Slide 1: Q2/18 Analyst Conference Call
Q2/18 Analyst Conference Call July 30, 2018 Brian Vaasjo, President & CEO Bryan DeNeve, SVP Finance & CFO capitalpower.com
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 as a result of certain m
Slide 3: Non-GAAP financial measures
Non-GAAP financial measures 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, and gains or losses on disposals (adjuste
Slide 4: Second quarter achievements
Second quarter achievements Increased dividend by 7% ($1.67 to $1.79 annualized) Executed 12-year contract for 150 MW Cardinal Point Wind project – operational in 2020 Added 77.5 MW to U.S. growth pipeline with acquisition of Green Hills Wind project in Missouri Acquired 5% equity interest i
Slide 5: 5th consecutive annual dividend increase
5th consecutive annual dividend increase 7% annual dividend growth guidance out to 2020 Annualized dividend per share(1) Guidance(2) $1.92 $2.05 $1.67 $1.79 $1.46 $1.56 $1.26 $1.36 2013 Y/E 2014 Y/E 2015 Y/E 2016 Y/E 2017 Y/E 2018 Y/E 2019T 2020T Dividend growth supported by ~$200M per year in dis
Slide 6: Alberta power market has recovered
Alberta power market has recovered Average spot prices Alberta peak demand have nearly tripled (MW) ($/MWh) 12,000 60 11,697 11,500 $56 11,000 11,099 10,500 40 10,000 9,500 20 9,000 $19 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Summer Peak Winter Peak 0 3% to 4% demand growth sets new summer
Slide 7: Alberta power market
Alberta power market Capacity market design AESO has finalized its proposed market design Design is constructive and provides an equal opportunity for existing and new assets to earn a return on and of capital Key design elements such as participation, market mitigation, term length are reason
Slide 8: Progress on our renewables growth strategy
Progress on our renewables growth strategy 450 MW 245 MW 1,200 MW ~ 3 contracted wind projects of potential wind development of potential wind development under advanced opportunities to participate in opportunities located throughout development or construction Alberta’s Renewable Electricity the U
Slide 9: Q2/18 financial review
Q2/18 financial review Q2/18 financial results exceeded management’s expectations • Generated $76M of AFFO • Adjusted EBITDA(1) of $201M Re-negotiated Bloom Wind tax equity agreement • A change in tax law provision was triggered in the agreement due to the reduction in U.S. Federal corporate tax
Slide 10: Updated modeling guidance for Bloom Wind
Updated modeling guidance for Bloom Wind Re-negotiated tax equity agreement impact 90 Under the re-negotiated tax equity agreement, and considering the reduction 80 in U.S. Federal corporate tax rate, Company has maintained its original 70 expected returns EBITDA (original) 60 Revision accelerat
Slide 11: Financial performance – Q2/18
Financial performance – Q2/18 $M, except per share amounts Q2/18 Q2/17 Change Revenues and other income $363 $201 81% Adjusted EBITDA (before mark-to-market)(1) $201 $125 61% Basic earnings per share $0.57 $1.03 (45%) Normalized EPS $0.22 $0.27 (19%) Adjusted funds from operations (AFFO) $76 $44 73%
Slide 12: Financial performance – Q2/18 YTD
Financial performance – Q2/18 YTD Q2/18 Q2/17 $M, except per share amounts Change YTD YTD Revenues and other income $670 $539 24% Adjusted EBITDA (before mark-to-market)(1) $374 $259 44% Basic earnings per share $0.89 $1.47 (39%) Normalized EPS $0.52 $0.61 (15%) Adjusted funds from operations (AFFO)
Slide 13: Portfolio optimization
Portfolio optimization AB commercial portfolio positions 2019 2020 2021 As of date June 30, 2018 % sold forward(1) 49% 25% 5% Contracted prices(2) ($/MWh) Low-$50 Low-$50 Mid-$50 Current average forward prices(3) $56 $52 $48 ($/MWh) Nearly 500 MW (gas peaking, wind) available to capture upside from
Slide 14: 6-month performance versus 2018 annual targets
6-month performance versus 2018 annual targets Facility availability Sustaining capex ($M) $85 95% 95% $41 Q2/18 YTD Target Q2/18 YTD Target Facility O&M expenses ($M) AFFO ($M) $230 to $250 $360 to $400 $121 $161 Q2/18 YTD Target Q2/18 YTD Target 2018 AFFO expected to be above the midpoint of the r
Slide 15: 2018 construction & development targets
2018 construction & development targets Construction Development Execute contracts for the output of 1-3 new wind developments • Contract executed for Cardinal Point Wind • Alberta’s Renewable Electricity Program • 1,200 MW of potential wind development opportunities in the U.S. capitalpower.com 1
Slide 16: Questions?
Questions?
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
Investor Relations Randy Mah 10423 101 Street NW Director 10th Floor (780) 392-5305 Edmonton, Alberta rmah@capitalpower.com Canada, T5H 0E9 www.capitalpower.com capitalpower.com