Capital Power Reports First Quarter 2014 Results

Capital Power Reports First Quarter 2014 Results 
EDMONTON, ALBERTA -- (Marketwired) -- 04/25/14 --   Capital Power
Corporation (Capital Power, or the Company) (TSX: CPX) today released
its financial results for the quarter ended March 31, 2014. 
Funds from operations were $90 million in the first quarter of 2014,
down 13%, on a comparable basis, from $103 million in the first
quarter of 2013. Net income attributable to shareholders in the first
quarter of 2014 was $32 million, or $0.33 per share, compared with
$34 million, or $0.44 per share, in the comparable period of 2013.
Normalized earnings attributable to common shareholders in the first
quarter of 2014, after adjusting for one-time items and fair value
adjustments, were $25 million or $0.31 per share compared with $25
million or $0.36 per share in the first quarter of 2013. 
"Financial results in the first quarter were modestly below our
expectations primarily due to a 10-day unplanned outage at Genesee
1," said Brian Vaasjo, President and CEO of Capital Power. "Despite
the unplanned outage at Genesee 1, the rest of the fleet performed
well with an overall average plant availability of 94% in the first
quarter. With Alberta power prices generally in-line with our
forecast for the remaining nine months of 2014, we remain on track to
achieve our funds from operations financial target for this year." 
"We have finalized joint arrangement agreements with ENMAX
Corporation to advance the development, construction, and operation
of the Genesee 4 and 5 facility," said Mr. Vaasjo. "Discussions
relating to commercial agreements are on-going with the expectation
that these agreements will be finalized when the project receives its
full notice to proceed. Genesee 4 and 5 is scheduled for completion
later this decade when additional generation in the province is
required to meet growing demand and replace generation from the
retirement of coal-fired units." 
"We are pleased to welcome our new joint venture partners,
Westmoreland Coal Company (Westmoreland) and Altius Minerals
Corporation, on the Genesee coal mine as part of Westmoreland's
recent acquisition of Prairie Mines & Minerals Royalty Ltd.'s coal
operations. Westmoreland has strong experience in mine-mouth
operations and is recognized as the lowest-cost fuel supplier to some
of the cleanest, most economical and highly utilized coal-fired
utility owned power plants in North America." 


 
 
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Operational and Financial Highlights(1)                   Three months ended
(unaudited)                                                         March 31
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(millions of dollars except per share and                                   
 operational amounts)                                     2014          2013
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Electricity generation (excluding acquired                                  
 Sundance PPA) (GWh)                                     3,241         4,142
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Generation plant availability (excluding acquired                           
 Sundance PPA) (%)                                         94%           94%
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Revenues                                           $       308   $       365
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Adjusted EBITDA (2)                                $       113   $       135
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Net income                                         $        38   $        48
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Net income attributable to shareholders of the                              
 Company                                           $        32   $        34
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Normalized earnings attributable to common                                  
 shareholders (2)                                  $        25   $        25
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Basic earnings per share                           $      0.33   $      0.44
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Diluted earnings per share                         $      0.33   $      0.44
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Normalized earnings per share (2)                  $      0.31   $      0.36
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Funds from operations (2)                          $        90   $       103
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Purchase of property, plant and equipment and                               
 other assets                                      $        75   $       293
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Dividends per common share, declared               $     0.315   $     0.315
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(1) The operational and financial highlights in this press release should be
    read in conjunction with Management's Discussion and Analysis and the   
    audited Consolidated Financial Statements for the three months ended    
    March 31, 2014.                                                         
(2) Earnings before finance expense, income tax expense, depreciation and   
    amortization, impairments, foreign exchange losses, and gains on        
    disposals (adjusted EBITDA), normalized earnings attributable to common 
    shareholders, normalized earnings per share, and funds from operations  
    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 Event 
Construction of K2 Wind Power Project commences 
On March 24, 2014, construction of the K2 Wind Power Project (K2
Wind) commenced following the successful completion of an $850
million financing in the form of a construction loan that will
convert to long-term project debt once K2 Wind starts commercial
operations. K2 Wind is a 270 megawatt (MW) wind power project located
in Goderich, Ontario that is under joint development by Samsung
Renewable Energy, Inc., Pattern Energy Group LP and Capital Power
with operations expected to commence in the second half of 2015. The
total estimated project cost has been revised upward to $930 million
from the previous upper end of range of $900 million primarily due to
foreign exchange changes on U.S. contract deliverables. Capital
Power's share is $310 million. As a higher portion of the project is
expected to be financed with project debt than originally forecast,
Capital Power expects higher equity returns on the project. 
Subsequent Events 
Genesee 4 and 5 
On April 24, 2014, Capital Power and ENMAX Corporation (ENMAX)
executed a purchase and sale agreement in support of a joint
arrangement agreement to jointly develop, construct, and operate the
Genesee 4 and 5 power project. The joint arrangement agreement will
provide provisions for, among other things, an agreement for ENMAX to
purchase approximately 225 MW from Capital Power for eight years. The
joint arrangement agreement closing is expected to occur in May 2014. 
Genesee coal mine 
Capital Power is a party to various agreements with Prairie Mines &
Minerals Royalty Ltd. (PMRL) in relation to the operations of the
Genesee coal mine (Genesee Coal Mine Agreements). Pursuant to the
Genesee Coal Mine Agreements, PMRL operates the Genesee Coal Mine. In
connection with the acquisition by Westmoreland Coal Company
(Westmoreland) of PMRL and the acquisition by Altius Minerals
Corporation (Altius) of the royalty assets of PMRL, the Genesee Coal
Mine Agreements and certain related agreements have, amongst other
things, been amended to: (a) confirm the acquisitions by Westmoreland
and Altius; and (b) provide for certain amendments to the Genesee
Coal Mine Agreements. 
Analyst Conference Call and Webcast 
Capital Power will be hosting a conference call and live webcast with
analysts on April 28, 2014 at 11:00 AM (ET) to discuss the first
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 1153040# followed by participant code 21543#. The replay will
be available until midnight on July 28, 2014. 
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) normalized earnings attributable to common shareholders, and
(iv) 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 gross income, 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 gross
income, operating income and net income, funds from operations to net
cash flows from operating activities and normalized earnings
attributable to common shareholders to net income attributable to
shareholders of the Company are contained in the Company's
Management's Discussion and Analysis dated April 24, 2014 for the
three months ended March 31, 2014 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 expectations regarding: (i) future cash
flows, and (ii) completion of capital projects. 
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 energy commodity market prices 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 (viii) changes
in general economic and competitive conditions. See Risks and Risk
Management in the Company's December 31, 2013 annual Management's
Discussion and Analysis for further discussion of these and other
risks. 
Contacts:
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
 
 
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