Capital Power Corporation · TSX:CPX
Capital Power — Q4 2009 Earnings Presentation
15 slides from Capital Power's earnings presentation, Mar 10, 2010
Slide 1: Q4/09 Financial results
Analyst conference call Q4/09 Financial results March 10, 2010 Brian Vaasjo, President & CEO Stuart Lee, CFO CONFIDENTIAL
Slide 2: Cautionary statement regarding forward-looking information
Cautionary statement regarding forward-looking information Certain information in this presentation and oral statements made during this presentation contains forward-looking information. Actual results could differ materially from conclusions, forecasts or projections in the forward-looking informa
Slide 3: Corporate updates
Corporate updates Q4/09 operating performance in-line with management’s expectations • 92% average plant availability including scheduled outage at Genesee 1 Final 100 MW natural gas-fired turbine at Clover Bar commenced operation in Dec/09 • Unit 3 completed 6 months ahead of schedule • Total p
Slide 4: Q4/09 Operating performance
Q4/09 Operating performance Q4, 2009 Plant Generation Availability (Gwh) Alberta commercial plants Genesee 3 99% 484 Joffre 94% 73 Clover Bar Energy Centre(1) 98% 9 Taylor Coulee Chute 66% 2 Clover Bar Landfill Gas 94% 10 Weather Dancer 0% - 97% 578 Alberta contracted plants Genesee 1 74% 618 Genese
Slide 5: Alberta power prices
Alberta power prices Alberta spot power prices of ~$46/MWh in Q4/09 declined 6.5% from Q3/09 Lower natural gas prices and reduced customer demand for power caused power prices to decline $57/MWh captured power price(1) for Alberta commercial position in Q4/09 • $11/MWh higher than the average
Slide 6: Financial highlights – Q4/09
Financial highlights – Q4/09 ($M, except earnings per share) Q4/09 Q3/09 Change Revenues $497 $511 2.7% Gross margin (excluding fair value changes)(1) $182 $189 3.7% Operating margin(1) $154 $169 8.9% Net income $7 $14 50% Earnings per share (normalized)(1) $0.18 $0.42 57% Funds from operations $71
Slide 7: Q4/09 Normalized EPS
Q4/09 Normalized EPS(1) Q4/09 normalized EPS of $0.18, compared to $0.42 in Q3/09 • Adjusted for unusual items such as fair value changes, impairments, unusual tax adjustments, and gains or losses on disposal of assets Significant items impacting quarter/quarter change: • Scheduled outage at Gen
Slide 8: Hedging Alberta spot power price exposure
Hedging Alberta spot power price exposure Alberta commercial portfolio Clover Bar units significantly enhance our capability to physically manage our Alberta electricity exposures and provides opportunity to participate in a rising power market substantially sold forward @ ~70% hedged low-$60/MWh
Slide 9: Financial outlook
9 Financial outlook 2010 vs. 2009 Sale of remaining 15% interest of Battle River PPA in Jan/10 Higher operating margin (excluding fair value adjustments) from full year of operation of Clover Bar units 2 and 3 Higher captured power price for Alberta commercial portfolio as a significant portio
Slide 10: 2010 Corporate priorities
2010 Corporate priorities Operational targets • Plant availability of ≥ 94% • Sustaining capex of $60M Construction / development objectives • CPC’s share of final costs for Keephills 3 project at ≤ $955M with completion by Q2/11 • Commit at least $500M to capital opportunities that meet or exce
Slide 11: Investment summary
Investment summary Positive long-term fundamentals for the Alberta power market • Demand growth expected to increase in 2011 from oil sands investment activity and retirement of capacity on Alberta electricity grid • Alberta power prices expected to be amongst first to recover in North America bas
Slide 12: Questions?
Questions? Investor Relations (780) 392-5305 (866) 896-4636 (toll-free) investor@capitalpower.com www.capitalpower.com CONFIDENTIAL 12
Slide 13: Non-GAAP financial measures
Non-GAAP financial measures The Company uses (i) gross margin, (ii) operating margin, (iii) funds from operations, (iv) funds from operations excluding non-controlling interests in CPILP and (v) normalized earnings per share as financial performance measures. These terms are not defined financial me
Slide 14: Non-GAAP financial measures (cont’d)
Non-GAAP financial measures (cont’d) Prior to the third quarter of 2009, the Company used adjusted earnings before foreign exchange gains and losses, interest, income tax, depreciation and amortization and impairments (adjusted EBITDA) to measure plant operating performance. Commencing with the thir
Slide 15: Non-GAAP financial measures (cont’d)
Non-GAAP financial measures (cont’d) Normalized net income and normalized earnings per share The Company uses normalized earnings per share to measure performance by period on a comparable basis. Normalized earnings per share is based on net income according to Canadian GAAP adjusted for items that