Capital Power Corporation · TSX:CPX
Capital Power — Q2 2013 Earnings Presentation
18 slides from Capital Power's earnings presentation, Jul 29, 2013
Slide 1: Analyst Conference Call Q2 2013 Review
CAPITAL POWER ANALYST CONFERENCE CALL Q2 2013 REVIEW Brian Vaasjo, President & CEO Stuart Lee, SVP & CFO July 29, 2013
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 losses, and gains on disposals (adjusted EBITDA), (ii) funds from operations, (iii) cash flow per share, (iv) discretionary cash flow, (v
Slide 4: Q2 Summary
Q2 Summary Q2/13 financial performance exceeded our expectations Normalized earnings of $0.24 per share increased significantly from $0.07 per share a year ago Generated strong cash flow, up 56% from last year to $0.86 per share Average plant availability of 86% Reflects two major scheduled ou
Slide 5: Alberta power market
Alberta power market Strong pricing in Q2/13 reflects positive supply and demand dynamics of the AB power market, which is recognized as one of the most attractive power markets in North America On July 2/13, AB’s demand for electricity reached an all-time summer high of 10,062 MW, surpassing th
Slide 6: Q2/13 Operating performance
Q2/13 Operating performance Plant Availability Q2/13 Q2/12 Strong availability from AB Alberta Genesee 3 100% 95% commercial plants commercial plants Keephills 3 65% 100% • K3’s performance Clover Bar 99% 97% reflects major Energy Centre scheduled outage Joffre 100% 99% Halkirk 99% N/A AB contra
Slide 7: Financial performance – Q2/13
Financial performance – Q2/13 $M, except per share amounts Q2/13 Q2/12 % Change Revenues and other income $321 $261 23% Adjusted EBITDA(1) $109 $73 49% Basic earnings per share $0.20 ($0.50) 140% Normalized earnings per share $0.24 $0.07 243% Funds from operations $85 $54 57% Cash flow per share $0.
Slide 8: Financial performance – YTD
Financial performance – YTD YTD YTD $M, except per share amounts % Change 2013 2012 Revenues and other income $686 $637 7.7% Adjusted EBITDA(1) $231 $212 9.0% Basic earnings per share $0.64 $0.08 - Normalized earnings per share $0.60 $0.50 20% Funds from operations $188 $170 11% Cash flow per share
Slide 9: AB commercial plants & portfolio optimization
AB commercial plants & portfolio optimization Segment continues to deliver value; contributed a record $114M adjusted EBITDA in Q2/13, up 107% YOY Primary driver of the increase in adjusted EBITDA was higher average power prices of $123/MWh in Q2/13, compared to $40/MWh in Q2/12 • Captured $93/MWh
Slide 10: AB commercial portfolio positions
AB commercial portfolio positions Alberta portfolio hedged positions for AB baseload plants and acquired Sundance PPA (% sold forward) July–Dec, 2013 2014 2015 Percentage sold forward 63% 87% 65% Average contracted prices(1) ($/MWh) Low-$60 High-$50 Mid-$50 Sensitivity analysis to +/- $1/MWh cha
Slide 11: Financial outlook
Financial outlook Company expects to exceed 2013 financial guidance Expect full year 2013 financial results to exceed our annual guidance of $1.20 to $1.40 for normalized earnings per share and $3.80 to $4.20 for cash flow per share • Based on our positive YTD results and current AB forward prices
Slide 12: Capital Power Energy Centre
Capital Power Energy Centre Actively following process to build a large (up to 900 MW) gas-fired power generation facility in the 2018-2020 timeframe to meet AB’s power needs Expect to finalize and announce a partnership agreement for the project in Q4/13 and file an application with Alberta Utili
Slide 13: Corporate priorities
Corporate priorities Operational targets Performance measure 2013 Target Q2/13 YTD Results Plant availability average ≥ 93% 90% Sustaining capex ≤ $105M $59M Maintenance and operating $225M - $245M $94M expenses 13
Slide 14: Corporate priorities (cont'd)
Corporate priorities (cont’d) Development and construction targets Performance measure 2013 Target Status Port Dover & Continue on On track Nanticoke Wind budget $340M, Q4/13 target COD K2 Ontario Environmental REA Wind approvals received received in Jul/13 2013 Shepard Energy Continue on On track C
Slide 15: Corporate priorities (cont'd)
Corporate priorities (cont’d) Financial targets Normalized EPS Funds from operations $1.50 $500 $1.20 – $1.40 $400 $385 – $415M $1.00 $300 $0.60 $188 $0.50 $200 $100 $0.00 $0 Q2 YTD 2013T Q2 YTD 2013T Cash flow per share $5.00 $4.00 $3.80 – $4.20 $3.00 $1.90 $2.00 $1.00 $0.00 Q2 YTD 2013T Expect ful
Slide 16: Questions?
QUESTIONS? Port Dover & Nanticoke wind project
Slide 17: 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 18: Investor Relations Contacts
Investor Relations Contacts Randy Mah Chris Williams Senior Manager Senior Analyst (780) 392-5305 (780) 392-5105 rmah@capitalpower.com cwilliams@capitalpower.com 18