Capstone Infrastructure Corp · TSX:CSE.PR.A
Capstone Infrastructure — FY2014 Earnings Presentation
25 slides from Capstone Infrastructure's earnings presentation, Mar 5, 2015
Slide 1: Fiscal 2014 Results Presentation
ESSENTIAL Fiscal 2014 Results Presentation March 5, 2015
Slide 2: Notice to Readers
Notice to Readers Certain of the statements contained within this document are forward-looking and reflect management’s expectations regarding the future growth, results of operations, performance and business of Capstone Infrastructure Corporation (the “Corporation”) based on information currently
Slide 3: Fiscal 2014 Snapshot
Fiscal 2014 Snapshot Strong overall performance ► Utilities ⁻ Bristol Water on track to complete the full AMP5 capex program within allotted time frame ⁻ Värmevärden had a good operating year with improved availability; new pricing methodology successfully rolled out ► Power ￚ High availability acro
Slide 4: Q4 YE 2014 Snapshot
Q4 YE 2014 Snapshot Financial Highlights Revenue Adjusted EBITDA1 AFFO1 +41.3% 500 +13.4% 180 +24.9% 60 55 450 160 50 400 140 45 350 In $ millions 40 In $ millions 120 In $ millions 300 35 100 250 30 +36.6% 200 80 +23.8% 25 +5.8% 60 20 150 40 15 100 10 50 20 5 0 0 0 Q4 2013 Q4 2014 YE 2013 YE 2014 Q
Slide 5: Q4 YE 2014 Financial Performance
Q4 YE 2014 Financial Performance In millions of Canadian dollars Quarter Ended Dec 31 Variance Year Ended Dec 31 Variance or on a per share basis unless otherwise noted 2014 2013 % 2014 2013 % Revenue 116.7 110.3 5.8 441.6 389.5 13.4 Net income (1.2) 16.0 (107.2) 33.5 67.2 (50.1) Adjusted EBITDA1,2
Slide 6: Adjusted EBITDA
Adjusted EBITDA* Variance in AFFO Drivers of Adjusted EBITDA Variance 180 ► Expanded operating +24.9% wind power portfolio 160 ► Higher contracted rates and 140 contribution from 120 Cardinal ► Positive foreign In $ millions 100 currency exchange impact & higher 80 revenue at Bristol +23.8% Water 60
Slide 7: Adjusted Funds from Operations
Adjusted Funds from Operations* Drivers of AFFO Variance ► Higher Adjusted 60 +41.3% EBITDA 55 ► Partially offset by 50 higher debt service 45 & maintenance 40 capex due to 35 expanded power portfolio; corporate 30 In $ millions taxes 25 +36.6% 20 15 10 5 0 Q4 2013 Q4 2014 YE 2013 YE 2014 * Please r
Slide 8: Transforming Cardinal
Transforming Cardinal Cycling conversion project ► Nearing completion of $30 million major maintenance, retrofitting and life extension project ► Commenced new contract and operations as a dispatchable facility in 2015 ► Systems in place to ensure profitable market operation Serving Ontario’s electr
Slide 9: Proven Execution Skill
Proven Execution Skill Hitting Development Milestones ► 9.5 MW Skyway 8 project in Ontario ⁻ Achieved commercial operations on Aug 14 ► 24 MW Saint-Philémon project in Québec ￚ Completed construction in Q4 2014 ￚ COD achieved in Jan 2015 ► 25 MW Goulais project in Ontario ￚ $76 million financing clo
Slide 10: Financial Overview: Revenue
Financial Overview Revenue Drivers of Revenue Variance 500 +13.4% 450 400 350 300 In $ millions 250 200 ► Increase in wind power production +5.8% ► Revenue growth at Bristol Water arising from 150 higher regulated water rates & increased water 100 consumption 50 ► Favourable foreign currency transla
Slide 11: Financial Overview: Expenses
Financial Overview Expenses Drivers of Expense Variance +2.7% 250 200 150 In $ millions 100 ► Foreign currency translation and higher operating (8.4)% expenses at Bristol Water due to maintenance activities 50 ► Expanded wind power portfolio ► Higher administrative expenses 0 ► Partially offset by l
Slide 12: Cash Resources
Cash Resources As at Dec 31 As at Dec 31 (in millions of Canadian dollars unless otherwise noted) 2014 2013 Power 33.1 29.0 Utilities- Water 13.3 9.1 Corporate 12.5 7.6 Unrestricted cash & cash equivalents 58.9 45.7 Less: cash with access limitations Power (18.2) (18.1) Utilities – Water1 (13.3) (9.
Slide 13: Debt Profile
Debt Profile Capital structure aligned to cash flow profile of businesses Long-Term Debt Maturity Profile In Compliance with all Covenants1 Dec 31, Covenant 2014 Amherstburg DSCR Min 1.15x 1.47x Hydros Senior Bonds – DSCR Min 1.2x 1.69x Subordinated bonds - DSCR Min 1.05x 2.00x Erie Shores DSCR Min
Slide 14: 2015 Outlook
2015 Outlook1 ►Expect Expect Lower Adjusted Adjusted EBITDA EBITDA in 2015Contribution to be betweenin$115M 2013 to $125M, reflecting: ￚ Growing contribution from wind power facilities ￚ New contract at Cardinal ￚ Bristol Water under AMP6 from Q2 through Q4 ► Key assumptions that: ￚ Internally-gener
Slide 15: Priorities in 2015
Priorities in 2015 Organic Growth ► Build out near-term wind projects by end of Q2 2015 ► Begin construction on mid-term projects once ERT process is complete and keep others moving through permitting process ► As Qualified Applicant under Ontario LRP, assess potential projects Maximize Performance
Slide 16: Priorities in 2015
Priorities in 2015 Evaluate Acquisitions & New Development Opportunities ► Continued focus on current pillars and P3 market ► Actively evaluating select acquisition opportunities ► Building on Capstone Power Development’s efforts & relationships 16
Slide 17: Strong Fundamentals
Strong Fundamentals High quality, diversified portfolio delivering strong performance Investments in perpetual utilities expected to generate growing cash flow Solid balance sheet New development pipeline and proven execution skills Experienced team with strong relationships across the infrastructur
Slide 18: Appendix
CAPSTONE INFRASTRUCTURE
Slide 19: Power Segment Performance
Power Segment Performance Seasonality Actual Actual Average long-term production (GWh) (1) Type PPA Expiry 2014 2013 Q1 Q2 Q3 Q4 Annual Gas(2) 2034 911.0 1,287.5 341.8 272.6 290.5 321.3 1,226.2 Wind(3) 2020 - 2037 471.2 311.1 140.7 90.6 75.3 140.8 447.4 Biomass(3) 2014 194.3 198.4 50.2 45.6 50.4 49.
Slide 20: Power Segment Performance
Power Segment Performance For the year ended Dec 31, 2014 (in millions of Canadian dollars Gas Wind1 Biomass1 Hydro Solar Development 2 Total unless otherwise noted) Power generated (GWh) 911.0 471.2 194.3 158.3 38.2 n/a 1,773.0 Capacity factor (%) 69.0 31.3 96.7 50.7 21.8 n/a n.m.f. Availability (%
Slide 21: Utilities Segment Performance: Bristol Water
Utilities Segment Performance Bristol Water Year Ended Dec 31 Variance (in millions of Canadian dollars unless otherwise noted) 2014 2013 (%) Water supplied (megalitres) 82.5 82.1 0.5% Revenue 238.3 195.6 21.8% Adjusted EBITDA before non-controlling interest 118.9 95.8 24.1% Adjusted EBITDA 59.4 47.
Slide 22: Utilities Segment Performance: Värmevärden
Utilities Segment Performance Värmevärden Year Ended Dec 31 Variance (in millions of Canadian dollars unless otherwise noted) 2014 2013 (%) Heat production (GWh) 1,010 1,091 7.4% Interest income 2.90 2.86 1.3% Adjusted EBITDA & AFFO(1) 7.4(2) 6.0 24.6% 1 – Värmevärden’s contribution to Capstone’s AF
Slide 23: Performance Measures
Performance Measures Definitions This presentation contains figures that are performance measures not defined by IFRS. These additional GAAP and non-GAAP performance measures do not have any standardized meaning prescribed by IFRS and are, therefore, unlikely to be comparable to similar measures pre
Slide 24: Performance Measures (continued)
Performance Measures Definitions (continued) Adjusted Funds from Operations (AFFO) AFFO is a non-GAAP financial measure that assists management, investors and other stakeholders in analyzing the cash flow available for future growth capital investments, acquisitions and dividends to common sharehold
Slide 25: Additional Details
Additional Details Glossary Investor Information AMP Quick Facts As at Dec Asset management plan, which is developed by water utilities in the UK 31, 2014 every five years & approved by Ofwat. Common shares outstanding 93,572,576 (TSX:CSE) Annual long-term average production (LTA) An average product
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