Capital Power Corporation · TSX:CPX
Capital Power — Investor Presentation (April 2024)
31 slides from Capital Power's investor presentation, April 2024
Slide 1: Building the leading power producer in North America
Building the leading power producer in North America April 2024 1
Slide 2: Table of Contents
Table of Contents Corporate Overview / 2023 Highlights Regional Asset Update Financial Update Appendix 2
Slide 3: Leading North American IPP
Leading North American IPP ~$5.0B ~6.5% Market Dividend (1) (2) Cap yield BBB- / BBB (low) ~9,300 S&P / DBRS Megawatts In Operation Wind Solar Gas 50/50% 32 Gas / Coal* Waste Heat Landfill Gas Canada / US Operating Battery Storage (3) Development and Construction Weighting Facilities *Genesee 1, 2,
Slide 4: 2023 Highlights
2023 Highlights Strong financial results, record generation Financial & operating results • Achieved record annual adjusted EBITDA of $1.455B • Record power generation of >32 TWh Strengthening our portfolio • Completed coal to gas conversion of Genesee 3; advanced Genesee 1 and Genesee 2 Repowerin
Slide 5: 2023 Highlights
2023 Highlights Achieved financial guidance and credit metrics Results consistent with revised Annual Adjusted Quarterly Adjusted EBITDA ($M) EBITDA ($M) adjusted EBITDA guidance $313 • Favorable results from U.S. and Ontario segments $1,455 • Full year contribution of Midland Cogeneration Venture •
Slide 6: Growing through decarbonization and diversification
Growing through decarbonization and diversification 10-year total shareholder return CAGR of 12.5% Coal/Dual Fuel Exposure (% Capacity) Adjusted EBITDA Growth 53% $1,455 44% 11% reduction CAGR $509 9% YE 2013 YE 2023 YE 2013 YE 2023 U.S. Exposure (% Capacity) Dividend Per Share Growth 50% $2.60 45%
Slide 7: Increasing capacity and reducing emissions
Increasing capacity 32 380 512 > > + and reducing TWh MW MW emissions Record generation in company history Additional renewable capacity being advanced Additional net capacity Record generation achieved with Total Portfolio Pathway to Net Zero Genesee Repower declining emissions intensity 40 100 3.4
Slide 8: Capital Power's strategic imperatives
Capital Power's strategic imperatives A balanced approach to energy transition DELIVER BUILD CREATE 1 Reliable & affordable power 2 Decarbonized power systems for tomorrow 3 Real net-zero power solutions for customers Optimize existing generation Develop renewable / lower Invest in technologies to c
Slide 9: U.S. WECC Market
U.S. WECC Market 9
Slide 10: Favourable Market Dynamics in U.S. WECC
Favourable Market Dynamics in U.S. WECC 1 Strong Fundamentals 2• Commitment to Decarbonization (1) • Large demand market requiring flexibility (>900 TWh) • Baseload capacity retirements • Favorable demand growth outlook • California targeting carbon neutral by 2045 (2) • California demand growth CAG
Slide 11: La Paloma and Harquahala acquisitions
La Paloma and Harquahala acquisitions Positioning Capital Power as a Leading Power Producer in North America Key Gas Assets in • La Paloma and Harquahala are critical infrastructure assets in their respective markets 1 Large US Market • Amplifies the opportunity for further growth through a new "hub
Slide 12: Attractive valuation and re-contracting opportunity
Attractive valuation and re-contracting opportunity Recent Capital Power Gas Acquisitions (EV / Adj. EBITDA1) AFFOPS1 6% 7% 6%2 6% 7%2 n/d3 8%2 Accretion 9.8x 9.1x 8.6x 7.9x 7.6x 6.7x 4.8x Decatur Energy East Windsor / York Arlington Valley Goreway Midland Frederickson Harq. & La Paloma Centre Energ
Slide 13: Market leading position in energy security
Market leading position in energy security Energy Security Champion Top 10 North American Non-Reg. Gas Operators1 (Net GW, Gas-Fired Capacity Only) • 5th largest reliable and flexible gas power generation fleet in North America1,2 Vistra 24.2 Geographic Diversification Calpine 21.1 • Grows footprint
Slide 14: Ontario Market
Ontario Market 14
Slide 15: 5 successful Ontario projects adding ~350 MW
5 successful Ontario projects adding ~350 MW Contracts executed for all projects with Ontario IESO; COD targeted in 2025 Expedited Long-Term RFP ($655M cost) Project Contracted Capacity Term East Windsor Expansion (106 MW) 81 MW summer To 2040 (~15 years) 100 MW winter York Battery Energy Storage Sy
Slide 16: Alberta Market
Alberta Market 16
Slide 17: Genesee 1&2 Repowering project
Genesee 1&2 Repowering project • Transition from dual-fuel to gas resulting in 58% increase in generating capacity to 1,332 MW • ~40% decrease in absolute annual emissions • ~60% decrease in GHG intensity • Attractive proforma economics • Following completion, Genesee 1&2 will be the most efficient
Slide 18: Repowering of Genesee 1&2 Preserves Competitive Market Position
Repowering of Genesee 1&2 Preserves Competitive Market Position Retired Asset Capacity (MW) Battle River 3 149 Keephills 1 395 Sundance 1 280 Sundance 2 280 Sundance 3 368 Sundance 4 406 Sundance 5* 406 Sundance 6** 401 Battle River 4** 155 Battle River 5** 385 Sheerness 1** 400 Sheerness 2** 400 Ke
Slide 19: Financial Update
Financial Update 19
Slide 20: 2023 Capital Allocation Update
• Maintained FFO / Debt of 20% or higher 2023 Capital Leverage and liquidity • Preserved BBB- / BBB(low) credit rating (S&P / DBRS) • Liquidity of ~$1B (post closing La Paloma, Harquahala) Allocation • Largest acquisition in company’s history Update External • $400M in common equity including priv
Slide 21: Delivering a decade of dividend growth
Delivering a decade of dividend growth Annual dividend guidance of 6% per year to 2025 6% per year ~7% CAGR $2.46 $1.26 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024E 2025E 1) Subject to market conditions, economic outlook, cash flow forecast, and Board approval at the time. 2) 2013 to
Slide 22: Delivering reliable, affordable and decarbonized electricity solutions
Delivering reliable, affordable and decarbonized electricity solutions Reliable Operational Net Zero Power Excellence by 2045 Stable and growing Well-maintained ESG leader cash flows from a and efficiently committed to highly contracted operated plants decarbonization generation portfolio Balance Sh
Slide 23: Investor Day 2024
• Event hosted at the JW Marriott Edmonton ICE District May 7, 2024 Investor • • Tour of Genesee site Evening reception May 8, 2024 Day2024 • Breakfast and registration • Presentations and Q&A • Lunch 23
Slide 24: Appendix
Appendix 24
Slide 25: Frederickson acquisition
Frederickson 1 acquisition Strategic diversification in Pacific Northwest Frederickson 1 Generating Station • Fully contracted with credit-worthy counterparties to October 2030 • High-quality, reliable baseload generation asset in the Puget Sound Region diversifies our geographic footprint • Well-po
Slide 26: Capital Power Emerges as One of the Largest and Most Diversified Power Generators in North America
Capital Power Emerges as One of the Largest and Most Diversified Power Generators in North America Capital Power's North American Strategic "Hubs" A Diversified North American Company Net Operating Capacity by Region U.S. WECC1 Current2 Pro Forma3 Alberta Acquisition of a Other Other 50.15% interest
Slide 27: Financial stability and strength
Financial stability and strength Strong balance sheet and continued commitment to investment grade credit ratings BBB- / Stable BBB(low) / Stable • Target FFO to Debt ≥ 20%(1) • Target cashflow to debt ≥ 20% • Target Debt to EBITDA ≤ 4x • Target EBITDA / Interest ≥ 4.5x 2024 credit metrics forecast
Slide 28: Genesee repower timelines/assumptions
Simple Cycle Completion Combined Cycle Completion Genesee repower Unit #1 Q2 2024 Unit #2 Q3 2024 Unit #1 Q4 2024 Unit #2 Q4 2024 timelines/assumptions Simple Cycle Completion – 411 MWs capacity • Unit 1 Q2 2024 • Unit 2 Q3 2024 • Output during commissioning will range between 0 MWs and 411 MWs • Ex
Slide 29: Legal Notices
Legal Notices Non-GAAP Financial Measures and Ratios A reconciliation of Adjusted EBITDA to net income resulting from the Acquisitions is as follows: This presentation contains references to certain financial measures that do not have a standardized meaning prescribed by GAAP (unaudited, $ millions)
Slide 30: Forward-looking information
Forward-looking information Forward-looking information or statements included in this presentation are provided to inform our • electricity and other energy and carbon prices; shareholders and potential investors about management’s assessment of Capital Power’s future plans and • performance; opera
Slide 31: Investor Relations
Investor Relations Roy Arthur VP, Investor Relations capitalpower.com 1-403-736-3315 investor@capitalpower.com 31