% interest.

Outlook on 2023 Funding Plan

Northland’s focus is on successfully constructing the Oneida energy storage project, and Baltic Power and Hai Long offshore wind projects.

These projects represent an aggregate equity investment by Northland of $1.75 billion, net of the Gentari Sell-Down transaction. Northland had access to $563 million of available liquidity at September 30, 2023, including $63 million of cash on hand and approximately $500 million of capacity on its corporate revolving credit facilities.

Northland also has a $500 million short-term corporate credit facility (“Short Term Facility”) to help fund its equity contribution in Hai Long, of which $344 million was utilized at September 30, 2023. This facility matures at the end of November 2023 and is expected to be repaid upon receipt of the proceeds from the Gentari Sell-Down transaction, which management is targeting to close in the fourth quarter of 2023, upon certain closing conditions being met, as discussed above. In the event that the Gentari Sell-Down is delayed due to satisfying closing conditions taking more time than planned, the facility may need to be extended or re-financed. In addition, Northland has secured a $1.0 billion Hai Long related corporate LC facility to support Hai Long credit requirements during construction. Northland’s Hai Long related letter of credit obligations and this facility would decrease by 49% upon closing of the Gentari Sell-Down.

2023 and Long-term Outlook

As of November 9, 2023, management has reiterated its 2023 financial outlook. Adjusted EBITDA in 2023 is expected to be at the low end of original guidance of $1.2 billion to $1.3 billion. Adjusted Free Cash Flow and Free Cash Flow per share in 2023 are also expected to be at the low end of our previously communicated ranges of $1.70 to $1.90 and $1.30 to $1.50, respectively. The ranges for Adjusted EBITDA, Adjusted Free Cash Flow and Free Cash Flow include sell-down gains.

Northland continues to implement a selective partnership strategy to sell interests in certain development projects on or before financial close. The Company will assess each opportunity individually and intends to remain a long-term owner of the renewable power assets it develops.

Over the longer term, Northland remains positioned to achieve substantial growth in Adjusted EBITDA by 2027, upon achieving targeted commercial operations of Oneida, Baltic Power and Hai Long, each with long-term contracted revenues of between 20 to 30 years.

Once all three projects are fully operational, anticipated by 2027, they are expected to collectively generate an aggregate Adjusted EBITDA and Free Cash Flow of $570 to $615 million and $185 to $210 million, respectively, resulting in significant value creation and accretion for Northland’s shareholders.

With over 3 gigawatts (GW) of gross operating capacity and a robust development pipeline of approximately 15GW, with 2.4GW being under construction and expected to be operational by 2026/2027, the Company is well positioned for an accelerating global energy transition. Northland intends to be selective and pursue only projects within its pipeline that meet its strategic objectives and targeted returns and closely monitor macroeconomic conditions surrounding renewables development globally.

Third-Quarter Earnings Conference Call

Northland will hold an earnings conference call on November 10, 2023, to discuss its 2023 third quarter results. The call will be hosted by Northland’s Senior Management, who will discuss the Company’s financial results and developments as well as answering questions from analysts.

Conference call details are as follows:

Friday, November 10, 2023, 10:00 a.m. ET

Participants wishing to join the call and ask questions must register using the following URL below:

https://register.vevent.com/register/BIb14b87ba5135410fb9fed115bde5d406

For all other attendees, the call will be broadcast live on the internet, in listen-only mode and can be accessed using the following link:

Webcast URL: https://edge.media-server.com/mmc/p/ysmaxpt8

For those unable to attend the live call, an audio recording will be available on northlandpower.com on November 13, 2023.

Northland’s unaudited interim condensed consolidated financial statements for the three and nine months ended September 30, 2023, and related Management’s Discussion and Analysis can be found on SEDAR+ at www.sedarplus.ca under Northland’s profile and on northlandpower.com.

ABOUT NORTHLAND POWER

Northland Power is a global power producer dedicated to helping the clean energy transition by producing electricity from clean renewable resources. Founded in 1987, Northland has a long history of developing, building, owning and operating clean and green power infrastructure assets and is a global leader in offshore wind. In addition, Northland owns and manages a diversified generation mix including onshore renewables, efficient natural gas energy, as well as supplying energy through a regulated utility.

Headquartered in Toronto, Canada, with global offices in eight countries, Northland owns or has an economic interest in approximately 3.4GW (net 2.9GW) of operating capacity. The Company also has a significant inventory of projects in construction and in various stages of development encompassing approximately 15GW of potential capacity.

Publicly traded since 1997, Northland's common shares, Series 1 and Series 2 preferred shares trade on the Toronto Stock Exchange under the symbols NPI, NPI.PR.A and NPI.PR.B, respectively.

NON-IFRS FINANCIAL MEASURES

This press release includes references to the Company’s adjusted earnings before interest, income taxes, depreciation and amortization (“Adjusted EBITDA”), Adjusted Free Cash Flow, Free Cash Flow and applicable payout ratios and per share amounts, which are measures not prescribed by International Financial Reporting Standards (“IFRS”), and therefore do not have any standardized meaning under IFRS and may not be comparable to similar measures presented by other companies. Non-IFRS financial measures are presented at Northland’s share of underlying operations. These measures should not be considered alternatives to net income (loss), cash flow from operating activities or other measures of financial performance calculated in accordance with IFRS. Rather, these measures are provided to complement IFRS measures in the analysis of Northland’s results of operations from management’s perspective. Management believes that Northland’s non-IFRS financial measures and applicable payout ratio and per share amounts are widely accepted and understood financial indicators used by investors and securities analysts to assess the performance of a company, including its ability to generate cash through operations.

FORWARD-LOOKING STATEMENTS

This press release contains statements that constitute forward-looking information within the meaning of applicable securities laws (“forward-looking statements”) that are provided for the purpose of presenting information about management’s current expectations and plans. Readers are cautioned that such statements may not be appropriate for other purposes. Northland’s actual results could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, the events anticipated by the forward-looking statements may or may not transpire or occur. Forward-looking statements include statements that are not historical facts and are predictive in nature, depend upon or refer to future events or conditions, or include words such as “expects,” “anticipates,” “plans,” “predicts,” “believes,” “estimates,” “intends,” “targets,” “projects,” “forecasts” or negative versions thereof and other similar expressions or future or conditional verbs such as “may,” “will,” “should,” “would” and “could.” These statements may include, without limitation, statements regarding future Adjusted EBITDA, Adjusted Free Cash Flow and Free Cash Flow, including respective per share amounts, dividend payments and dividend payout ratios, the timing for and attainment of the Hai Long and Baltic Power offshore wind, and Oneida energy storage projects’ anticipated contributions to Adjusted EBITDA, Adjusted Free Cash Flow and Free Cash Flow, the expected generating capacity of certain projects, guidance, the completion of construction, acquisitions, dispositions, investments or financings and the timing thereof, including the timing and final terms of the pending sell-down of Hai Long to Gentari, the timing for and attainment of financial close and commercial operations, for each project, the potential for future production from project pipelines, cost and output of development projects, the all-in interest cost for debt financing, the impact of currency hedges, litigation claims, anticipated results from the optimization of the Thorold Co-Generation facility and the timing related thereto, plans for raising capital and future funding requirements, the allocation of the net proceeds from the Green Notes offering, and the future operations, business, financial condition, financial results, priorities, ongoing objectives, strategies and the outlook of Northland, its subsidiaries and joint ventures. There is a risk that delays in closing financings, assets sales or sell-downs, failure to obtain the anticipated level of finance commitments and failure to close one or more financings or sell-downs could affect construction schedules and/or Northland’s cash or credit position and capital funding needs. These statements are based upon certain material factors or assumptions that were applied in developing the forward-looking statements, including the design specifications of development projects, the provisions of contracts to which Northland or a subsidiary is a party, management’s current plans and its perception of historical trends, current conditions and expected future developments, the ability to obtain necessary approvals, satisfy any closing conditions, satisfy any project finance lender conditions to closing sell-downs or obtain adequate financing regarding contemplated construction, acquisitions, dispositions, investments or financings, as well as other factors, estimates and assumptions that are believed to be appropriate in the circumstances. Although these forward-looking statements are based upon management’s current reasonable expectations and assumptions, they are subject to numerous risks and uncertainties. Some of the factors include, but are not limited to, risks associated with further regulatory and policy changes in Spain which could impair current guidance and expected returns, risks associated with merchant pool pricing and revenues, risks associated with sales contracts, the emergence of widespread health emergencies or pandemics, Northland’s reliance on the performance of its offshore wind facilities at Gemini, Nordsee One and Deutsche Bucht for over 50% of its Adjusted EBITDA, counterparty and joint venture risks, contractual operating performance, variability of sales from generating facilities powered by intermittent renewable resources, offshore wind concentration, natural gas and power market risks, commodity price risks, operational risks, recovery of utility operating costs, Northland’s ability to resolve issues/delays with the relevant regulatory and/or government authorities, permitting, construction risks, project development risks, acquisition risks, procurement and supply chain risks, financing risks, disposition and joint-venture risks, competition risks, interest rate and refinancing risks, liquidity risk, inflation risks, impacts of regional or global conflicts, credit rating risk, currency fluctuation risk, variability of cash flow and potential impact on dividends, taxation, natural events, environmental risks, climate change, health and worker safety risks, market compliance risk, government regulations and policy risks, utility rate regulation risks, international activities, cybersecurity, data protection and reliance on information technology, labour relations, reputational risk, insurance risk, risks relating to co-ownership, bribery and corruption risk, terrorism and security, legal contingencies, and the other factors described in the “Risks Factors” section of Northland’s Management’s Discussion and Analysis and Annual Information Form for the year ended December 31, 2022, which can be found at www.sedarplus.ca under Northland’s profile and on Northland’s website at northlandpower.com. Northland has attempted to identify important factors that could cause actual results to materially differ from current expectations, however, there may be other factors that cause actual results to differ materially from such expectations. Northland’s actual results could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, and Northland cautions you not to place undue reliance upon any such forward-looking statements.

The forward-looking statements contained in this release are, unless otherwise indicated, stated as of the date hereof and are based on assumptions that were considered reasonable as of the date hereof. Other than as specifically required by law, Northland undertakes no obligation to update any forward-looking statements to reflect events or circumstances after such date or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise.

Certain forward-looking information in this MD&A, including, but not limited to the information in Section 9: Outlook and our projected Adjusted EBITDA and Free Cash Flow expected to be generated from Northland’s interest in Hai Long, Baltic Power and Oneida may also constitute “financial outlooks” within the meaning of applicable securities laws. Financial outlook involves statements about Northland’s prospective financial performance, financial position or cash flows and is based on and subject to the assumptions about future economic conditions and courses of action and the risk factors described above in respect of forward-looking information generally, as well as any other specific assumptions and risk factors in relation to such financial outlook noted in this MD&A. Such assumptions are based on management’s assessment of the relevant information currently available and any financial outlook included in this MD&A is provided for the purpose of helping readers understand Northland’s current expectations and plans for the future. Readers are cautioned that reliance on any financial outlook may not be appropriate for other purposes or in other circumstances and that the risk factors described above or other factors may cause actual results to differ materially from any financial outlook. The actual results of Northland’s operations will likely vary from the amounts set forth in any financial outlook and such variances may be material.

For further information, please contact:

Adam Beaumont, Vice President

Dario Neimarlija, Vice President

647-288-1019

investorrelations@northlandpower.com

northlandpower.com