Capital Power Corporation · TSX:CPX
Capital Power — Q3 2013 Earnings Presentation
20 slides from Capital Power's earnings presentation, Oct 28, 2013
Slide 1: Analyst Conference Call Q3 2013 Review
CAPITAL POWER ANALYST CONFERENCE CALL Q3 2013 REVIEW Brian Vaasjo, President & CEO Stuart Lee, SVP & CFO October 28, 2013
Slide 2: Forward-looking information
Forward-looking information Cautionary statement Certain information in this presentation and in responses to questions contains forward-looking information. Actual results could differ materially from conclusions, forecasts or projections in the forward-looking information, and certain material fac
Slide 3: Non-GAAP financial measures
Non-GAAP financial measures The Company uses (i) earnings before finance expense, income tax expense, depreciation and amortization, impairments, foreign exchange losses, and gains on disposals (adjusted EBITDA), (ii) funds from operations, (iii) cash flow per share, (iv) discretionary cash flow, (v
Slide 4: Corporate updates
Corporate updates Agreement reached on the sale of US Northeast plants to Emera Announced agreement on Aug 28 for the sale of three US Northeast plants to Emera for US$541M Transaction expected to close before year-end subject to regulatory approvals Proceeds used to fund our investment in the
Slide 5: Organizational focus and streamlining
Organizational focus and streamlining Refocusing of merchant business and implementation of an Enterprise Resource Planning (ERP) system has resulted in an expected reduction of ~160 full-time employee positions in 2013, excluding 60 employees associated with the sale of the New England assets O
Slide 6: Secondary offering of common shares
Secondary offering of common shares EPCOR completed a secondary offering of 9.6M common shares on Diluted shares (M) Oct 10/13 100 EPCOR’s indirect ownership reduced to 19% from 29% and they 75 may only elect two of Capital 59.0 Power’s directors compared to four 31.0 70.0 80.6 previously 50 Pub
Slide 7: Q3 Summary
Q3 Summary Q3/13 financial performance exceeded our expectations Normalized earnings of $0.72 per share increased significantly from $0.55 per share a year ago Financial performance benefited from higher Alberta power prices that averaged $84/MWh in Q3/13, compared to $78/MWh a year ago Albert
Slide 8: Q3/13 Operating performance
Q3/13 Operating performance Plant availability Q3/13 Q3/12 Alberta Genesee 3 99% 100% commercial plants 98%+ average availability Keephills 3 100% 100% from all three contracted Clover Bar Energy Centre 93% 97% plant segments in AB, ON Joffre 100% 98% & BC, and North Carolina Halkirk 89% N/A AB
Slide 9: Financial updates
Financial updates Sale of US Northeast assets Recorded a pre-tax impairment charge of $6M in Q3/13 based on transaction sales price When sale is finalized, expect to record a gain including ~$51M from accumulated F/X translation gains subject to changes in F/X rates Overall, expect a pre-tax g
Slide 10: Financial updates (cont'd)
Financial updates (cont’d) Completed final tranche payment for 50% interest in Shepard facility On Sept 30, completed second tranche payment of $325M to ENMAX for the remaining 25% interest in the Shepard facility; now own 50% of Shepard project Plan to repay amounts owed under credit facilities
Slide 11: Financial performance – Q3/13
Financial performance – Q3/13 $M, except per share amounts Q3/13 Q3/12 % Change Revenues and other income $380 $394 (4%) Adjusted EBITDA(1) $150 $144 4% Basic earnings per share $0.55 $0.55 - Normalized earnings per share $0.72 $0.55 31% Funds from operations $122 $128 (5%) Cash flow per share $1.23
Slide 12: Financial performance – Q3 YTD
Financial performance – Q3 YTD YTD YTD $M, except per share amounts % Change 2013 2012 Revenues and other income $1,066 $1,031 3% Adjusted EBITDA(1) $381 $356 7% Basic earnings per share $1.19 $0.65 83% Normalized earnings per share $1.35 $1.06 27% Funds from operations $310 $298 4% Cash flow per sh
Slide 13: AB commercial portfolio positions
AB commercial portfolio positions Alberta portfolio hedged positions for AB baseload plants and acquired Sundance PPA (% sold forward) Oct-Dec, 2013 2014 2015 Percentage sold forward 81% 92% 77% Average contracted Mid-$60 High-$50 Mid-$50 prices(1) ($/MWh) Forward prices ($/MWh) $62 $58 $50 (as of
Slide 14: Financial outlook
Financial outlook Company expects to exceed 2013 financial guidance Expect full year 2013 financial results to exceed our annual guidance of $1.20 to $1.40 for normalized earnings per share and $3.80 to $4.20 for cash flow per share • Based on our positive YTD results with AB power prices averagin
Slide 15: Corporate priorities
Corporate priorities Operational targets Performance measure 2013 Target Q3/13 YTD Results Plant availability average ≥ 93% 93% Sustaining capex ≤ $105M $68M Maintenance and operating $225M - $245M $143M expenses 15
Slide 16: Corporate priorities (cont'd)
Corporate priorities (cont’d) Development and construction targets Performance measure 2013 Target Status Port Dover & Continue on On track Nanticoke Wind budget $340M, Q4/13 target COD K2 Ontario Environmental √ Wind approvals received in 2013 Shepard Energy Continue on On track Centre budget of $8
Slide 17: Corporate priorities (cont'd)
Corporate priorities (cont’d) Financial targets Normalized EPS (NEPS) Funds from operations $1.50 $1.35 $500 $1.20 – $1.40 $400 $385 – $415M $1.00 $310 $300 $0.50 $200 $100 $0.00 $0 Q3 YTD 2013T Q3 YTD 2013T Cash flow per share $5.00 $4.00 $3.80 – $4.20 $3.13 $3.00 $2.00 $1.00 $0.00 Q3 YTD 2013T Exp
Slide 18: Questions?
QUESTIONS? Port Dover & Nanticoke wind project
Slide 19: Forward-looking information
Forward-looking information Forward-looking information or statements included in this presentation are provided to inform the Company’s shareholders and potential investors about management’s assessment of Capital Power’s future plans and operations. This information may not be appropriate for othe
Slide 20: Investor Relations Contact
Investor Relations Contact Randy Mah Senior Manager (780) 392-5305 rmah@capitalpower.com Head Office 10th Floor 10423 – 101 Street NW Edmonton, AB T5H 0E9 www.capitalpower.com