Intelligent energy for a greener planet Investor Presentation Investor Presentation July, 2014 0 NPI.TO
Overview Canadian ‐ based Global Power Producer in business since 1987 Full lifecycle developers, owners, and operators of our facilities Generate long ‐ term stable cash flows; committed to dividend sustainability and ongoing value creation for our shareholders and ongoing value creation for our shareholders Developing thermal, wind, and solar projects in Canada, Europe, and U.S. 1,335 MW 39% in operation i ti M Management Ownership (14 facilities) $1 08 $1.08 dividend (6 0% i ld) (6.0% yield) 1
Long Term Focus Delivers Value g Northland’s full life cycle commitment Captures development profits and provides stable cash flows over the life of facilities Captures development profits and provides stable cash flows over the life of facilities to service the dividend Preferred by power off ‐ takers and lenders Ensures quality projects are constructed to achieve performance and reliability Ensures quality projects are constructed to achieve performance and reliability origination feasibility signed financial commercial confirmed PPA close operations date Development and Development and construction value Reward Operations cashflow to create value to service dividends Risk/ Initial risk Greatest exposure Diminishing risk ADVANCED UNDER OPERATIONS IN DEVELOPMENT DEVELOPMENT CONSTRUCTION Stage 2
Diversification by Geography and Technology y g p y gy 1 Cochrane 32 MW* 2 Kirkland Lake 101 MW* 2 Kirkland Lake 101 MW 3 Iroquois Falls 120 MW 12 4 Kingston 110 MW 10 5 Kavelstorf 7 MW 9 6 EckolstIädt 15 MW 7 7 Jardin d’Éole 128 MW 1 16 8 Thorold 265 MW 3 2 2 9 Mont Louis 100 MW 14 17 13 10 Spy Hill 86 MW 5 11 4 11 Roof ‐ top solar 1 MW* 15 12 North Battleford 260 MW 12 North Battleford 260 MW 8 6 13 Ground ‐ Mount Solar 130 MW ** 14 McLean’s Mountain 30 MW* 15 Grand Bend 50 MW* 16 Frampton 16 MW* 17 Gemini 360 MW* In operation Under construction Thermal Wind In advanced development p Biomass Solar 3 *Represents Northland’s economic interest **Ground ‐ mount solar: 80 MW in operations and 50 MW under construction.
Diversified Adjusted EBITDA Portfolio of Assets j By Facility 2013 ‐ $263 M 2015 ‐ $380 ‐ 400 M McLean's Mtn Germany Germany Mt Louis Mt L i 3% Kirkland Lake Jardin Gemini 1% 4% Cochrane 6% 4% 4% Spy Hill Germany 1% Kirkland Lake 6% 1% 2% Cochrane Jardin Jardin 2% 6% Mt Louis Spy Hill North Solar 6% Battleford 4% (13 solar sites) 18% 20% 20% Solar l (6 sites) Iroquois Falls 5% Thorold 13% North Battleford 20% Iroquois Falls 22% 9% 9% Kingston Kingston 18% Kingston 12% 12% Th Thorold ld 13% 4
Producing and Maintaining Stable Cash Flows – Long ‐ term Focus g Remaining PPA Term for Each Operating Facility Extension options ** Iroquois Falls Cochrane* Weighted average 13.9 years^ Kirkland Lake* (without extension options**) Kingston Kingston Thorold Iroquois Falls Spy Hill Germany Jardin Cochrane* Cochrane Weighted average 15.7 years** Thorold (with extension options**) Kirkland* Mont Louis Mt Louis Ground ‐ Mount Solar*** G d M t S l *** Germany Jardin North Battleford Ground Mounted Solar** Ground Mounted Solar McLean’s Mtn North Battleford** Spy Hill 0 5 10 15 20 25 *Represents Northland’s economic interest in the facilities ** Facilities with dashed bar graph represent option to extend the power contract for additional period *** 5 of 13 ground mounted solar projects remain in construction ^ The weighted average PPA life is weighted by respective MW capacity. The weighted average PPA life of 13.9 years includes projects currently under 5 construction. For operating projects only, the weighted average PPA life is 13.9 years. The thickness of each bar represents each facilities respective overall contribution to 2015 forecasted EBITDA
Development Pipeline p p Development Pipeline consists of construction and development assets T otal: > 2,500 MW longer longer lowest lowest Development pipeline > 2,200 MW 2,200 MW TIME TO COMPLETION DEGREE OF CERTAINTY P j t ith t t (PPA) Projects with contract (PPA) 66 MW* U nder construction 410MW* 410MW shorter highest 1,335 MW* Operating 6 * Represents Northland’s economic interest
Recent Projects Recent Projects North Battleford, Saskatchewan • 260 MW gas ‐ fired combined cycle plant 260 MW gas fired combined cycle plant • 20 ‐ year power contract • Final project cost: $641 million Frampton • Started operation on June 5, 2013 ed y Complete Crosby Belleville South Phases 1 & 2 Ground ‐ Mount Solar, Ontario • 8X10 MW ground ‐ mount solar farms • 20 ‐ year power contract • Final project cost: $387 million Final project cost: $387 million Recently • Started operation in 2013 ‐ 2014 McLean’s Mountain, Manitoulin Island, Ontario • 60 MW (net interest 30 MW) wind farm • 20 ‐ year power contract • Expected project cost: ~$185 million • 50/50 partnership with First Nations • Started operation in May 2014 St t d ti i M 2014 uction Phase 3 Ground ‐ Mount Solar, Eastern Ontario er • 5X10 MW ground ‐ mount solar farms g Unde Constru • 20 ‐ year power contract • Expected project cost: ~$295 million 7 • Operation expected in 2014 ‐ 2015 6
Upcoming Projects to be Constructed Upcoming Projects to be Constructed Advancements on Contracted Projects: Grand Bend Frampton 100 MW wind farm 24 MW wind farm Project cost: $385M Project cost:$75M COD: 2015 ‐ 2016 COD: 2015 50/50 partnership 50/50 partnership 66% partnership 66% partnership with First Nations with Municipality 8
Strong and Growing Financial Results Strong and Growing Financial Results ADJUSTED EBITDA Millions $300 $250 CAGR: 28% $200 $150 $100 $50 $0 2009 2010 2011 2012 2013 2013 Highlights Adjusted EBITDA of $263M b y 47% from 2012 Free cash flow of $130M more than doubled that of 2012 9 *Includes dividends reinvested in common shares issued as part of the DRIP.
Positioning for Growth Positioning for Growth Appointed Sean Durfy as President and Chief Appointed Sean Durfy as President and Chief Development Officer to lead Northland’s development activity in North America and internationally Ex ‐ CEO of WestJet and ENMAX Energy Corporation Ex CEO of WestJet and ENMAX Energy Corporation with significant prior experience in the power industry WestJet revenues doubled during his tenure from bl h f Current Pipeline of $1B (2004) to $2B (2009) Capacity Growth 1,950 Previously a member of Northland’s Previously a member of Northland s Board of Directors for 3 years 1,450 950 450 10 '08 '09 '10 '11 '12 '13 '14F '15F '16F 'F17
Northland’s Growth Strategy gy Northland has been evaluating more opportunities outside of Northland has been evaluating more opportunities outside of Canada The focus has been on jurisdictions and technologies that satisfy The focus has been on jurisdictions and technologies that satisfy our investment criteria: Long ‐ term contract availability Long term contract availability Stable economical and political jurisdictions (more mature markets) Credit worthy off ‐ takers Conducive to project finance execution p j Northland also evaluates areas with faster growth prospects and increasing demand (while employing risk ‐ mitigating strategies) g ( p y g g g g ) 11
Development Focus • Canada Larger Larger • U.S. projects projects • Latin America • Europe Appropriate Appropriate Target Target project project project project specific specific ifi ifi return return markets markets thresholds thresholds Stable High ‐ Quality Projects with j Attractive Returns Utilize Utilize Contracted Contracted p preferred preferred p power power power power • Natural gas technologies technologies • Wind 12 • Large solar
Disciplined Development Remains p p Criteria Long ‐ term power contracts Creditworthy counterparties Predictable economics Power sales Power off ‐ taker assumes fuel risks, where fuel cannot be otherwise hedged Non ‐ recourse single project Non recourse single project Fully amortizing Project financing Term matched to PPA Interest rate and foreign exchange hedging d f h h d Fixed price guarantee Construction Penalty provisions Fixed price guarantee Equipment and supply Comprehensive maintenance contracts Comprehensive insurance program Insurance Insurance “Loss prevention” mindsets 13
Project Gemini ‐ Overview Project Gemini Overview Off ‐ shore wind project, North Sea, Netherlands 600 MW (2 sites x 300 MW) offshore wind farm 600 MW (2 sites x 300 MW) offshore wind farm – €2.8B total capital cost – Will be largest wind farm in the North Sea Will be largest wind farm in the North Sea and 2 nd largest offshore wind farm in the world 15 year revenue contract with the Dutch government 15 year operations and maintenance contract with Siemens Northland owns 60% of the project Project partners: Siemens, Van Oord, HVC 14
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