Capital Power Corporation · TSX:CPX
Capital Power — Q1 2011 Earnings Presentation
22 slides from Capital Power's earnings presentation, May 2, 2011
Slide 1: Analyst Conference Call Q1, 2011 Review
Analyst Conference Call Q1, 2011 Review Brian Vaasjo, President & CEO Stuart Lee, SVP & CFO May 2, 2011 1
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: Corporate updates
Corporate updates Q1/11 results consistent with management’s guidance provided on Mar 8/11 • Normalized EPS of $0.33 compared to $0.51 in Q1/10 • Funds from operations excluding non-controlling interests in Capital Power Income L.P. (CPILP) of $78M, up 10% from $71M in Q1/10 Successfully closed the
Slide 4: Q1/11 Operating performance
Q1/11 Operating performance Plant Generation Availability (GWh) Alberta commercial plants Genesee 3 100% 482 Joffre 99% 98 Clover Bar Energy Centre 65% 162 Clover Bar Energy Centre (CBEC) Taylor Coulee Chute 100% - Unit 3 outage with estimated Clover Bar Landfill Gas 95% 8 return to service of Jun 3
Slide 5: Financial summary – Q1/11
Financial summary – Q1/11 Normalized EPS of $0.33, down 35% over Q1/10 primarily due to lower margins on the AB commercial portfolio Realized price for the AB commercial plants and portfolio optimization was $64/MWh in Q1/11, compared to $67/MWh in Q1/10 • Average AB power spot price was $82/MWh for
Slide 6: Financial performance – Q1/11
Financial performance – Q1/11 % $M, except earnings per share Q1/11 Q1/10 Change Revenues and other income(1) $504 $484 4.1% EBITDA(1,2) $114 $134 (15%) Earnings attributable to common $2 $12 (83%) shareholders Earnings per share $0.06 $0.55 (89%) Earnings per share (normalized)(2) $0.33 $0.51 (35%)
Slide 7: Transitioning to IFRS
Transitioning to IFRS Transition to IFRS had an immaterial impact on opening equity; going forward, earnings impact also expected to be modest Expected 2011 IFRS impact is a $5M reduction to income before tax, driven by the following changes: • ~11M of the expected $13M maintenance costs for Genesee
Slide 8: Transitioning to IFRS (cont’d)
Transitioning to IFRS (cont’d) Statement presentation changes Income statement expenses presented by nature under IFRS, which combine plant direct & indirect admin costs that were previously shown separately Non-IFRS measure of Operating margin replaced by EBITDA due to requirement to reconcile Non-
Slide 9: 2011 Capital expenditure outlook
2011 Capital expenditure outlook Expect $90M sustaining capex & $290M growth capex ~$20M to $30M (2-3%) in additional capital costs for CPC’s share of the Keephills 3 project based on revised COD in Q3/11 Estimated plant maintenance capex is ~$16M higher due to the impact of IFRS whereby costs for m
Slide 10: 2011 Financial outlook
2011 Financial outlook New England plant acquisitions expected to contribute $34M to $38M in earnings after depreciation expense and before financing and income tax expenses in 2011 Equity issuance of 9.3M common shares in Mar/11 is slightly dilutive to earnings in Q1 as it preceded the late Apr/11
Slide 11: 2011 Financial outlook (cont’d)
2011 Financial outlook (cont’d) If average AB spot power prices for the balance of 2011 settle on average in the low-$60/MWh range, expect full year 2011 normalized EPS to be ~$1.40 • Previous guidance for 2011 normalized earnings per share based on an average AB power price of $50/MWh • Although th
Slide 12: Updated 2011 earnings guidance
Updated 2011 earnings guidance $0.12 $0.03 -$ 0.11 -$ 0.04 $0.22 -$ 0.02 ~ $1.40 ~ $1.20 Original Change in Depreciation Acquisition Actual Q1 IFRS Other Updated normalized AB power expense of 3 New results vs. transition normalized EPS price accounting England expectation EPS guidance assumption im
Slide 13: 2011 corporate priorities
2011 corporate priorities Priority Status Operational targets • Plant availability of ≥ 94% Expect 91% due to – CPC capacity-weighted plant availability (one issues with CBEC 3 Genesee turnaround planned for 2011) Maintenance capital of approximately $56M(1) Estimate $63M(2) – Plant maintenance and
Slide 14: 2011 corporate priorities (cont’d)
2011 corporate priorities (cont’d) Priority Status Financial • Normalized EPS under previous Canadian GAAP reporting Revised of ~$1.20(1,2) annualized $1.40(3) • Funds from operations expected to be modestly higher than 2010 On track • Cash flow per share expected to be modestly higher than 2010 On
Slide 15: Questions?
Questions? Investor Relations (780) 392-5305 (866) 896-4636 (toll-free) investor@capitalpower.com www.capitalpower.com 15
Slide 16: Forward-looking information
Forward-looking information Certain information in this presentation is forward-looking within the meaning of Canadian securities laws as it relates to anticipated financial performance, events or strategies. When used in this context, words such as will, anticipate, believe, plan, intend, target, a
Slide 17: Forward-looking information (cont’d)
Forward-looking information (cont’d) services revenue through operational flexibility; (xxix) expectations regarding the Company’s strategy, including the Company’s expectation to commit at least $1.5 billion of new development or acquisitions in 2011; (xxx) expectations regarding CPILP’s income tax
Slide 18: Forward-looking information (cont’d)
Forward-looking information (cont’d) forward looking information and statements noted in that section. See also Business Risks in the Company’s December 31, 2010 annual MD&A. If any such risks actually occur, they could materially adversely affect the Company’s business, financial condition or resul
Slide 19: Non-IFRS financial measures
Non-IFRS financial measures The Company uses (i) EBITDA, (ii) funds from operations, (iii) funds from operations excluding non-controlling interests in CPILP, (iv) normalized earnings attributable to common shareholders and (v) normalized earnings per share as financial performance measures. These t
Slide 20: Non-IFRS financial measures (cont’d)
Non-IFRS financial measures (cont’d) (unaudited, $millions) Three months ended Mar 31, Dec 31, Sept 30, June 30, Mar 31, 2011 2010 2010 2010 2010 Revenues $ 440 $ 429 $ 493 $ 301 $ 484 Other income 18 8 18 12 17 Energy purchases and fuel 291 232 278 196 284 Gross income 167 205 233 117 217 Other raw
Slide 21: Non-IFRS financial measures (cont’d)
Non-IFRS financial measures (cont’d) during the period, rather than interest and taxes paid as these differences are impacted by the timing of cash receipts and payments and are not comparable from period to period. Therefore, the Company uses funds from operations as its primary operating cash flow
Slide 22: Non-IFRS financial measures (cont’d)
Non-IFRS financial measures (cont’d) (unaudited, $millions except earnings (loss) Three per share) months Year ended ended Three months ended Mar 31, Dec 31, Dec 31, Sept 30, June 30, Mar 31, 2011 2010 2010 2010 2010 2010 Earnings (loss) per share $ 0.06 $ 0.77 $ (0.13) $ 0.73 $ (0.37) 0.55 Net inco