Capital Power Corporation · TSX:CPX
Capital Power — Q3 2018 Earnings Presentation
15 slides from Capital Power's earnings presentation, Oct 29, 2018
Slide 1: Q3/18 Analyst Conference Call
Q3/18 Analyst Conference Call Brian Vaasjo, President & CEO Bryan DeNeve, SVP Finance & CFO October 29, 2018
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
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: Acquisition of Arlington Valley
Acquisition of Arlington Valley Announced on Sept 6/18 an agreement to acquire a 580 MW contracted gas facility in Arizona for US$300M Strategic benefits: • Immediate accretion – 5-year average accretion of $0.22 (6%) on AFFO/share and $0.03 (2%) to EPS • Strengthens contracted cash flow profile o C
Slide 5: Acquisition of Arlington Valley
Acquisition of Arlington Valley Low risk, long-term cash generating investment providing an important platform for further potential growth in Desert Southwest • Acquisition to be financed through credit facilities followed by permanent debt financing • No need to issue equity with existing balance
Slide 6: Positive outlook for Alberta power market
Positive outlook for Alberta power market Q3/18 average spot price more than doubled YoY ($/MWh) 70 Alberta power prices(1) 60 Alberta peak demand (MW) 12,000 50 11,697 11,500 11,169 40 11,000 10,500 30 10,000 9,500 20 9,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Summer Peak Winter Peak 1
Slide 7: Portfolio optimization
Portfolio optimization AB commercial portfolio positions 2019 2020 2021 As of date Sept 30, 2018 Nearly 500 MW (gas peaking, wind) available % sold forward(1) 55% 22% 4% to capture the upside from low natural gas Contracted prices(2) ($/MWh) Low-$50 Low-$50 Mid-$50 prices, higher power prices, and p
Slide 8: Q3/18 financial review and Q4/18 outlook
Q3/18 financial review and Q4/18 outlook • Excellent operating performance with average facility availability of 98% • Q3/18 financial results exceeded management’s expectations o Generated strong AFFO of $156M, highest AFFO quarter since Q2/15, when comparative information was first reported for AF
Slide 9: Financial performance – Q3/18
Financial performance – Q3/18 $M, except per share amounts Q3/18 Q3/17 Change Revenues and other income $389 $346 12% Strong results in Alberta Adjusted EBITDA $173 $161 7% contracted facilities from (before mark-to-market)(1) higher rolling average Basic earnings per share $0.10 ($0.13) 177% pool p
Slide 10: Financial performance – Q3/18 YTD
Financial performance – Q3/18 YTD $M, except per share amounts Q3/18 YTD Q3/17 YTD Change Revenues and other income $1,059 $885 20% Adjusted EBITDA $547 $420 30% Strong growth in (before mark-to-market)(1) Adjusted EBITDA and Basic earnings per share $0.99 $1.30 (24%) AFFO from assets acquired and N
Slide 11: Q3/18 YTD performance versus 2018 annual targets
Q3/18 YTD performance versus 2018 annual targets 2018 AFFO expected to be above the midpoint of the range Facility O&M Facility availability Sustaining capex ($M) expenses ($M) AFFO ($M) $230 to $250 $360 to $400 $85 96% 95% $177 $317 $54 Q3/18 YTD Target Q3/18 YTD Target Q3/18 YTD Target Q3/18 YTD
Slide 12: 2018 construction & development targets
2018 construction & development targets Construction 2018 2019 2020 2021 New Frontier Wind Whitla Wind Cardinal Point Wind (North Dakota) (Alberta) (Illinois) • 99 MW • 201.6 MW (Phase 1) • 150 MW • 12-year PPA • 20-year PPA • 12-year PPA • $182M • $315-$325M • $289-$301M • COD in Dec/18 • COD in Q4
Slide 13: Questions?
Questions? capitalpower.com 13
Slide 14: Forward-looking information
Forward-looking information Forward-looking information or statements included in this presentation are provided to inform the These statements are based on certain assumptions and analyses made by the Company in light of its experience Company’s shareholders and potential investors about management
Slide 15: 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 15