Capital Power Corporation · TSX:CPX
Capital Power — Debt Investor Presentation (November 2018)
21 slides from Capital Power's debt investor presentation, Nov 15, 2018
Slide 1: Driving a Sustainable Future
Driving a Sustainable Future Bryan DeNeve, SVP Finance & CFO Sandra Haskins, VP Finance & Treasury Darren Anderson, Director Treasury Fixed Income Investor Update Call November 15, 2018
Slide 2: Growth-oriented North American power producer
Growth-oriented North American power producer • 4,500 MWs of capacity; additional 580 MW upon close of Arlington Valley • Highly-contracted portfolio • Strong growth outlook • Committed to investment grade credit rating capitalpower.com 2
Slide 3: Young fleet with long asset lives
Young fleet with long asset lives 5-year average Average age 14 years(1) 95% availability (2018 target of 95%) Bloom Wind (4) K2 Wind Beaufort Solar Shepard Energy Centre Port Dover & Nanticoke of current generation portfolio 3% Halkirk Quality Wind York Energy Macho Springs is expected to retire Ke
Slide 4: Positive outlook for Alberta power market
Positive outlook for Alberta power market Q3 2018 average spot price more than doubled YoY ($/MWh) 70 Alberta power prices(1) 60 Alberta peak demand 50 40 30 20 10 ~4% demand growth help to set a new summer peak record of 11,169 MW on August 10, 2018(2) 0 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 No
Slide 5: Portfolio optimization
Portfolio optimization AB commercial portfolio positions 2019 2020 2021 As of date Sept 30, 2018 Nearly 500 MW (gas peaking, wind) available % sold forward(1) 55% 22% 4% to capture the upside from low natural gas Contracted prices(2) ($/MWh) Low-$50 Low-$50 Mid-$50 prices, higher power prices, and p
Slide 6: Maximizing the commodity portfolio
Maximizing the commodity portfolio Creating incremental value and stability through market expertise Average realized power prices(1) have exceeded spot power prices by ($/MWh) 23% since the Company’s inception 9 years ago $125 $100 $75 $50 $25 $0 (1) Average AB spot power price Capital Power captur
Slide 7: Capacity market design
Capacity market design We are well-positioned under the final market design for Alberta AESO’s forecast revenue for baseload facilities(1) • AESO has finalized its proposed market design Capacity market commences • Design is constructive and provides an equal in November 2021 opportunity for existin
Slide 8: Growth Strategy
Growth Strategy • Strong renewable pipeline including 1,200 MW of U.S. wind development • Natural gas plant acquisitions
Slide 9: Sale of minority interest in K2 Wind
Sale of minority interest in K2 Wind Provides capital to fund incremental future growth • Executed agreement to divest our minority interest of 90 MW in K2 Wind to a consortium of investors led by Axium Infrastructure for $216M • Expected closing date of Dec 31/18 • Estimated pre-tax gain on disposa
Slide 10: Acquisition of Arlington Valley
Acquisition of Arlington Valley Announced an agreement to acquire a 580 MW contracted gas facility in Arizona for US$300M on Sept 6/18 Strategic benefits: • Immediate accretion – 5-year average accretion of $0.22 (6%) on AFFO/share and $0.03 (2%) to EPS(1) • Strengthens contracted cash flow profile
Slide 11: Canadian growth opportunities
Canadian growth opportunities Significant investment required by 2030 British Columbia Saskatchewan Development sites: Targeting 50% renewable • 2x wind generation capacity by 2030 • 1x gas • 1,600 MW of new wind Ontario Nuclear retirements Alberta Market Renewal Program • Coal phase-out • Increment
Slide 12: US wind development opportunities
US wind development New Frontier opportunities • 99 MW • 12-year fixed price contract for 87% of the facility’s output Tisch Mills • 100 MW • COD Dec/18 • Budget of $182M Nolin Hills • 350 MW Black Fork • Black Fork Garrison Butte • 100-180 MW • 200 MW Cardinal Point • 150 MW • 12-year fixed price c
Slide 13: 2018 construction & development targets
2018 construction & development targets Construction 2018 2019 2020 2021 New Frontier Wind Whitla Wind Cardinal Point Wind (North Dakota) (Alberta) (Illinois) • 99 MW • 201.6 MW (Phase 1) • 150 MW • 12-year PPA • 20-year PPA • 12-year PPA • $182M • $315-$325M • $289-$301M • COD in Dec/18 • COD in Q4
Slide 14: Coal-to-gas conversion transition plan
Coal-to-gas conversion transition plan Optimal operational flexibility for Genesee units Anticipate On track to bring significant decision point in Federal coal to natural gas to site by 2020 2020 due to gas regulations carbon & natural extend facility gas pricing life to almost Co-firing provides g
Slide 15: Financial Performance & Outlook
Financial Performance & Outlook • Disciplined growth through contracted cash flow • Maintain investment grade credit rating • Manage financing risk
Slide 16: Q3/18 YTD performance versus 2018 annual targets
Q3/18 YTD performance versus 2018 annual targets 2018 AFFO expected to be above the midpoint of the range Facility O&M Facility availability Sustaining capex ($M) expenses ($M) AFFO(1) ($M) $230 to $250 $360 to $400 $85 96% 95% $177 $317 $54 Q3/18 YTD Target Q3/18 YTD Target Q3/18 YTD Target Q3/18 Y
Slide 17: Financial Strength
Financial Strength Strong balance sheet and commitment to investment grade credit ratings Within S&P financial criteria for current rating Agency Ratings Outlook Adj. FFO/Debt(1-4) Adj. Debt/EBITDA(1-4) 20% 5.0 S&P BBB- / P-3 Stable 15% 4.0 DBRS BBB(low) / Pfd-3 (low) Stable 3.0 10% 2.0 5% 1.0 • Str
Slide 18: Debt maturity schedule
Debt maturity schedule(1) Well spread-out debt maturities supported by long asset lives $450 ($M) $450 $400 $350 $300 $300 $250 $250 $200 US $230 US $65 $150 $160 $100 $50 $0 2018 2019 2020 2021 2022 2023 2024 2025 2026 Capital Markets CAD Private Placement USD Private Placement 1) Debt amounts as o
Slide 19: Driving a sustainable future
Driving a sustainable future Decreasing risk and growing cash flows Growth Generation Contracted North American 450 MW technology(1) capacity(1) footprint(1) Under development Average Asset Age 2015 42% Gas and renewables 66% Contracted 74% Alberta 14 years Average Contract Life 2018 58% Gas and ren
Slide 20: Non-GAAP financial measures
Non-GAAP financial measures The Company uses (i) earnings before net finance expense, income tax expense, depreciation and amortization, impairments, foreign exchange gains or losses, finance expense and depreciation expense from its joint venture interests, and gains or losses on disposals (Adjuste
Slide 21: Forward-looking information
Forward-looking information Forward-looking information or statements included in this presentation are provided to inform the These statements are based on certain assumptions and analyses made by the Company in light of its experience Company’s shareholders and potential investors about management
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