Capital Power Corporation · TSX:CPX
Capital Power — Q4 2011 Earnings Presentation
29 slides from Capital Power's earnings presentation, Mar 14, 2012
Slide 1: Analyst Conference Call Q4 2011 Review
CAPITAL POWER ANALYST CONFERENCE CALL Q4 2011 REVIEW Brian Vaasjo, President & CEO Stuart Lee, SVP & CFO March 14, 2012 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: Non-GAAP financial measures
Non-GAAP financial measures The Company uses (i) EBITDA, (ii) funds from operations, (iii) funds from operations excluding non-controlling interests in CPILP, (iv) cash flow per share, (v) dividend coverage ratio, (vi) normalized earnings attributable to common shareholders, and (vii) normalized ear
Slide 4: Q4 2011 Performance Highlights
Q4 2011 PERFORMANCE HIGHLIGHTS 4
Slide 5: Capital Power's strategy drives results
Q4 HIGHLIGHTS Capital Power’s strategy drives results(1) Strong Q4 performance contributes to double-digit year-over-year gains in cash flow, and meeting full-year earnings guidance Full-year operating availability rises to Operational Financial stability excellence and strength 92%, from 90% in 201
Slide 6: Capital Power's fleet is aligned with the business strategy
Q4 HIGHLIGHTS Capital Power’s fleet is aligned with the business strategy Q4 transactions rationalize the fleet and sharpen focus Closed sale of CPILP to Atlantic Power CPC’s Q4/11 results reflect ~$1.08/share gain on the transaction CPC received $314M in combined consideration ($145M cash, $121
Slide 7: Risk is effectively managed
Q4 HIGHLIGHTS Risk is effectively managed Networked hub strategy and effective portfolio management successfully mitigate outage impacts Genesee 3 unplanned outage Outage from Nov 11/11 – Jan 15/12 Q4/11 production 222 GWh, versus an average of 485 GWh/quarter in 2011 ~$2M incremental repairs
Slide 8: Fleet-wide operating performance
Q4 HIGHLIGHTS Fleet-wide operating performance Plant Availability Q4/11 2011 Alberta Genesee 3 44% 85% Q4/11 87% average commercial availability vs. 91% in Q4/10 plants Keephills 3 99% 99% Joffre 93% 92% G3 experienced an Clover Bar Energy Centre 99% 80% unplanned outage in Q4 and Taylor Coulee
Slide 9: 2011 Full Year Performance
2011 FULL YEAR PERFORMANCE 9
Slide 10: 2011 Performance overview: operational excellence
2011 Performance overview Operational excellence Performance measures 2011 targets 2011 actual results Plant availability average 94% or greater 92% Capex for plant maintenance and Genesee ~$56 million $57 million (excludes mine extension $14 million for New England facilities) Operating Performance
Slide 11: 2011 Performance overview: development and construction
2011 Performance overview (cont’d) Development and construction Performance measures 2011 targets 2011 actual results CPC’s final costs for Keephills 3 ≤ $955M with $949M with COD COD in Q2/11 Sep/11 Quality Wind and Port Dover & Nanticoke wind Continue on time Quality Wind in-line projects and on b
Slide 12: 2011 Performance overview: disciplined growth
2011 Performance overview (cont’d) Disciplined growth Performance measures 2011 targets 2011 actual results Committed capital for acquisitions / ≥ $1.5B $1.4B committed developments that are in-line with targeted • Acquisition of 3 plants in rates of return New England and 2 plants in North Carolina
Slide 13: Original financial targets exceeded
2011 Performance overview (cont’d) Original financial targets(1) (Jan/11) exceeded Normalized EPS Funds from operations $1.50 excluding CPILP(2) $1.16 $1.24 $400 $352 $1.00 $300 $277 $200 $0.50 $100 $0.00 $0 2011 T 2011 A 2011 T 2011 A Cash flow per share(3) Dividend coverage ratio $5.00 3.0 $3.89 2
Slide 14: Q4 Financial Performance, 2012 Outlook & Disclosure Improvements
Q4 FINANCIAL PERFORMANCE, 2012 OUTLOOK & DISCLOSURE IMPROVEMENTS 14
Slide 15: Financial performance – Q4/11
Financial performance – Q4/11 $M, except per share amounts Q4/11 Q4/10 % Change Revenues and other income(1) $398 $474 (16%) EBITDA(1,2,3) $140 $90 56% Earnings per share (loss) $1.47 ($0.13) n.m. Normalized earnings per share(3) $0.36 $0.21 71% Funds from operations(3) $99 $98 1.0% Funds from opera
Slide 16: Financial summary – Q4/11
Financial summary(1) – Q4/11 Normalized EPS of $0.36 in line with expectations $1.11 difference compared to reported EPS of $1.47, primarily due to the gain on sale of CPILP ($1.08) EBITDA(2,3) of $140M in Q4/11, up 56% YOY Driven by strong YOY segmented plant performances (AB commercial plants
Slide 17: Continued strong cash flow generation
Continued strong cash flow generation Discretionary cash flow(1) of $131M in 2011, up 19% from $110M in 2010 2011 FFO excl CPILP(2) of $352M Discretionary cash flow $180 2% $160 Estimate 26% $130- $140 $170M $120 37% $100 $80 35% $60 $40 $20 Dividends (common and preferred) $0 Sustaining capex 2010
Slide 18: AB commercial portfolio positions
AB commercial portfolio positions Lower hedged position in 2012 is expected to result in higher realized prices for the portfolio Q4/11 realized price for AB commercial portfolio was $75/MWh compared to $76/MWh average AB spot price Alberta portfolio hedged positions for AB baseload plants and S
Slide 19: 2012 Outlook
2012 Outlook Normalized EPS and FFO for 2012 are expected to exceed 2011 levels Based on average Alberta power price of ~$74/MWh Expect higher realized prices for AB commercial portfolio due to lower hedged positions entering the year Expect similar realized prices on economically unhedged pos
Slide 20: Improvements in financial disclosure
Improvements in financial disclosure In Q3/11, a survey was conducted on behalf of CPC to gauge analyst and investor views of CPC’s financial disclosure practices Overall, most respondents felt CPC provided comprehensive, transparent financial disclosure. We are acting to enhance disclosure base
Slide 21: 2012 Corporate Priorities
2012 CORPORATE PRIORITIES Me Be \h VA -. it £ ne deena i Jiikalis hh na i wi Capital Power oO / Corporation
Slide 22: 2012 Corporate priorities
2012 Corporate priorities Priority: Deliver strong operational performance from a young, well-maintained generation fleet Operational targets Performance measure 2012 target Plant availability average ≥ 91% or greater Capex for plant maintenance, Genesee mine extension, and other ≤ $108M Maintenance
Slide 23: 2012 Corporate priorities (cont'd)
2012 Corporate priorities (cont’d) Priority: Enhance value for shareholders by delivering accretive growth from current developments and identifying and committing to new opportunities that meet CPC’s investment criteria Development and construction targets Performance measure 2012 target Quality Wi
Slide 24: 2012 Corporate priorities (cont'd)
2012 Corporate priorities(1) (cont’d) Priority: Deliver on substantial growth in cash flow and normalized EPS Normalized EPS Funds from operations $2.00 $500 $1.50 Est. $1.50–$1.70 $400 $352 Est. $380–$420M $1.24 $300 $1.00 $200 $0.50 $100 $0.00 $0 2011 2012E 2011 2012E Cash flow per share Dividend
Slide 25: Summary
Summary Capital Power’s strategy drives results Strong Q4 performance contributes to double-digit year-over-year gains in cash flow Networked hub strategy and effective portfolio management successfully mitigates outage impacts • 99% availability at Clover Bar in Q4 helped partially offset lost
Slide 26: Questions?
QUESTIONS? 26
Slide 27: 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 28: Discretionary cash flow
Discretionary cash flow The Company uses discretionary cash flow as a measure of the Company’s available cash to reinvest into the business after paying sustaining capital expenditures and declared dividends and distributions to common and preferred shares. Discretionary cash flow is not a defined f
Slide 29: Investor Relations contacts
Investor Relations contacts Randy Mah Senior Manager (780) 392-5305 rmah@capitalpower.com www.capitalpower.com Chris Williams Senior Analyst (780) 392-5105 cwilliams@capitalpower.com www.capitalpower.com 29