Slide 1: Q4/14 and 2014 year-end Analyst Conference Call
CAPITAL POWER Q4/14 and 2014 year-end Analyst Conference Call February 23, 2015 Brian Vaasjo, President & CEO Stuart Lee, SVP Finance & CFO
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, and gains on disposals (adjusted EBITDA), (ii) funds from operations (FFO), (iii) normalized earnings attributable to co
Slide 4: 2014 Highlights
2014 Highlights Completed final stages of construction with ENMAX on the Shepard Energy Centre with expected COD in Q1/15 Completed project financing and commenced construction of the K2 Wind project (1/3 ownership of 270 MW project) with expected COD in mid-2015 Executed agreements with ENMAX
Slide 5: Q4/14 Operating performance
Q4/14 Operating performance Plant availability Q4/14 Q4/13 Alberta commercial plants Genesee 3 Keephills 3 74% 92% 98% 99% Strong operating Clover Bar 90% 91% performance with Joffre 82% 85% average plant Halkirk 98% 99% availability of 94% in Alberta contracted Genesee 1 100% 100% Q4/14; compared
Slide 6: Proven track record of high fleet availability
Proven track record of high fleet availability Plant availability consistently 90%+ in past 6 years 18,000 100% 16,000 96% 14,000 95% 94% 95% 93% 12,000 92% 91% Generation 10,000 90% (GWh) 90% 8,000 6,000 85% 4,000 2,000 - 80% 2009 2010 2011 2012 2013 2014 2015T Generation Average plant availability
Slide 7: Q4/14 Financial review
Q4/14 Financial review Generated $102M of FFO in Q4/14 in-line with expectations Normalized EPS of $0.20 in Q4/14 was lower than expected due to the non-cash impact of 2014 deferred tax expenses and lower wind generation at Quality Wind and Port Dover & Nanticoke Despite a 39% decline in avera
Slide 8: Alberta power market trading
Alberta power market trading Portfolio optimization activities focused on managing exposure to commodity risks, reducing volatility and creating incremental value Average realized power price has exceeded spot power prices ($/MWh) by 16% on average over the past 5 years $125 $100 $75 $50 $25 $0 Q1
Slide 9: Financial performance – Q4/14
Financial performance – Q4/14 $M, except per share amounts Q4/14 Q4/13 Change Revenues $432 $327 32% Adjusted EBITDA (before mark-to-market)(1) $104 $102 2% Basic earnings per share $0.40 $0.89 (55%) Normalized earnings per share $0.20 $0.40 (50%) Funds from operations $102 $110 (7%) Normalized EPS
Slide 10: Financial performance – 2014
Financial performance – 2014 $M, except per share amounts 2014 2013 Change Revenues $1,228 $1,393 (12%) Adjusted EBITDA (before mark-to-market)(1) $387 $483 (20%) Basic earnings per share $0.28 $2.13 (87%) Normalized earnings per share $0.72 $1.74 (59%) Funds from operations $362 $426 (15%) Generate
Slide 11: Alberta power price outlook
Alberta power price outlook Saw a sharp decline in 2015 forward prices in late Jan 2015 when spot prices began to decline, Shepard Energy Centre reaching material generation levels and declining natural gas prices 11
Slide 12: Financial outlook
Financial outlook Due to a significant decline in global oil prices that is expected to lower both economic and power demand growth in AB, along with lower forward natural gas prices for 2015, AB power forward prices have recently declined 2015 AB power forwards are currently in mid-$30/MWh rang
Slide 13: 2014 Performance & 2015 targets
2014 Performance & 2015 targets Operational and financial targets 100% Plant availability Sustaining capex ($M) 95% 95% 94% $100 95% $85 $75 $75 $65 90% $50 85% $25 80% 2014T 2014 2015T $0 2014T 2014 2015T Plant operating & ($M) maintenance expenses ($M) Funds from operations $250 $500 $180 - $200 $
Slide 14: 2015 Development & construction targets
2015 Development & construction targets On-time, on-budget and safe development of committed projects K2 Wind (Ontario) Genesee 4&5 (Alberta) Complete construction for Transition from development COD in mid-2015 to construction 14
Slide 15: Financial obligations & dividends fully covered by contracted cash flow
Financial obligations & dividends fully covered by contracted cash flow Operating margin(1) to financial obligations(2) and dividends(3) 200% Contracted + merchant ($70/MWh) 150% Contracted + merchant ($40/MWh) Contracted margin 100% 50% 2013 2014 2015F 2016F 2017F (1) Merchant margin is calculated
Slide 16: Questions?
Capital¢S apital ©
Slide 17: Forward-looking information
Forward-looking information Forward-looking information or statements included in this presentation and in responses to questions on the analyst conference call are provided to inform the Company’s shareholders and potential investors about management’s assessment of Capital Power’s future plans and
Slide 18: Investor Relations Contact
Investor Relations Contact Randy Mah Senior Manager (780) 392-5305 rmah@capitalpower.com Head Office 10th Floor 10423 – 101 Street NW Edmonton, AB T5H 0E9 www.capitalpower.com