Capital Power reports second quarter 2026 results

EDMONTON, Alberta, July 29, 2026 (GLOBE NEWSWIRE) -- Capital Power Corporation (TSX: CPX) today released financial results for the quarter ended June 30, 2026. Highlights In July, entered into a long-term Energy Supply Agreement for 250 megawatts of capacity and energy with Meta Platforms, Inc. for a data centre in Alberta Generated net cash flows from operating activities of $214 million and adjusted funds from operations (AFFO) 1 of $328 million Generated a net loss of $43 million and adjusted EBITDA 1 of $351 million Increased annual common share dividend by 2%, representing the 13th consecutive year of increase 1 AFFO and adjusted EBITDA are non-GAAP financial measures. See Non-GAAP Financial Measures and Ratios.

CEO Message Our second quarter reinforces continued execution of our strategy and our conviction in Capital Power's long-term growth outlook. Our long-term (greater than 10 years) supply agreement with Meta represents the achievement of an important milestone for the company and demonstrates that Alberta's data centre opportunity is translating into real investment and committed load. Combined with increasing clarity around large-load integration, market design and government policy, we see growing market optimism in Alberta's ability to attract investment, support rising electricity demand and create long-term value.

We also continue to see strong fundamentals across our other core markets. This is reflected in rising energy and capacity pricing, reinforcing our confidence in the long-term value of our assets as we recontract existing assets at higher pricing for longer duration. At the same time, growing demand for reliable, dispatchable and lower-carbon power continues to support opportunities in renewables and energy storage in addition to natural gas thermal power generation.

Backed by a strong balance sheet, disciplined capital allocation and a portfolio with meaningful embedded growth opportunities, we continue to unlock value from our existing assets and increased our annual dividend by 2%, reflecting our balanced and compelling long-term value proposition. Operational and Financial Highlights 1 The operational and financial highlights in this press release should be read in conjunction with the Management’s Discussion and Analysis (MD&A) and the unaudited condensed interim financial statements for the six months ended June 30, 2026. Gigawatt hours (GWh) of electricity generation reflects the Company’s share of facility output and includes GWh discharged from BESS.

Facility availability represents the percentage of time in the period that the facility was available to generate power regardless of whether it was running and therefore is reduced by planned and unplanned outages. Diluted earnings per share was calculated after giving effect to outstanding share purchase options. The consolidated financial highlights, except for adjusted EBITDA, AFFO and AFFO per share were prepared in accordance with GAAP.

See Non-GAAP Financial Measures and Ratios. Revenues and other income increased quarter-over-quarter and year-over-year, primarily reflecting contributions from the Hummel Station and Rolling Hills facilities acquired in June 2025, with the quarter also benefiting from favourable unrealized fair value changes on commodity derivatives and emission credits; underlying segment performance was broadly consistent as stronger contributions from the Ontario battery energy storage projects and Alberta portfolio optimization were largely offset by lower Alberta pool prices and generation. Adjusted EBITDA increased for the same underlying reason — the added contributions from Hummel Station and Rolling Hills — partially offset by higher outage costs in our U.S. flexible generation segment and higher net corporate expenses.

Net loss improved quarter-over-quarter as higher adjusted EBITDA and a favourable change in unrealized fair value on commodity derivatives and emission credits and lower acquisition and integration costs more than offset higher depreciation and amortization, increased finance expense and unfavourable foreign exchange; on a year-to-date basis, however, results shifted to a net loss from net income in the prior year due to a smaller favourable fair value change on commodity derivatives and emission credits. AFFO increased both quarter-over-quarter and year-over-year, driven primarily by the recognition of Clean Technology Investment Tax Credit government grants for eligible Canadian renewables projects — recognized upon completion of the required regulatory filing — and by higher adjusted EBITDA from the U.S. flexible generation portfolio following the June 2025 acquisitions of the Hummel Station and Rolling Hills facilities, partly offset by a heavier sustaining capital program and higher finance and current tax costs. Net cash flows from operating activities also increased year-over-year, reflecting those same acquisition contributions and higher distributions from equity-accounted investments, net of higher interest paid on the related acquisition debt.

Subsequent Events Meta Platforms, Inc. ESA In July, Capital Power announced that it entered into a long-term (greater than 10 years) energy supply agreement (ESA) for 250 MW of capacity and energy in support of a data centre in Sturgeon County, Alberta being developed by Meta Platforms, Inc. (Meta). The load from the project is anticipated to be in service in the back half of 2028. Tax equity financing On July 10, 2026, Capital Power’s Hornet Solar project reached mechanical completion.

Subsequently, the Company received approximately $26 million (US$18 million) in tax equity financing, net of issue costs of $5 million (US$3 million) associated with the financing, from a U.S. financial institution in exchange for Class A interests of a subsidiary of the Company. A further $104 million (US$73 million) will be received at substantial completion of the project, which is expected within the fourth quarter of 2026. Tax equity financing represents the contribution made by the project investor, adjusted for earnings, tax benefits and cash distributions realized/paid over time.

The maturity dates of these obligations are subject to change and are driven by the dates on which the project investor reaches the agreed upon target rate of return. In accordance with the Company's material accounting policies (as described in the 2025 annual consolidated financial statements), the amounts paid by the project investors for their equity stakes are classified as loans and borrowings on the consolidated statements of financial position until the projects have yielded an agreed-upon target rate of return to the project investors. Analyst conference call and webcast Capital Power will be hosting a conference call and live webcast with analysts on July 29, 2026 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/s8frqh5q/ . 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 equity-accounted investments, acquisition and integration costs, and other items that are not reflective of the Company’s facility operating performance (adjusted EBITDA), and (ii) adjusted funds from operations (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, 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: Includes finance expense, depreciation expense and unrealized changes in fair value of derivative instruments from equity-accounted investments. For the three and six months ended June 30, 2026, other non-recurring items reflects legal fees related to construction issues on the Genesee Repowering project. The six months ended June 30, 2025 reflects costs related to the end-of-life of Genesee coal operations.

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. The Company's AFFO definition includes government grants related to off-coal compensation to be received annually to 2030. During the second quarter of 2026, the Company updated the composition of AFFO and AFFO per share to reflect the introduction of similar government grants where cash grants form part of the operating returns on qualifying capital investment and support the Company's cash generation and liquidity profile.

As a result, AFFO and AFFO per share now include Clean Technology ITCs associated with eligible Canadian renewable projects. In the second quarter of 2026, the Company has included $174 million in government grants related to Clean Technology ITCs, representing approximately 30% of eligible Canadian renewables project costs. These amounts are included in AFFO and AFFO per share in the period in which the required filing with the applicable tax authority is completed, rather than when cash is received to eliminate timing variability associated with administrative processing.

While Capital Power expects amounts ultimately received to be consistent with amounts filed, actual receipts may differ. The amendment did not impact previously reported AFFO or AFFO per share amounts. AFFO represents net cash flows from operating activities adjusted to: exclude timing impacts of cash receipts and payments that may impact period-to-period comparability by including deductions for net finance expense and current income tax expense, and excluding deductions for interest paid, deductions for income taxes paid and changes in operating working capital, include our share of AFFO of equity-accounted investments and exclude distributions received from our equity-accounted investments which are calculated after the effect of non-operating activity equity-accounted investments debt payments, include government grants which represent a portion of operating returns on capital investment recognized in the period that they are either contractually obligated to be received by Capital Power or the period in which Capital Power has completed the necessary filing with the applicable tax authority to eliminate timing uncertainty due to administrative filing processes, exclude 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, exclude 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: Included in other cash items on the condensed interim consolidated statements of cash flows to reconcile net income to net cash flows from operating activities. Excludes unrealized changes on interest rate derivative contracts, amortization, accretion charges, and non-cash implicit interest on tax equity investment structures. For the three and six months ended June 30, 2025, excludes current income tax expense related to the partial divestiture of Quality Wind and Port Dover and Nanticoke Wind in 2024 as the amount is classified as an investing activity.

Sustaining capital expenditures related to equity-accounted investments of nil and $9 million for the three and six months ended June 30, 2026, respectively, compared with $2 million and $6 million for the three and six months ended June 30, 2025 were included in AFFO from equity-accounted investments. For the three and six months ended June 30, 2026, reflects recognition of $174 million in Clean Technology ITCs filed with the applicable tax authority, representing approximately 30% of eligible Canadian renewables project costs. For the three and six months ended June 30, 2025, reflects payment received from the Government of Alberta for the settlement of previously disputed off-coal compensation payments as described in the Company's 2025 annual consolidated financial statements.

For the three and six months ended June 30, 2026, current income tax expenses of $1 million related to prior period acquisition and integration costs. For the three and six months ended June 30, 2025, net of current income tax expenses of $1 million. For the three and six months ended June 30, 2026, other non-recurring items included $2 million of legal costs related to a contractor dispute concerning construction work at the Genesee Repowering project, partially offset by current income tax recoveries of $4 million and $6 million, respectively, associated with non-recurring items recognized in prior periods.

For the three months ended June 30, 2025, other non-recurring items consisted of $7 million of current income tax expenses associated with non-recurring items recognized in prior periods. For the six months ended June 30, 2025, other non-recurring items reflected $5 million of costs associated with the end-of-life of Genesee coal operations, net of $16 million of current income tax recoveries. Forward-looking information Forward-looking information or statements (collectively, "forward-looking information") included in this press release are provided to inform our shareholders, potential investors and other stakeholders 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, among other things, expectations regarding: our priorities and strategies, including our strategy of securing durable, long-term contracts from creditworthy counterparties across a broad opportunity set, our 2026 performance targets, including sustaining capital expenditures, AFFO and adjusted EBITDA, the construction by Meta of the data centre and the timing of Meta's project's load entering service, the outcomes resulting from the Arlington Valley tolling agreement extension and capacity uprate project, including expectations regarding the anticipated capacity payment increase from the facility and the anticipated timing and realization of such financial benefits, and the construction of the solar projects in North Carolina and the timing of their expected commercial operation.

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 this forward-looking information relate to: electricity and other energy (including natural gas) and carbon prices, the Company's performance, the Company's business prospects (including potential re-contracting of facilities) and opportunities including expected growth and capital projects, the energy needs of certain jurisdictions, 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 the 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 include: Meta's completion of a data centre as contemplated in the ESA, 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 market prices and 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 the MD&A. See Risks and Risk Management in our 2025 Integrated Annual Report, for further discussion of these and other risks. Readers are cautioned not to place undue reliance on any such forward-looking information, which speak only as of the date made and that other events or circumstances, although not listed above, could cause Capital Power's actual results to differ materially from those estimated or projected and expressed in, or implied by the forward-looking information.

Capital Power does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking information 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. About Capital Power Capital Power is one of North America's leading independent power producers, with approximately 12 GW of generation capacity across 35 facilities. Our portfolio includes natural gas, renewables, and battery energy storage solutions.

We deliver power generation at utility-scale through a flexible and resilient fleet built to meet growing electricity demand. Backed by an investment-grade credit rating, we provide safe, reliable power communities can depend on. We are Powering Change by Changing Power™.

For more information, please contact: Globe Newswire July 29, 2026 - 4:00 AM PDT News by QuoteMedia www.quotemedia.com