Capital Power reports strong third 2024 online casino 2018 results
Results are highlighted by strong cash flow generation 2024 online casino quarter
EDMONTON, Alberta – Capital Power Corporation (TSX: CPX) today released financial results for the 2024 online casino ended September 30, 2018.
Third 2024 online casino Highlights
- Announced the acquisition of Arlington Valley, a 580 megawatt contracted natural gas facility in Arizona
- Achieved excellent operating performance with 98% facility availability
- Generated net cash flows from operating activities of 2024 online casino and adjusted funds from operations of 6 2024 online casino
- Purchased and cancelled 0.5 2024 online casino common shares under the Normal Course Issuer Bid
“One of the highlights in the quarter was the announced acquisition of Arlington Valley, a contracted natural gas facility operating in the attractive Desert Southwest (DSW) power market,” said Brian Vaasjo, President and CEO of Capital Power. “As I stated at the time, this transaction contributes immediately to our adjusted 2024 online casino and earnings and provides geographic diversification outside of Alberta while providing a platform for potential further growth in the DSW market. Arlington Valley is a low risk, cash generating investment that provides stable contracted cash flows until 2025 and has a high probability of re-contracting as confirmed by third-party market assessments.”
Net cash flows from operating activities were 2024 online casino in the third quarter of 2018 compared with 0 2024 online casino in the third quarter of 2017. Adjusted funds from operations (AFFO) were 6 2024 online casino in the third quarter of 2018, compared to 5 2024 online casino in the third quarter of 2017.
Net income attributable to shareholders in the third quarter of 2018 was 2024 online casino and basic earnings per share was >708_word_end<.10 per share, compared with net loss attributable to shareholders of 2024 online casino, and basic loss per share of >708_word_end<.13, in the comparable period of 2017. Normalized earnings attributable to common shareholders in the third quarter of 2018, after adjusting for non-recurring items and fair value adjustments, were 2024 online casino or >708_word_end<.35 per share compared with 2024 online casino or >708_word_end<.28 per share in the third quarter of 2017.
Net cash flows from operating activities were 7 2024 online casino for the nine months ended September 30, 2018 compared with 7 2024 online casino for the nine months ended September 30, 2017. Adjusted funds from operations were 7 2024 online casino for the nine months of 2018, compared to 7 2024 online casino in the comparable nine month period last year.
For the nine months ended September 30, 2018, net income attributable to shareholders was 3 2024 online casino and basic earnings per share was >712_word_end<.99 per share compared with 4 2024 online casino and .30 per share for the nine months ended September 30, 2017. For the nine months ended September 30, 2018, normalized earnings attributable to common shareholders were 2024 online casino, or >712_word_end<.87 per share, compared with 2024 online casino, or >712_word_end<.88 per share, in the first nine months of 2017.
“Capital Power’s financial results for the third quarter of 2018 exceeded management’s expectations,” said Mr. Vaasjo. “Our third quarter results benefitted from strong operating performance with average facility availability of 98 per cent and higher Alberta power prices that averaged per megawatt hour (MWh) compared to per MWh a year ago. The Company generated a strong quarter of adjusted funds from operations of 6 2024 online casino in the third quarter and 7 2024 online casino in the first nine months of 2018. Based on our outlook for the fourth quarter of the year, we continue to be on track to achieve AFFO above the midpoint of the 0 2024 online casino to 0 2024 online casino target range for 2018.”
The Company continued to be active with its Normal Course Issuer Bid (NCIB) by purchasing and cancelling 0.5 2024 online casino common shares at an average exercise price of .34 per share for a total cost of 2024 online casino in the third quarter. In the first nine months of 2018, the Company purchased and cancelled 2.2 2024 online casino common shares at an average exercise price of .77 per share for a total cost of 2024 online casino. Under its TSX approved NCIB, the Company can purchase and cancel up to 9.3 2024 online casino common shares during the one-year period ending February 20, 2019.
| Operational and 2024 online casino Highlights 1 (unaudited) |
Three months ended September 30 |
Nine Month ended September 30 |
||
| (millions of dollars except 2024 online casino and operational amounts) | 2018 | 2017 | 2018 | 2017 |
| Electricity generation (Gigawatt hours) | 5,213 | 4,720 | 14,823 | 12,356 |
| Generation facility availability | 98% | 97% | 96% | 96% |
| Revenues and other income | 9 | 6 | ,059 | 5 |
| 2024 online casino EBITDA 2 | 8 | 8 | 3 | 7 |
| Net income (loss) | $(7) | 8 | 7 | |
| Net income (loss) attributable to shareholders of 2024 online casino | $(5) | 3 | 4 | |
| Basic earnings (loss) 2024 online casino | >832_word_end<.10 | $(0.13) | >836_word_end<.99 | .30 |
| Diluted earnings (loss) 2024 online casino | >844_word_end<.10 | $(0.13) | >848_word_end<.99 | .29 |
| Normalized earnings attributable to common shareholders 2 | ||||
| Normalized earnings 2024 online casino 2 | >872_word_end<.35 | >874_word_end<.28 | >876_word_end<.87 | >878_word_end<.88 |
| Net cash flows 2024 online casino operating activities | 0 | 7 | 7 | |
| Adjusted 2024 online casino 2, 3 | 6 | 5 | 7 | 7 |
| Adjusted 2024 online casino per share 2 | .52 | .30 | .07 | .68 |
| Purchase of property, plant and equipment and other assets | 5 | 1 | 6 | |
| Dividends 2024 online casino common share, declared | >936_word_end<.4475 | >938_word_end<.4175 | .2825 | .1975 |
1. The operational and 2024 online casino highlights in this press release should be read in conjunction with Management’s Discussion and Analysis and the unaudited condensed interim consolidated 2024 online casino statements for the nine months ended September 30, 2018.
2. Earnings before net finance expense, income tax expense, depreciation and amortization, impairments, foreign exchange gains or losses, finance expense and depreciation expense from its joint venture interests, and gains or losses on disposals (adjusted EBITDA), normalized earnings attributable to common shareholders, normalized earnings per share, adjusted 2024 online casino and adjusted 2024 online casino per share 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.
3. Commencing with the Company’s March 31, 2018 quarter-end, the reported adjusted 2024 online casino measure was refined to better reflect the purpose of the measure (see Non-GAAP Financial Measures). The applicable comparable periods have been adjusted to conform to the current period’s presentation.
Significant Events
Acquisition of Arlington Valley
On September 6, 2018, the Company announced it has entered into an agreement to acquire 100% of the ownership interests in Arlington Valley, LLC, which owns the Arlington Valley facility (Arlington facility), a 580 megawatt (MW) combined cycle natural gas generation facility, from funds managed by Oaktree Capital Management, L.P. and its co-investors for a total of 6 2024 online casino (US0 2024 online casino), subject to working capital and other closing adjustments. Capital Power will finance the transaction using its credit facilities followed by permanent debt financing. The transaction is expected to close in the fourth quarter of 2018, subject to regulatory approvals and other customary closing conditions.
The Arlington facility sells capacity and electricity to an investment grade load serving utility (credit ratings of A2/A- 2024 online casino Moody’s and S&P, respectively) under tolling agreements through 2025. The Arlington facility is adjacent to the Palo Verde hub allowing for additional capacity and energy to be sold into the DSW or the California Independent System Operator (CAISO) wholesale markets during the months outside the summer tolling months.
The acquisition of the Arlington facility supports the Company’s US growth strategy and fully meets the Company’s investment criteria. Arlington facility is a well-positioned asset 2024 online casino attractive DSW power market with growing demand and a low investment risk environment. In addition to meeting the Company’s expected return criteria, the investment contributes to the Company’s dividend growth strategy through immediate AFFO accretion supported by contracted cash flows to the end of 2025 with a high probability of re-contracting as confirmed through third-party market assessments.
The Arlington facility is expected to generate approximately US 2024 online casino of adjusted EBITDA and US 2024 online casino of AFFO in 2019 during the last year of its current toll. Subsequently, adjusted EBITDA averages US 2024 online casino per year (ranging from US 2024 online casino to US 2024 online casino) and US 2024 online casino of AFFO during the 6-year period from 2020 to 2025. Based on the expected financing, the 5-year average accretion for AFFO is expected to be >967_word_end<.22 per share reflecting a 6% increase. The average accretion to earnings is expected to be >967_word_end<.03 per share in the first 5 years, representing a 2% increase.
Dividend increase
On July 27, 2018, the Company’s Board of Directors approved an increase of 7% in the annual dividend for holders of its common shares, 2024 online casino .67 per common share to .79 per common share. This increased common dividend will commence with the third quarter 2018 quarterly dividend payment on October 31, 2018 to shareholders of record at the close of business on September 28, 2018.
Genesee contracted physical natural gas capacity
During the second 2024 online casino, Capital Power secured additional physical natural gas delivery capacity for the Genesee site. This capacity is expected to enable increased natural gas co-firing as early as 2020 and allows for full conversion to natural gas as early as 2020.
Genesee royalty rate agreement
During the second quarter, Capital Power entered into an agreement with Genesee Royalty Limited Partnership establishing a fixed royalty rate structure in place of the previous structure which was based on coal regulations 2024 online casino the 1980’s. The new structure provides improved royalty cost certainty in the future.
Investment in C2CNT
In May 2018, Capital Power acquired a 5% equity interest in C2CNT, a company that developed and is now testing at scale an innovative technology that captures and transforms carbon dioxide (CO2) into a useful and high-value product called carbon nanotubes, for total consideration of .2 2024 online casino (US.5 2024 online casino). This technology will take CO2 from many sources including emissions from thermal power generation and other industrial processes and convert it into a carbon-based product that can be used in various industries. This investment in C2CNT supports Capital Power’s pursuit of innovative and leading-edge technology and approaches that have the potential to reduce greenhouse gases. Included with the acquisition is an option that may be elected prior to March 1, 2020 to increase the Company’s equity interest in C2CNT by an additional 20%.
Bloom Wind 2024 online casino agreement amendment
As part of the enactment of the U.S. Tax Cuts and Jobs Act of 2017 in the fourth quarter of 2017, and the resulting reduction in the U.S. Federal corporate tax rate (effective January 1, 2018), a change in tax law provision was triggered in the tax equity agreement for Bloom Wind. As a result, in May of 2018, the Company re-negotiated certain commercial terms within the tax equity agreement for Bloom Wind. The re-negotiated terms of the Bloom Wind tax equity agreement resulted in an interest rate increase on the tax equity financing balance. As well, a one-time reduction to the tax equity financing balance by 2024 online casino (US 2024 online casino) was recorded relating to additional tax benefits used by the tax equity partner. The overall impact of the re-negotiated terms of the tax-equity agreement resulted in a one-time, non-cash increase in net income after tax of 2024 online casino (US 2024 online casino). Under the re-negotiated tax equity agreement and considering the reduction in the U.S. Federal corporate tax rate, the Company has maintained its original expected returns for the project.
Completion of contracts for Cardinal Point Wind
On April 30, 2018, Capital Power announced that the construction of Cardinal Point Wind will proceed once all applicable regulatory approvals are received. Cardinal Point Wind is a 150 MW facility to be constructed in the McDonough and Warren Counties, Illinois, and is anticipated to cost between 9 2024 online casino and 1 2024 online casino (US6 2024 online casino to US6 2024 online casino). Commercial operation of the facility is expected in March of 2020. Capital Power will operate Cardinal Point Wind under a 12-year fixed price contract with an investment grade U.S. financial institution covering 85% of the facility’s output. Under the contract, Capital Power will swap the market revenue of the facility’s generation for a fixed price payment over a 12-year term. In addition, the Cardinal Point Wind project has secured 15-year, fixed-price Renewable Energy Credit (REC) contracts with three Illinois utilities. The REC and output contracts will secure long-term predictable revenues, allowing Cardinal Point Wind to secure renewable energy tax equity financing and provide Capital Power the opportunity to complete its third wind development project in the growing U.S. renewables market.
Executive appointment
Consistent with 2024 online casino’s ongoing commitment to sustainability, during the second quarter of 2018, 2024 online casino named Senior Vice President, Kate Chisholm, its Chief Legal and Sustainability Officer, and sustainability was added to the Board of Directors’ mandate.
Analyst conference call and webcast
Capital Power will be hosting a conference call and live webcast with analysts on October 29, 2018 at 9:00 am (MDT) to discuss the third 2024 online casino financial results. The conference call dial-in numbers are:
(604) 638-5340 (Vancouver)
(403) 351-0324 (Calgary)
(416) 915-3239 (Toronto)
(514) 375-0364 (Montreal)
(800) 319-4610 (toll-free 2024 online casino Canada and USA)
Interested parties may also access the live webcast on 2024 online casino’s website at www.capitalpower.com
with an archive 2024 online casino webcast available following the conclusion 2024 online casino analyst conference call.
Non-GAAP 2024 online casino Measures
The Company uses (i) earnings before net finance expense, income tax expense, depreciation and amortization, impairments, foreign exchange gains or losses, finance expense and depreciation expense from its joint venture interests, and gains or losses on disposals (adjusted EBITDA), (ii) adjusted funds from operations, (iii) adjusted 2024 online casino per share (iv) normalized earnings attributable to common shareholders, and (v) 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, therefore, are unlikely to be comparable to similar measures used by other enterprises. These measures should not be considered alternatives to net income, net income attributable to shareholders of the Company, net cash flows 2024 online casino 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 2024 online casino management’s perspective.
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 2024 online casino’s future plans and operations. This information may not be appropriate for other purposes. The forwardlooking 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 disclosures regarding the expected results in relation to the 2018 AFFO guidance range, expectations pertaining to the construction cost and commercial operations date for Cardinal Point Wind and expectations pertaining to the acquisition of Arlington Valley (see Significant Events). Such expectations around the Arlington Valley acquisition include: (i) impacts of the acquisition on adjusted 2024 online casino, adjusted 2024 online casino per share and adjusted EBITDA, (ii) financing plans for the acquisition, (iii) timing of close for the acquisition, and (iv) re-contracting of the Arlington Valley facility.
These statements are based on certain assumptions and analyses made by 2024 online casino in light of its experience and perception of historical trends, current conditions, 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, other energyand carbon prices, (ii) anticipated facility performance, (iii) business prospects (including potential re-contracting opportunities) and opportunities including expected growth and capital projects, (iv) status of and impact of policy, legislation and regulations, 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 2024 online casino 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, market structure and tax legislation, (iv) facility availability and performance including maintenance of equipment, (v) ability to fund current and
future capital and working capital needs, (vi) developments including timing and costs of regulatory approvals and construction, (vii) changes in market prices and availability of fuel, (viii) ability to realize the anticipated benefits of the Arlington Valley acquisition, (ix) limitations inherent 2024 online casino Company’s review of acquired assets and (x) changes in general economic and competitive conditions. See Risks and Risk Management 2024 online casino Company’s Management’s Discussion and Analysis for the year ended December 31, 2017, prepared as of February 15, 2018, for further discussion of these and other risks.
Readers are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the specified approval date. 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 2024 online casino Company’s expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law.
Click here to view the management’s discussion and analysis and consolidated 2024 online casino statements (pdf).