Capstone Infrastructure Corp · TSX:CSE.PR.A
Capstone Infrastructure — Investor Presentation (March 2014)
21 slides from Capstone Infrastructure's investor presentation, Mar 26, 2014
Slide 1: Building for Tomorrow: A New Contract for Cardinal: Impact & Outlook
BUILDING FOR TOMORROW A New Contract for Cardinal: Impact & Outlook March 26, 2014
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: Certainty for Cardinal
Certainty for Cardinal Positive outcome ► 20-year non-utility generator (NUG) contract with the Ontario Power Authority ► Effective Jan 1, 2015 ► Provides certainty on plant’s future & ability to contribute cash flow post-2014 ► Demonstrates Cardinal’s value in Ontario’s electricity supply Serving O
Slide 4: Certainty for Cardinal: Key features of contract with OPA
Certainty for Cardinal Key features of contract with OPA ► A dispatchable facility that delivers electricity to Ontario grid only when economical to do so rather than 24/7 ► Will receive a fixed monthly payment from OPA that escalates annually ￚ Intended to cover fixed operating costs & return on ca
Slide 5: Certainty for Cardinal: Procurement of gas
Certainty for Cardinal Procurement of gas ► Responsible for arranging own gas supply, which is expected to be procured through Iroquois ► Gas purchase agreement with Husky remains in place until May 1, 2015 ► Expect to purchase gas on market & transport it to plant on a pay-per-use basis 5
Slide 6: Certainty for Cardinal: Expectations for operations
Certainty for Cardinal Expectations for operations ► As combined-cycle facility, Cardinal has a lower heat rate than simple-cycle peaking facilities ￚ Expect to be dispatched ahead of these peaking facilities ￚ Expect to capture better margins during peak times ► Relatively small portion of Cardinal
Slide 7: Partnership with Ingredion
Partnership with Ingredion 20-year energy savings agreement ► Cardinal will receive fee from Ingredion for O&M services ► Extension of land lease for 20 years ￚ Option to purchase land ► Cardinal will pay a royalty to Ingredion based on variable market revenue from electricity sales Ready to support
Slide 8: Cardinal's Cash Flow Impact
Cardinal’s Cash Flow Impact Adjusted EBITDA profile In 2015, Cardinal is expected to deliver Adjusted EBITDA of ~$7M to $9M1 Reflects: ► Cash flow expected under our 20- year contract ► ~$30M in capex to upgrade our existing facility ► Margin anticipated from sale of electricity in marketplace ► O&M
Slide 9: Building for the Future
Building for the Future Investment plans ► Expect to invest ~$30M of capital to prepare Cardinal for cycling ￚ Includes new rotor & exhaust cylinder to be installed in spring 2015 ► Some work slated for 2014 to provide operational flexibility ► Investments have been planned for ￚ Expect to finance t
Slide 10: Sustainable Dividend
Sustainable Dividend Improving investment quality of company Significantly extended cash flow profile of our portfolio Cash Flow Duration 1 1 – Located in Alberta, the Whitecourt biomass power facility is expected to have the ability to operate as a merchant facility following the expiry of its powe
Slide 11: Sustainable Dividend
Sustainable Dividend Well positioned to deliver on dividend commitment ► Supported overall by high quality of businesses, strong performance of portfolio & build out of wind projects ► Expect payout ratio to return to targeted range by 2017 ￚ Wind projects fully commissioned ￚ Growth in dividends fr
Slide 12: Positive Outlook
Positive Outlook Predictable, growing Adjusted EBITDA1 Strong visibility on Adjusted EBITDA from current portfolio2 Adjusted EBITDA (C$000's) ► New wind projects generating 200,000 full year of cash flow by 2017 ► Step change in dividends from Bristol Water expected starting 100,000 in 2015 In $000s
Slide 13: The New Capstone
The New Capstone Building the value of our company Maximizing Business Performance 1 ► Effective maintenance, planned capex & incremental improvements that increase cash flow such as sale of RECs at Whitecourt & installation of WindBOOST at Erie Shores Broadened Capabilities & Footprint 2 ► Building
Slide 14: The New Capstone: Driving value
The New Capstone Driving value Bristol Water is a key driver of Capstone’s long-term cash flow & value 2 £800 AMP 6 RCV Growth £700 £600 £500 £400 £300 £200 £100 £- 15/16 16/17 17/18 18/19 19/20 26% real RCV growth Expected 30% real RCV growth in AMP 5 in AMP 61 1 – Expectation based on draft busine
Slide 15: Focused on Delivering
Focused on Delivering High quality, diversified & low risk portfolio of infrastructure businesses providing essential services Substantial investment in Bristol Water, a perpetual business we expect to generate growing cash flow Sizable contracted power portfolio Strong operating performance support
Slide 16: Pursuing New Opportunities
Pursuing New Opportunities Focused on the future Capstone has significant growth potential & a bright future Power Utilities P3 Transportation • Traditional • Water • Courts • Roads • Renewable • Gas (transmission & • Hospitals • Rails • District heating & distribution) • Schools • Airports cooling
Slide 17: Appendix
CAPSTONE INFRASTRUCTURE
Slide 18: Non-GAAP Performance Measures
Non-GAAP Performance Measures Definitions This presentation contains figures that are performance measures not defined by International Financial Reporting Standards (IFRS). These non-GAAP and additional GAAP performance measures do not have any standardized meaning prescribed by IFRS and are, there
Slide 19: Non-GAAP Performance Measures (continued)
Non-GAAP Performance Measures Definitions (continued) Adjusted Funds from Operations (AFFO) Capstone’s definition of AFFO measures cash generated by activities of infrastructure business investments which is available for dividends and general corporate purposes. For wholly owned businesses, AFFO is
Slide 20: Assumptions
Assumptions Material factors or assumptions applied in formulating the forward-looking statements and financial outlook contained herein include or relate to the following: that the business and economic conditions affecting the Corporation’s operations will continue substantially in their current s
Slide 21: Contact
Contact 155 Wellington Street West Suite 2930 Toronto, Ontario M5V 3H1 T: 416-649-1300 Email: info@capstoneinfra.com Website: www.capstoneinfrastructure.com 21
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