Capstone Infrastructure Corp · TSX:CSE.PR.A
Capstone Infrastructure — FY2011 Earnings Presentation
29 slides from Capstone Infrastructure's earnings presentation, Mar 8, 2012
Slide 1: Fiscal 2011 Results Presentation
Fiscal 2011 Results Presentation March 8, 2012
Slide 2: Disclaimer
Disclaimer Certain of the statements contained within this document are forward-looking and reflect management’s Although the Corporation believes that it has a reasonable basis for the expectations reflected in these forward- expectations regarding Capstone Infrastructure Corporation’s (the “Corpor
Slide 3: Fiscal 2011 Highlights
Fiscal 2011 Highlights ► 1 Converted from income fund to a corporation & adopted International Financial Reporting Standards ► Transitioned from external management 2 structure to being an independent company ► Acquired interests in Värmevärden, the district 3 ► heating business in Sweden, & Bristol
Slide 4: Fiscal 2011: A much larger, more diversified company
Fiscal 2011 A much larger, more diversified company Adjusted EBITDA ~120.02 67.33 In $ millions 75.31 61.2 55.8 2008 2009 2010 2011 2012E Extending the Cash Flow Duration of our Portfolio Growth in Total Assets 1,700 +111.3% over 2010 In $ millions 804 7373 712 .. .. 2008 2009 2010 2011 1 – Excludes
Slide 5: Fiscal 2011 Highlights
Fiscal 2011 Highlights In line with or ahead of expectations 32.9% increase in Adjusted EBITDA excluding internalization costs In millions of Canadian dollars or on a per share Quarter ended Variance Fiscal Year Variance basis unless otherwise noted Dec 31 Ended Dec 31 2011 2010 (%) 2011 2010 (%) Re
Slide 6: Power Segment Performance
Power Segment Performance Three main drivers Strong production at Erie Shores, Whitecourt & the hydro power facilities For the year ended, Dec 31, 2011 (in millions of Canadian dollars unless Gas Wind Biomass1 Hydro Solar2 Total otherwise noted) Power generated (GWh) 1,256.1 236.7 202.4 161.6 17.6 1
Slide 7: Power Segment Performance
Power Segment Performance Quarterly & annual production by asset Production up 0.7% & 2.0% in the quarter & year, respectively (including Amherstburg) Power Generation Three Months Ended Variance Year Ended Variance (GWh) Dec 31 (%) Dec 31 (%) 2011 2010 2011 2010 Cardinal 332.3 328.3 1.2 1256.1 1258
Slide 8: Utilities Segment Performance
Utilities Segment Performance Bristol Water Värmevärden Results for period of ownership from Oct 5 - Dec 31, 2011 Results for period of ownership from Mar 31 - Dec 31, 2011 (in millions of Canadian dollars unless otherwise noted) (in millions of Canadian dollars unless otherwise noted) Water supplie
Slide 9: A Stronger Business Today
A Stronger Business Today New additions to portfolio will enhance long-term stability 2011 Adjusted EBITDA by Country1 2011 Adjusted EBITDA by Business1 17% 5% 78% 2010 Adjusted EBITDA by Country1 2010 Adjusted EBITDA by Business1 100% Acquisitions completed in 2011 are expected to enhance investmen
Slide 10: Our 2012 Priorities
Our 2012 Priorities Addressing our challenges ‣ Executing our refinancing strategy 1 ‣ Completed recapitalization of Värmevärden on February 24th ‣ Negotiations on Cardinal are progressing 2 ‣ Five meetings with OPA since mid-December ‣ Working through analysis of future dividend policy 3 ‣ Expect t
Slide 11: Revenue Growth
Revenue Growth 36.2% increase over 2010 PPAs provide price certainty for 98.7% of power generated by our facilities Regulatory framework for water utilities enables Bristol Water to earn a reasonable return on the capital it invests 3% Revenue in 2011 was more than 97% derived from water sales & gre
Slide 12: Expenses
Expenses Total expenses increased by 50.7%, including internalization costs ~33% (in millions of Canadian dollars or on a per share Fiscal Year Variance Increase in basis unless otherwise noted) Ended Dec 31 expenses 2011 2010 (%) excluding Corporate1 38.0 11.9 219.6 internalization costs Power segm
Slide 13: Cash Resources
Cash Resources 2011 balance reflects redeployment of surplus funds generated from sale of Leisureworld (in millions of Canadian dollars or on a per share basis unless otherwise noted) As at Dec 31 2011 2010 Power 14.0 29.4 Utilities- Water 35.4 - Social - 0.1 Corporate 8.2 98.9 Unrestricted cash & c
Slide 14: Debt Profile
| tee INFRASTRUCTURE Debt Profile Long-term Debt Maturity Profile =Corporate Bristol Water ™ Power Millions $ rPrRNN Los) 'SBSSR8s 2016-2020 2026 -2030 al 2031 -2035 NN 2021 - 2025 2012 Beyond 2012 14 '
Slide 15: Financial Position
Financial Position Continuing to comfortably meet all covenants Covenant Dec 31, 2011 CPC - Cardinal Total Leverage Ratio Max 3.50x 2.73x Interest Coverage Ratio Min 3.00x 5.76x Erie Shores Debt DSCR Min 1.20x 1.81x Amherstburg Debt DSCR Min 1.15x 1.34x Bristol Water Debt Interest Coverage Ratio Min
Slide 16: Financing Initiatives
Financing Initiatives Värmevärden Recapitalization Completed on February 24, 2012 ‣ Parent of Värmevärden issued ~$138M in senior secured bonds with option to issue up to an additional ~$12M ‣ Repatriated ~$46M in capital used to repay a portion of the senior credit facility ‣ Potential to repatriat
Slide 17: 2012 Outlook: Power Portfolio
2012 Outlook Expect stable performance & Adjusted EBITDA of ~$120M Power Portfolio Expected to Perform in Line with LTA Production DRIVERS ‣ Steady production across portfolio subject to wind, water flows & sunlight ‣ Full year of contribution from Amherstburg Solar Park MITIGATING FACTORS FOR ADJUS
Slide 18: 2012 Outlook: Bristol Water
2012 Outlook Expect stable performance & Adjusted EBITDA of ~$120M Bristol Water Expected to Deliver > ~$8M in Dividends in 2012 DRIVERS ‣ Steady demand with little seasonal variation ‣ Expected to benefit from a ~3.9% real increase & a 5.2% inflationary increase in its regulated revenue (total incr
Slide 19: 2012 Outlook: Värmevärden
2012 Outlook Expect stable performance & Adjusted EBITDA of ~$120M Full Year Contribution from Värmevärden ‣ Leverage in business following the recapitalization ‣ Expect to receive ~$4M in cash flow from this investment in 2012 ￚ Continuing emphasis on operational efficiency ￚ Building & enhancing r
Slide 20: 2012 Priorities: Refinancing
2012 Priorities Refinancing $119M – CPC-Cardinal Credit Facility $78M – Senior Credit Facility ~$46M paid on Senior Credit Facility Leaves ~$150M to refinance in 2012 Expect to raise net $70M - $75M on Hydro Facility Financing by end of Q1/early April Will leave ~$75M - $80M to be refinanced in 2012
Slide 21: 2012 Priorities: Cardinal
2012 Priorities Cardinal ► Negotiations continuing ￚ Five meetings since mid-December ► Better insight today although significant work remains to be done ￚ Complex negotiations ► Expect to have better sense of Cardinal’s future profile during first half of 2012 ￚ OPA drives timing & process ► Our go
Slide 22: 2012 Objectives: Dividend
2012 Objectives Dividend Objective ► Establish & implement new dividend policy in first half of 2012 ￚ As certainty is gained on financings & more information on the outcome at Cardinal Philosophy is Unchanged ► Continue to expect a majority of the total return we deliver to shareholders to be in fo
Slide 23: Ongoing Objectives: Power Segment
Ongoing Objectives Maximize performance at power businesses Power Segment ► Maintaining high availability ► Sale of renewable energy credits (RECs) at Whitecourt ￚ Additional ~$450K in revenue ￚ Exploring similar opportunities at Erie Shores & hydro power facilities History of High Availability 23
Slide 24: Ongoing Objectives: Bristol Water
Ongoing Objectives Maximize performance at Bristol Water Utilities Segment – Bristol Water ► Executing capital projects, which will drive growth in RCV ► Focused on achieving regulatory targets ￚ Leakage of < 51M litres/day in 2012 – 2013 ￚ Top quartile ranking in 2012 on Ofwat’s SIM customer servic
Slide 25: Ongoing Objectives: Re-focus on growth
Ongoing Objectives Re-focus on growth after completion of financings, dividend decision Shifting the mix & cash flow characteristics of the businesses in our portfolio should contribute to steady dividends & capital appreciation in years ahead 25
Slide 26: Enduring Strengths
Enduring Strengths Positioned to deliver on 2012 objectives ► An active management approach that drives strong asset 1 performance ► A disciplined approach to growing our portfolio with a focus on 2 enhancing returns ► Capabilities & relationships that span the infrastructure sector, 3 which over th
Slide 27: Non-IFRS Performance Measures
Non-IFRS 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, ther
Slide 28: Assumptions
Assumptions The material factors or assumptions that were applied in formulating the Corporation’s financial outlook include the following: that the business and economic conditions affecting the Corporation’s operations will continue substantially in their current state, including, with respect to:
Slide 29: Additional Details
Additional Details Glossary Investor Information AMP Quick Facts Asset management plan, which is developed by water utilities in the UK every five years & approved by Ofwat. Common shares outstanding 70,957,368 Annual long-term average production (LTA) Preferred shares outstanding 3,000,000 An avera
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