Slide 1: Analyst Conference Call Q2, 2011 Review
Analyst Conference Call Q2, 2011 Review Brian Vaasjo, President & CEO Stuart Lee, SVP & CFO July 28, 2011 1
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: Corporate updates
Corporate updates Q2 results Normalized earnings per share of $0.07 in Q2/11; $15M impact from loss on settlement of forward bond contracts and costs related to pension obligation valuation adjustment Higher cash flow generation with funds from operations (FFO), excluding CPILP, of $65M; up 76%
Slide 4: Corporate updates (cont’d)
Corporate updates (cont’d) Strategic updates Acquisition of 150 MW Halkirk Wind project in AB • May 25/11, acquired 100% from Greengate Power Corporation • Includes 20-year PPA for sale of renewable energy credits with PG&E • Total expected project cost of ~$357M including $33M acquisition cost •
Slide 5: Q2/11 Operating performance
Q2/11 Operating performance Q2 Plant YTD Plant Availability Availability Alberta commercial plants Summary (excluding CPILP) Genesee 3 100% 100% Q2/11 91% availability vs. 83% Joffre 78% 88% in Q2/10 Clover Bar Energy Centre 65% 65% Taylor Coulee Chute 94% 97% Q2 YTD availability of 92% vs. Clov
Slide 6: Financial summary – Q2/11
Financial summary – Q2/11 Higher FFO (excluding CPILP) of $65M, up 76% from $37M in Q2/10 • Incremental contributions from the Island Generation and New England facilities acquired in Q4/10 and Q2/11, respectively • Lower availability penalty payments for Genesee 1 scheduled outage in Q2/11, compa
Slide 7: Accounting - CPILP transaction
Accounting - CPILP transaction Announcement of CPILP transaction resulted in the assets being classified as held for sale and required the testing for impairment with the consideration in the agreements representing fair value $43M impairment on the CPILP management contracts recognized in Q2/11
Slide 8: AB Commercial Plants and Portfolio Optimization
AB Commercial Plants and Portfolio Optimization Q2/11 realized price for AB portfolio was $56/MWh compared to $52/MWh average AB spot price Volatile AB power prices in the latter part of June with significant spikes from unplanned and forced outages in the region, including Capital Power’s PPA a
Slide 9: Financial performance – Q2/11
Financial performance – Q2/11 % $M, except earnings (loss) per share Q2/11 Q2/10 Change Revenues and other income(1) $479 $387 24% EBITDA(1,2) $63 $91 (31%) Earnings (loss) per share ($0.67) ($0.37) (81%) Earnings per share (normalized)(2) $0.07 $0.05 40% Funds from operations(2) $87 $61 43% Funds f
Slide 10: Financing highlights
Financing highlights Continued access to the capital markets • Jun 15/11, completed US$295M private placement of senior notes • Jul 12 & 22/11, completed $231M common share offering including exercise of overallotment option • EPCOR’s ownership interest in Capital Power LP (CPLP) reduced to 49%
Slide 11: 2011 Financial outlook
2011 Financial outlook If AB power prices for the balance of 2011 settle on average in the range of their current forward prices in the low $70/MWh, we expect normalized EPS for 2011 to be in line with guidance provided in Q1/11 MD&A, excluding the impact of the loss on the settlement of bond forw
Slide 12: 2011 corporate priorities
2011 corporate priorities Priority Status Operational targets • Plant availability of ≥ 94% Expect 91% due – CPC capacity-weighted plant availability (one to CBEC 3 outage Genesee turnaround planned for 2011) • Maintenance capital of approximately $56M(1) Estimate $71M(2) – Plant maintenance and Gen
Slide 13: 2011 corporate priorities (cont’d)
2011 corporate priorities (cont’d) Priority Status Financial • Normalized EPS under previous Canadian GAAP reporting In line with of ~$1.20(1) annualized earlier guidance(2) • Funds from operations expected to be modestly higher than On track 2010 • Cash flow per share expected to be modestly higher
Slide 14: Questions?
Questions? Investor Relations (780) 392-5305 (866) 896-4636 (toll-free) investor@capitalpower.com www.capitalpower.com 14
Slide 15: CPILP results included in CPC consolidated results
Appendix CPILP results included in CPC consolidated results ($M) Adjustment Net impact of For the 6-month CPILP Accounting for North CPILP on period ending (reported adjustments(1) Carolina CPC Jun 30/11 results) facilities statements EBITDA 85.6 15.7 1.4 102.7 Depreciation 45.5 6.1 (4.3) 47.3 Finan
Slide 16: Forward-looking information
Forward-looking information Certain information in this presentation is forward-looking within the meaning of Canadian securities laws as it relates to anticipated financial performance, events or strategies. When used in this context, words such as will, anticipate, believe, plan, intend, target, a
Slide 17: Forward-looking information (cont’d)
Forward-looking information (cont’d) per share for the first five years of operations, the after-tax internal rate of return over the life of the assets, and the total number of turbines the project will incorporate; (xxv) expectations regarding the source of Halkirk’s revenues and that 40% to 45% i
Slide 18: Forward-looking information (cont’d)
Forward-looking information (cont’d) Whether actual results, performance or achievements will conform to the Company’s expectations and predictions is subject to a number of known and unknown risks and uncertainties which could cause actual results and experience to differ materially from the Compan
Slide 19: Non-IFRS financial measures
Non-IFRS financial measures The Company uses (i) EBITDA, (ii) funds from operations, (iii) funds from operations excluding non-controlling interests in CPILP, (iv) normalized earnings attributable to common shareholders and (v) normalized earnings per share as financial performance measures. These t
Slide 20: Non-IFRS financial measures (cont’d)
Non-IFRS financial measures (cont’d) (unaudited, $millions) Three months ended Six months ended June 30, June 30, June 30, June 30, 2011 2010 2011 2010 Revenues $ 455 $ 301 $ 895 $ 785 Other income 17 12 35 29 Energy purchases and fuel (255) (196) (546) (480) Gross income 217 117 384 334 Other raw m
Slide 21: Non-IFRS financial measures (cont’d)
Non-IFRS financial measures (cont’d) operations excluding non-controlling interests in CPILP, the Company includes interest and current income tax expense recorded during the period, rather than interest and taxes paid which are impacted by the timing of cash receipts and payments and are not compar
Slide 22: Non-IFRS financial measures (cont’d)
Non-IFRS financial measures (cont’d) gains or losses on disposal of assets or on unusual contracts such as the contract for maintenance of EPCOR’s Rossdale plant. A reconciliation of net income (loss) attributable to shareholders to normalized earnings attributable to common shareholders, and earnin