Capital Power Corporation

Thank you for standing by. This is the conference operator. Welcome to Capital Power's fourth quarter 2020 results conference call. As a reminder, all participants are in listen-only mode and the conference is being recorded today, February 19th, 2021. I will now turn the call over to Mr. Randy Ma, the Director of Investor Relations. Please go ahead.

Good morning, and thank you for joining us today to review Capital Power's fourth quarter and 2020 year-end results, which we released earlier this morning. Our 2020 integrated annual report and the presentation for this conference call are posted on our website at capitalpower.com. Joining me on the call are Brian Baggio, President and CEO, and Sandra Haskins, Senior Vice President, Finance and CFO. We will start with opening comments and then open the lines to take your questions. Before we start, I would like to remind everyone that certain statements about future events made on the call are forward looking in nature and are based on certain assumptions and analysis made by the company. Actual results could differ materially from the company's expectations due to various risks and uncertainties associated with our business. Please refer to the cautionary statement on forward looking information on slide two. In today's discussion, we will be referring to various non-GAAP financial measures as noted on slide three. These measures 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 are provided to complement the GAAP measures which are provided in the analysis of the company's results from management's perspective. Reconciliations of these non-GAAP financial measures to their nearest GAAP measures can be found in our 2020 Integrated Annual Report. I will now turn the call over to Brian Vazio for his remarks starting on slide four.

Thanks, Randy, and good morning. 2020 was an excellent year for Capital Power, which included tremendous growth in renewable development and significant announcements on repowering and our off-coal strategy. With respect to growth, we committed approximately $1.7 billion in capital for seven renewable projects and the repowering of Genesee 1 and 2. The renewable projects included five solar development projects that have confirmed our competitive capability in solar development, which more than doubles our renewable development opportunities in North America. When completed, the repowered Genesee 1 and 2 units will be the most efficient, lowest GHG-emitting natural gas combined cycle units in Canada, and will provide tremendous long-term value. These units will also be capable of 30% hydrogen firing at COD, with a potential for 95% hydrogen at nominal additional capital costs. As part of our commitment to sustainability, we've accelerated our plan to be off coal to 2023, which is six years early. We are also investing in utilization technology with our increased ownership in C2CNT. Our financial results in 2020 were generally in line with our guidance, which resulted in an AFFO dividend payout ratio of 40%, which is below our long-term target of 45% to 55%. Overall, solid progress was made in 2020 on our decarbonization strategy. Turning to slide five, I'll review our 2020 performance versus our annual targets, and Sandra will provide more details on our financial performance in our comments. Average facility availability of 95% significantly exceeded the 93% target. This was driven by excellent operational performance on top of the deferral of planned outages due to COVID-19. Sustaining capex of 73 million was below the 90 to 100 million target, mainly due to the deferral of various capital projects to 2021, most notably at Genesee driven by COVID. We generated $955 million in adjusted EBITDA, which was slightly below the $960 million midpoint of the guidance range. AFFO of $522 million would be above the midpoint of the guidance range, excluding the $6 million impact of the line loss rule proceeding. For our construction targets, Cardinal Point Wind exceeded targets as it was completed early and came in below the low end of the targeted budget range in U.S. dollars. The Whitlaw Wind 2 project is tracking on budget and is on schedule for COD in the fourth quarter of this year. And as I mentioned, we exceeded our $500 million growth capital target by committing approximately $1.7 billion to seven renewable projects and the repowering of Genesee 1 and 2. Overall, we reached solid operational solid operational and financial results despite the COVID-19 pandemic. Moving to slide six, which illustrates our continued growth in renewables, our seven renewable development projects will add a total of 427 megawatts when completed later this year and in 2022. The three North Carolina and Strathmore solar development projects have long-term PPAs of 20- and 25-year terms, respectively. And we continue to pursue contracts for Whitlaw Wind 2 and 3 and the Enchant solar project. In total, the seven projects are expected to contribute an annualized adjusted EBITDA of $70 million. Our generation mix is shown in the pie charts on this slide. In 2020, our renewable assets contributed 27% of our total adjusted EBITDA which is expected to increase to 34% in 2025 based on the seven announced renewable projects. Natural gas facilities generated 43% of adjusted EBITDA in 2020, and this is expected to increase to 66% in 2025, including the repowering of Genesee 1 and 2 and 100% gas utilization at Genesee 3. There will be a significant shift in our generation mix, as we transition off coal in 2023. I'll now turn the call over to Sandra.