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Operational and Financial Highlights¹

Significant Events

Renewable power asset sell-down

On December 20, 2024, the Company closed its sale of 49% interests in the Quality Wind facility in British Columbia and the Port Dover and Nanticoke Wind facility in Ontario to Axium Infrastructure. Total pre-tax cash proceeds from the transaction are $333 million, inclusive of working capital. At December 31, 2024, transaction fees of $7 million have been recorded within trade and other payables.

The two wind facilities are fully contracted with investment grade counterparties and have a remaining weighted average contract life of ~11 years. Capital Power will continue to manage and operate the assets on behalf of the newly formed partnership under a long-term asset management agreement. Consistent with its strategy, the transaction represents the crystallization of a levered equity return in excess of Capital Power’s capital allocation thresholds and enhances its financial flexibility.

$460 million bought offering of common shares

On December 17, 2024, the Company completed a public offering of 7,820,000 common shares (inclusive of the full exercise of a 1,020,000 common shares over-allotment option), at an issue price of $58.80 per common share for total gross proceeds of approximately $460 million (the Offering) less issue costs of $19 million.

The Company intends to use the net proceeds from the Offering to fund future potential acquisitions and growth opportunities and for general corporate purposes.

Genesee is off coal and repowering achieves commercial operations

On June 18, 2024, the Company reached a significant milestone for the Genesee Repowering project with the announcement that the Genesee Generating Station is off coal and now 100% natural gas-fueled, resulting in the facility being off coal more than 5 years ahead of the Alberta government mandate.

On December 13, 2024, the Company announced that its Genesee Repowering project as Genesee Unit 2 achieved combined cycle commercial operations. This milestone marked a significant phase in the Genesee Repowering project resulting in Genesee Units 1 and 2 becoming Canada’s most efficient natural gas combined cycle facility³. The advancement of this project increases overall capacity at the Genesee Generating Station by 512 MW and reduces CO₂ emissions (Scope 1) by 3.4 MT annually⁴ – representing a ~60% increase in capacity while reducing emissions (Scope 1) by ~40%.

The approximately $1.5 billion project began construction in summer 2021 requiring more than 5.8 million hours of labour with a peak of ~1,250 workers on site. Located entirely within the footprint of the existing Genesee Generating Station, the project involved installing two new Mitsubishi M501JAC gas-fired combustion turbines and Vogt triple-pressure heat recovery steam generators, while utilizing the units’ existing steam turbine generators.

The Genesee Generating Station is now capable of delivering up to 1,857 MW of reliable, affordable and lower-carbon power for Alberta’s thriving economy. The significant baseload generation available on the 26,000+ acre site supports grid-wide reliability while presenting opportunities for future development, energizing the Alberta advantage for new technologies, industries and growth. With the project now complete, Capital Power will be referring to the Genesee Generating Station as a single facility in our portfolio (30 total facilities instead of 32 when counting all three units separately).

Refinancing of York Energy

On November 27, 2024, York Energy successfully refinanced and upsized its existing term loan for an additional approximately ten-year term maturing April 30, 2035. The $315 million term loan bears interest at a fixed rate of 5.34% and is repayable in quarterly installments. This refinancing creates interest savings of approximately 0.66% and extends the maturity to align with the power purchase agreements expiring in 2035.

Organizational review - voluntary departure program

On October 24, 2024, the Company announced the rollout of the voluntary departure program (VDP) and achieved a reduction in its Canada-based corporate employees of approximately 40% (165 positions). The VDP is the result of a strategic organizational review to optimize the organization to scale and grow efficiently, inclusive of decentralizing corporate functions, reducing headcount in certain areas and expanding in key growth areas.

In connection with the restructuring, the Company incurred a total cost of $49 million, which includes $10 million related to employee benefit costs that would have otherwise been incurred in future periods. The total restructuring costs are expected to be paid within the next six months as the employees participating in the VDP will depart the Company by June 2025.

Analyst conference call and webcast

Capital Power will be hosting a conference call and live webcast with analysts on February 26, 2025 at 9:00 am (MT) to discuss the fourth quarter and 2024 year-end financial results. The webcast can be accessed at: https://edge.media-server.com/mmc/p/vvu8g99s/.

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 net finance expense, income tax expense, depreciation and amortization, impairments, foreign exchange gains or losses, finance expense and depreciation expense from our joint venture interests, gains or losses on disposals and unrealized changes in fair value of commodity derivatives and emission credits (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

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 and other items that are not reflective of the long-term performance of the Company’s underlying business.

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

Adjusted funds from operations and adjusted funds from operations per share

AFFO and AFFO per share are measures of the Company’s ability to generate cash from its operating activities to fund growth capital expenditures, the repayment of debt and the payment of common share dividends.

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 the Company’s share of the AFFO of its joint venture interests and exclude distributions received from the Company’s joint venture interests which are calculated after the effect of non-operating activity joint venture debt payments,

• include cash from off-coal compensation that will be received annually,

• remove the tax equity financing project investors’ shares of AFFO associated with assets under tax equity financing structures so only the Company’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 the Company’s bank margin account held with a specific exchange counterparty, and

• exclude other typically non-recurring items affecting cash 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 adjusted funds from operations is as follows:

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 disclosures regarding (i) forecasted 2025 depreciation, (ii) the timing of, funding of, generation capacity of, costs of technologies selected for, environmental benefits or commercial and partnership arrangements regarding existing, planned and potential development projects and acquisitions (including the repowering of Genesee 1 and 2, and La Paloma and Harquahala acquisitions), (iii) the financial impacts of the La Paloma and Harquahala acquisitions, (iv) the ability of profit-sharing arrangements to support partner communities, (v) the performance of future projects and the performance of such projects in comparison to the market, and (vi) the future energy needs of certain jurisdictions.

These statements are based on certain assumptions and analyses made by the Company considering 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: (i) electricity, other energy and carbon prices, (ii) performance, (iii) business prospects (including potential re-contracting of facilities) 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 from the Company’s expectations. Such material risks and uncertainties are: (i) changes in electricity, natural gas and carbon prices in markets in which the Company operates and the use of derivatives, (ii) regulatory and political environments including changes to environmental, climate, financial reporting, market structure and tax legislation, (iii) disruptions, or price volatility within our supply chains, (iv) generation facility availability, wind capacity factor 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 the availability of fuel, (viii) ability to realize the anticipated benefits of acquisitions, (ix) limitations inherent in the Company’s review of acquired assets, (x) changes in general economic and competitive conditions and (xi) changes in the performance and cost of technologies and the development of new technologies, new energy efficient products, services and programs. See Risks and Risk Management in the Company’s Integrated Annual Report for the year ended December 31, 2024, prepared as of February 25, 2025, 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 in the Company’s 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 10 GW of power generation at 30 facilities across North America. We prioritize safely delivering reliable and affordable power communities can depend on, building clean power systems, and creating balanced solutions for our energy future. We are Powering Change by Changing Power™.

For more information, please contact:

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¹ Anticipated GHG emission reductions from Genesee Repowering project and transition off-coal compared to 2019 facility emissions.
² Repowered Units 1 and 2 at Genesee Generating Station use Mitsubishi M501JAC turbines and Vogt heat recovery steam generators in combined cycle mode are the most efficient combined cycle units currently operating in Canada.
³ Repowered Units 1 and 2 at Genesee Generating Station use Mitsubishi M501JAC turbines and Vogt heat recovery steam generators in combined cycle mode are the most efficient combined cycle units currently operating in Canada.
⁴ Anticipated GHG emission reductions from Genesee Repowering project and transition off-coal compared to 2019 facility emissions.