Capital Power Corporation · TSX:CPX
Capital Power — Q2 2022 Earnings Presentation
15 slides from Capital Power's earnings presentation, Aug 2, 2022
Slide 1: Q2/22 Analyst Conference Call
Q2/22 Analyst Conference Call Brian Vaasjo, President & CEO Sandra Haskins, SVP Finance & CFO August 2, 2022 1
Slide 2: Forward-looking information
Forward-looking information Cautionary statement Certain information in this presentation and responses to questions contains forward-looking information. Actual results could differ materially from conclusions, forecasts or projections in the forward-looking information as a result of certain mater
Slide 3: Non-GAAP financial measures and ratios
Non-GAAP financial measures and ratios 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, gains or losses on disposals a
Slide 4: Q2 developments supportive of natural gas strategy
Q2 developments supportive of natural gas strategy • Continued track record of recontracting natural gas assets • Executed agreement to acquire a 50% interest in the Midland Cogen facility, the largest gas-fired cogeneration facility in North America • Ontario IESO has identified significant increme
Slide 5: Continued execution of midlife natural gas strategy
Continued execution of midlife natural gas strategy Acquisition of Midland Cogeneration Venture (Midland Cogen) • 1,633 MW natural gas combined-cycle cogen facility located in Midland, Michigan • Partnered with Manulife Investment Management to acquire Midland Cogen for a total of US$894M, including
Slide 6: Solid track record of recontracting natural gas assets
Solid track record of recontracting natural gas assets Securing long term PPAs provide stable cash flows Securing long term PPAs provide stable cash flows Decatur (Alabama) Arlington (Arizona) Island Generation (BC) Goreway (ON) Acquired: Jun/17 Acquired: Nov/18 Acquired: Oct/10 Acquired: Jun/19 Ori
Slide 7: Clean Electricity Standard (CES) update
Clean Electricity Standard (CES) update March 2022 Notable impacts to Capital Power • Federal consultations on CES design principles and considerations • Our Canadian thermal fleet, • Government commitment to manage transition to maintain reliability including Genesee repowering, and affordability w
Slide 8: Delivering 9 consecutive years of dividend growth
Delivering 9 consecutive years of dividend growth Increased annual dividend guidance to 2025 from 5% to 6% 6% increase per year ~7% CAGR $2.32 $2.19 $1.26 42% 50% 45% 45% 35% 40% 39% Average payout of ~40% payout 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023E 2024E 2025E Forecast to be belo
Slide 9: Strong company-wide Q2/22 financial performance
Strong company-wide Q2/22 financial performance $697M $319M $108M $180M +33% yoy +32% yoy -16% yoy +98% yoy Revenues and Adjusted EBITDA Net cash flows AFFO other income(1) from operating activities • Higher generation and power pricing from AB Commercial facilities • Full quarter of contributions f
Slide 10: 6-month financial performance above expectations
6-month financial performance above expectations $1,443M $667M $523M $380M +28% yoy +23% yoy +56% yoy +52% yoy Revenues and other Adjusted Net cash flows AFFO income(1) EBITDA from operating activities • Similar explanations for Q2/22 YTD performance as Q2/22 including higher generation and strong A
Slide 11: Key drivers of outperformance in first 6-months
Key drivers of outperformance in first 6-months Natural gas trading optimization Higher generation (AB Commercial) Main drivers of outperformance Higher AB • Higher generation (AB Commercial power prices segment) Higher generation (AB • Better performance from non-Alberta Commercial) from deferral o
Slide 12: Alberta portfolio optimization of commodity price risk
Alberta portfolio optimization of commodity price risk (All data as of Jun 30/22) 2023 2024 2025 Q2/22 average spot price of $122/MWh Power • Higher natural gas costs % Sold forward(1) 70% 45% 27% • Lower imports and overall increase in demand Contracted power prices(2) ($/MWh) High-$60s Low-$60s Lo
Slide 13: 2022 targets
2022 targets Higher financial guidance reflects YTD results and positive outlook Facility availability(1) Sustaining capex(1) ($M) Higher revised financial guidance 93% 93% $105 to $115 • 11% and 19% increases to the midpoints of guidance ranges for adjusted EBITDA and AFFO, respectively $55 • Drive
Slide 14: Forward-looking information
Forward-looking information Forward-looking information or statements included in this presentation are provided to inform the Company’s status of and impact of policy, legislation and regulations; shareholders and potential investors about management’s assessment of Capital Power’s future plans a
Slide 15: Questions?
Questions? Investor Relations Randy Mah 10423 101 Street NW Director, Investor Relations 11th Floor (780) 392-5305 Edmonton, Alberta rmah@capitalpower.com Canada T5H 0E9 15