• INTELLIGENT ENERGY for a GREENER PLANET Perspectives 2011
Cranes are used to assemble a turbine at Northland’s Mont Louis wind farm, one of three major new facilities under construction at the close of 2010. This report highlights Northland Power Income Fund’s significant events in 2009 and 2010 and management’s plans for the future. Northland’s annual report, including consolidated financial statements and management’s discussion and analysis, is available on the company’s site, www.northlandpower.ca. Forward-Looking Statements The contents of this document contain forward-looking statements based on assumptions management considered reasonable when it was prepared on March 16, 2011. These statements, by their nature, are subject to risks and uncertainties beyond management’s control. Northland’s actual results could differ materially from these forward-looking statements for reasons including, but not limited to, those described in the “Risks and Uncertainties” section of the company’s 2010 annual report. For these reasons, readers are cautioned against relying on forward-looking statements in making investment decisions.
and sell clean and green power. Northland Power develops, owns, and operates facilities that produce Performance ~ Delivering on our commitment to investors Expertise ~ Leveraging clean and green technologies Stability ~ Managing for a sustainable future Leadership ~ Seizing new opportunities, doing the right thing › › 2 2 2 › › 8 8 14 › 24 › 31
plant we opened last year in Thorold opportunities to ensure Northland will remain stable • Avoiding ineffjcient, high-impact and dirty energy ofg-peak to on-peak periods managing risk, amortizing assets, upgrading our Marmora as an opportunity to develop pumped equipment, improving our processes and evaluating demand-responsive combined heat and power to develop more effjcient solutions – such as the footprint such as TREK low-impact hydro technology energy with the lowest possible impact and carbon of new technologies that promise cost-efgective • Constantly exploring, testing and applying a range needs, policies and opportunities • Working ahead of the curve to identify energy and profjtable for years to come • Running our business with an eye to the future – Northland Power’s intelligent energy leverages our experience and expertise to create sustainable value for customers, shareholders, communities and employees – and a greener future for our planet. INTELLIGENT ENERGY for a GREENER PLANET What does that mean? For us, it’s several things: • Seeing an abandoned mine like the one at storage that will shift energy production from technologies to focus on promising new areas, • Harnessing our technical expertise and creativity 1
Perspectives 2011 › JAMES C. TEMERTY Northland breaks new ground – again In many ways, 2010 continued a remarkable run for Northland has been at the forefront of IPP wind and solar development, and Power. In April 2009, when we announced plans to merge the income our teams have forged important agreements with First Nations fund with its external management company, the fund had 742 MW on wind and hydro. in operation or construction and a unit price of about $10. We keep finding new and creative energy solutions, even At the end of 2010, as we in thermal technology, where we began. Our Thorold cogeneration converted to a fully inte- facility combines high energy efficiency with rapid response grated power corporation, capability. Looking forward, we have strong contenders to respond Leadership we had $1 billion in projects to the need for new power facilities in a number of jurisdictions. under construction and For all we’ve accomplished, credit goes to the men and women another $1 billion under of Northland Power. They have shown imagination, intelligence and contract , and our unit price persistence in merging our two entities, finding and developing was close to $16. Our price in part reflects growth that will double new opportunities, winning power purchase agreements ( PPA s), our pre-merger capacity by 2014. bringing new facilities on stream and raising more than $1 billion The merger was a significant milestone for Northland. in tough financial markets. It created a business with both the operating discipline needed Governance is keeping pace. Our Board has also evolved with to deliver consistent performance and reliable shareholder returns Northland’s needs. Linda Bertoldi, Dr. Marie Bountrogianni and and the strategic perspective and development expertise needed Peter Harder joined the Board in 2010, replacing retiring members to sustain growth. Warren Moysey and David Rounthwaite. Northland Power has led the way. In merging the management As part of their responsibilities, all Board members participate company and income fund, we showed the way for other power in regular information sessions about Northland and its business. trusts that benefited from Northland’s heavy lifting in modelling To provide succession potential, former WestJet CEO Sean Durfy is their own transitions. attending Board meetings and information sessions as an observer. This is a familiar role for us. We were one of Canada’s first Northland’s horizon holds more growth. With the completion of independent power producers ( IPP s) and the first to obtain public our projects currently under construction, we will have 1,264 MW of finan cing for a Canadian power project. More recently, Northland operating assets. Our new Thorold facility, Saskatchewan projects 2
under construction and proposed Ontario facilities showcase Growing capacity and value Northland’s expertise in the full range of thermal technologies. These, plus new solar and wind capacity both under and ready for construction and exciting opportunities in pumped storage, 1,264 MW 742 MW hydro kinetics and run-of-river hydro, will provide years of $16 $10 profitable growth. April 2009 December 2010 Steady returns plus wider investor appeal. Northland has Unit price delivered average annual investor returns of 12.5% since inception Generating capacity – a 13-year record few can match. Going forward as a dividend- paying corporation, our combination of reliable returns and Recent growth: Since Northland’s merger announcement in April 2009, generating capacity has grown nearly 70% and unit price by 60% to the bright prospects will attract new investors in Canada and abroad. end of 2010. We look forward to a bright future together as Northland fulfills its promise of intelligent energy for a greener planet. James C. Temerty Chairman 3
Highlights • Merger makes Northland a fully integrated independent power producer • Thorold and Jardin d’Éole open, adding 365 MW in generating capacity • Projects under construction total $1 billion at 2010 year-end • New power purchase agreements total 586 MW • Northland raises over $1 billion since merger in July 2009 • Northland units return 68% since merger announcement • Development pipeline swells to 2,500 MW , with 708 MW under contract • Fund becomes Northland Power Inc. at midnight December 31, 2010 Perspectives 2011 › 2009–10 Return on NPI vs. TSX Total Return Index Per cent 500% 400% 300% 200% 100% 0% 97 98 99 00 01 02 03 04 05 06 07 08 09 10 Northland Power TSX Total Return Index Strong returns: At 424%, Northland’s total return since inception doubled that of the TSX . The compounded annual return was 12.5%. 4
Northland Power is run by three leaders who have worked closely together for more than a decade. Each has a significant equity stake in the company, Anthony F. Anderson Salvatore Mantenuto ensuring that their interests are aligned with John W. Brace Northland investors’ interests.
Perspectives 2011 › The Right Honourable Pierre Gloutney Sean Durfy Dr. Marie Bountrogianni James C. Temerty, James C. Temerty, C.M. James C. Temerty, James C. Temerty, John N. Turner, Q.C. John N. Turner, Q.C. Linda L. Bertoldi V. Peter Harder Director since 1997, Board observer Director since 2010, Chairman and Director Director since 1997, Director since 2010, Director since 2010, Audit Committee Chair, since 2010 member of Compensation since 1997, member of Governance Committee member of Governance Compensation member of Governance Committee Compensation Committee Chair, member of Audit Committee Committee Chair, Committee Committee member of Audit Committee 6
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