Capital Power Corporation · TSX:CPX
Capital Power — Q1 2010 Earnings Presentation
17 slides from Capital Power's earnings presentation, May 3, 2010
Slide 1: Q1, 2010 Review
Q1, 2010 Review Analyst Conference Call May 3, 2010 Brian Vaasjo, President & CEO Stuart Lee, CFO CONFIDENTIAL
Slide 2: Cautionary statement regarding forward-looking information
Cautionary statement regarding forward-looking information Certain information in this presentation and oral statements made during this presentation contains forward-looking information. Actual results could differ materially from conclusions, forecasts or projections in the forward-looking informa
Slide 3: Corporate updates
Corporate updates Q1/10 performance was ahead of management’s expectations • 96% average plant availability • Financial results reflect disciplined management of Alberta commercial plants and portfolio optimization Awarded two long-term wind power contracts totaling 247 MW • Quality Wind project
Slide 4: Q1/10 Operating performance
Q1/10 Operating performance Plant Generation Availability (GWh) Alberta commercial plants Genesee 3 100% 483 Clover Bar Energy Centre Joffre 100% 41 Reduced availability due to Clover Bar Energy Centre 72% 43 oil system inspections of Taylor Coulee Chute 98% - Units 2 & 3 and mechanical Clover Bar
Slide 5: Wind power project contract wins
Wind power project contract wins Quality Wind Port Dover & Nanticoke Location Tumbler Ridge, BC Norfolk and Haldimand, ON Size 142 MW 105 MW Project costs (est.) $455M $340M Expected COD Spring, 2013 Q4, 2012 Expected capacity ~35% (5 year wind study) ~35% (3 year wind study) factor Contract 25-year
Slide 6: Keephills 3 construction project update
Keephills 3 construction project update 495 MW coal-fired plant, supercritical boiler technology (same as Genesee 3) Partnership with TransAlta Total project cost of ~$1.9B (CPX 50% portion = $955M) Project currently at peak hired labor (~1,600 workers) Overall project 87% completed; power
Slide 7: Financial updates
Financial updates Two base shelf prospectuses filed, positioning the Company to fund growth plans through the issuance of up to $1B in both equity and debt Financing of wind power projects (Quality Wind, Port Dover & Nanticoke) • Each project meets our minimum 9% hurdle rate (unlevered, after-ta
Slide 8: Financial performance
Financial performance ($M, except earnings per share) Q1/10 Q4/09 Q3/09 Revenues $499 $497 $511 Gross margin(1,2) $210 $182 $189 Operating margin(1,2) $161 $120 $140 Net income $13 $7 $14 Earnings per share $0.60 $0.33 $0.64 Earnings per share (normalized)(2) $0.55 $0.18 $0.42 Funds from operations(
Slide 9: Alberta power prices
Alberta power prices Alberta spot power prices of $41/MWh in Q1/10 declined 36% from Q1/09 and 12% from Q4/09 Company’s captured power price(1) of $67/MWh in Q1/10 • $26/MWh higher than the average spot price $80 $66 $63 $67 $70 $58 $57 $60 $54 $49 $46 ($/MWh) $50 $41 $40 $32 $30 $20 $10 $0 Q1/0
Slide 10: Hedging Alberta spot power price exposure
Hedging Alberta spot power price exposure Actively manage our position throughout various time periods Plant capacity (MW) 2009 2010 2011 AB Commercial – Base load Hedging positions taken primarily on Genesee 3 248 248 248 base load length from coal facilities Sundance PPA 371 371 371 and PPAs B
Slide 11: Hedging Alberta spot power price exposure
Hedging Alberta spot power price exposure Alberta commercial portfolio Hedging positions based primarily on generation from Genesee 3 base load coal plant and output from the Sundance PPA Risk management targets 70%+ hedged position entering into a prompt year % Contracted Contract price 2010 Su
Slide 12: 2010 financial outlook
12 2010 financial outlook Higher captured power price for Alberta commercial portfolio as a significant portion of portfolio sold forward in low-$60/MWh Clover Bar Unit 2 outage may impact expected benefits of having all 3 units available Scheduled maintenance outages for Genesee 2 and 3 (tota
Slide 13: Review of 2010 corporate priorities
Review of 2010 corporate priorities Priority Status Operational targets Plant availability of ≥ 94% Challenged due to Clover Bar (Unit 2) outage Sustaining capex of $60M On track Construction / development objectives CPC’s share of final costs for Keephills 3 project On track at ≤ $955M with c
Slide 14: Questions?
Questions? Investor Relations (780) 392-5305 (866) 896-4636 (toll-free) investor@capitalpower.com www.capitalpower.com CONFIDENTIAL 14
Slide 15: Non-GAAP financial measures
Non-GAAP financial measures The Company uses (i) gross margin, (ii) operating margin, (iii) funds from operations, (iv) funds from operations excluding non-controlling interests in CPILP and (v) normalized earnings per share as financial performance measures. These terms are not defined financial me
Slide 16: Non-GAAP financial measures (cont’d)
Non-GAAP financial measures (cont’d) Management considers operating margin to be representative of plant performance as it excludes corporate administration and business development expenses (indirect administration). The presentation of the pro forma consolidated information for the three months en
Slide 17: Non-GAAP financial measures (cont’d)
Non-GAAP financial measures (cont’d) Normalized net income and normalized earnings per share The Company uses normalized earnings per share to measure performance by period on a comparable basis. Normalized earnings per share is based on net income according to Canadian GAAP adjusted for items that