Capital Power Corporation · TSX:CPX
Capital Power — Q3 2022 Earnings Presentation
15 slides from Capital Power's earnings presentation, Oct 31, 2022
Slide 1: Q3/22 Analyst Conference Call
Q3/22 Analyst Conference Call Brian Vaasjo, President & CEO Sandra Haskins, SVP Finance & CFO October 31, 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: Q3/22 updates
Q3/22 updates Strong Q3 results – record quarter for adjusted EBITDA • 96% average availability • $221/MWh average AB spot power price benefitted AB Commercial facilities • Double-digit % increases in adjusted EBITDA from Goreway and Decatur Closed the acquisition of Midland Cogen facility • Execute
Slide 5: Favorable policy announcements supportive of our strategy
Favorable policy announcements supportive of our strategy TIER review • AB Environment and Parks (AEP) initiated consultations on proposed changes to TIER framework • Includes adopting Federal carbon price schedule to 2030, 2% per year decline in electricity stringency from 0.37t/MWh • We are suppor
Slide 6: Inaugural green hybrid bond issuance aligns with Green Financing Framework
Inaugural green hybrid bond issuance aligns with Green Financing Framework • Cost-effective financing with economic savings of ~$5M per annum (initial 10 years) on an after-tax basis relative to reset rates of Preferred Shares, Series 7 and 9 • With the inclusion of a forward starting C$350,000,000
Slide 7: Strong company-wide Q3/22 financial performance
Strong company-wide Q3/22 financial performance $871M $383M $370M $328M +57% yoy +34% yoy +7% yoy +59% yoy Revenues and Adjusted EBITDA Net cash flows AFFO other income(1) from operating activities • $221/MWh average spot price from competitive bidding behaviours, unseasonably hot weather, and outag
Slide 8: 9-month financial performance above expectations
9-month financial performance above expectations $2,314M $1,050M $893M $708M +37% yoy +27% yoy +31% yoy +55% yoy Revenues and other Adjusted Net cash flows AFFO income(1) EBITDA from operating activities • Similar performance drivers for Q3/22 YTD including higher generation and strong AB power pric
Slide 9: Alberta portfolio optimization of commodity price risk
Alberta portfolio optimization of commodity price risk (All data as of Sep 30/22) 2023 2024 2025 Power % Sold forward(1) 72% 55% 36% Contracted power prices(2) ($/MWh) Low-$70s Low-$60s Low-$60s Forward power prices ($/MWh) $114 $82 $76 Natural gas % Bought forward(3) Over 80% Over 70% Over 50% Weig
Slide 10: Managing Alberta carbon exposure
Managing Alberta carbon exposure(1,2) ($M) $350 Alberta Emissions Expense Carbon Offset Savings $300 • Optimized carbon emission credit inventory from 2022 $250 27 114 to 2024 to align the expected increase in TIER $200 stringency requirements with carbon compliance $150 price increases 230 $100 184
Slide 11: 2022 targets
2022 targets Revised financial guidance reflects YTD results and outlook Updated sustaining capex guidance • Reflects increased generation and spend on shutdown work plus sustaining capex for Midland Cogen Updated financial guidance • 16% increase to adjusted EBITDA (based on midpoints of original a
Slide 12: Upward revision to 2022 AFFO guidance
Upward revision to 2022 AFFO guidance A 31% increase based on midpoints of guidance ranges Main drivers behind revised higher guidance AFFO ($M) $770 to $810 $708 $770 to $810 $580 to $630 $708 Original Q3/22 YTD Revised Target Target 12
Slide 13: Forward-looking information
Forward-looking information Forward-looking information or statements included in this presentation are provided to inform the Company’s business prospects (including potential re-contracting of facilities) and opportunities including shareholders and potential investors about management’s assessm
Slide 14: 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 14
Slide 15: Please mark your calendars
Please mark your calendars 2022 Investor Day December 1, 2022 (Event held in Brampton ON with a tour of Goreway Power Station) Luncheon Speaker: Chris Benedetti Managing Partner of Sussex Strategy Group More details will be announced later this week 15