EDMONTON, Alberta – Capital Power Corporation (TSX: CPX) (Capital Power or the Company) is hosting its third annual Investor Day event in Toronto at the St. Andrew’s Club and Conference Centre (150 King Street West, 16th floor) starting at 8:30 a.m. Eastern Time today. Members of the executive leadership team will provide updates on Capital Power’s operations and construction projects, the outlook for its target markets, and will outline its corporate priorities for 2012.
“During Capital Power’s first 30-months, we’ve built a business based on the strategy set out at the initial public offering, focusing on creating shareholder value through continued operational excellence, maintaining financial stability and strength, and being disciplined in our approach to growth,” said Brian Vaasjo, President and CEO. “In 2011, our employees delivered strong operations safety and production performance; commissioned Canada’s most technologically-advanced coal-fired power plant, the Keephills 3 joint venture facility; aligned Capital Power’s fleet with the business strategy through acquisitions, developments and divestitures; and demonstrated the ability to access capital markets and increase trading liquidity.”
“Looking forward, Capital Power is well positioned to deliver value for shareholders,” Mr. Vaasjo continued. “Cash flow per share is visible, substantial and growing, as we expect to realize a full year of production from the Keephills 3 joint venture in 2012, begin to bring wind projects online in late 2012, and are well positioned to capture upside from rising power prices over time. If Alberta spot power prices average $74 per megawatt hour (MWh) in 2012, we expect cash flow per share to reach $3.90 to $4.30, more than 40% higher than 2010 levels, and expect normalized earnings per share to rise to $1.50 to $1.70.”
Financial and operating information provided during the presentation include updates on current and expected cash flow, funds from operations, plant availability, capital structure, and the Company’s hedged positions in Alberta from 2012 to 2014.
Development and growth updates provided during the presentation include construction and development updates and expected capital expenditures for the Company’s four wind projects (Quality Wind, Port Dover & Nanticoke, Halkirk Wind, K2 Wind Ontario), the Company’s outlook in its targeted North American power markets, and an overview of the Company’s development pipeline.
Dividend Reinvestment Plan (DRIP)
The Company announced the launch of a Dividend Reinvestment Plan (the Plan) effective January 1, 2012 subject to the completion of customary documentation. Eligible shareholders may elect to participate in the Plan commencing with the Company’s first quarter 2012 cash dividend. The Plan will provide eligible shareholders with an alternative to receiving their quarterly cash dividends. Under the Plan, eligible shareholders may elect to efficiently and cost-effectively accumulate additional shares in the Company by reinvesting their quarterly cash dividends on the applicable dividend payment date in new shares issued from treasury. Participation in the Plan will be optional. Those shareholders who do not enroll in the Plan will still be entitled to receive their quarterly cash dividends.
The Company reserves the right to limit the amount of new equity available under the Plan on any particular dividend payment date. No assurances can be made that new shares will be made available under the Plan on a quarterly basis, or at all. Accordingly, participation may be prorated in certain circumstances. If on any dividend payment date the Company determines not to issue any equity under the Plan, or the availability of new shares is prorated in accordance with the terms of the Plan, then participants will be entitled to receive from the Company the full amount of their regular quarterly cash dividend for each share in respect of which the dividend is payable but cannot be reinvested under the Plan in accordance with the applicable election.
No commissions, service charges or similar fees will be payable in connection with the purchase of shares from treasury under the Plan. All administrative costs of the Plan will be paid by the Company. Shareholders who wish to participate in the Plan indirectly through the brokers, investment dealers, financial institutions or other similar nominees through which their shares are held should consult such nominees to confirm whether commissions, service charges or similar fees are payable.
Participation in the Plan will not relieve shareholders of any liability for taxes that may be payable in respect of dividends that are reinvested in new shares under the Plan. Shareholders should consult their tax advisors concerning the tax implications of their participation in the Plan having regard to their particular circumstances.
Outlook for 2012
The Company will discuss its financial targets and corporate priorities for 2012 including:
- Operational targets of 91% capacity-weighted average plant availability, reflecting two planned turnarounds at the Genesee facilities, plant maintenance capital and other expenditures of up to $108 million, and maintenance and operating expenses of $215 million to $235 million;
- On-time, on-budget and safe construction of current development projects, including commissioning of the Halkirk Wind and Quality Wind projects in fourth quarter 2012;
- Expected 2012 financial performance, based on an average Alberta spot price of $74 per megawatt hour:
- Normalized EPS of $1.50 to $1.70 versus 2011 estimate of $1.25 per share;
- Cash flow per share of $3.90 to $4.30 versus 2011 estimate of $3.74 per share;
- Funds from operations of $380 to $420 million versus estimate of $337 million; and
- Dividend coverage ratio of 2.2 to 2.6 versus 2011 estimate of 2.1 times.
- Earnings before interest, taxes, depreciation and amortization (EBITDA) sensitivities to changes in Alberta power prices and New England spark spreads.
A live audio webcast of the Investor Day event is available on the Company’s website at www.capitalpower.com. The presentation slides and webcast will be archived and accessible for replay.
About Capital Power Corporation
Capital Power (TSX: CPX) is a growth-oriented North American power producer headquartered in Edmonton, Alberta. The company develops, acquires, operates and optimizes power generation from a variety of energy sources. Capital Power owns more than 3,300 megawatts of power generation capacity at 16 facilities across North America. An additional 487 megawatts of owned wind generation capacity is under construction or in advanced development in British Columbia, Alberta, and Ontario.
Non-IFRS Financial Measures
The Company uses (i) EBITDA, (ii) funds from operations, (iii) funds from operations excluding non-controlling interests in CPILP, (iv) cash flow per share, (v) normalized earnings attributable to common shareholders, (vi) normalized earnings per share as financial performance measures, and (vii) dividend coverage ratio. These terms are not defined financial measures according to IFRS and do not have standardized meanings prescribed by IFRS, and therefore may not be comparable to similar measures used by other enterprises. These measures should not be considered alternatives to net income, cash flow from operating activities or other measures of financial performance calculated in accordance with IFRS. Rather, these measures are provided to complement IFRS measures in the analysis of the Company’s results of operations from management’s perspective. Reconciliations of EBITDA to net income, funds from operations and funds from operations excluding non-controlling interests in CPILP to cash flows from operating activities, normalized earnings attributable to common shareholders to net income attributable to common shareholders, and normalized earnings per share to earnings per share are contained in the Company’s Management’s Discussion and Analysis dated October 26, 2011 for the nine months ended September 30, 2011 which is available under the Company’s profile on SEDAR at www.SEDAR.com.
Certain information in this news release and in the Investor Day presentations is forward-looking within the meaning of Canadian securities laws as it relates to anticipated financial and operating performance, events or strategies. When used in this context, words such as will, anticipate, believe, plan, intend, target, and expect or similar words suggest future outcomes. Forward-looking information includes, among other things, information relating to: (i) expectations regarding Capital Power being well-positioned to deliver shareholder value; (ii) expectations regarding visible, substantial and growing cash flow per share; (iii) expectations regarding the realization of a full year of production from Keephills 3 in 2012; (iv) expectations regarding the safe, on-time and on-budget construction of wind projects and their commissioning dates in 2012; (v) expectations regarding capacity-weighted average plant availability and planned plant outages; (vi) expectations regarding maintenance capital and other expenditures and maintenance and operating expenses in 2012; (vii) expectations regarding the average Alberta spot price for electricity; (viii) expectations regarding financial performance in 2012, including expectations regarding normalized earnings per share, cash flow per share, funds from operations, and dividend coverage ratio; (ix) expectations regarding rising power prices over time, and Capital Power’s ability to capture the upside of the same; (x) expectation that the Company will meet its credit rating agencies’ financial metrics in the 2012-2013 timeframe; (xi) estimated maintenance capital expenditures; and (xii) estimated sources and uses of cash for the remainder of 2011 and 2012.
These statements are based on certain assumptions and analyses made by the Company in light of its experience and perception of historical trends, current conditions and expected future developments and other factors it believes are appropriate. The material factors and assumptions used to develop these forward-looking statements include, but are not limited to: (i) the operation of the Company’s facilities; (ii) power plant availability and dispatch; (iii) the Company’s financial position and credit facilities and sources of funding; (iv) the Company’s assessment of commodity and power markets; (v) the Company’s assessment of the markets and regulatory environments in which it operates; (vi) the Company’s assessment of economic conditions; (vii) weather; (viii) availability and cost of labour and management resources; (ix) performance of contractors and suppliers; (x) availability and cost of financing; (xi) foreign exchange rates; (xii) management’s analysis of applicable tax legislation; (xiii) the currently applicable and proposed tax laws will not change and will be implemented; (xiv) currently applicable and proposed environmental regulations will be implemented; (xv) counterparties will perform their obligations; (xvi) renewal and terms of PPAs; (xvii) ability to successfully integrate and realize benefits of its acquisitions; (xviii) ability to implement strategic initiatives which will yield the expected benefits; (xix) ability to obtain necessary regulatory approvals for development projects; (xx) the Company’s assessment of capital markets and ability to complete future share and debt offerings; (xxi) locations of projects and the areas of which they will be developed, including the availability and use of certain optioned lands; and, (xxii) costs of construction and development.
Whether actual results, performance or achievements will conform to the Company’s expectations and predictions is subject to a number of known and unknown risks and uncertainties which could cause actual results and experience to differ materially from the Company’s expectations. Such risks and uncertainties include, but are not limited to, risks relating to: (i) operation of the Company’s facilities; (ii) power plant availability and performance; (iii) unanticipated maintenance and other expenditures; (iv) availability and price of energy commodities; (v) electricity load settlement; (vi) regulatory and government decisions including changes to environmental, financial reporting and tax legislation; (vii) weather and economic conditions; (viii) competitive pressures; (ix) economic and market conditions, including in the markets served by Capital Power’s facilities; (xx) construction; (xi) availability and cost of financing; (xii) foreign exchange rates; (xiii) availability and cost of labour, equipment and management resources; (xiv) performance of counterparties, partners, contractors and suppliers in fulfilling their obligations to the Company, (xv) developments in the North American capital markets; (xvi) compliance with financial covenants; (xvii) ability to successfully realize the benefits of acquisitions and investments; and (xviii) the tax attributes of and implications of any acquisitions. If any such risks actually occur, they could materially adversely affect the Company’s business, financial condition or results of operations. In that case the trading price of the Company’s common shares could decline, perhaps materially.
If any such risks actually occur, they could materially adversely affect the Company’s business, financial condition or results of operations. In that case the trading price of the Company’s common shares could decline, perhaps materially. Readers are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Forward-looking statements are provided for the purpose of providing information about management’s current expectations, and plans relating to the future. Readers are cautioned that such information may not be appropriate for other purposes. The Company does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in the Company’s expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law.