Click here to close now.

Welcome!

.NET Authors: Carmen Gonzalez, Elizabeth White, Liz McMillan, Greg O'Connor, Jason Bloomberg

News Feed Item

Capital Power Files Business Acquisition Report

Report Includes Second Quarter Financial Results and Updated Outlook

EDMONTON, Sept. 16 /PRNewswire-FirstCall/ - Capital Power Corporation (Capital Power, or the Company) (TSX:CPX) today announced the filing of a Business Acquisition Report (BAR) in connection with its acquisition of substantially all of the power generation assets previously owned by EPCOR Utilities Inc. The report includes Capital Power's 2009 second quarter and six month financial results and an updated outlook. A copy of the BAR is available on the company's website at www.capitalpower.com or on SEDAR at www.sedar.com.

As described in Capital Power's prospectus dated June 25, 2009 (the Prospectus) in connection with the Company's Initial Public Offering (IPO), consideration for the acquisition of the Company's assets consisted of approximately $1,364 million in cash and 56.625 million exchangeable limited partnership units of Capital Power L.P. (CPLP), representing a 72.2% partnership interest in CPLP. The acquisition was effective July 1, 2009.

While the acquisition was not completed until the third quarter of Capital Power's fiscal year, the BAR includes pro forma consolidated financial information for the second quarter and six months ended June 30, 2009. For the purpose of the pro forma consolidated statements of income, the pro forma consolidated statements of income in the BAR presents the effects of the completion of the IPO and related reorganization as if they had been completed on January 1, 2008.

    -------------------------------------------------------------------------
    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.

"Our second quarter results reflect weak power prices in the Alberta market, which are a function of low natural gas prices and strong availability of power generation units in the province," said Brian Vaasjo, President and Chief Executive Officer of Capital Power. "Alberta power prices averaged $32 per megawatt hour in the second quarter of 2009 compared with $108 per megawatt hour in 2008. This underlines the importance of our strategic focus to maintain a balance of contracted and merchant facilities."

Despite the weak pricing environment, Capital Power's year-over-year performance in the second quarter with respect to gross margin and adjusted EBITDA was essentially flat. This reflected a number of positive and negative variances, as described in the BAR report. Notable among these was a decline from the year earlier period in the contribution from the Company's Alberta commercial plants, while the contribution from contracted facilities and the EPCOR Power L.P. (EPLP) increased.

Outlook

Alberta forward power prices declined in the first half of 2009 and are expected to remain low in the near term, mainly due to low natural gas prices. Consistent with the second quarter results, lower power prices are expected to reduce adjusted EBITDA, excluding fair value adjustments, and cash flow from operations for the remainder of 2009, as approximately 53% of the Company's Alberta commercial portfolio is exposed to the spot market. The remaining 47% has been sold forward at an average price in the mid-$60/MWh range. The Alberta commercial plants represent approximately 40% to 50% of adjusted EBITDA, before unrealized fair value changes, excluding the non-controlling interest in EPLP.

For 2010, approximately 80% of the Alberta commercial portfolio position has been sold forward at an average price in the mid-$60/MWh range, which should reduce the exposure to decreases in power prices. For 2011, the Alberta commercial portfolio's open position is expected to increase to approximately 60% to 65% of the total portfolio, which could introduce more variability in adjusted EBITDA and cash flow, depending on changes in power prices. The average contracted price is in the low $70/MWh range for the generation sold forward in 2011. The Company will continue to monitor commodity price forecast movements and undertake transactions to optimize the portfolio and limit exposure to price movements.

The sensitivity to an increase/decrease of $1/MWh in the Alberta power price, assuming all other factors are held constant, is estimated to be an adjusted EBITDA increase/decrease of approximately $1 million for the remainder of 2009, $1 million for 2010 and $4 million for 2011. The increased sensitivity in 2011 is due to the open position on the Keephills 3 facility and the expiration of certain Alberta wholesale and commercial and industrial customer contracts.

The Company also outlined in the "Outlook" section of the BAR various factors that are expected to impact its results for the remainder of 2009 and for 2010.

"Looking forward, Capital Power has a strong balance sheet, a modern and efficient fleet, a diversified portfolio of assets, long-term contracts including power purchase arrangements, and an investment-grade credit rating," added Mr. Vaasjo. "This represents an ideal foundation from which to expand our current operating platform and participate in the recovery of natural gas and power prices."

Webcast of Analyst Conference Call

Capital Power will be hosting a conference call with analysts on September 17, 2009 at 9:00 am (MDT) to discuss the BAR. Interested parties may access the live webcast on the Company's website at www.capitalpower.com. An archive of the webcast will be available on the website.

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

Capital Power is a growth-oriented North American independent power producer, building on more than a century of innovation and reliable performance. The Company's vision is to be recognized as one of North America's most respected, reliable and competitive power generators. Headquartered in Edmonton, Alberta, Capital Power has interests in 31 facilities in Canada and the U.S. totaling approximately 3,300 megawatts of generation capacity. Capital Power and its subsidiaries develop, acquire and optimize power generation from a wide range of energy sources.

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

This news release contains forward-looking statements, including "forward-looking statements" within the meaning of applicable Canadian and United States securities laws, as it relates to anticipated financial performance, events and strategies. Such forward-looking statements include, without limitation, statements regarding: (i) expected lower power prices and the impact for the remainder of 2009; (ii) anticipated reduction in exposure to decreases in power prices in 2010; (iii) expected increase in the Alberta commercial portfolio position in 2011 and its effect on operating results; (iv) the Company's intention to monitor commodity price forecast movements and take action to optimize the portfolio and limit exposure; (v) estimated sensitivity of a change in power prices for the final six months of 2009, 2010 and 2011; and (v) factors that form the foundation from which the Company may expand its operating platform.

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, including those subject to acquired PPAs (iii) the Company's financial position and credit facilities (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) weather; (vii) availability and cost of labour and management resources; (viii) performance of contractors and suppliers; (ix) availability and cost of financing; * foreign exchange rates; (xi) management's analysis of applicable tax legislation; (xii) the currently applicable and proposed tax laws will not change and will be implemented; (xiii) currently applicable and proposed environmental regulations will be implemented; (xiv) counterparties will perform their obligations; (xv) renewal and terms of PPAs (xvi) ability to successfully integrate and realize benefits of its acquisitions (xvii) ability to implement strategic initiatives which will yield the expected benefits; and (xviii) the Company's assessment of capital markets and ability to complete future share offerings.

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) construction; * availability and cost of financing; (xi) foreign exchange; (xii) availability and cost of labour, equipment and management resources; (xiii) performance of counterparties, partners, contractors and suppliers in fulfilling their obligations to the Company; (xiv) developments in the North American capital markets; (xv) compliance with financial covenants; (xvi) ability to successfully realize the benefits of acquisitions and investments; (xvii) the tax attributes of and implications of any acquisitions; and (xviii) other factors and assumptions discussed in the section entitled Risk Factors in the Prospectus and in other documents filed with provincial securities commissions in Canada. 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.

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

The Company uses (i) gross margin, (ii) adjusted EBITDA, (iii) funds from operations, and (iv) funds from operations excluding non-controlling interests in EPLP as financial performance measures. These terms are not defined financial measures according to Canadian GAAP and do not have standardized meanings prescribed by GAAP, and therefore may not be comparable to similar measures used by other enterprises. These measures should not be considered an alternative to net earnings, cash flow from operating activities or other measures of financial performance calculated in accordance with Canadian GAAP. Rather, these measures are provided as additional information to complement those Canadian GAAP measures by providing further understanding of the Company's results of operations from management's perspective.

    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
                                                          -------------------
                                                          -------------------

SOURCE Capital Power Corporation

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
SYS-CON Events announced today that Intelligent Systems Services will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Established in 1994, Intelligent Systems Services Inc. is located near Washington, DC, with representatives and partners nationwide. ISS’s well-established track record is based on the continuous pursuit of excellence in designing, implementing and supporting nationwide clients’ mission-critical systems. ISS has completed many successful projects in Healthcare, Commercial, Manufacturing, ...
Sonus Networks introduced the Sonus WebRTC Services Solution, a virtualized Web Real-Time Communications (WebRTC) offer, purpose-built for the Cloud. The WebRTC Services Solution provides signaling from WebRTC-to-WebRTC applications and interworking from WebRTC-to-Session Initiation Protocol (SIP), delivering advanced real-time communications capabilities on mobile applications and on websites, which are accessible via a browser.
SYS-CON Events announced today that B2Cloud, a provider of enterprise resource planning software, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. B2cloud develops the software you need. They have the ideal tools to help you work with your clients. B2Cloud’s main solutions include AGIS – ERP, CLOHC, AGIS – Invoice, and IZUM
SYS-CON Events announced today that Tufin, the market-leading provider of Security Policy Orchestration Solutions, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. As the market leader of Security Policy Orchestration, Tufin automates and accelerates network configuration changes while maintaining security and compliance. Tufin's award-winning Orchestration Suite™ gives IT organizations the power and agility to enforce security policy across complex, multi-vendor enterprise networks. With more than 1...
SYS-CON Events announced today that Cloudian, Inc., the leading provider of hybrid cloud storage solutions, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Cloudian, Inc., is a Foster City, California - based software company specializing in cloud storage software. The main product is Cloudian, an Amazon S3-compliant cloud object storage platform, the bedrock of cloud computing systems, that enables cloud service providers and enterprises to build reliable, affordable and scalable cloud storage solu...
“With easy-to-use SDKs for Atmel’s platforms, IoT developers can now reap the benefits of realtime communication, and bypass the security pitfalls and configuration complexities that put IoT deployments at risk,” said Todd Greene, founder & CEO of PubNub. PubNub will team with Atmel at CES 2015 to launch full SDK support for Atmel’s MCU, MPU, and Wireless SoC platforms. Atmel developers now have access to PubNub’s secure Publish/Subscribe messaging with guaranteed ¼ second latencies across PubNub’s 14 global points-of-presence. PubNub delivers secure communication through firewalls, proxy ser...
SYS-CON Events announced today that Gridstore™, the leader in hyper-converged infrastructure purpose-built to optimize Microsoft workloads, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Gridstore™ is the leader in hyper-converged infrastructure purpose-built for Microsoft workloads and designed to accelerate applications in virtualized environments. Gridstore’s hyper-converged infrastructure is the industry’s first all flash version of HyperConverged Appliances that include both compute and storag...
SYS-CON Events announced today that IDenticard will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. IDenticard™ is the security division of Brady Corp (NYSE: BRC), a $1.5 billion manufacturer of identification products. We have small-company values with the strength and stability of a major corporation. IDenticard offers local sales, support and service to our customers across the United States and Canada. Our partner network encompasses some 300 of the world's leading systems integrators and security s...
Containers and microservices have become topics of intense interest throughout the cloud developer and enterprise IT communities. Accordingly, attendees at the upcoming 16th Cloud Expo at the Javits Center in New York June 9-11 will find fresh new content in a new track called PaaS | Containers & Microservices Containers are not being considered for the first time by the cloud community, but a current era of re-consideration has pushed them to the top of the cloud agenda. With the launch of Docker's initial release in March of 2013, interest was revved up several notches. Then late last...
So I guess we’ve officially entered a new era of lean and mean. I say this with the announcement of Ubuntu Snappy Core, “designed for lightweight cloud container hosts running Docker and for smart devices,” according to Canonical. “Snappy Ubuntu Core is the smallest Ubuntu available, designed for security and efficiency in devices or on the cloud.” This first version of Snappy Ubuntu Core features secure app containment and Docker 1.6 (1.5 in main release), is available on public clouds, and for ARM and x86 devices on several IoT boards. It’s a Trend! This announcement comes just as...
SYS-CON Events announced today the IoT Bootcamp – Jumpstart Your IoT Strategy, being held June 9–10, 2015, in conjunction with 16th Cloud Expo and Internet of @ThingsExpo at the Javits Center in New York City. This is your chance to jumpstart your IoT strategy. Combined with real-world scenarios and use cases, the IoT Bootcamp is not just based on presentations but includes hands-on demos and walkthroughs. We will introduce you to a variety of Do-It-Yourself IoT platforms including Arduino, Raspberry Pi, BeagleBone, Spark and Intel Edison. You will also get an overview of cloud technologies s...
Health care systems across the globe are under enormous strain, as facilities reach capacity and costs continue to rise. M2M and the Internet of Things have the potential to transform the industry through connected health solutions that can make care more efficient while reducing costs. In fact, Vodafone's annual M2M Barometer Report forecasts M2M applications rising to 57 percent in health care and life sciences by 2016. Lively is one of Vodafone's health care partners, whose solutions enable older adults to live independent lives while staying connected to loved ones. M2M will continue to gr...
While not quite mainstream yet, WebRTC is starting to gain ground with Carriers, Enterprises and Independent Software Vendors (ISV’s) alike. WebRTC makes it easy for developers to add audio and video communications into their applications by using Web browsers as their platform. But like any market, every customer engagement has unique requirements, as well as constraints. And of course, one size does not fit all. In her session at WebRTC Summit, Dr. Natasha Tamaskar, Vice President, Head of Cloud and Mobile Strategy at GENBAND, will explore what is needed to take a real time communications ...
The best mobile applications are augmented by dedicated servers, the Internet and Cloud services. Mobile developers should focus on one thing: writing the next socially disruptive viral app. Thanks to the cloud, they can focus on the overall solution, not the underlying plumbing. From iOS to Android and Windows, developers can leverage cloud services to create a common cross-platform backend to persist user settings, app data, broadcast notifications, run jobs, etc. This session provides a high level technical overview of many cloud services available to mobile app developers, includi...
“In the past year we've seen a lot of stabilization of WebRTC. You can now use it in production with a far greater degree of certainty. A lot of the real developments in the past year have been in things like the data channel, which will enable a whole new type of application," explained Peter Dunkley, Technical Director at Acision, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events announced today that Vicom Computer Services, Inc., a provider of technology and service solutions, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. They are located at booth #427. Vicom Computer Services, Inc. is a progressive leader in the technology industry for over 30 years. Headquartered in the NY Metropolitan area. Vicom provides products and services based on today’s requirements around Unified Networks, Cloud Computing strategies, Virtualization around Software defined Data Ce...
Dave will share his insights on how Internet of Things for Enterprises are transforming and making more productive and efficient operations and maintenance (O&M) procedures in the cleantech industry and beyond. Speaker Bio: Dave Landa is chief operating officer of Cybozu Corp (kintone US). Based in the San Francisco Bay Area, Dave has been on the forefront of the Cloud revolution driving strategic business development on the executive teams of multiple leading Software as a Services (SaaS) application providers dating back to 2004. Cybozu's kintone.com is a leading global BYOA (Build Your O...
SYS-CON Media announced today that @WebRTCSummit Blog, the largest WebRTC resource in the world, has been launched. @WebRTCSummit Blog offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. @WebRTCSummit Blog can be bookmarked ▸ Here @WebRTCSummit conference site can be bookmarked ▸ Here
SYS-CON Events announced today that Ciqada will exhibit at SYS-CON's @ThingsExpo, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Ciqada™ makes it easy to connect your products to the Internet. By integrating key components - hardware, servers, dashboards, and mobile apps - into an easy-to-use, configurable system, your products can quickly and securely join the internet of things. With remote monitoring, control, and alert messaging capability, you will meet your customers' needs of tomorrow - today! Ciqada. Let your products take flight. For more inform...
SYS-CON Events announced today that GENBAND, a leading developer of real time communications software solutions, has been named “Silver Sponsor” of SYS-CON's WebRTC Summit, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. The GENBAND team will be on hand to demonstrate their newest product, Kandy. Kandy is a communications Platform-as-a-Service (PaaS) that enables companies to seamlessly integrate more human communications into their Web and mobile applications - creating more engaging experiences for their customers and boosting collaboration and productiv...