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Capital Power Files Business Acquisition Report

^{Published on 2009-09-16 18:46:07 - Market Wire}
 

 ------------------------------------------------------------------------- Operational and Financial Three months ended Six months ended Highlights(1) (unaudited) June 30 June 30 ------------------------------------------------------------------------- (millions of dollars) 2009 2008 2009 2008 ------------------------------------------------------------------------- Electricity generation (GWh) 3,492 2,875 7,160 6,230 ------------------------------------------------------------------------- Generation plant availability (%) 93% 84% 95% 89% ------------------------------------------------------------------------- Revenues $537 $686 $1,246 $1,319 ------------------------------------------------------------------------- Gross margin(2) $250 $247 $449 $483 ------------------------------------------------------------------------- Adjusted EBITDA(2) $148 $149 $265 $302 ------------------------------------------------------------------------- Funds from operations(2) $28 $49 $109 $119 ------------------------------------------------------------------------- Historical net income (loss) $2 $(18) $56 $17 ------------------------------------------------------------------------- Pro forma net income(3) $11 n/a $30 n/a ------------------------------------------------------------------------- (1) The operational and financial highlights in this press release are derived from and should be read in conjunction with the financial statements and other information contained in the BAR. (2) Gross margin, adjusted Earnings before interest, taxes, depreciation and amortization (EBITDA), and Funds from operations are non-GAAP financial measures and do not have standardized meanings under GAAP, and therefore, may not be comparable to similar measures used by other enterprises. Reconciliations to these non-GAAP financial measures to net income in the case of gross margin and adjusted EBITDA, and cash provided by operating activities in the case of funds from operations are included at the end of this press release. (3) Adjusted for IPO-related changes to capital structure, fair value and public company costs as detailed in Note 3 to the Unaudited Pro Forma Financial Consolidated Statements of Income for the six months ended June 30, 2009 contained in the BAR. 

 About Capital Power ------------------- 

 Forward-Looking Statements -------------------------- 

 Non-GAAP Financial Measures --------------------------- 

 Gross margin and adjusted EBITDA -------------------------------- Capital Power uses gross margin and adjusted EBITDA to measure the operating performance of plants and groups of plants from period to period. A reconciliation of gross margin and adjusted EBITDA to net income is as follows: Three months Six months (unaudited, $ millions) ended June 30 ended June 30 ------------------- ------------------- 2009 2008 2009 2008 --------- --------- --------- --------- Revenues......................... $ 537 $ 686 $ 1,246 $ 1,319 Energy purchases and fuel...... 287 439 797 836 --------- --------- --------- --------- Gross margin..................... 250 247 449 483 Deduct (add): Operations, maintenance, and administration................ 102 98 184 181 --------- --------- --------- --------- Adjusted EBITDA.................. 148 149 265 302 --------- --------- --------- --------- Deduct (add): Depreciation, amortization, and asset retirement accretion.... 43 46 89 91 Foreign exchange losses (gains) 2 (3) 2 10 Gain on sale of power purchase arrangement and related transactions.................. - - (30) (34) Net financing expenses......... 63 50 127 101 Income taxes................... 7 6 12 11 Non-controlling interests...... 31 68 9 106 --------- --------- --------- --------- Net income (loss)................ $ 2 $ (18) $ 56 $ 17 --------- --------- --------- --------- --------- --------- --------- --------- Funds from operations and funds from operations excluding non-controlling ------------------------------------------------------------------------- interests in EPLP ----------------- Capital Power uses funds from operations to measure the Company's ability to generate funds from current operations and measures its interest in cash flows by excluding the non-controlling interest in EPLP's cash flows. A reconciliation of funds from operations and funds from operations excluding non-controlling interests in EPLP to cash provided by operating activities is as follows: Three months Six months (unaudited, $ millions) ended June 30 ended June 30 ------------------- ------------------- 2009 2008 2009 2008 --------- --------- --------- --------- Funds from operations excluding non-controlling interests in EPLP......................... $ 2 $ 33 $ 64 $ 77 Funds from operations due to non-controlling interests in EPLP....................... 26 16 45 42 --------- --------- --------- --------- Funds from operations............ 28 49 109 119 --------- --------- --------- --------- Change in non-cash operating working capital............... 34 (7) (20) (10) --------- --------- --------- --------- Cash provided by operating activities...................... $ 62 $ 42 $ 89 $ 109 --------- --------- --------- --------- --------- --------- --------- --------- Changes in working capital are primarily made up of intercompany payables and receivables between the Company and EPCOR and are not representative of how working capital would be managed by the Company on a stand-alone basis. Therefore, the Company uses funds from operations as its primary operating cash flow measure. Three Six (unaudited, $ millions) months months --------- --------- Funds from operations for the periods ended June 30, 2008 $ 49 $ 119 Higher Genesee PPA availability incentive income..... 27 42 Higher adjusted EBITDA from EPLP..................... 11 2 Lower Genesee 1,2 and 3 maintenance expenses......... 16 26 Lower (higher) current income taxes.................. (2) 8 Higher financing expenses............................ (13) (26) Lower adjusted EBITDA from other portfolio activities (8) (2) Higher administration expense, excluding EPLP........ (19) (22) Lower Alberta commercial plants electricity margin... (21) (25) Other................................................ (12) (13) --------- --------- (Decrease) (21) (10) --------- --------- Funds from operations for the periods ended June 30, 2009 $ 28 $ 109 ------------------- -------------------