Hydro One Reports Fourth Quarter Results

Hydro One Reports Fourth Quarter Results

TORONTO, Feb. 13, 2026  – Hydro One Limited (Hydro One or the Company) today announced its financial and operating results for the fourth quarter ended December 31, 2025.

Fourth Quarter Highlights

• Fourth quarter basic earnings per share (EPS) of $0.39 compares to EPS of $0.33 for the same period in 2024.
• The change in EPS year-over-year was largely due to lower operation, maintenance and administration (OM&A) costs, increased revenues from higher peak demand and OEB-approved rates, partially offset by lower revenues associated with higher earnings sharing in the current year, higher financing charges, and higher income tax expense.
• The Company realized productivity savings of $254 million in 2025 through ongoing cost optimizations.
• Hydro One was selected to develop and construct a new priority transmission line between Bowmanville and the Greater Toronto Area (GTA) in partnership with First Nations.
• Hydro One filed an application with the OEB to construct the Welland Thorold Power Line in the Niagara region in southern Ontario.
• All five partner First Nations secured the necessary financing to become equity partners in the Chatham to Lakeshore Transmission Line.
• Subsequent to quarter end, Hydro One was selected to develop and construct the Greenstone Transmission Line as well as the Sudbury to Barrie Transmission Line.
• Subsequent to quarter end, members of the Society of United Professionals ratified the tentative agreement reached on January 12, 2026. The new agreement will take effect retroactively from October 1, 2025 to March 31, 2028 and covers employees in engineering, supervisory and other professional roles.
• Hydro One was recognized as one of Canada’s Best Employers for 2026 by Forbes and Statista.
• The Company priced $1.6 billion aggregate principal amount of Medium-Term Notes under its Sustainable Financing Framework.
• The Company’s capital investments and in-service additions for the quarter were $939 million and $1,310 million, respectively, compared to $799 million and $1,100 million in 2024.
• A quarterly dividend of $0.3331 per share was declared, payable on March 31, 2026.

“We are proud to have reached an important milestone in our First Nations Equity Partnership model, with all five partner First Nations completing their investment in the Chatham to Lakeshore Transmission Line,” said David Lebeter, President and Chief Executive Officer of Hydro One. “This historic achievement marks the first project developed under our 50:50 equity model and represents a meaningful step forward in reconciliation, community partnership, and economic inclusion. As we continue to invest in the system, we are creating opportunities to work alongside First Nations and communities to support economic prosperity across the province.”

Selected Consolidated Financial and Operating Highlights 

		Three months ended December 31			Year ended December 31
(millions of Canadian dollars, except as otherwise noted)		2025	2024		2025	2024
Revenues		2,268	2,095		9,041	8,484
Purchased power		1,287	1,060		4,486	4,143
Revenues, net of purchased power1		981	1,035		4,555	4,341
Net income attributable to common shareholders		233	200		1,339	1,156
Basic EPS		$0.39	$0.33		$2.23	$1.93
Diluted EPS		$0.39	$0.33		$2.23	$1.92
Net cash from operating activities		867	703		2,695	2,534
Capital investments		939	799		3,366	3,063
Assets placed in-service		1,310	1,100		2,901	2,463
Transmission: Average monthly Ontario 60-minute peak demand (MW)		20,491	19,396		21,398	20,659
Distribution:    Electricity distributed to Hydro One customers (GWh)		8,802	8,249		33,294	31,523

1 “Revenues, net of purchased power” is a non-generally accepted accounting principles (GAAP) financial measure. Non-GAAP financial measures do not have a standardized meaning under United States (U.S.) GAAP used to prepare the Company’s financial statements and might not be comparable to similar measures presented by other entities. See the section “Non-GAAP Financial Measures”.

Key Financial Highlights        

2025 Fourth Quarter Highlights

The Company reported net income attributable to common shareholders of $233 million during the quarter, compared to $200 million in the same period of 2024. This resulted in EPS of $0.39, compared to EPS of $0.33 during the same period in the prior year.

Revenues of $2,268 million for the fourth quarter were $173 million higher than revenues for the fourth quarter of 2024 mainly due to higher costs of purchased power. Revenues, net of purchased power[1] of $981 million for the fourth quarter were $54 million lower than revenues, net of purchased power¹ for the fourth quarter of 2024. The decrease is mainly attributable to lower revenues resulting from regulatory adjustments, including higher earnings sharing in the current period, partially offset by higher revenues resulting from higher average monthly peak demand and energy consumption, as well as increased transmission and distribution revenues due to OEB-approved 2025 rates.

OM&A costs in the fourth quarter of 2025 were lower than prior year primarily resulting from lower corporate support costs.

Depreciation, amortization and asset removal costs for the fourth quarter of 2025 were comparable to  the prior year.

Financing charges in the fourth quarter of 2025 were higher than the prior year primarily as a result of an increase in outstanding long-term debt, partially offset by higher capitalized interest.

Income tax expense for the fourth quarter of 2025 was higher than the prior year primarily due to higher pre-tax earnings.

Hydro One continues to invest in the reliability and performance of Ontario’s electricity transmission and distribution systems by addressing aging power system infrastructure, facilitating connectivity to new load customers and generation sources, and improving service to customers. The Company made capital investments of $939 million during the fourth quarter of 2025 and placed $1,310 million of new assets in-service.

__________________

1 Revenues, net of purchased power, is a non-GAAP financial measure. Non-GAAP financial measures do not have a standardized meaning under U.S. GAAP used to prepare the Company’s financial statements and might not be comparable to similar measures presented by other entities. See the section “Non-GAAP Financial Measures”.

2025 Annual Highlights

For the twelve months ended December 31, 2025, the Company reported net income attributable to common shareholders of $1,339 million compared to $1,156 million in 2024, an increase of $183 million compared to the prior year. This resulted in EPS for the period of $2.23 compared to EPS of $1.93 in 2024. Annual results were primarily impacted by higher revenues resulting from OEB-approved 2025 transmission and distribution rates, higher average monthly peak demand and energy consumption, as well as lower OM&A primarily resulting from lower work program expenditures, partially offset by lower revenues resulting from regulatory adjustments related to higher earnings sharing in the current year, higher depreciation, amortization and asset removal costs, and higher financing charges.

For the full year, the Company placed $2,901 million of assets into service in 2025 compared to $2,463 million in 2024.

Selected Operating Highlights

Hydro One was selected to develop and construct a new priority transmission line between Bowmanville and the GTA. The proposed project is a new double-circuit 500-kilovolt (kV) transmission line from the Bowmanville Switching Station to the Parkway Transformer Station, including associated station facility expansions or upgrades required at terminal stations. The line is expected to be in service in the early-2030s. Hydro One will build the line in partnership with proximate First Nations who will have the opportunity to invest in a 50 per cent equity stake in the transmission line component of the project, through the company’s industry leading First Nation 50-50 Equity Partnership Model.

The Company filed an application with the OEB to construct a new double-circuit 230-kV transmission line between Abitibi Consolidated Junction, within an existing Hydro One transmission corridor in Thorold and Crowland Transformer Station in Welland. In addition to the line work, Hydro One will also expand the Crowland Transformer Station. The approximately $311 million investment in the region is expected to be complete by 2029 to bolster capacity and improve the reliability and security of the electricity grid. Proximate First Nations have the opportunity to invest in a 50 per cent equity stake in the transmission line component of the project.

Hydro One was selected to develop and construct a new priority transmission line in the Greenstone region in northern Ontario. The proposed project is a single-circuit 230-kV transmission line, designed to support a future second circuit and will be connected to the existing 230-kV infrastructure (the East-West Tie) near Nipigon Bay. The line will extend to Longlac Transformer Station where a new 230-kV station will connect to the existing 115-kV circuit and continue to or near Aroland First Nation, terminating at a new 230-kV switching station with associated station facilities. The line is expected to be in-service in 2032. Proximate First Nations have the opportunity to invest in a 50 per cent equity stake in the transmission line component of the project.

The Company was selected to develop and construct a new priority transmission line between Sudbury and the Barrie area. The proposed project is a new single-circuit 500- kV transmission line that will span approximately 300 kilometres from the Hanmer Transformer Station in Sudbury to the Essa Transformer Station near Barrie, including associated station facility expansions. The line is expected to be in-service in 2032. The designation of this priority project includes the direction to complete development work for a second new single-circuit 500-kV transmission line. Proximate First Nations have the opportunity to invest in a 50 per cent equity stake in the transmission line component of the project.

Hydro One’s wholly owned subsidiary, Hydro One Inc. completed an offering of $1.6 billion of Medium-Term Notes consisting of $1.2 billion aggregate principal amount of 3.90% Medium-Term Notes, Series 64, due 2033 and $400 million aggregate principal amount of 4.80% Medium-Term Notes, Series 65, due 2056 (collectively, the Notes). The net proceeds from the issuance of the Notes represent the issuance of Medium-Term Notes pursuant to Hydro One’s Sustainable Financing Framework. Hydro One Inc. intends to allocate an amount equal to the net proceeds from the sale of the Notes to finance and/or refinance, in whole or in part, new and/or existing eligible green projects that meet the eligibility criteria described in the 2024 Framework.

Common Share Dividends

On February 12, 2026, the Company declared a quarterly cash dividend to common shareholders of $0.3331 per share to be paid on March 31, 2026 to shareholders of record on March 11, 2026.

Supplemental Segment Information

SUMMARY OF FOURTH QUARTER RESULTS OF OPERATIONS

Net Income

Net income attributable to common shareholders for the quarter ended December 31, 2025 of $233 million is $33 million, or 16.5%, higher than the same period in the prior year, primarily due to:

• lower OM&A costs primarily resulting from lower corporate support costs; partially offset by
• lower revenues, net of purchased power,[2] resulting from regulatory adjustments, primarily due to higher earnings sharing in the current period, partially offset by higher revenues resulting from higher average monthly peak demand and energy consumption, as well as increased transmission and distribution revenues due to OEB-approved 2025 rates;
• higher financing charges attributable to an increase in outstanding long-term debt, partially offset by higher capitalized interest; and
• higher income tax expense primarily resulting from higher pre-tax earnings.

EPS

Basic EPS was $0.39 in the fourth quarter of 2025, compared to Basic EPS of $0.33 in the fourth quarter of 2024.

Revenues

The year-over-year decrease of $14 million, or 2.8%, in transmission revenues during the quarter primarily resulted from:

• regulatory adjustments, including a higher earnings sharing accrual in the current period; partially offset by
• higher average monthly peak demand; and
• higher revenues resulting from OEB-approved 2025 rates.
• The year-over-year increase of $174 million, or 11.0%, in distribution revenues during the quarter primarily resulted from:
• higher purchased power costs, which are fully recovered from ratepayers and thus net income neutral;
• higher revenues resulting from OEB-approved 2025 rates; and
• higher energy consumption; partially offset by
• regulatory adjustments, mainly attributable to a higher earnings sharing accrual in the current period; and
• lower revenue associated with mutual storm assistance costs recovered from third parties in the prior year, which is offset in OM&A and therefore net income neutral.

Distribution revenues, net of purchased power,³ decreased by 10.1% during the fourth quarter of 2025 compared to the prior year primarily due to:

• regulatory adjustments, including a higher earnings sharing accrual in the current period; and
• lower revenue associated with mutual storm assistance costs recovered from third parties, which is offset in OM&A and therefore net income neutral; partially offset by
• higher revenues resulting from OEB-approved 2025 rates; and
• higher energy consumption.

OM&A Costs

The year-over-year decrease of $48 million, or 37.5%, in transmission OM&A costs during the quarter was primarily due to:

• severance costs in the prior year;
• lower corporate support costs; and
• lower work program expenditures, including work related to facilities maintenance and vegetation management.

The year-over-year decrease of $51 million, or 25.0%, in distribution OM&A costs during the quarter was primarily due to:

• severance costs in the prior year;
• net income neutral items, including mutual storm assistance costs and lower fuel costs of Hydro One Remotes, both of which are offset in revenue; and
• lower corporate support costs; partially offset by
• higher work program expenditures, including emergency restoration and vegetation management.

The year-over-year decrease of $16 million, or 39.0%, in other OM&A costs during the quarter was due to various factors, including lower costs in Acronym primarily due to higher third party service costs in the prior year.

Depreciation, Amortization and Asset Removal Costs

Depreciation, amortization and asset removal costs for the fourth quarter of 2025 were comparable to the same period in 2024.

Financing Charges

The $17 million, or 10.8%, increase in financing charges for the quarter ended December 31, 2025, was primarily due to an increase in outstanding long-term debt, partially offset by higher capitalized interest.

Income Tax Expense

Income tax expense for the fourth quarter of 2025 increased by $13 million compared to the same period in 2024. This resulted in a realized Effective Tax Rate (ETR) of approximately 11.4% in the fourth quarter of 2025, compared to approximately 7.8% in the fourth quarter of the prior year.

The increase in ETR for the three months ended December 31, 2025 was primarily attributable to:

• higher pre-tax earnings; and
• lower deductible timing differences compared to the prior year.

Assets Placed In-Service

The increase in transmission assets placed in-service during the fourth quarter was primarily due to:

• timing of assets placed in-service for station refurbishments and replacements, including the Bruce A Transmission station, the Merivale Transmission Station, and the Lauzon Transmission Station; and
• investments placed in-service for customer connection projects; partially offset by
• investments placed in-service for the Chatham to Lakeshore Transmission Line; and
• lower volume of line refurbishments and wood pole replacements.

The increase in distribution assets placed in-service during the fourth quarter was primarily due to:

• investments placed in-service for Ontario’s broadband initiative;
• assets placed in-service for the AMI 2.0 system; and
• higher volume of assets placed in-service for customer connections; partially offset by
• lower volume of wood pole replacements and line refurbishments;
• timing of assets placed in-service for system capability reinforcement projects; and
• assets placed in-service for the Orleans Operation Centre in the prior year.

Capital Investments

The increase in transmission capital investments during the fourth quarter was primarily due to:

• higher investments in the Waasigan Transmission Line Project;
• investments in the St. Clair Transmission Line Project;
• higher spend on major development projects; and
• higher spend on customer connections; partially offset by
• lower volume of line refurbishments and wood pole replacements.

The decrease in distribution capital investments during the fourth quarter was primarily due to:

• lower volume of wood pole replacements;
• investments in the Orillia Distribution Warehouse, Orillia Operation Centre, and Orleans Operation Centre; and
• lower volume of PCB transformer replacements; partially offset by
• investments in Ontario’s broadband initiative; and
• investments in the AMI 2.0 system.

Consolidated Income Statements

Consolidated Balance Sheets

As at December 31 (millions of Canadian dollars)				2025	2024
Assets
Current assets:
Cash and cash equivalents				549	716
Accounts receivable				1,083	911
Due from related parties				409	325
Other current assets				133	165
				2,174	2,117
Property, plant and equipment				31,450	29,093
Other long-term assets:
Regulatory assets				3,857	3,503
Deferred income tax assets				135	127
Intangible assets				654	661
Goodwill				378	373
Other assets				1,023	808
				6,047	5,472
Total assets				39,671	36,682
Liabilities
Current liabilities
Short-term notes payable				100	200
Long-term debt payable within one year				925	1,150
Accounts payable and other current liabilities				2,086	1,809
Due to related parties				479	342
				3,590	3,501
Long-term liabilities
Long-term debt				18,092	16,329
Regulatory liabilities				1,621	1,476
Deferred income tax liabilities				1,799	1,452
Other long-term liabilities				1,823	1,751
				23,335	21,008
Total liabilities				26,925	24,509
Noncontrolling interest subject to redemption				19	19
Equity
Common shares				5,721	5,713
Additional paid-in capital				25	28
Retained earnings				6,911	6,360
Accumulated other comprehensive loss				(9)	(12)
Hydro One shareholders’ equity				12,648	12,089
Noncontrolling interest				79	65
Total equity				12,727	12,154
				39,671	36,682

Consolidated Statements of Cash Flows

	Three months ended December 31,			Year ended December 31,
(millions of Canadian dollars)		2025	2024		2025	2024
Operating activities
Net income		234	201		1,349	1,165
Environmental expenditures		(1)	(2)		(3)	(11)
Adjustments for non-cash items:
Depreciation and amortization		257	246		966	920
Regulatory assets and liabilities		166	64		240	81
Deferred income tax expense		(8)	10		76	140
Other		5	(6)		14	(10)
Changes in non-cash balances related to operations		214	190		53	249
Net cash from operating activities		867	703		2,695	2,534
Financing activities
Long-term debt issued		1,599	765		2,698	2,781
Long-term debt repaid		(400)	—		(1,150)	(700)
Short-term notes issued		1,035	510		6,070	2,810
Short-term notes repaid		(1,870)	(520)		(6,170)	(2,890)
Dividends paid on common shares		(200)	(188)		(788)	(743)
Distributions paid to noncontrolling interest		(1)	(2)		(12)	(10)
Contributions received from sale of noncontrolling interest		—	—		16	—
Costs to obtain financing		(6)	(3)		(12)	(15)
Net cash from financing activities		157	562		652	1,233
Investing activities
Capital expenditures
Property, plant and equipment		(805)	(653)		(2,970)	(2,720)
Intangible assets		(25)	(26)		(80)	(88)
Additions to future use assets		(58)	(117)		(213)	(323)
Investment in equity investees		—	—		(261)	—
Capital contributions received		—	—		3	2
Other		1	(1)		7	(1)
Net cash used in investing activities		(887)	(797)		(3,514)	(3,130)
Net change in cash and cash equivalents		137	468		(167)	637
Cash and cash equivalents, beginning of period		412	248		716	79
Cash and cash equivalents, end of period		549	716		549	716

This press release should be read in conjunction with the Company’s 2025 Consolidated Financial Statements and MD&A. These financial statements and MD&A together with additional information about Hydro One, can be accessed at www.HydroOne.com/Investors and www.sedarplus.com.

Quarterly Investment Community Teleconference

The Company’s fourth quarter 2025 results teleconference with the investment community will be held on February 13, 2026 at 8 a.m. ET, a webcast of which will be available at www.HydroOne.com/Investors. Members of the financial community wishing to ask questions during the call should go to this link (https://register-conf.media-server.com/register/BI2b26ea28580c4a4f9429a651e697b9ed) prior to the scheduled start time to access Hydro One’s fourth quarter 2025 results call. Media and other interested parties are welcome to participate on a listen-only basis. A webcast of the teleconference will be available at the same link following the call. Additionally, investors should note that, from time to time Hydro One management presents at brokerage sponsored investor conferences. Most often, but not always, these conferences are webcast by the hosting brokerage firm, and when they are webcast, links are made available on Hydro One’s website at www.HydroOne.com/Investors and are posted generally at least two days before the conference.

Hydro One Limited (TSX: H)

Hydro One Limited, through its wholly-owned subsidiaries, is Ontario’s largest electricity transmission and distribution provider with 1.5 million valued customers, $39.7 billion in assets as at December 31, 2025, and annual revenues in 2025 of $9 billion.

Our team of 9,600 skilled and dedicated employees proudly build and maintain a safe and reliable electricity system which is essential to supporting strong and successful communities. In 2025, Hydro One invested $3.4 billion in its transmission and distribution networks, and supported the economy through buying $3.0 billion of goods and services.

We are committed to the communities where we live and work through community investment, sustainability and diversity initiatives.

Hydro One Limited’s common shares are listed on the TSX and certain of Hydro One Inc.’s medium term notes are listed on the NYSE. Additional information can be accessed at www.hydroone.com/, www.sedarplus.com or www.sec.gov.

For More Information

For more information about everything Hydro One, please visit www.hydroone.com where you can find additional information including links to securities filings, historical financial reports, and information about the Company’s governance practices, corporate social responsibility, customer solutions, and further information about its business.

Non-GAAP Financial Measures

Hydro One uses a number of financial measures to assess its performance. The Company presents revenues, net of purchased power to reflect revenues net of the cost of purchased power, which is a non-GAAP financial measure. Since these specified financial measures and financial ratios may not have a standardized meaning within U.S. GAAP, results may not be comparable to similar financial measures and financial ratios presented by other entities. They should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under U.S. GAAP.

Revenues, Net of Purchased Power

Revenues, net of purchased power is defined as revenues less the cost of purchased power; distribution revenues, net of purchased power, is defined as distribution revenues less the cost of purchased power. These measures are used internally by management to assess the impacts of revenue on net income and are considered useful because it excludes the cost of power that is fully recovered through revenues and therefore net income neutral.

The following table provides a reconciliation of GAAP (reported) revenues to non-GAAP (adjusted) revenues, net of purchased power on a consolidated basis.

			Three months ended December 31		Year ended December 31
(millions of dollars)			2025	2024	2025	2024
Revenues			2,268	2,095	9,041	8,484
Less: Purchased power			1,287	1,060	4,486	4,143
Revenues, net of purchased power			981	1,035	4,555	4,341
			Three months ended December 31		Year ended December 31
(millions of dollars)			2025	2024	2025	2024
Distribution revenues			1,757	1,583	6,557	6,175
Less: Purchased power			1,287	1,060	4,486	4,143
Distribution revenues, net of purchased power			470	523	2,071	2,032

For further information: For further information, please contact: Investors: Wassem Khalil, Director, Investor Relations, investor.relations@hydroone.com, 416-345-5943; Media: Bronwen Evans, Vice President, Communications and Marketing, media.relations@hydroone.com, 416-345-6868

IBF5