Capital Power reports strong second quarter 2013 performance

Company expects to exceed 2013 financial guidance 
EDMONTON, July 26, 2013 /CNW/ - Capital Power Corporation ("Capital Power", or 
the "Company") (TSX: CPX) today released its financial results for the second 
quarter and six months ended June 30, 2013. The Company also announced that it 
expects to exceed its 2013 financial guidance for normalized earnings per 
share and cash flow per share. 
Normalized earnings attributable to common shareholders in the second quarter 
of 2013, after adjusting for one-time items and fair value adjustments, were 
$17 million, or $0.24 per share, compared with $5 million, or $0.07 per share, 
in the comparable period of 2012. 
Funds from operations were $85 million in the second quarter of 2013, up 57 
per cent from $54 million in the second quarter of 2012. Cash flow per share 
for the quarter was $0.86 compared with $0.55 for the same quarter in the 
previous year. 
Net income attributable to shareholders in the second quarter of 2013 was $20 
million, or $0.20 per share, compared with a net loss of $32 million, or $0.50 
per share, in the comparable period of 2012. 
For the six months ended June 30, 2013, normalized earnings attributable to 
common shareholders were $42 million, or $0.60 per share, compared with $32 
million, or $0.50 per share, in the first six months of 2012. Funds from 
operations totaled $188 million compared with $170 million in the comparable 
six-month period last year. 
"Second quarter financial performance exceeded our expectations," said Brian 
Vaasjo, President and CEO of Capital Power. "Normalized earnings of $0.24 per 
share increased significantly from the $0.07 per share a year ago and we 
generated strong cash flow, up 56 per cent from last year to $0.86 per share. 
Financial results benefited from strong Alberta power prices in the quarter 
that averaged $123 per megawatt hour (MWh) compared to $40 per MWh for the 
same period last year and resulted in a record quarterly adjusted EBITDA 
contribution of $114 million from the Alberta commercial plants and portfolio 
optimization segment." 
The strong pricing reflects the positive supply and demand dynamics of the 
Alberta power market, which is recognized as one of the most attractive power 
markets in North America. On July 2, 2013, Alberta's demand for electricity 
reached an all-time summer high of 10,062 megawatts (MW), surpassing the 
previous summer record of 9,885 MW set in July 2012. 
"Capital Power is making significant investments in Alberta that will uniquely 
position the Company to benefit from continued strong demand growth and the 
need for new sources of generation to replace coal units that are expected to 
retire later in the decade," added Mr. Vaasjo. "With the completion in 2015 of 
the jointly-owned Shepard Energy Centre, and the addition of our Capital Power 
Energy Centre later this decade, Capital Power will own an outstanding fleet 
of power generation assets in Alberta and will be well positioned to continue 
benefiting from this attractive power market," said Mr. Vaasjo. 
The second quarter results position the Company strongly in terms of its 
annual financial guidance. "Based on our positive year-to-date results and 
current Alberta forward prices of approximately $75 per MWh for the balance of 
the year, we now expect full year 2013 financial results to exceed the high 
end of our annual guidance of $1.20 to $1.40 for normalized earnings per share 
and $3.80 to $4.20 for cash flow per share," said Mr. Vaasjo. 


                                                                  

Operational and Financial
Highlights (1)                      Three months ended Six months ended
(unaudited)                              June 30           June 30

(millions of dollars except per
share and operational amounts)        2013      2012     2013     2012

Electricity generation (excluding
acquired Sundance PPA) (GWh)          3,746      3,499   7,888    7,721

Generation plant availability
(excluding acquired Sundance PPA)
(%)                                     86%        82%     90%      89%

Revenues and other income           $   321 $      261 $   686 $    637

Adjusted EBITDA (2)                 $   104 $       65 $   239 $    217

Net income (loss) attributable to
shareholders                        $    20 $     (32) $    54 $      8

Basic earnings per share            $  0.20 $   (0.50) $  0.64 $   0.08

Diluted earnings per share          $  0.19 $   (0.57) $  0.63 $   0.06

Dividends declared per common share $ 0.315 $    0.315 $  0.63 $   0.63

Normalized earnings attributable to
common shareholders (2)             $    17 $        5 $    42 $     32

Normalized earnings per share( 2)   $  0.24 $     0.07 $  0.60 $   0.50

Funds from operations (2)           $    85 $       54 $   188 $    170

Cash flow per share (2)             $  0.86 $     0.55 $  1.90 $   1.74

Discretionary cash flow (2)         $     6 $     (26) $    58 $     41

Capital expenditures                $   169 $      142 $   462 $    283

(1)    The operational and financial highlights in this press release
       should be read in conjunction with Management's
       Discussion and Analysis and the unaudited Condensed Interim
       Consolidated Financial Statements for the six
       months ended June 30, 2013.

(2)    Earnings before finance expense, income tax expense,
       depreciation and amortization, impairments, foreign
       exchange losses, and gains on disposals (adjusted EBITDA), funds
       from operations, cash flow per share,
       discretionary cash flow, normalized earnings attributable to
       common shareholders, and normalized earnings
       per share are non-GAAP financial measures and do not have
       standardized meanings under GAAP and are,
       therefore, unlikely to be comparable to similar measures used by
       other enterprises. See Non-GAAP Financial
       Measures.

Significant Events

$200 million offering of 4.50% Cumulative Rate Reset Preference Shares

On March 14, 2013, Capital Power Corporation issued 8 million Cumulative Rate 
Reset Preference Shares, Series 5 (Series 5 Shares) at $25 per share for 
aggregate gross proceeds of $200 million on a bought deal basis with a 
syndicate of underwriters.

The Series 5 Shares will pay fixed cumulative preferential dividends of $1.125 
per share per annum, yielding 4.50% per annum, payable on the last business 
day of March, June, September and December each year, as and when declared by 
the Board of Directors of Capital Power Corporation. These dividends are 
applicable for the initial period ending June 30, 2018. The Series 5 Shares 
are subject to specified redemption, conversion and reset rights.

Standard & Poor's (a division of the McGraw Hill Companies, Inc.) has assigned 
a rating of P-3 and DBRS Limited has assigned a rating of Pfd-3 (low) for 
these Series 5 Shares.

Purchase of interest in Shepard Energy Centre

The Company has entered into a series of agreements with ENMAX Corporation 
(ENMAX) to purchase a 50% interest in the 800 MW natural-gas-fuelled Shepard 
Energy Centre (Shepard) located on the eastern limits of the City of Calgary. 
Construction is scheduled for completion in the first quarter of 2015. On 
February 28, 2013, the purchase of the first tranche of the Company's interest 
in Shepard closed. Upon close of this transaction, the Company paid $237 
million and acquired a 25% interest in Shepard. The total amount incurred by 
the Company to the date of close was $287 million compared with the total 
anticipated capital cost of $860 million. The second tranche, expected to 
close in the first quarter of 2014, will result in the Company's acquisition 
of an additional 25% interest in Shepard bringing its total ownership interest 
to 50%. Subsequent to the close of the first tranche, and prior to the close 
of the second tranche, all decisions related to Shepard will require unanimous 
approval by the Company and ENMAX. As a result, the Company jointly controls 
Shepard with ENMAX upon close of the first tranche. Based on the terms of the 
Shepard agreements, the Company will account for the Shepard joint 
arrangement, under the new accounting standard for joint arrangements, as a 
joint operation.

Analyst Conference Call and Webcast

Capital Power will be hosting a conference call and live webcast with analysts 
on July 29, 2013 at 11:00 AM (ET) to discuss second quarter results. The 
conference call dial-in numbers are:

  (604) 681-8564 (Vancouver)
  (403) 532-5601 (Calgary)
  (416) 623-0333 (Toronto)
  (514) 687-4017 (Montreal)
  (855) 353-9183 (toll-free from Canada and USA)

Participant access code for the call: 21543#

A replay of the conference call will be available following the call at: (855) 
201-2300 (toll-free) and entering conference reference number 1044204# 
followed by participant code 21543#. The replay will be available until 
midnight on October 29, 2013.

Interested parties may also access the live webcast on the Company's website 
at www.capitalpower.com with an archive of the webcast available following the 
conference call.

Non-GAAP Financial Measures

The Company uses (i) adjusted EBITDA, (ii) funds from operations, (iii) cash 
flow per share, (iv) discretionary cash flow, (v) normalized earnings 
attributable to common shareholders, and (vi) normalized earnings per share as 
financial performance measures. These terms are not defined financial measures 
according to GAAP and do not have standardized meanings prescribed by GAAP, 
and are, therefore, unlikely to be comparable to similar measures used by 
other enterprises. These measures should not be considered alternatives to net 
income, net income attributable of Shareholders of the Company, net cash flows 
from operating activities or other measures of financial performance 
calculated in accordance with GAAP. Rather, these measures are provided to 
complement GAAP measures in the analysis of the Company's results of 
operations from management's perspective. Reconciliations of adjusted EBITDA 
to net income, funds from operations to net cash flows from operating 
activities and normalized earnings attributable to common shareholders to net 
income attributable to common shareholders are contained in the Company's 
Management's Discussion and Analysis dated July 26, 2013 for the six months 
ended June 30, 2013 which is available under the Company's profile on SEDAR at 
www.SEDAR.com.

Forward-looking Information

Forward-looking information or statements included in this press release 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 may not be appropriate for other purposes. The forward-looking 
information in this press release is generally identified by words such as 
will, anticipate, believe, plan, intend, target, and expect or similar words 
that suggest future outcomes.

Material forward-looking information in this press release includes 
information with respect to: (i) expectations regarding future earnings, and 
(ii) expectations regarding future cash flows.

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 relate to: (i) electricity and other energy 
prices, (ii) performance, (iii) business prospects and opportunities including 
expected growth and capital projects, (iv) status and impact of policy, 
legislation and regulation, and (v) effective tax rates.

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 material 
risks and uncertainties are: (i) changes in electricity prices in markets in 
which the Company operates, (ii) changes in commodity prices in markets in 
which the Company operates and use of derivatives, (iii) regulatory and 
political environments including changes to environmental, financial reporting 
and tax legislation, (iv) power plant availability and performance including 
maintenance expenditures, (v) ability to fund current and future capital and 
working capital needs, (vi) acquisitions and developments including timing and 
costs of regulatory approvals and construction, (vii) changes in market prices 
and availability of fuel, and (vii) changes in general economic and 
competitive conditions. See Risks and Risk Management in the Company's 
December 31, 2012 annual Management's Discussion and Analysis for further 
discussion of these and other risks.

Media Relations: Michael Sheehan (780) 392-5222 msheehan@capitalpower.com 


Investor Relations: Randy Mah (780) 392-5305 or (866) 896-4636 (toll-free) 
investor@capitalpower.com  

SOURCE: Capital Power Corporation

To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/July2013/26/c9952.html

CO: Capital Power Corporation
ST: Alberta
NI: UTI ERN CONF 

-0- Jul/26/2013 20:30 GMT


 
Press spacebar to pause and continue. Press esc to stop.