Capstone Infrastructure Corp · TSX:CSE.PR.A
Capstone Infrastructure — Q2 2012 Earnings Presentation
28 slides from Capstone Infrastructure's earnings presentation, Aug 14, 2012
Slide 1: Q2 2012 Results Presentation
Q2 2012 Results Presentation August 14, 2012
Slide 2: Notice to Readers
Notice to Readers 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 expectations regarding the future growth, results of operations, performanc
Slide 3: Financial Overview
Financial Overview Second quarter & year to date in line with or ahead of expectations In millions of Canadian dollars or on a per share basis unless Three months ended Variance Six months ended Variance otherwise noted Jun 30 Jun 30 2012 2011 (%) 2012 2011 (%) Revenue 85.8 37.0 131.8 178.0 83.9 112
Slide 4: 2012 Highlights
2012 Highlights Successful first six months ► Successfully refinanced all debt maturing in 1 2012: recapitalizations of Varmevarden & hydro power facilities; sale of 20% interest in Bristol Water 2 ► Established new common share dividend policy of $0.30 per share annually (payable quarterly) that pr
Slide 5: Financial Overview: Revenue and Adjusted EBITDA
Financial Overview Revenue Adjusted EBITDA1,2 Key Drivers +112% +113% ► Increases reflect contribution of newest businesses offset by: In $ millions In $ millions +132% ￚ Planned maintenance +129% outage at Cardinal ￚ Poor wind conditions in Q2 ￚ Lower water flows in Q1 In line with or slightly ahea
Slide 6: Financial Overview: Stable foundation
Financial Overview Stable foundation Actual Actual Average long-term production (GWh) (1) Type Facility PPA Expiry Q2 2012 Q2 2011 Q1 Q2 Q3 Q4 Annual Gas Cardinal 2014 251.4 281.0 342.9 278.1 304.0 332.6 1,257.6 Wind Erie Shores 2026 47.5 52.6 76.3 52.5 34.2 78.1 241.1 Biomass Whitecourt 2014 47.8 4
Slide 7: Adjusted Funds from Operations
Financial Overview Adjusted Funds from Operations YTD 2012 AFFO by Business1,2 Quarterly & YTD Variance in AFFO2,3 -1.2% Key Drivers ► Higher maintenance capex at Cardinal In $ millions ► Higher debt YTD 2012 AFFO by Country1,2 service costs at Erie Shores & -21.5% hydro facilities ► Higher corporat
Slide 8: Capstone Today
Capstone Today Stronger foundation from which to grow Capstone today Substantially lower risk is larger, more profile in terms of diversified than portfolio diversification one year ago & & balance sheet continuing to deliver stable Broader international operating reach & two world-class performance
Slide 9: Power Segment Performance: Quarterly overview
Power Segment Performance Quarterly overview For the three months ended Jun 30, 2012 (in millions of Canadian dollars unless otherwise noted) Gas Wind Biomass1 Hydro Solar Total Power generated (GWh) 251.4 47.5 47.8 63.8 13.7 424.2 Capacity factor 78.7% 22.0% 93.2% 81.8% 31.3% n/a Availability 83.1%
Slide 10: Power Segment Performance: Year-to-date overview
Power Segment Performance Year-to-date overview For the six months ended Jun 30, 2012 (in millions of Canadian dollars unless Gas Wind Biomass1 Hydro Solar Total otherwise noted) Power generated (GWh) 593.3 131.4 100.9 94.5 20.4 940.5 Capacity factor 87.9% 30.4% 96.3% 60.6% 23.4% n/a Availability 91
Slide 11: Utilities Segment Performance: Bristol Water
Utilities Segment Performance Bristol Water Three months ended Jun 30 Six months ended Jun 30 (in millions of Canadian dollars unless otherwise noted) 2012 2011 2012 2011 Water supplied (megalitres) 21,359 - 41,122 - Revenue 45.7 - 87.2 - Adjusted EBITDA 13.7 - 27.3 - AFFO - 4.9 - 4.9 - ► Revenue in
Slide 12: Utilities Segment Performance: Värmevärden
Utilities Segment Performance Värmevärden Three months ended Jun 30 Variance Six months ended Jun 30 Variance (in millions of Canadian dollars unless otherwise noted) 2012 2011 (%) 2012 2011 (%) Heat production (GWh) 209 267 (21.7) 602 267 125.5 Interest income 0.7 1.7 (61.3) 2.0 1.7 18.3 Dividends
Slide 13: Expenses
Expenses Total expenses increased by 88% in Q2 & 82% YTD 2012, excluding internalization costs (in millions of Canadian dollars unless otherwise noted) Three months ended Jun 30 Variance Six months ended Jun 30 Variance 2012 2011 (%) 2012 2011 (%) Corporate1 3.7 2.5 49.9 5.9 6.5 (10.7) Power segment
Slide 14: Cash Resources
Cash Resources As at (in millions of Canadian dollars unless otherwise noted) Jun 30, 2012 Dec 31, 2011 Power 15.5 14.0 Utilities- Water 43.2 35.4 Corporate 5.6 8.2 Unrestricted cash & cash equivalents 64.3 57.6 ► Bristol Water holds an additional $40.3M in short-term investments, which, along with
Slide 15: Debt Profile
Debt Profile Debt-to-capitalization ratio of 62.9% Long-Term Debt Maturity Profile Covenants Covenant Jun 30, 2012 CPC - Cardinal Total Leverage Ratio Max 3.50x 0.48x Interest Coverage Ratio Min 3.50x 5.23x Erie Shores Debt DSCR Min 1.20x 1.77x Amherstburg Debt DSCR Min 1.15x 1.23x Hydro Facilities
Slide 16: 2012 Outlook: Power Portfolio
2012 Outlook1 Expect stable performance & total Adjusted EBITDA of ~$110M to $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 F
Slide 17: 2012 Outlook: Bristol Water
2012 Outlook1 Expect stable performance & total Adjusted EBITDA of ~$110M to $120M Bristol Water Expected to Deliver $7.5M in Dividends in 2012 DRIVERS ‣ Steady demand with little seasonal variation ‣ Benefitting from a ~3.9% real increase & a 5.2% inflationary increase in regulated revenue (total i
Slide 18: 2012 Outlook: Värmevärden
2012 Outlook Expect stable performance & total Adjusted EBITDA of ~$110M to $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 Buildin
Slide 19: Strategic Priorities: Cardinal
Strategic Priorities: Cardinal Advancing negotiations ► Dialogue with OPA is continuing ► Remain confident that Cardinal has significant value ► Working towards outcome that recognizes Cardinal’s high quality & importance ￚ Electricity ￚ Industrial ￚ Economic ￚ Social ￚ Community ► Continue to belie
Slide 20: Strategic Priorities: Value Creation
Strategic Priorities: Value Creation Drivers of Near-Term Value ► Availability & performance of power facilities ► Meeting regulatory targets at Bristol Water Drivers of Long-Term Value ► Completing smart acquisitions & development Total return projects that Capstone ► Diversifying our portfolio by
Slide 21: Strategic Priorities: Focus on operational excellence
Strategic Priorities: Value Creation Focus on operational excellence Contribution from Continuing Amherstburg high availability offset by scheduled across power maintenance portfolio outage at Cardinal Quarter ended Six months ended Jun 30 Jun 30 2012 2011 2012 2011 Cardinal 83.11 92.3 91.5 1 96.1 E
Slide 22: Strategic Priorities: Achieving regulatory targets at Bristol Water
Strategic Priorities: Value Creation Achieving regulatory targets 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 O
Slide 23: Strategic Priorities: Re-focusing on growth in second half of 2012
Strategic Priorities: Value Creation Re-focusing on growth in second half of 2012 Efforts to increase the value of our portfolio should contribute to steady dividends & capital appreciation in years ahead 23
Slide 24: Stronger Today
Stronger Today Poised to capitalize on infrastructure investment opportunities Active Management Drives Strong Asset Performance Secure Capabilities & Dividend Disciplined Approach to Relationships that Span with Growth with Focus on Sector Potential for Enhancing Returns Growth 24
Slide 25: Non-GAAP Performance Measures: Definitions
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 26: Non-GAAP Performance Measures: Definitions (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 27: 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 28: 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 72,061,230 Annual long-term average production (LTA) Preferred shares outstanding 3,000,000 An avera
Capstone Infrastructure — Q2 2012 Earnings Presentation on 6ix