Slide 1: Q4/17 Analyst Conference Call
Q4/17 Analyst Conference Call Brian Vaasjo, President & CEO Bryan DeNeve, SVP Finance & CFO February 16, 2018 capitalpower.com
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 fa
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: Execution in 2017
Execution in 2017 Substantial contracted growth and diversification Executed on renewables strategy including a 20-year contract for Whitla Wind Acquired five thermal assets Added nearly 1,300 MW to the fleet including completion of Bloom Wind 13% increase in AFFO per share Contracted % of
Slide 5: Updates on Alberta power market
Updates on Alberta power market Capacity market design – key components AESO released Draft 1 of the Comprehensive Market Design (Draft 1) on Jan 26/18 Overall, design appears constructive and resembles a market structure where existing and future assets have the opportunity to earn a return on/
Slide 6: Updates on Alberta power market
Updates on Alberta power market AESO’s forecast revenue for baseload facilities commencing in 2021 based on proposed design $/MWh $70 Start of capacity market Under the capacity $60 market, AESO’s forecast $50 of $55-$65/MWh for the $40 combined capacity and $30 energy payments will $20 allow existi
Slide 7: Alberta power market
Alberta power market Renewable Electricity Program (REP) – Rounds 2 & 3 Next two rounds of the REP target 700 MW of new renewable capacity Key requirements under both rounds REP-2 (300 MW) Minimum Indigenous • new or expanded renewable electricity generation equity component (i.e. projects owner
Slide 8: Q4/17 Financial review
Q4/17 Financial review Q4/17 financial results were in line with management’s expectations • Generated $91M of AFFO (63% increase from $56M in Q4/16) • Normalized EPS of $0.24 versus $0.27 in Q4/16 Trading desk captured a 109% higher realized average power price versus spot price in Q4/17 Portfo
Slide 9: Financial performance – Q4/17
Financial performance – Q4/17 $M, except per share amounts Q4/17 Q4/16 Change Revenues and other income $261 $280 (7%) Adjusted EBITDA (before mark-to-market)(1) $172 $138 25% Basic earnings (loss) per share $(0.20) $0.21 (195%) Normalized EPS $0.24 $0.27 (11%) Adjusted funds from operations (AFFO)
Slide 10: Financial performance – 2017
Financial performance – 2017 $M, except per share amounts 2017 2016 Change Revenues and other income $1,146 $1,214 (6%) Adjusted EBITDA (before mark-to-market)(1) $592 $509 16% Basic earnings per share (EPS) $1.07 $0.91 18% Normalized EPS $1.12 $1.22 (8%) Adjusted funds from operations (AFFO) $363 $
Slide 11: Alberta power market outlook
Alberta power market outlook AB commercial portfolio positions Forward prices ($/MWh) (as of Dec 31/17) $65 2018 2019 2020 $60 % baseload 87% 37% 20% $55 generation sold forward(1) $50 Contracted prices(2) High- Low- Low- $45 ($/MWh) $40 $50 $50 $40 Sep 30/17 Dec 7/17 Feb 13/18 2018 Forwards 2019 Fo
Slide 12: 2017 performance vs. annual targets
2017 performance vs. annual targets Facility availability Sustaining capex ($M) 96% $75 $80 95% $59 Actual Target Actual Original Revised Target Target Facility O&M expenses ($M) AFFO ($M) $215 to $195 to $240 $340 to $215 $305 to $385 $224 $345 $363 Actual Original Revised Actual Original Revised T
Slide 13: 2017 Disciplined growth
2017 Disciplined growth Bloom Wind and new developments 2017 Target Results Complete Bloom Wind on time Project completed ahead of schedule with and on budget for COD in Q3/17 construction costs below budget Execute contracts for the output New Frontier Wind – secured a 12-year of two new develo
Slide 14: 2018 Development & construction targets
2018 Development & construction targets Disciplined growth Complete New Frontier Wind within $182M budget for COD in Dec 2018 Complete Whitla Wind within $315-$325M budget for COD in Q4 2019 Execute contracts for the output of 1-3 new wind developments • Alberta REP – rounds 2 & 3 • US develop
Slide 15: 2018 Financial target
2018 Financial target Adjusted funds from operations(1) AFFO(3) per share ($M) $4.00 $3.59 $3.65 $360 to $400(2) $400 $363 $3.21 $3.04 $300 $3.00 $2.51 $200 $2.00 $100 $0 $1.00 2017 2018T $0.00 2014 2015 2016 2017 2018T 2018 AFFO expected to be above Expect ~10% CAGR for the mid-point of the guidanc
Slide 16: Questions?
Questions? capitalpower.com
Slide 17: 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 18: Investor Relations
Investor Relations Randy Mah 10423 101 Street NW Senior Manager 10th Floor (780) 392-5305 Edmonton, Alberta rmah@capitalpower.com Canada, T5H 0E9 www.capitalpower.com capitalpower.com