Capital Power Corporation · TSX:CPX
Capital Power — Q2 2016 Earnings Presentation
17 slides from Capital Power's earnings presentation, Jul 25, 2016
Slide 1: Q2/16 Analyst Conference Call
CAPITAL POWER Q2/16 Analyst Conference Call July 25, 2016 Brian Vaasjo, President & CEO Bryan DeNeve, SVP Finance & CFO 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) earnings before finance expense, income tax expense, depreciation and amortization, impairments, foreign exchange gains or losses, finance expense from joint venture, and gains or losses on disposals (adjusted EBITDA), (ii) funds from operations, (iii
Slide 4: Q2/16 Highlights
Q2/16 Highlights Q2/16 financial performance exceeded expectations • Normalized EPS of $0.30 • Funds from operations of $106M Continue to be engaged with the Alberta government to ensure fair compensation is received for accelerated closure of coal- fired units by 2030 under the Climate Leadersh
Slide 5: Dividend increase
Dividend increase Third consecutive 10 cents per share annual increase to dividend Effective with Q3/16, Annualized dividend quarterly dividend per common share(1) increased 6.8% to $0.39 $1.56 per share $1.36 $1.46 $1.26 24% increase in annualized dividends since 2013 2013 Y/E 2014 Y/E 2015 Y/E
Slide 6: Q2/16 Operating performance
Q2/16 Operating performance Plant availability Q2/16 Q2/15 Alberta commercial Genesee 3 100% 100% 90% average plants Keephills 3 100% 97% availability in Q2/16, Clover Bar 91% 95% unchanged yoy Joffre 55% 87% Completed major Shepard 82% 73% scheduled outage at Halkirk 98% 98% Genesee 2 Alberta c
Slide 7: Q2/16 Financial review
Q2/16 Financial review Generated $106M of FFO, up 51% compared to $70M in Q2/15 Normalized EPS of $0.30 versus $0.10 in Q2/15 Despite a 74% decline in average Alberta power prices from $57/MWh to $15/MWh in Q2 year-over-year, trading desk captured a 307% higher realized average power price ver
Slide 8: Alberta power market trading
Alberta power market trading Continue to see significant value from portfolio optimization activities Average realized power prices(1) have exceeded spot power prices by 10% since company’s inception 7 years ago ($/MWh) $125 $100 $75 $50 $25 $0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Slide 9: Financial performance – Q2/16
Financial performance – Q2/16 $M, except per share amounts Q2/16 Q2/15 Change Revenues $229 $83 176% Adjusted EBITDA (before mark-to-market)(1) $123 $94 31% Basic earnings (loss) per share $0.19 $(0.39) 149% Normalized earnings per share $0.30 $0.10 200% Funds from operations $106 $70 51% Higher Rev
Slide 10: Financial performance – Q2/16 YTD
Financial performance – Q2/16 YTD Q2/16 Q2/15 $M, except per share amounts Change YTD YTD Revenues $570 $441 29% Adjusted EBITDA (before mark-to-market)(1) $251 $210 20% Basic earnings (loss) per share $0.07 $(0.06) 217% Normalized earnings per share $0.63 $0.40 58% Funds from operations $215 $178 2
Slide 11: Financial outlook
Financial outlook Alberta commercial hedging profile Termination of our Buyer role under Sundance C PPA has significantly increased our baseload hedging profile from 2015 year-end Alberta Commercial baseload positions: 2017 2018 2019 As of date Mar Jun Mar Jun Mar Jun 31/16 30/16 31/16 30/16 31/
Slide 12: 2016 YTD performance vs. annual targets
2016 YTD performance vs. annual targets Operational and financial targets Plant availability Sustaining capex ($M) 94% $65 93% $33 2016 YTD Target 2016 YTD Target Plant operating & Funds from operations ($M) maintenance expenses ($M) $380 - $430 $200 - $220 $215 $108 2016 YTD Target 2016 YTD Target
Slide 13: 2016 Disciplined growth targets
2016 Disciplined growth targets Genesee 4&5 (Alberta) Target Q2/16 Status Proceeding with construction based on: Awaiting further clarification on Clarity with respect to impact of implementation of CLP and impacts decisions from the Alberta on current Alberta assets Government’s Climate Leaders
Slide 14: 2016 Disciplined growth targets
2016 Disciplined growth targets New developments Target Q2/16 Status Execute a contract for the Bloom Wind (178 MW project in output of a new development Kansas) • 10-year fixed price contract covering 100% of the output • Cost of $358M (CDN$) • Construction begins in Q3/16 with COD targeted in
Slide 15: Questions?
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Slide 16: Forward-looking information
Forward-looking information Forward-looking information or statements included in this presentation and in responses to questions 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 m
Slide 17: Investor Relations Contact
Investor Relations Contact Randy Mah Head Office Senior Manager 10th Floor (780) 392-5305 10423 – 101 Street NW rmah@capitalpower.com Edmonton, AB T5H 0E9 www.capitalpower.com