Slide 1: Q2/15 Analyst Conference Call
CAPITAL POWER Q2/15 Analyst Conference Call July 27, 2015 Brian Vaasjo, President & CEO Bryan DeNeve, 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: Q2/15 Highlights
Q2/15 Highlights Solid operating performance with average plant availability of 90% reflecting both planned and unplanned outages Normalized EPS of $0.10 were slightly below expectations but higher than $0.07 in Q2/14 Funds From Operations (FFO) of $70M were modestly below expectations and low
Slide 5: Q2/15 Operating performance
Q2/15 Operating performance Plant availability Q2/15 Q2/14 Alberta commercial Genesee 3 100% 96% 90% average plants Keephills 3 97% 100% availability in Q2/15 Clover Bar Joffre 95% 87% 98% 95% 73% availability at Shepard 73% N/A Shepard due to 28-day Halkirk 98% 98% unplanned outage Alberta cont
Slide 6: Corporate updates
Corporate updates K2 Wind begins commercial operations On May 29/15, K2 Wind became fully operational and capable of generating 270 MW (90 MW to CPX) of power in Ontario under a 20- year PPA Capital Power, Samsung Renewable Energy, and Pattern Energy Group are equal partners on the K2 Wind proje
Slide 7: Changes to AB's emissions regulations
Changes to AB’s emissions regulations Specified Gas Emitters Regulation (SGER) in Alberta requires facilities that emit 100,000 tonnes or more of greenhouse gases per year to reduce emissions intensity by a specific target Alberta Government announced on June 25 changes to SGER: 2015 2016 2017 E
Slide 8: Dividend increase
Dividend increase A 10 cents per share increase (7.4%) to the annual dividend Effective with Q3/15, quarterly dividend increased 7.4% to $0.365 Annualized dividend from $0.34 per share per common share(1) $1.46 Contracted cash flow base has grown significantly with the recent additions $1.36 of
Slide 9: Q2/15 financial review
Q2/15 financial review Generated $70M of FFO in Q2/15, modestly below expectations Normalized EPS of $0.10 Changes to corporate tax rate: • Alberta government increased the provincial corporate income tax rate from 10% to 12% effective July 1, 2015 • As a result of the increase, Company recogn
Slide 10: Alberta Commercial segment results
Alberta Commercial segment results Alberta power prices averaged $57/MWh in Average AB power prices Q2/15, compared to $42/MWh in Q2/14 ($/MWh) Shepard outage occurred primarily in June $57 coinciding with other non-Capital Power operated $42 plant outages and warmer weather with AB spot power p
Slide 11: Financial performance – Q2/15
Financial performance – Q2/15 $M, except per share amounts Q2/15 Q2/14 Change Revenues $83 $240 (65%) Adjusted EBITDA (before mark-to-market)(1) $92 $91 1% Basic earnings (loss) per share ($0.39) $0.17 (329%) Normalized earnings per share $0.10 $0.07 43% Funds from operations $70 $85 (18%) Q2/15 fin
Slide 12: Financial performance – Q2/15 YTD
Financial performance – Q2/15 YTD Q2/15 Q2/14 $M, except per share amounts Change YTD YTD Revenues $441 $548 (20%) Adjusted EBITDA (before mark-to-market)(1) $208 $197 6% Basic earnings (loss) per share ($0.06) $0.50 (112%) Normalized earnings per share $0.40 $0.39 3% Funds from operations $178 $177
Slide 13: Financial outlook
Financial outlook Average Alberta power price of $43/MWh in first half of 2015, consistent with our original forecast assumption of $44/MWh At the beginning of the year, Alberta baseload position for 2015 was significantly hedged in the mid-$50/MWh No change to revised FFO guidance; expect 201
Slide 14: 2015 YTD performance versus annual targets
2015 YTD performance versus annual targets Operational and financial targets ($M) 100% Plant availability Sustaining capex $100 95% $75 94% 94% 90% $50 $65 85% $25 $35 80% $0 2015 YTD Target 2015 YTD Target Plant operating & maintenance expenses Funds from operations ($M) $200 $180 - $200 ($M) $365
Slide 15: 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) Transition from On track; Complete construction for COD in mid-2015 development to targeting COD construction of Genesee 4 in 2019 15
Slide 16: Questions?
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Slide 17: Forward-looking information
Forward-looking information Forward-looking information or statements included in this presentation and in responses to questions 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 m
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