Capital Power announces second quarter 2025 results

The Company expands and enhances its US flexible generation portfolio with its largest acquisition to date

EDMONTON, Alberta, July 30, 2025 (GLOBE NEWSWIRE) — Capital Power Corporation (TSX: CPX) today released financial results for the quarter ended June 30, 2025.

Highlights

• Completed previously announced acquisition of the Hummel and Rolling Hills facilities in the PJM¹ market for ~$3.0 billion² (US $2.2 billion), adding ~2.2 GW of capacity to its U.S. flexible generation³ portfolio, the largest acquisition in the Company’s history
• Increased its annual common share dividend, for the 12^th consecutive year, by 6%
• Executed a ~$1.7 billion⁴ (US $1.2 billion) inaugural US private offering of senior notes and obtained a third credit rating with Fitch assigning a BBB- rating
• Raised $667 million of equity capital consisting of an upsized bought deal offering of common shares, for total gross proceeds of $517 million, and a concurrent private placement of $150 million with Alberta Investment Management Corporation (AIMCo)
• Reached commercial operation of the 40MW uprate at Goreway and continued to advance four other long-term contracted projects in Ontario with 310MW of total capacity
• Started construction on two additional solar projects in North Carolina, with commercial operation expected between Q4 2026 and Q1 2027
• Generated AFFO of $235 million and net cash flows from operating activities of $143 million
• Generated adjusted EBITDA of $322 million and a net loss of $131 million

“The completion of our PJM acquisition marks an extraordinary milestone for Capital Power as it underscores our ability to execute on our growth strategy and reaffirms our leadership in North American flexible generation. By expanding into North America’s largest and most liquid power market, we have added approximately 2.2 GW of flexible generation capacity. The Hummel Station and Rolling Hills facilities are strategically positioned as young and highly efficient assets with significant commercial optimization potential that enjoy access to low-cost fuel” said Avik Dey, President and CEO of Capital Power. “This transaction enhances the positioning of our US generation fleet on these key metrics, supporting long-term shareholder value creation.”

“This quarter reflects our continued success in delivering on our strategic priorities of growth, disciplined capital allocation, and diversification while maintaining a strong balance sheet. The recent acquisitions of Hummel Station and Rolling Hills significantly expand our U.S. footprint and are accretive to AFFO per share. Over the past year, we executed our largest acquisition, completed our most ambitious organic growth initiative—the Genesee repowering project, increased our dividend, and remain well within our financial guardrails that underpin our investment-grade credit rating. These milestones highlight our disciplined execution and reinforce our confidence in delivering long-term, sustainable value for shareholders.” said Sandra Haskins, SVP Finance and CFO of Capital Power.

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Revised 2025 Annual Guidance

Operational and Financial Highlights¹

Significant Events

Acquisition of Hummel Station and Rolling Hills

On June 9, 2025, Capital Power completed its previously announced acquisition of 100% of the equity interests in:

• Hummel Station, LLC, owner of the 1,124MW Hummel combined cycle natural gas facility in Shamokin Dam, Pennsylvania (the Hummel Acquisition); and
• Rolling Hills Generating, LLC, owner of the 1,023MW Rolling Hills Generation plant, a combustion turbine natural gas facility in Wilkesville, Ohio (the Rolling Hills Acquisition and together with Hummel Acquisition, the Acquisition).

The Acquisition expands the Company’s operations into the PJM interconnection market and adds to its U.S. flexible generation fleet.

The total purchase price of the Acquisition was $3.0 billion (US$2.2 billion) in total cash consideration, including working capital and other closing adjustments.

Capital Power partially financed the acquisition with net proceeds from an offering of common shares and a private offering of senior notes, described in further detail below. The balance of the Acquisition was funded with additional cash on hand and a drawdown on the Company’s existing revolving credit facilities.

$1.7 billion (US$1.2 billion) senior notes offering

On May 28, 2025, Capital Power closed a private placement offering of $966 million (US$700 million) aggregate principal amount of 5.257% senior notes due 2028 and $690 million (US$500 million) aggregate principal amount of 6.189% senior notes due 2035 issued by Capital Power (US Holdings) Inc., a U.S. wholly-owned subsidiary of the Company. The notes are guaranteed by the Company and the Company’s subsidiaries that guarantee the Company’s revolving credit facilities. The net proceeds of the offering were used to fund a portion of the Acquisition.

$667 million bought deal offering of common shares

On April 22, 2025, the Company completed its bought deal offering of 11,902,500 common shares of Capital Power, which included 1,552,500 common shares issued pursuant to the full exercise of the over-allotment option, at an offering price of $43.45 per common share (the Offering Price), for total gross proceeds of approximately $517 million (the Public Offering).

Concurrently, the Company issued 3,455,000 common shares at the Offering Price to Alberta Investment Management Corporation on a private placement basis for gross proceeds of approximately $150 million.

The net proceeds of the offerings were used to partially finance the Acquisition.

Analyst conference call and webcast

Capital Power will be hosting a conference call and live webcast with analysts on July 30, 2025 at 9:00 am (MT) to discuss the second quarter financial results. The webcast can be accessed at: https://edge.media-server.com/mmc/p/ovx9eaxq. Conference call details will be sent directly to analysts.

An archive of the webcast will be available on the Company’s website at www.capitalpower.com following the conclusion of the analyst conference call.

Non-GAAP Financial Measures and Ratios        

Capital Power uses (i) earnings before, income tax expense, depreciation and amortization, net finance expense, foreign exchange gains or losses, gains or losses on disposals and other transactions, unrealized changes in fair value of commodity derivatives and emission credits, other expenses from our joint venture interests, acquisition and integration costs, and other items that are not reflective of the Company’s facility operating performance (adjusted EBITDA), and (ii) AFFO as specified financial measures. Adjusted EBITDA and AFFO are both non-GAAP financial measures.

Capital Power also uses AFFO per share as a specified performance measure. This measure is a non-GAAP ratio determined by applying AFFO to the weighted average number of common shares used in the calculation of basic and diluted earnings per share.

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 Capital Power, 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 our results of operations from management’s perspective.

Adjusted EBITDA

During the second quarter of 2025, the Company amended the composition of adjusted EBITDA to exclude acquisition and integration costs, as these costs are not reflective of facility operating performance. The Company has applied this change to all historical amounts reported. Capital Power uses adjusted EBITDA to measure the operating performance of facilities and categories of facilities from period to period. Management believes that a measure of facility operating performance is more meaningful if results not related to facility operations are excluded from the adjusted EBITDA measure such as impairments, foreign exchange gains or losses, gains or losses on disposals and other transactions, unrealized changes in fair value of commodity derivatives and emission credits, acquisition and integration costs, and other items that are not reflective of the long-term performance of the Company’s underlying operations.

A reconciliation of adjusted EBITDA to net income is as follows:

AFFO and AFFO per share

AFFO and AFFO per share are measures of our ability to generate cash from our operating activities to fund growth capital expenditures, repayment of debt, and payment of common share dividends. During the second quarter of 2025, the Company amended the composition of AFFO and AFFO per share to exclude acquisition and integration costs, as these costs are not reflective of cash generated from facility operations. The Company has applied this change to all historical amounts reported.

AFFO represents net cash flows from operating activities adjusted to:

• remove timing impacts of cash receipts and payments that may impact period-to-period comparability which include deductions for net finance expense and current income tax expense, the removal of deductions for interest paid and income taxes paid and removing changes in operating working capital,
• include our share of AFFO of joint venture interests and exclude distributions received from our joint venture interests which are calculated after the effect of non-operating activity joint venture debt payments,
• include cash from off-coal compensation received annually through to 2030,
• remove the tax equity financing project investors’ shares of AFFO associated with assets under tax equity financing structures so only Capital Power’s share is reflected in the overall metric,
• deduct sustaining capital expenditures and preferred share dividends,
• exclude the impact of fair value changes in certain unsettled derivative financial instruments that are charged or credited to our bank margin account held with a specific exchange counterparty,
• exclude acquisition and integration costs, and
• exclude other typically non-recurring items affecting cash flows from operating activities that are not reflective of the long-term performance of the Company’s underlying business.

A reconciliation of net cash flows from operating activities to AFFO is as follows:

Forward-looking Information

Forward-looking information or statements included in this MD&A are provided to inform our 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 MD&A 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 MD&A includes expectations regarding:

• our priorities and long-term strategies, including our corporate, and decarbonization strategies,
• our 2025 performance targets, including sustaining capital expenditures, adjusted funds from operations (AFFO) and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA),
• future revenues, expenses, earnings, adjusted EBITDA and AFFO,
• the future pricing of electricity and market fundamentals in existing and target markets,
• our future cash requirements including interest and principal repayments, capital expenditures, dividends and distributions,
• our sources of funding, adequacy and availability of committed bank credit facilities and future borrowings, various aspects around existing, planned and potential development projects and acquisitions. This includes expectations around timing, transaction close timing and receipt of required regulatory approvals, and the satisfaction of other customary closing conditions, funding, project and acquisition costs, generation capacity, costs of technologies selected, environmental and sustainability benefits, and commercial and partnership arrangements,
• our 2025 estimated capital expenditures for previously announced growth projects,
• the performance of future projects and the performance of such projects in comparison to the market,
• plans and results related to the acquisition of Hummel Station, LLC (Hummel Station) and Rolling Hills Generating, L.L.C. (Rolling Hills),
• the return to operation of the downed unit at the Rolling Hills facility;
• anticipated pricing trends, growth opportunities, market conditions, and future power demand in the Pennsylvania-New Jersey-Maryland market,
• legislative developments regarding carbon pricing in Pennsylvania and Ohio,
• future growth and emerging opportunities in our target markets,
• market and regulation designs and regulatory and legislative proposals and changes, regulatory updates and the impact thereof on the Company’s core markets and business, and
• the impact of climate change, including our assumptions relating to our identification of future risks and opportunities from climate change, our plans to mitigate transition and physical climate risks, and opportunities resulting from those risks.

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, expected future developments, and other factors it believes are appropriate including its review of purchased businesses and assets. The material factors and assumptions used to develop these forward-looking statements relate to:

• electricity and other energy and carbon prices,
• performance,
• business prospects (including potential re-contracting of facilities) and opportunities including expected growth and capital projects,
• the status and impact of policy, legislation and regulations,
• effective tax rates,
• the development and performance of technology,
• the outcome of claims and disputes,
• foreign exchange rates, and
• other matters discussed under the Performance Outlook and Risks and Risk Management sections of this MD&A.

Whether actual results, performance or achievements will conform to our 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 our expectations. Such material risks and uncertainties are:

• changes in electricity, natural gas and carbon prices in markets in which we operate and the use of derivatives,
• regulatory and political environments including changes to environmental, climate, financial reporting, market structure and tax legislation,
• disruptions, or price volatility within our supply chains,
• generation facility availability, wind capacity factor and performance including maintenance expenditures,
• ability to fund current and future capital and working capital needs,
• acquisitions and developments including timing and costs of regulatory approvals and construction,
• changes in the availability of fuel,
• ability to realize the anticipated benefits of acquisitions,
• limitations inherent in our review of acquired assets,
• changes in general economic and competitive conditions, including inflation and recession,
• changes in the performance and cost of technologies and the development of new technologies, new energy efficient products, services and programs, and
• risks and uncertainties discussed under the Risks and Risk Management section of this MD&A.

See Risks and Risk Management in our 2024 Integrated Annual Report, 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 date made. Capital Power 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 our expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law.

Territorial Acknowledgement

In the spirit of reconciliation, Capital Power respectfully acknowledges that we operate within the ancestral homelands, traditional and treaty territories of the Indigenous Peoples of Turtle Island, or North America. Capital Power’s head office is located within the traditional and contemporary home of many Indigenous Peoples of the Treaty 6 region and Métis Nation of Alberta Region 4. We acknowledge the diverse Indigenous communities that are located in these areas and whose presence continues to enrich the community.

About Capital Power

Capital Power is a growth-oriented power producer with approximately 12 GW of power generation at 32 facilities across North America. We prioritize safely delivering reliable and affordable power communities can depend on, building lower-carbon power systems, and creating balanced solutions for our energy future. We are Powering Change by Changing Power^TM.  

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