Capital Power Corporation (Capital Power, or the Company) (TSX:CPX) today
released its financial results for the second quarter ended June 30, 2014. The
Company also announced that its Board of Directors has approved a 7.9% dividend
increase for its common shares. Accordingly, effective for the third quarter
2014 dividend payment, the quarterly dividend will increase from $0.315 to $0.34
per common share, representing an annualized dividend rate of $1.36 per share.


Normalized earnings attributable to common shareholders in the second quarter of
2014, after adjusting for one-time items and fair value adjustments, were $6
million, or $0.07 per share, compared with $19 million, or $0.27 per share, in
the comparable period of 2013.


Net income attributable to shareholders in the second quarter of 2014 was $20
million, or $0.17 per share, compared with $20 million, or $0.20 per share, in
the comparable period of 2013. Funds from operations were $85 million for both
the second quarter of 2014 and the second quarter of 2013.


For the six months ended June 30, 2014, normalized earnings attributable to
common shareholders were $32 million, or $0.39 per share, compared with $44
million, or $0.63 per share, in the first six months of 2013. Funds from
operations totaled $177 million compared with $191 million in the comparable
six-month period last year.


"Second quarter financial performance was impacted by seasonally low Alberta
power prices, lower generation from the acquired Sundance PPA, and lower
generation at Genesee 3 caused by transmission constraints," said Brian Vaasjo,
President and CEO of Capital Power. "Alberta power prices have averaged $51 per
megawatt hour in the first six months of 2014 compared to our original full year
forecast of $57 per megawatt hour. With the expected output from our commercial
plants fully hedged for the remainder of the year, we expect funds from
operations in 2014, including the $20 million received for the amendment of the
Genesee Coal Mine Agreements, to be in the middle of our annual financial target
range of $360 to $400 million."


"While we are disappointed with this quarter's financial performance, the
fundamentals of our business and the additions to our solid asset base continue
to strengthen the outlook for the Company," said Mr. Vaasjo. "Capital Power's
contracted cash flow base has grown significantly since 2012 with the addition
of three contracted wind facilities to our fleet. In addition, the Shepard
Energy Centre is expected to begin first fire in early August and the facility
is on track to begin commercial operations in early 2015. Seventy-five per cent
of our generation from the Shepard facility is contracted for the first 3 years
and 50% is contracted from 2018 to 2034. Combined with the expected completion
of the K2 Wind project in Ontario later next year, we are forecasting a
substantial expansion in our contracted operating margin. Based on this strong
cash flow base, I am pleased to announce that the Board of Directors has
approved a 7.9% dividend increase."


"With our growing contracted cash flow base and the increasing demand for
Alberta power, we are well positioned to continue to grow our cash flows,
allowing us to reinvest in growth opportunities such as the Genesee 4 and 5
project, and consistently grow our dividends. We believe both are critical
components to delivering long-term shareholder value," continued 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)        2014       2013       2014       2013
----------------------------------------------------------------------------
Electricity generation                                                      
 (excluding acquired Sundance                                               
 PPA) (GWh)                           2,711      3,746      5,952      7,888
----------------------------------------------------------------------------
Generation plant availability                                               
 (excluding acquired Sundance                                               
 PPA) (%)                               92%        86%        94%        90%
----------------------------------------------------------------------------
Revenues                          $     240  $     321  $     548  $     686
----------------------------------------------------------------------------
Adjusted EBITDA (2)               $      78  $     104  $     191  $     239
----------------------------------------------------------------------------
Net income                        $      21  $      23  $      59  $      71
----------------------------------------------------------------------------
Net income attributable to                                                  
 shareholders of the Company      $      20  $      20  $      52  $      54
----------------------------------------------------------------------------
Normalized earnings attributable                                            
 to common shareholders (2)       $       6  $      19  $      32  $      44
----------------------------------------------------------------------------
Basic earnings per share          $    0.17  $    0.20  $    0.50  $    0.64
----------------------------------------------------------------------------
Diluted earnings per share        $    0.17  $    0.19  $    0.50  $    0.63
----------------------------------------------------------------------------
Normalized earnings per share                                               
 (2)                              $    0.07  $    0.27  $    0.39  $    0.63
----------------------------------------------------------------------------
Funds from operations (2 )        $      85  $      85  $     177  $     191
----------------------------------------------------------------------------
Purchase of property, plant and                                             
 equipment and other assets       $      63  $     169  $     138  $     462
----------------------------------------------------------------------------
Dividends per common share,                                                 
 declared                         $  0.3150  $  0.3150  $  0.6300  $  0.6300
----------------------------------------------------------------------------

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 six months ended June
    30, 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 Events

Dividend increase

On July 25, 2014, the Company announced that its Board of Directors approved a
7.9% increase of the annual dividend for holders of its common shares, from
$1.26 per common share to $1.36 per common share. This increased common dividend
will commence with the third quarter 2014 quarterly dividend payment payable on
October 31, 2014 to shareholders of record at the close of business on September
30, 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; (b) provide
for certain amendments to the Genesee Coal Mine Agreements; and (c) provide for
a payment to Capital Power of $20 million upon completion of the acquisitions,
which payment was received.


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 occurred in July 2014.


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.


Analyst Conference Call and Webcast

Capital Power will be hosting a conference call and live webcast with analysts
on July 28, 2014 at 11:00 AM (Eastern Time) to discuss the 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 1159793# followed
by participant code 21543#. The replay will be available until midnight on
October 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 July 25, 2014 for the six months ended June 30, 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 including
contracted base, dividend growth, and reinvestment, 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.


FOR FURTHER INFORMATION PLEASE CONTACT: 
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

Capital Power (TSX:CPX)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more Capital Power Charts.
Capital Power (TSX:CPX)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more Capital Power Charts.