Capstone Infrastructure Corp · TSX:CSE.PR.A
Capstone Infrastructure — Shareholder Meeting (June 2013)
46 slides from Capstone Infrastructure's shareholder meeting presentation, Jun 18, 2013
Slide 1: 2013 Annual General Meeting of Shareholders
VALUE EVERY DAY 2013 Annual General Meeting of Shareholders June 18, 2013
Slide 2: Formal Proceedings
CAPSTONE INFRASTRUCTURE FORMAL PROCEEDINGS
Slide 3: V. James Sardo, Chairman of the Board
V. JAMES SARDO Chairman of the Board
Slide 4: Introduction of the Board of Directors
INTRODUCTION OF THE BOARD OF DIRECTORS
Slide 5: Formal Meeting
Formal Meeting ► Call to Order ► Notice of Meeting ► Quorum & Voting Procedure ► Minutes of Last Meeting ► Presentation of Financial Statements & Auditor’s Report ► Re-appointment of Auditors ► Fixing Number of Directors ► Nomination of Directors ► Election of Directors ► Other Business ► Terminatio
Slide 6: Management Presentation
CAPSTONE INFRASTRUCTURE MANAGEMENT PRESENTATION
Slide 7: 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 8: Michael Bernstein, President & CEO
MICHAEL BERNSTEIN President & Chief Executive Officer
Slide 9: 2013 AGM
2013 AGM 2012 highlights Challenges & opportunities Value for shareholders 9
Slide 10: Charting a New Course
Charting a New Course …More diversified & re-focused on core infrastructure …Foothold in regulated water …International partnerships …New development team 10
Slide 11: A New Capstone is Evolving
A New Capstone is Evolving Improved quality, stability & opportunities Stronger long-term cash profile Contractual or Regulated Terms 11
Slide 12: A New Capstone is Evolving: Bristol Water
A New Capstone is Evolving Growing rate base & value at Bristol Water New organic growth potential at Bristol Water Expected growth in 40% RCV from 2010- 20152 1 – Annual data reflects fiscal years ended Mar 31. 2 – With expected inflation. 12
Slide 13: A New Capstone is Evolving: Värmevärden
A New Capstone is Evolving Growth at Värmevärden Potential opportunities presented by fragmentation of district heating sector in Sweden. 13
Slide 14: A New Capstone is Evolving: Power development
A New Capstone is Evolving Power development capabilities Focused on sourcing, developing & pursuing clean energy projects in Western Canada & US. Positions Capstone to develop pipeline of projects.
Slide 15: Achieving Growth: Total assets
Achieving Growth Total assets In $ millions Note: Information from 2004 to 2009 is presented in Canadian GAAP and may not be comparable with information provided under IFRS for 2010, 2011 and 2012. 15
Slide 16: Achieving Growth: Adjusted EBITDA
Achieving Growth Adjusted EBITDA1 In $ millions 2 1 - Adjusted EBITDA is a performance measure that is not defined by International Financial Reporting Standards. Please refer to page 20 of Capstone’s fiscal 2012 annual report for a definition. 2 - Fiscal 2004 was a partial year following Capstone’s
Slide 17: Named One of Canada's Top 500 Fastest-Growing Companies
Achieving Growth Named One of Canada’s Top 500 Fastest-Growing Companies 17
Slide 18: Behind the Numbers
Behind the Numbers …Drinking water for 1.2 million people …Clean electricity to power 190,000 households …Heat distributed within 10 communities with combined population of 170,000 18
Slide 19: Creating Value
Creating Value ► Actively managing our businesses ► Delivering strong financial performance ► Identifying opportunities to grow & diversify 19
Slide 20: Fiscal 2012: Improved financial position
Fiscal 2012 Improved financial position ► Recapitalized Värmevärden ► Refinanced hydro power facilities ► Sold 20% interest in Bristol Water to ITOCHU at attractive premium ► Extended corporate credit facility Refinanced ~$200M in debt during 2012 20
Slide 21: Fiscal 2012: Set new common share dividend
Fiscal 2012 Set new common share dividend ► 30 cents per share annually ► Reflects long-term cash flow profile of current portfolio ► Assumes range of reasonable outcomes at Cardinal ► Long-term average payout ratio of 70% to 80% Ability to retain cash that can be reinvested in growth 21
Slide 22: Fiscal 2012: Built value of businesses
Fiscal 2012 Built value of businesses ► Maintained high availabilities across power facilities ► Sold renewable energy credits at Whitecourt ► Advanced capital investment program at Bristol Water ► Increased availability & use of low- cost fuel at Värmevärden High quality, strong platform for growth
Slide 23: Fiscal 2012: Achieved targeted Adjusted EBITDA
Fiscal 2012 Achieved targeted Adjusted EBITDA Growth Diversification $120.7M 2012 2011 4% 17% $75.3M 5% 39% 57% 78% in $ millions $55.8M 2010 100% Canada Sweden UK Note: Adjusted EBITDA is a performance measure that is not defined by International Financial Reporting Standards. Please refer to page
Slide 24: Fiscal 2012: Positioning for growth
Fiscal 2012 Positioning for growth ► Returning to historical levels of business development activity in 2013 ► Supported by strengthened balance sheet & lower payout ratio ► Seek to invest in businesses that improve our portfolio’s value, quality & cash flow 24 Growing our company is a major focus f
Slide 25: Cardinal
Cardinal Continuing to work towards a new contract 25
Slide 26: Cardinal
Cardinal Offers compelling value to Ontario Ability to provide flexibility to system + strong community support 26 & partnerships + economic & employment benefits.
Slide 27: Our Mission
Our Mission Our mission is to build & responsibly manage a high quality portfolio of infrastructure businesses in Canada & internationally in order to deliver a superior total return to our shareholders by providing reliable income & capital appreciation. 27
Slide 28: Michael Smerdon, EVP & CFO
MICHAEL SMERDON Executive Vice President & Chief Financial Officer
Slide 29: Value Drivers: Contractual or regulatory nature
Value Drivers Contractual or regulatory nature of our infrastructure businesses Diversified by asset type, Adjusted EBITDA by Power Facility 370 MW geographic location, PPA length & counterparty, & fuel source Availability (%) Facility 2012 5-Year Average Cardinal 95.0 96.7 Erie Shores 97.9 96.7 Hyd
Slide 30: Value Drivers: Bristol Water
Value Drivers Contractual or regulatory nature of our infrastructure businesses Bristol Water brings an organic growth profile to our portfolio & will be a key contributor to Capstone’s 30 long-term cash flow & value.
Slide 31: Value Drivers: Effective asset management
Value Drivers Effective asset management Rolling out WindBOOST at Erie Shores in 2013 to increase the facility’s annual energy output. 31
Slide 32: Value Drivers: Effective asset management
Value Drivers Effective asset management Working with Bristol Water to accelerate its capital expenditure plan, which includes expanding its network of pipes & mains. 32
Slide 33: Value Drivers: Capital structure
Value Drivers Capital structure1 Capital Structure Long-Term Debt1 Maturity Profile ~$945M 34% Common Equity Preferred Shares & 11% Convertible Debentures 55% Asset-Level Debt Percentage of consolidated debt 88% scheduled to amortize over PPA terms or with a maturity longer than 10 years 1 - As at M
Slide 34: Value Drivers: Access to capital
Value Drivers Access to capital ► Expect to build up $40M - $50M in cash by end of 2014 ► Credit capacity at corporate level ► Good relationships with lenders ► Ability to partner 34
Slide 35: Value Drivers: Growth
Value Drivers Growth Continue to diversify across core infrastructure categories in Canada, the US, Western & Northern Europe & Australia. 35
Slide 36: Value Drivers: Performance
Value Drivers Performance Adjusted EBITDA Expectation for $110M - $120M Adjusted EBITDA in 2013 ► Represents 5% increase on pro forma basis had we owned 50% of Bristol Water for full 2012 year ► Expected performance supports dividend & allows us to retain cash Note: Adjusted EBITDA is a performance
Slide 37: Michael Bernstein, President & CEO
MICHAEL BERNSTEIN President & Chief Executive Officer
Slide 38: Growth
Growth Seeking to increase Capstone’s size, scope & value Infrastructure investment needs 38 globally are large & growing.
Slide 39: Core Infrastructure Pillars
Core Infrastructure Pillars Power Utilities P3 Transportation • Traditional • Water • Courts • Roads • Renewable • Gas (transmission & • Hospitals • Rails • District heating & distribution) • Schools • Airports cooling • Electric • Transportation • Ports • Waste to energy (transmission & distributio
Slide 40: Our Vision
Our Vision We have the team, skills & financial stability Our vision is to be Canada’s pre-eminent diversified infrastructure company.
Slide 41: Why Invest in Capstone?
Why Invest in Capstone? …invest in high quality businesses delivering everyday services that are essential throughout the economic cycle. 41
Slide 42: Why Invest in Capstone?
Why Invest in Capstone? …own a stake in a high-growth regulated water utility that will generate growing, perpetual cash flow & increasing value & dividends. 42
Slide 43: Why Invest in Capstone?
Why Invest in Capstone? …own a sizable power portfolio in Canada that’s generating electricity for 190,000+ 43 households under PPAs.
Slide 44: Why Invest in Capstone?
Why Invest in Capstone? …a way to access the infrastructure asset class globally & benefit from its investment merits. 44
Slide 45: Why Invest in Capstone?
Why Invest in Capstone? …own a portfolio of infrastructure businesses that are delivering strong performance & an attractive dividend for investors. 45
Slide 46: Questions
CAPSTONE INFRASTRUCTURE QUESTIONS
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