Slide 1: Q2/17 Analyst Conference Call
CAPITAL POWER Q2/17 Analyst Conference Call July 26, 2017 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 net finance expense, income tax expense, depreciation and amortization, impairments, foreign exchange gains or losses, finance expense from its joint venture interests, and gains or losses on disposals (adjusted EBITDA), (ii) adjusted
Slide 4: Executing on growth
Executing on growth Recent acquisitions of contracted facilities Completed the acquisition of Decatur Energy Center on June 13th for $603M (US$448M) • 795 MW natural gas-fired facility fully contracted until December 2022 with high probability of re-contracting based on its history and need for ca
Slide 5: Completion of Bloom Wind project
Completion of Bloom Wind project Company’s first wind development project in the U.S. Bloom Wind began commercial operations on June 1/17 178 MW project in Kansas completed one month ahead of schedule with construction costs below budget 10-year fixed price contract covering 100% of the output
Slide 6: Geographical profile
Geographical profile Recent acquisitions and completion of Bloom Wind has increased geographical diversification Geographical breakdown based on Adjusted EBITDA U.S. ON 5% 13% U.S. 22% BC 9% AB AB ON 52% 73% 17% BC 9% 2016(1) 2018 Estimate 1) Percentage breakdown for 2016 is based on Adjusted EBITDA
Slide 7: Improving contracted adjusted EBITDA
Improving contracted adjusted EBITDA(1,2,3,4) $600 Savona & 150 Mile House Decatur East Windsor $500 York Energy Off-coal compensation $400 Bloom Macho Springs and Beaufort ($M) $300 K2 Wind Shepard PD&N $200 Halkirk Quality Wind $100 Island Generation North Carolina Kingsbridge 1 $0 Genesee 1&2 201
Slide 8: Common share dividend guidance
Common share dividend guidance Annualized dividend Targeting 7% annual per share(1,2) increase $2.05 $1.92 $1.79 $1.67 $1.56 $1.46 $1.36 $1.26 2013 Y/E 2014 Y/E 2015 Y/E 2016 Y/E 2017 Y/E 2018T 2019T 2020T 7.1% increase to quarterly dividend ($0.39 to $0.4175) effective Q3/17 Extended annual 7%
Slide 9: Alberta power market update
Alberta power market update Capacity market Government of Alberta’s schedule for the transition of Alberta’s energy- only market to a capacity market continues to be on-track • Design to be formalized late 2018 / early 2019 • Expect first capacity auction in 2019 for delivery in 2021 Five workin
Slide 10: Alberta power market update
Alberta power market update Renewable Electricity Program (REP) Two proposed projects to bid into the REP • Whitla Wind in southern Alberta was bid into REP round one, and is now competing in third stage of the process (RFP)* *Correction: Whitla Wind continues to make significant progress and if a
Slide 11: Q2/17 operating performance
Q2/17 operating performance Q2/17 Q2/16 Facility availability Q2/17 Q2/16 YTD YTD AB commercial facilities 95% 87% 96% 93% AB contracted facilities 85% 84% 92% 91% ON & BC contracted facilities 99% 99% 99% 99% U.S. contracted facilities 96% 95% 95% 92% Average availability 94% 90% 96% 93% Overall
Slide 12: Q2/17 Financial review
Q2/17 Financial review Q2/17 financial results were consistent with management’s expectations • Generated $47M of AFFO • Normalized EPS of $0.27 versus $0.30 in Q2/16 Trading desk captured a 174% higher realized average power price versus spot price in Q2/17 Portfolio optimization Q2/17 Q2/16 AB
Slide 13: Financial performance – Q2/17
Financial performance – Q2/17 $M, except per share amounts Q2/17 Q2/16 Change Revenues and other income $201 $226 (11%) Adjusted EBITDA (before mark-to-market)(1) $125 $123 2% Basic earnings per share $1.03 $0.19 442% Normalized earnings per share $0.27 $0.30 (10%) Adjusted funds from operations $47
Slide 14: Financial performance – Q2/17 YTD
Financial performance – Q2/17 YTD Q2/17 Q2/16 $M, except per share amounts Change YTD YTD Revenues and other income $539 $560 (4%) Adjusted EBITDA (before mark-to-market)(1) $259 $251 3% Basic earnings per share $1.47 $0.07 2000% Normalized earnings per share $0.61 $0.63 (3%) Adjusted funds from ope
Slide 15: Financial outlook
Financial outlook Last half of 2017 will include full AFFO and EBITDA contributions from the acquisitions (Veresen’s thermal power business, Decatur Energy) and Bloom Wind Q3/17 AFFO will include a $52.4M off-coal compensation payment to be received in July Alberta Commercial baseload position
Slide 16: Q2/17 YTD performance vs. annual targets
Q2/17 YTD performance vs. annual targets Facility availability Sustaining capex ($M) $80 96% $75 95% $34 Q2/17 Original Revised Q2/17 YTD Target YTD Target Target Facility O&M expenses ($M) AFFO ($M) $215 to $240 $195 to $215 $340 to $385 $305 to $345 $104 $138 Q2/17 Original Revised Q2/17 Original
Slide 17: Disciplined growth targets
Disciplined growth targets Bloom Wind and new developments 2017 Targets Q2/17 Status Complete Bloom Wind on time √ Project completed ahead of and on budget for COD in Q3/17 schedule with construction costs below budget Execute contracts for the output On track with target – progress of two new
Slide 18: Questions?
Capital ¢> Power
Slide 19: 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 20: Investor Relations Contact
Investor Relations Contact Randy Mah 10423 101 Street NW Senior Manager 10th Floor (780) 392-5305 Edmonton, Alberta rmah@capitalpower.com Canada, T5H 0E9 www.capitalpower.com