Welcome!

Microsoft Cloud Authors: Lori MacVittie, Elizabeth White, Yeshim Deniz, Serafima Al, Janakiram MSV

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
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at @ThingsExpo, James Kirkland, Red Hat's Chief Archi...
The current age of digital transformation means that IT organizations must adapt their toolset to cover all digital experiences, beyond just the end users’. Today’s businesses can no longer focus solely on the digital interactions they manage with employees or customers; they must now contend with non-traditional factors. Whether it's the power of brand to make or break a company, the need to monitor across all locations 24/7, or the ability to proactively resolve issues, companies must adapt to...
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settl...
Organizations planning enterprise data center consolidation and modernization projects are faced with a challenging, costly reality. Requirements to deploy modern, cloud-native applications simultaneously with traditional client/server applications are almost impossible to achieve with hardware-centric enterprise infrastructure. Compute and network infrastructure are fast moving down a software-defined path, but storage has been a laggard. Until now.
In his general session at 19th Cloud Expo, Manish Dixit, VP of Product and Engineering at Dice, discussed how Dice leverages data insights and tools to help both tech professionals and recruiters better understand how skills relate to each other and which skills are in high demand using interactive visualizations and salary indicator tools to maximize earning potential. Manish Dixit is VP of Product and Engineering at Dice. As the leader of the Product, Engineering and Data Sciences team at D...
DXWorldEXPO LLC announced today that the upcoming DXWorldEXPO | CloudEXPO New York event will feature 10 companies from Poland to participate at the "Poland Digital Transformation Pavilion" on November 12-13, 2018.
Digital Transformation is much more than a buzzword. The radical shift to digital mechanisms for almost every process is evident across all industries and verticals. This is often especially true in financial services, where the legacy environment is many times unable to keep up with the rapidly shifting demands of the consumer. The constant pressure to provide complete, omnichannel delivery of customer-facing solutions to meet both regulatory and customer demands is putting enormous pressure on...
The best way to leverage your CloudEXPO | DXWorldEXPO presence as a sponsor and exhibitor is to plan your news announcements around our events. The press covering CloudEXPO | DXWorldEXPO will have access to these releases and will amplify your news announcements. More than two dozen Cloud companies either set deals at our shows or have announced their mergers and acquisitions at CloudEXPO. Product announcements during our show provide your company with the most reach through our targeted audienc...
JETRO showcased Japan Digital Transformation Pavilion at SYS-CON's 21st International Cloud Expo® at the Santa Clara Convention Center in Santa Clara, CA. The Japan External Trade Organization (JETRO) is a non-profit organization that provides business support services to companies expanding to Japan. With the support of JETRO's dedicated staff, clients can incorporate their business; receive visa, immigration, and HR support; find dedicated office space; identify local government subsidies; get...
DXWorldEXPO LLC announced today that All in Mobile, a mobile app development company from Poland, will exhibit at the 22nd International CloudEXPO | DXWorldEXPO. All In Mobile is a mobile app development company from Poland. Since 2014, they maintain passion for developing mobile applications for enterprises and startups worldwide.
@DevOpsSummit at Cloud Expo, taking place November 12-13 in New York City, NY, is co-located with 22nd international CloudEXPO | first international DXWorldEXPO and will feature technical sessions from a rock star conference faculty and the leading industry players in the world.
"Akvelon is a software development company and we also provide consultancy services to folks who are looking to scale or accelerate their engineering roadmaps," explained Jeremiah Mothersell, Marketing Manager at Akvelon, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
As data explodes in quantity, importance and from new sources, the need for managing and protecting data residing across physical, virtual, and cloud environments grow with it. Managing data includes protecting it, indexing and classifying it for true, long-term management, compliance and E-Discovery. Commvault can ensure this with a single pane of glass solution – whether in a private cloud, a Service Provider delivered public cloud or a hybrid cloud environment – across the heterogeneous enter...
DXWorldEXPO LLC announced today that ICC-USA, a computer systems integrator and server manufacturing company focused on developing products and product appliances, will exhibit at the 22nd International CloudEXPO | DXWorldEXPO. DXWordEXPO New York 2018, colocated with CloudEXPO New York 2018 will be held November 11-13, 2018, in New York City. ICC is a computer systems integrator and server manufacturing company focused on developing products and product appliances to meet a wide range of ...
More and more brands have jumped on the IoT bandwagon. We have an excess of wearables – activity trackers, smartwatches, smart glasses and sneakers, and more that track seemingly endless datapoints. However, most consumers have no idea what “IoT” means. Creating more wearables that track data shouldn't be the aim of brands; delivering meaningful, tangible relevance to their users should be. We're in a period in which the IoT pendulum is still swinging. Initially, it swung toward "smart for smart...
Headquartered in Plainsboro, NJ, Synametrics Technologies has provided IT professionals and computer systems developers since 1997. Based on the success of their initial product offerings (WinSQL and DeltaCopy), the company continues to create and hone innovative products that help its customers get more from their computer applications, databases and infrastructure. To date, over one million users around the world have chosen Synametrics solutions to help power their accelerated business or per...
Dion Hinchcliffe is an internationally recognized digital expert, bestselling book author, frequent keynote speaker, analyst, futurist, and transformation expert based in Washington, DC. He is currently Chief Strategy Officer at the industry-leading digital strategy and online community solutions firm, 7Summits.
In an era of historic innovation fueled by unprecedented access to data and technology, the low cost and risk of entering new markets has leveled the playing field for business. Today, any ambitious innovator can easily introduce a new application or product that can reinvent business models and transform the client experience. In their Day 2 Keynote at 19th Cloud Expo, Mercer Rowe, IBM Vice President of Strategic Alliances, and Raejeanne Skillern, Intel Vice President of Data Center Group and ...
Founded in 2000, Chetu Inc. is a global provider of customized software development solutions and IT staff augmentation services for software technology providers. By providing clients with unparalleled niche technology expertise and industry experience, Chetu has become the premiere long-term, back-end software development partner for start-ups, SMBs, and Fortune 500 companies. Chetu is headquartered in Plantation, Florida, with thirteen offices throughout the U.S. and abroad.
Bill Schmarzo, author of "Big Data: Understanding How Data Powers Big Business" and "Big Data MBA: Driving Business Strategies with Data Science," is responsible for setting the strategy and defining the Big Data service offerings and capabilities for EMC Global Services Big Data Practice. As the CTO for the Big Data Practice, he is responsible for working with organizations to help them identify where and how to start their big data journeys. He's written several white papers, is an avid blogge...