Capstone Infrastructure Corp · TSX:CSE.PR.A
Capstone Infrastructure — FY2013 Earnings Presentation
25 slides from Capstone Infrastructure's earnings presentation, Mar 7, 2014
Slide 1: Fiscal 2013 Results Presentation
BUILDING FOR TOMORROW Fiscal 2013 Results Presentation March 7, 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: Fiscal 2013 Snapshot
Fiscal 2013 Snapshot Strong overall performance Revenue Adjusted EBITDA1 AFFO1 +8.9% +6.7% +12.3% In $ millions In $ millions In $ millions +16.5% +21.5% +2.8% 1 - "Adjusted EBITDA“ and “Adjusted Funds from Operations” are non-GAAP financial measures and do not have any standardized meaning prescrib
Slide 4: Financial Performance
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 2013 2012 (%) 2013 2012 % Revenue 110.3 94.7 16.5 389.5 357.6 8.9 Net income 16.0 16.9 (5.4) 67.2 46.0 46.2 Adjusted EBITDA1,2 38.0 31.1 21.5
Slide 5: Adjusted EBITDA
Adjusted EBITDA1 Variance in AFFO Drivers of Positive Adjusted EBITDA Variance 2013 Adjusted EBITDA by Business2 ► Higher revenue at Bristol Water ► Increased power production at In $ millions Cardinal & Erie Shores ► Contribution from 2013 Adjusted EBITDA by Geography2 ReD operating wind facilities
Slide 6: Adjusted Funds from Operations
Adjusted Funds from Operations1 Drivers of Positive AFFO Variance 2013 AFFO by Business2 ► Contribution from power segment ► Partially offset by lower AFFO from Bristol Water due to In $ millions lower ownership interest 2013 AFFO by Geography2 6 1 - Chart illustrates contribution for the businesses
Slide 7: Strategic Priorities in 2013: Growth & Diversification
Strategic Priorities in 2013 Growth & Diversification 1 ► Completed acquisition of Renewable Energy Developers Inc. (ReD) on October 1, 2013 ► Capstone gained: ￚ Net 95 MW of operating wind power facilities in Ontario & Nova Scotia ￚ A net 79 MW pipeline of contracted power development opportunities
Slide 8: Strategic Priorities in 2013: Maximizing Business Performance
Strategic Priorities in 2013 Maximizing Business Performance 2 POWER ► Power facilities achieved high availabilities & total production in line with or better than long-term average production ► Sale of RECs at Whitecourt & installation of WindBOOST at Erie Shores BRISTOL WATER ► Advanced ~$520M cap
Slide 9: Financial Overview: Revenue
Financial Overview Revenue Drivers of Revenue Variance In $ millions ► Higher regulated water rates at Bristol Water, offset by reduced 50% ownership interest ► Higher power production ￚ Cardinal & Erie Shores ￚ Rate increases at Cardinal ￚ Contribution from ReD’s operating wind power facilities 9
Slide 10: Financial Overview: Expenses
Financial Overview Expenses Drivers of Expense Variance +6.4% In $ millions ► Higher operating expenses at Bristol Water due to +9.4% maintenance activities & inflationary increases for energy, consumables, wages & salaries ► Addition of ReD’s operating facilities for one quarter ► Higher fuel expen
Slide 11: Cash Resources
Cash Resources As at Dec 31 As at Dec 31 (in millions of Canadian dollars unless otherwise noted) 2013 2012 Power 29.0 20.9 Utilities- Water 9.1 25.3 Corporate 7.7 3.3 Unrestricted cash & cash equivalents 45.8 49.6 Less: cash with access limitations Power (18.1) (8.4) Utilities – Water1 (9.1) (25.3)
Slide 12: 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 2013 Amherstburg DSCR Min 1.15x 1.37x Hydros Senior Bonds – DSCR Min 1.2x 1.81x Subordinated bonds - Min 1.05x 2.88x DSCR Erie Shores DSCR Min
Slide 13: 2014 Outlook
2014 Outlook1 ►Expect Expect Lower Adjusted Adjusted EBITDA EBITDA in 2014Contribution to be betweenin$140M 2013 to $150M, reflecting: ￚ Stable performance from power facilities ￚ Some growth from Bristol Water & Värmevärden ￚ Full year of contribution from ReD operating facilities ► Key assumptions
Slide 14: Strategic Priorities in 2014
Strategic Priorities in 2014 Complete New PPA for Cardinal ► Process at advanced stage Advance Development Pipeline ► Focus on completing 10MW Skyway 8 project & 24 MW Saint-Philémon project on time & budget ► Waiting ERT ruling on 25 MW Goulais but optimistic about advancing project Maximize Perfor
Slide 15: Strategic Priorities in 2014: New Investment Opportunities
Strategic Priorities in 2014 Pursue Growth Initiatives New Investment Opportunities: Power Utilities P3 Transportation • Traditional • Water • Courts • Roads • Renewable • Gas (transmission & • Hospitals • Rails • District heating & distribution) • Schools • Airports cooling • Electric (transmission
Slide 16: Strong Fundamentals
Strong Fundamentals High quality, diversified portfolio that is delivering strong performance Substantial investment in Bristol Water, a perpetual business we expect to generate growing cash flow Solid balance sheet New development pipeline Experienced team with strong relationships across the infra
Slide 17: Appendix
CAPSTONE INFRASTRUCTURE
Slide 18: Power Segment Performance: Seasonality
Power Segment Performance Seasonality Actual Actual Average long-term production (GWh) (1) Type PPA Expiry 2013 2012 Q1 Q2 Q3 Q4 Annual Gas 2014 1,287.5 1,231.9 343.4 281.4 302.3 334.1 1,261.2 Wind(2) 2020 - 2037 469.3 233.4 140.6 105.6 75.4 135.9 457.5 Biomass(2) 2014 198.4 197.0 50.2 45.5 50.3 49.
Slide 19: Power Segment Performance: Annual
Power Segment Performance Annual For the year ended Dec 31, 2013 (in millions of Canadian dollars Gas Wind1,2 Biomass1 Hydro Solar Development Total unless otherwise noted) Power generated (GWh) 1,287.5 469.3 198.4 168.7 36.6 n/a 2,160.5 Capacity factor (%) 97.9 29.2 95.8 53.9 20.9 n/a n.m.f. Availa
Slide 20: Utilities Segment Performance: Bristol Water
Utilities Segment Performance Bristol Water Year Ended Dec 31 Variance (in millions of Canadian dollars unless otherwise noted) 2013 20121 (%) Water supplied (megalitres) 82,125 81,245 1.1 Revenue 195.6 178.4 9.5 Adjusted EBITDA before non-controlling interest 95.8 85.2 12.5 Adjusted EBITDA 47.9 48.
Slide 21: Utilities Segment Performance: Värmevärden
Utilities Segment Performance Värmevärden Year Ended Dec 31 Variance (in millions of Canadian dollars unless otherwise noted) 2013 2012 (%) Heat production (GWh) 1,091 1.078 1.2 Interest income 2.9 3.4 (14.7) Adjusted EBITDA & AFFO1 6.0 5.4 11.3 1 – Värmevärden’s contribution to Capstone’s AFFO cons
Slide 22: 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 23: 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 24: Assumptions
Assumptions Material factors or assumptions that were 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
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, 2013 every five years & approved by Ofwat. Common shares outstanding 92,853,970 (TSX:CSE) Annual long-term average production (LTA) An average product
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