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Northland Power Investor Presentation
Northland Power Investor Presentation
Northland Power Investor Presentation
Northland Power Investor Presentation
Northland Power Investor Presentation
Northland Power Investor Presentation
Northland Power Investor Presentation
Northland Power Investor Presentation
Northland Power Investor Presentation
Northland Power Investor Presentation
Northland Power Investor Presentation
Northland Power Investor Presentation
Northland Power Investor Presentation
Northland Power Investor Presentation
Northland Power Investor Presentation
Northland Power Investor Presentation
Northland Power Investor Presentation
Northland Power Investor Presentation
Northland Power Investor Presentation
Northland Power Investor Presentation
Northland Power Investor Presentation
Northland Power Investor Presentation
Northland Power Investor Presentation
Northland Power Investor Presentation
Northland Power Investor Presentation
Northland Power Investor Presentation
Northland Power Investor Presentation
Northland Power Investor Presentation
Northland Power Investor Presentation
Northland Power Investor Presentation
Northland Power Investor Presentation
Northland Power Investor Presentation
Northland Power Investor Presentation
Northland Power Investor Presentation
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Northland Power Investor Presentation

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Updated as of November 2012

Updated as of November 2012

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  • 1. Investor PresentationNovember 2012 1
  • 2. Forward Looking Information DisclaimerThis written and accompanying oral presentation contains certain forward‐looking statements which are provided for the purpose of presenting information about management’s current expectations and plans.  Readers are cautioned that such statements may not be appropriate for other purposes. Forward looking statements include statements that are predictive in statements may not be appropriate for other purposes. Forward‐looking statements include statements that are predictive innature, depend upon or refer to future events or conditions, or include words such as “expects,” “anticipates,” “plans,” “believes,” “estimates,” “intends,” “targets,” “projects,” “forecasts” or negative versions thereof and other similar expressions, or future or conditional verbs such as “may,” “will,” “should,” “would” and “could.” These statements may include, without limitation, statements regarding future EBITDA, cash flows and dividend payments, the construction, completion, attainment ofcommercial operations, cost and output of development projects, plans for raising capital, and  the operations, business, commercial operations cost and output of development projects plans for raising capital and the operations businessfinancial condition, priorities, ongoing objectives, strategies and outlook of Northland and its subsidiaries. This information is based upon certain material factors or assumptions that were applied in developing the forward‐looking statements, including the design specifications of development projects, the  provisions of contracts to which Northland or a subsidiary is a party, management’s current plans, its perception of historical trends, current conditions and expected future developments, as well asother factors that are believed to be appropriate in the circumstances.  Although these forward‐looking statements are based upon management’s current reasonable expectations and assumptions, they are subject to numerous risks and uncertainties. Some of the factors that could cause results or events to differ from current expectations include, but are not limited to, construction risks, counterparty risks, operational risks, the variability of revenues from generating facilities powered by intermittent renewable resources  and the other  factors described in the “Risks and Uncertainties” section of Northland’s 2011 Annual Report and 2011 Annual Information Form, which are both filed electronically at www.sedar.com and Northland’s website www.northlandpower.ca. Northland’s actual results could differ materially from those expressed in, or implied by, these forward‐looking statements and, accordingly, no assurances can be given that any of theevents anticipated by the forward looking statements will transpire or occur.  The forward looking statements contained in this events anticipated by the forward‐looking statements will transpire or occur The forward‐looking statements contained in thispresentation are based on assumptions that were considered reasonable at time of delivery.  Other than as specifically required by law, Northland undertakes no obligation to update any forward‐looking statements to reflect events or circumstances after such date or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise. 2
  • 3. Northland Overview Develop Finance Build Own Operate Canadian‐based Independent Power Producer since 1987 Well‐diversified across many clean and green technologies and  geographical jurisdictions Full lifecycle developers, owners and operators of our facilities Strategic and disciplined organic Strategic and disciplined organic growth platform platform  Stable, long‐term contracted (non‐merchant) projects with  creditworthy counterparties S&P debt rating BBB– positive outlook  Focus on contracted low risk cash flow streams; little interest in  Focus on contracted low risk cash flow streams little interest in taking positions on commodities, FX and interest rates 3
  • 4. Stability and Growth Stability Growth Commitment to $1.08/share  annual  Development Pipeline consists of  construction and development assets dividend 1,005MW in operating assets 11% 15.3*‐year weighted average PPA life 11% $2.0 billion in available tax pools Long average tenure of management  Long average tenure of management 2,800 MW team 78% Exceptional environmental, health  and safety records Management ownership: 37%↑** 3 0MW 320MW In Construction 280MW Advanced Development* Includes operating projects and projects under construction. For operating projects only, the weighted average PPA life is 13.6 years. 2,200MW Development Pipeline 4** Includes conversion of merger shares
  • 5. Diversified by Geography and Technology1. Cochrane 32 MW* h Germany 102. Iroquois Falls 120 MW3. Kirkland Lake 99 MW3 Kirkland Lake 99 MW*4. Thorold 265 MW 115. Kingston 110 MW6. North Battleford 260 MW7. Spy Hill 86 MW CANADA 98. Jardin d’Éole 128 MW Quebec 8 69. Mont Louis 100 MW 710. Kavelstorf  7MW l f 1 2 Ontario 311. Eckolstädt 14 MW 14 Saskatchewan 13 512. Brandywine 44 MW** y 413. Rooftop 1 MW**14. Ground Mount 60 MW Under construction Solar UNITED STATES UNITED STATES 12 Natural Gas In operation Biomass  Wind Maryland* Represents Northland’s 75% economic interest 5** Represents Northland’s ownership interest
  • 6. Long Term Focus Delivers ValueNorthland’s full life cycle focus Captures development profits and provides stable cash flows over  the life of facilities to service the dividend.  Preferred by power off‐takers.  Ensures quality projects are constructed to achieve performance and  reliability.  origination feasibility signed financial commercial operations  confirmed PPA close date Risk k IN DEVELOPMENT ADVANCED UNDER OPERATIONS DEVELOPMENT CONSTRUCTION Development and Initial risk construction value Greatest exposure Operations cashflow to create  Diminishing risk 6 value to service dividends
  • 7. Diversified Portfolio of Assets 2011 ‐ $151M 2015 ‐ $360‐400M Saskatchewan EBITDA – by Geography 2% Saskatchewan 26% Quebec Quebec 11% 8% Other Other Ontario 2% 1% Ontario 85% 65% EBITDA – by Technology Wind  17% Solar 17% Wind  Hydro Thermal 13% 2% 87% Thermal 64% 7
  • 8. Diversified Portfolio of Assets EBITDA – by Facility 2011 ‐ $151M 2011  2015  2015 ‐ $360‐400M Cochrane* Germany Mt Louis Manitoulin Spy Hill Grand Bend 1% Kirkland Lake* 1% Jardin 4% 2% 6% 2% 1% 5% Kirkland Lake* 3% Germany 2% Cochrane* Solar Thorold Th ld 1% 17% 36% Jardin 9% Spy Hill 4% Mt Louis Kabinakagami 2% 2% North Battleford Iroquois Falls 21% 10% Iroquois Falls q Kingston Ki t 23% 24% Kingston Thorold 11% 13% 8
  • 9. Stability of Cash Flows Remaining PPA Term for Each Facility Cochrane* Iroquois Falls Weighted average*** g g Kirkland* Ki kl d* Kingston Kingston Thorold Iroquois Falls G Spy Hill Spy Hill Germany Jardin Cochrane* Thorold Kirkland* Mont Louis Mt Louis Ground Mounted Solar** Germany Jardin North Battleford**Ground Mounted Solar** North Battleford** Spy Hill 0 5 10 15 20 25 30 Weighted average PPA life is 15.3 years*** *Managed facilities ** Projects currently under construction *** The weighted average PPA life is weighted by respective MW capacity. The weighted average PPA life of 15.3 years includes projects currently under  construction. For operating projects only, the weighted average PPA life is 13.6 years. 9
  • 10. Strong Balance Sheet S&P Debt Rating BBB– Positive Outlook  (October 29, 2012) (October 29 2012) 7% Preferred Shares 1% Convertible  Debentures/Shares ENTERPRISE VALUE $3.7 November 2012 N b 2012 BILLION 31% Non‐Recourse 60% Project Debt Equity at recent $18.75 share price*;  118 million shares*** Closing November 12, 2012** Represents shares recognized for accounting purposes which includes Convertible Class A, Class C Shares and Replacement Rights.  10
  • 11. Full In‐house Capabilities Project  Origination Fuel and  Concept  Electricity  Engineering Management Operations &  Asset  Management 100% NORTHLAND Corporate &  Project  Financing IN‐HOUSE IN HOUSE Construction  Permitting  Management Management Community  Community Relations 11
  • 12. Growth PipelineConstructionAdvanced DevelopmentAd dConstruction D l Advanced Development Development D l tDevelopment Construction Advanced Development Development 12
  • 13. Construction and Development Pipeline 320MW ‐ In Construction 20% 280MW ‐ Advanced Development Hydro / d / 2,200MW ‐ Development Pipeline Pumped Storage 20% Wind Construction and 55% 2,800 2 800 MWNatural Gas Development Pipeline 5% Solar 13
  • 14. Projects Under ConstructionNorth Battleford, Saskatchewan, Canada On track for  O t kf Q2 2013  completion 260MW gas‐fired  combined cycle plant 20‐year PPA $677M Expected project cost Construction Kiewit COD guarantee Q4 2013 Q4 2013 14
  • 15. Projects Under ConstructionGround Mounted Solar, Ontario, Canada Expected  E t d completion  Q1‐Q3 2013  60MW X6 10MW ground  mount solar farms mo nt solar farms 20‐year PPA $285M Expected project cost Construction Aecon – Miwel 15
  • 16. Construction: On‐time, On‐budget Northland’s track record is on‐time, on‐budget project delivery Budget  Actual  % OnFacility COD Location MW (M) (M) Under TimeIroquois Falls cogeneration plantI i F ll i l 1997 ON 110 $158 $151 4.18% 4 18%Iroquois Falls gas turbine replacement 2003 ON 80 $24 $23 2.13% p yKirkland Lake peaker facility 2004 ON 30 $30 $30 1.33%Mont Miller wind farm 2005 QC 54 $98 $93 5.11%Jardin d’Éole wind farm 2009 QC 128 $268 $268 0.22%Thorold cogeneration facility 2010 ON 265 $520 $509 2.12%Mont Louis wind farm 2011 QC 100 $181 $173 4.42%Spy Hill peaker facilitySpy Hill peaker facility 2011 SK 86 $141 $137 2.83% North Battleford and six ground mount solar projects currently  under construction are within budget and on schedule 16
  • 17. Disciplined Development Power Sales Long‐term power contracts Creditworthy counterparties Predictable economics Power off‐taker assumes fuel risks, where  fuel cannot be otherwise hedged Project Financing Non‐recourse single project Fully amortizing Fully amortizing Term matched to PPA Interest rate and FX hedging Construction C i Fixed price guarantee Fi d i Penalty provisions Equipment and Supply Fixed price guarantee Comprehensive maintenance contracts Insurance Comprehensive insurance program “Loss prevention” mindsets Loss prevention mindsets 17
  • 18. Advanced Development Projects Mclean’s Mountain Grand Bend 60MW*  $190M 100MW * $38 M  00 $385 COD 2013 COD 2014 280 MW* under contract Frampton 24MW * $75M COD 2015 COD 2015 Ground mount solar Kabinakagami 70MW*  $325M 26MW*  $180M MW COD  2013 ‐2014  COD 2015 Total Project Costs  $1.2 billion Total Project Costs ~$1.2 billion* Represents total installed capacity of projects in advanced development. 18
  • 19. Ground‐Mounted Solar – Future Phases   Ontario, Canada 70MW: 7 projects x 10MW Total project costs $325M  Target in‐service dates 2013 ‐2014 Development Checklist Development Checklist Power contract obtained  Solar panel supply Construction contractor  Land Secured  Interconnection assessment I t ti t Receipt of final permits Financing g 19
  • 20. McLean’s Mountain on Manitoulin Island Ontario, Canada 60MW wind farm Total project cost ~$190M 50/50 partnership with First  Nations North  Target in‐service date ‐ l i i d late 2013 20 3 Manitoulin  Island Development Checklist Power contract obtained  Turbine supply Construction contractor  Construction contractor Land Secured  Wind assessment Interconnection assessment   Receipt of final permits Financing 20
  • 21. Grand Bend Ontario, Canada 100MW wind project Total project cost ~$385M Target in‐service date ‐ late 2014 Poised to leverage a strong  relationship with local First Nations  to a successful partnership Development Checklist D l t Ch kli t Power contract obtained  Turbine supply pp y Construction contractor  Land Secured  Wind assessment Interconnection assessment  Receipt of final permits Receipt of final permits Financing 21
  • 22. Development Pipeline Combined Heat and Power Natural Gas Hydro – Run‐of‐River Hydro – Pumped storage Wind Solar 2,200 MW PIPELINE 22
  • 23. Marmora Pumped Storage   Ontario, Canada 400MW Hydro pumped  storage facility Stores off‐peak power for             on‐peak use Supports grid stability Proven technology Ideal site Unprecedented community  support Artist’s rendering of completed project. 23
  • 24. Financial Summary  Recent Share Price (TSX: NPI) $18.75 Shares Outstanding 128M Float (Common + Class A) 115M Institutional Ownership ~30% Annual Dividend $1.08 $ Annual Dividend Yield 5.8% Total Debt, Net of Cash Total Debt Net of Cash $968M Convertible Debentures (NPI.DB.A) $32M Preferred Shares (NPI.PR.A, NPI.PR.C) Preferred Shares (NPI.PR.A, NPI.PR.C) $263M Market Capitalization (Common only) $1,602M 24 Enterprise Value $3,739M
  • 25. Financial Highlights and Forecast Growth Highlights Forecasted EBITDA Growth Revenue of more than $350 million $400M Over $2.3 billion in total assets$300M Successfully raised $1.4 billion in  financing between 2007‐2012 g$200M Growth initiatives have  demonstrated results (September $100M 30, 2012 YTD EBITDA increased by  25% vs. 2011) $M 2011 2012 2013 2014 2015 Strong Stable Cash Flows Diversified cash flows over five  geographically separate regions and  2011 EBITDA ($151M) regulatory jurisdictions forecasted to more than $2.0 billion in available tax pools  DOUBLE by 2014 results in minimal cash taxes for  foreseeable future Long term power contracts reside  L id with creditworthy counterparties 25
  • 26. Industry‐leading ReturnsSince its 1997 IPO, Northland Power has delivered a compounded annual return to investors of 13.1% doubling the TSX total returnannual return to investors of 13.1% doubling the TSX total return600% 10 year  5 year  Merger g Northland Power outlook l k outlook500% TSX Peer Group*400%300% NPI Annual Total Return Post Merger:  30.7%200% 5 Year:  17.5% y 10 year:  14.3%100% Since Inception:  13.1% 0% April  97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 April 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 97* Peer Group includes TransAlta Corp., Capital Power Corp., Algonquin Power & Utilities Corp, Brookfield Renewable Energy Partners, Boralex Inc., Innergex Renewable Energy Inc.  26
  • 27. Liquidity Management1. Consistent and predictable annual free cash flow2. Line of Credit ‐ $250 million total3. Continued access to capital markets Continued access to capital markets4. Development expenses and discretionary capital expenditures5. No meaningful cash taxes for foreseeable future f l h f f bl f $1B $962M $1.1B from operating assets from construction projects from contracted projects AVAILABLE FUTURE Northland’s  Tax Pools $2.0B $1.1B 27
  • 28. DRIP – A Win‐Win Opportunity 6. Dividend Reinvestment Plan (DRIP) For management  a key liquidity tool, enabling  For management – a key liquidity tool enabling Northland to raise growth capital at a low cost For shareholders – a convenient means to purchase  For shareholders a convenient means to purchase additional shares at a discounted price without  incurring brokerage commissions  incurring brokerage commissions Since inception, the DRIP has raised $25.2 million at  a negligible transaction costs and has an overall  a negligible transaction costs and has an overall participation rate of ~26% Features of DRIP Features of DRIP* Type of Plan Treasury or Market Purchases Issue price from treasury Discounted to 5 day weighted average price Current discount di 5% %* See www.northlandpower.ca for more details. 28
  • 29. Why Invest in Northland?  Stability: The track record, commitment and ability  to deliver shareholder value. Commitment to $1.08  d li h h ld l i $ annual dividend. Strong and Visible Growth Opportunities: An  exciting portfolio of attractive, strategic development  projects. Experienced Team: Strong, seasoned people at  Experienced Team: Strong, seasoned people at every level. Management’s ownership of more than 37%  ensures alignment with shareholder interests 29
  • 30. Appendix 30
  • 31. Operating Projects PPA Gas Project Loc. Size Ownership Technology term Term 2015‐Iroquois Falls ON 120 MW 100% Natural gas cogeneration 2021 2016Kingston ON 110 MW 100% Natural gas combined cycle 2017 2017Thorold ON 265 MW 100% Natural gas cogeneration 2030  2030Spy Hill SK 86 MW 100% Natural gas peaking plant 2036 n/aPanda MD 230 MW 19% Natural gas combined cycle 2021 2021BrandywineJardin d’Éole QC 128 MW 100% Wind 2029 n/aKavelstorf &K l f& Germ G 22 MW 100% Wind n/a* n/aEckolstadt ‐anyMont Louis QC 100 MW 100% Wind 2031 n/aSolar Rooftop l f ON 2 MW 75% Rooftop solar f l 2031 n/a / Biomass & natural gas combined cycleKirkland Lake ON 132 MW ** 2015 2015 and peakingCochraneC h ON 42 MW 42 MW ** Biomass & natural gas combined cycle  Bi & t l bi d l 2015 2016 * German electricity production is purchased by local power utilities as required by German legislation at predetermined prices. ** Northland manages these facilities under contract, however Northland has an effective 75% residual economic interest in these facilities. 31
  • 32. Construction & Development ProjectsProject Expected  PPA Expected  Loc. Size Ownership TechnologyConstruction COD Term Capital Cost Capital Cost North  Natural gas  SK 260 MW 100% Q2 2013 20 year $677M  Battleford combined cycleGround Mount Ground Mount ON 60 MW 100% Ground mount solar 2013 20 year $285M $ Solar ‐ IDevelopmentMcLean’s Mtn ON 60 MW <100% Wind Late 2013 20 year $190M *Ground Mount 2013‐ ON 70 MW 100% Ground mount solar 20 year $325MSolar ‐ II 2014Kabinakagami ON 26 MW <100% Run‐of‐river hydro 2015 40 year $180M *Grand Bend ON 100 MW <100% Wind 2014 20 year $385MFrampton QC 24 MW <100% Wind 2015 20 year $75M * *   Represents full cost of the project (100%).  Northlands estimated ownership interest is (50% Manitoulin, Kabinakagami, and 67% Frampton) 32
  • 33. Experienced Management Management has over Management owns  200+ years of experience in approximately 37%  the energy industry with of Northland equity.of Northland equity. average tenure of 16 years.  average tenure of 16 years James Temerty  John Brace .  Chairman President and Chief Executive Officer Formed Northland 1987 Joined 1988 Paul Bradley Sam Mantenuto Tony Anderson Michael Shadbolt Chief Financial Officer Chief Operating Officer and Chief  Chief Investment Officer Vice President and  Joined 2011 d Development Officer Joined 1989 General Counsel Joined 1997 Joined 2011 David G. Dougall Dino Gliosca Jim Cipolla Vice President, Operations Vice President, Engineering Vice President, Gas and  Joined 1990 Joined 1987 Electricity Marketing Joined 1999 33
  • 34. Investor Relations Contacts Investor Relations Contacts Adam Beaumont Ad B t Director of Finance 647.288.1929investorrelations@northlandpower.ca www.northlandpower.ca Barb Bokla Manager, Investor Relations  647.288.1438 647 288 1438 34

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