Slide 1: Analyst Conference Call
CAPITAL POWER Analyst Conference Call • Acquisition of 294 MW of contracted power facilities • Q4/16 and 2016 Results February 21, 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 joint venture, and gains or losses on disposals (adjusted EBITDA), (ii) funds from operations (
Slide 4: Acquisition of 294 MW of fully contracted power facilities
Acquisition of 294 MW of fully contracted power facilities Highlights of transaction Agreement to acquire two gas-fired generation facilities and two waste heat assets from Veresen Inc. $225M cash purchase price, subject to working capital adjustments and other closing adjustments, and assumptio
Slide 5: Ontario natural gas facilities
Ontario natural gas facilities Young, high-quality generation facilities with a weighted average PPA life of 14 years remaining York Energy and East Windsor have long-term York Energy Centre PPAs with Ontario IESO (A rated) Earn revenues through fixed capacity payments partly indexed to inflatio
Slide 6: B.C. waste heat generation facilities
B.C. waste heat generation facilities Fully contracted with 11 years of EPA life remaining 150 Mile House and Savona waste heat facilities are under 20-year EPAs with BC Hydro (AA rated), with original terms expiring in 2028 EPAs have partial inflation indexation and premium pricing under peak l
Slide 7: Improving contracted EBITDA
Improving contracted EBITDA(1,2,3,4) ($M) $500 EnPower Waste Heat East Windsor York Energy $400 Bloom Off-coal Compensation Beaufort $300 Macho Springs K2 Wind Shepard $200 PD&N Halkirk Quality Wind Island Generation $100 North Carolina Kingsbridge 1 Genesee 1&2 $0 2010 2011 2012 2013 2014 2015 2016
Slide 8: Benefits of transaction
Benefits of transaction Young, high-quality assets – excellent operating history that will strengthen existing fleet of assets Geographical diversification – waste heat facilities in BC and natural gas facilities in Ontario Long-term contracts – weighted average remaining PPA life of 14 years
Slide 9: Highlights for 2016
Highlights for 2016 Strong performance in 2016 with Company meeting its annual operating and financial targets • Achieved average plant availability of 94% • Generated $384M in FFO within $380-$430M target and Adjusted EBITDA of $520M • Continued to construct Bloom Wind, which is on schedule for C
Slide 10: Q4/16 and 2016 operating performance
Q4/16 and 2016 operating performance Facility availability Q4/15 Q4/16 2016 AB Genesee 3 100% 68% 92% Average availability of commercial Keephills 3 100% 99% 96% facilities 94% in Q4/16, lower Clover Bar 97% 99% 95% than exceptional 99% Joffre 100% 98% 81% performance in Q4/15 Shepard 98% 76% 89%
Slide 11: Proven track record of high fleet availability
Proven track record of high fleet availability Average facility availability of 94% in the past 5 years 18,000 100% 16,000 98% 14,000 12,000 96% Generation 10,000 95% 95% (GWh) 8,000 94% 94% 93% 6,000 4,000 92% 91% 2,000 0 90% 2012 2013 2014 2015 2016 Generation Average facility availability 11
Slide 12: Q4/16 Financial review
Q4/16 Financial review Generated $75M of FFO, down 40% compared to $125M in Q4/15 due to one-time Sundance PPA settlement payment of $20M and realized losses from settlement of interest rate swaps Normalized EPS of $0.27 versus $0.42 in Q4/15 Trading desk captured a 205% higher realized averag
Slide 13: Financial performance – Q4/16
Financial performance – Q4/16 $M, except per share amounts Q4/16 Q4/15 Change Revenues $280 $337 (17%) Adjusted EBITDA (before mark-to-market)(1) $138 $146 (5%) Basic earnings per share $0.21 $0.29 (28%) Normalized earnings per share $0.27 $0.42 (36%) Funds from operations $75 $125 (40%) Lower finan
Slide 14: Financial performance – 2016
Financial performance – 2016 $M, except per share amounts 2016 2015 Change Revenues $1,214 $1,241 (2%) Adjusted EBITDA (before mark-to-market)(1) $509 $483 5% Basic earnings per share $0.91 $0.70 30% Normalized earnings per share $1.22 $1.15 6% Funds from operations $384 $400 (4%) Increase in Adjust
Slide 15: Financial outlook
Financial outlook Commencement of annual off-coal compensation payments of $52.4M/year EBITDA contributions (~$55M full year) from acquisition of gas and waste heat assets that is expected to close in Q2/17 Alberta Commercial baseload positions: 2017 2018 2019 As of date Dec 31/16 Dec 31/16 De
Slide 16: 2016 Performance and 2017 targets
2016 Performance and 2017 targets Operational and financial targets 2016 2016 2017 2017 Targets Results Targets Targets (Dec 15/16) (Current) Facility availability 94% 94% 95% 95% Sustaining capex $65 $55 $75 $75 Genesee Performance Standard $10 $10 Facility operating & maintenance $200 - $220 $205
Slide 17: Disciplined growth targets
Disciplined growth targets Genesee 4&5 (Alberta) 2016 Target 2016 Results Proceed with construction based on: Full notice to proceed decision Clarity with respect to impact of deferred decisions from the AB government’s Continuation and timing of the Climate Leadership Plan project will be con
Slide 18: Disciplined growth targets
Disciplined growth targets New developments 2016 Target 2017 Targets Execute a contract for the Complete Bloom Wind on output of a new development time and on budget 2016 Results Execute contracts for the Bloom Wind (178 MW project in output of two new Kansas) developments • 10-year fixed pr
Slide 19: Questions?
Capital €S apital @ | QUESTIONS?.
Slide 20: 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 21: 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