Capstone Infrastructure Corp · TSX:CSE.PR.A
Capstone Infrastructure — Q1 2015 Earnings Presentation
25 slides from Capstone Infrastructure's earnings presentation, May 15, 2015
Slide 1: Q1 2015 Results Presentation
Essential Q1 2015 Results Presentation May 15, 2015
Slide 2: Notice to Readers
Notice to Readers This document is being distributed on a confidential basis by Capstone Infrastructure Corporation (“Capstone” or the “Corporation”). References to “we” “us”, “our” and similar expressions are to Capstone. This document is an outline of matters for discussion only and no representat
Slide 3: Q1 2015 Snapshot
Q1 2015 Snapshot Performance In Line with Forecast Revenue Adjusted EBITDA1 AFFO1 140 45 25 120 40 -21.2% 35 -29.3% 20 -67.3% 100 In $ millions In $ millions In $ millions 30 80 15 25 60 20 10 15 40 10 5 20 5 0 0 0 Q1 2015 Q1 2014 Q1 2015 Q1 2014 Q1 2015 Q1 2014 1 - "Adjusted EBITDA“ and “Adjusted F
Slide 4: Financial Performance
Financial Performance In millions of Canadian dollars or on a per share basis unless Quarter Ended Mar 31 Variance otherwise noted 2015 2014 (%) Revenue 90.2 114.4 (21.2) Net income 5.4 19.5 (72.3) Adjusted EBITDA1,2 29.5 41.7 (29.3) AFFO1,3 6.5 19.9 (67.3) AFFO per share 0.067 0.207 (67.6) Dividend
Slide 5: Adjusted EBITDA
Adjusted EBITDA1 Variance in AFFO Drivers of Adjusted EBITDA Variance Q1 2015 Adjusted EBITDA by Business2 ► Lower margin from 45 contracts at heritage 40 assets (Cardinal and -29.3% Whitecourt) 35 ► Lower wind 30 production 25 ► Positive foreign 20 currency exchange Q1 2015 Adjusted EBITDA by Geogr
Slide 6: Adjusted Funds from Operations
Adjusted Funds from Operations1 Drivers of AFFO Variance Q1 2015 AFFO by Business2 25 ► Lower across power segment 20 ► Higher at Bristol Water -67.3% ► Primarily related to 15 lower Adjusted EBITDA factors in the power segment 10 Q1 201 AFFO by Geography2 5 0 Q1 2015 Q1 2014 1 - Please refer to sli
Slide 7: New Contract for Cardinal
New Contract for Cardinal Took effect in Q1 ► Nearing completion of $30 million refurbishment to dispatchable facility ► No production during Q1 ► Majority of EBITDA is for capacity payments; market revenues expected to contribute a small portion ► Expected to provide power to the grid during warm s
Slide 8: Steady Organic Growth
Steady Organic Growth Advancing near-term wind projects ► 24 MW Saint-Philémon project in Québec Commissioned in Q1 ► 25 MW Goulais Project made significant progress; expected COD May 2015 ► Renewable Energy Approvals in hand for four projects: ￚ Ganaraksa ￚ Grey Highlands ZEP ￚ Grey Highlands Clean
Slide 9: Bristol Water CMA Progress
Bristol Water CMA Progress Regulator review is proceeding well ► Written submissions and replies/responses have been made ► Publicly available on CMA website ► Industry view is that Bristol Water is presenting a solid case ► Main party hearings begin in June ► Provisional determination published in
Slide 10: Financial Overview: Revenue
Financial Overview Revenue 140 Drivers of Revenue Variance 120 -21.2% 100 80 In $ millions 60 40 ► Cardinal contract ► Lower Alberta Power Pool Prices 20 ► Revenue growth at Bristol Water arising from higher regulated water rates & foreign 0 Q1 2015 Q1 2014 exchange 10
Slide 11: Financial Overview: Expenses
Financial Overview Expenses 70 Drivers of Expense Variance 60 -19.0% 50 40 In $ millions 30 ► Reduced expenses from lower production at Cardinal 20 ► Lower administrative expenses ► Partially offset by higher costs at Bristol Water related 10 to foreign currency, restructuring and regulatory review
Slide 12: Cash Resources
Cash Resources As at Mar 31 As at Dec 31 (in millions of Canadian dollars unless otherwise noted) 2015 2014 Power 38.3 36.6 Utilities- Water 11.1 13.3 Corporate 6.0 8.9 Unrestricted cash & cash equivalents 55.4 58.8 Less: cash with access limitations Power (20.1) (18.2) Utilities – Water1 (11.1) (13
Slide 13: Debt Profile
Debt Profile Capital structure aligned to cash flow profile of businesses Long-Term Debt Maturity Profile In Compliance with all Covenants1 Covenant Mar 31, 2015 Amherstburg DSCR Min 1.15x 1.45x Hydros Senior Bonds – DSCR Min 1.2x 1.72x Subordinated bonds - DSCR Min 1.05x 2.18x Erie Shores DSCR Min
Slide 14: 2015 Outlook
2015 Outlook1 ► Adjusted EBITDA in 2015 expected to be between $115M to $125M, reflecting: • Lower contribution from Cardinal; • Reduced power pool rates in Alberta; • Bristol Water operates under Ofwat’s Dec 2014 final determination between Q2 and Q4; • A return to normal dividends from Värmevärden
Slide 15: Priorities in 2015
Priorities in 2015 Secure improved outcome at Bristol Water ► Work with management at Bristol Water to ensure successful CMA review process ► Final determination deadline is Sept 3, with provisional determination set for June/July Pursue Growth Initiatives ► Complete Goulais wind farm in Q2 ► Secure
Slide 16: Priorities in 2015: Growth Initiatives
Priorities in 2015 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 • Transpo
Slide 17: Solid Fundamentals
Solid Fundamentals High quality, growing, diversified portfolio Solid balance sheet New projects steadily reaching COD and other moving towards construction Experienced team with strong relationships across the infrastructure spectrum 17
Slide 18: Appendix
CAPSTONE INFRASTRUCTURE
Slide 19: Power Segment Performance
Power Segment Performance Seasonality Actual Average long-term production (GWh) (1) Type PPA Expiry Q1 2015 Q1 Q2 Q3 Q4 Annual Wind(2) 2020 - 2037 146.1 159.6 96.9 82.3 140.8 479.6 Biomass(2) 2029 46.6 49.8 45.6 50.4 49.1 194.9 Hydro 2017 - 2042 33.0 31.5 57.3 29.8 41.6 160.2 Solar 2031 8.1 7.1 12.9
Slide 20: Power Segment Performance
Power Segment Performance For the quarter ended Mar 31, 2015 (in millions of Canadian dollars Gas Wind1 Biomass1 Hydro Solar Development2 Total unless otherwise noted) Power generated (GWh) 1.0 146.1 46.6 33.0 8.1 n/a 234.8 Capacity factor (%) 0.6 31.5 89.1 42.2 19.0 n/a n.m.f. Availability (%) 80.8
Slide 21: Utilities Segment Performance: Bristol Water
Utilities Segment Performance Bristol Water Quarter Ended Mar 31 Variance (in millions of Canadian dollars unless otherwise noted) 2015 2014 (%) Water supplied (megalitres) 19,482 19,638 (0.8) Revenue 61.5 56.2 9.4 Adjusted EBITDA before non-controlling interest 26.8 26.9 (0.4) Adjusted EBITDA 13.4
Slide 22: Utilities Segment Performance: Värmevärden
Utilities Segment Performance Värmevärden Quarter Ended Mar 31 Variance (in millions of Canadian dollars unless otherwise noted) 2015 2014 (%) Heat production (GWh) 364 367 (0.8) Interest income 0.7 0.8 (12.5) Adjusted EBITDA & AFFO1 0.7 0.8 (12.5) 1 – Värmevärden’s contribution to Capstone’s AFFO c
Slide 23: 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 24: Non-GAAP Performance Measures (continued)
Non-GAAP Performance Measures Definitions (continued) Adjusted Funds from Operations (AFFO) AFFO is a non-GAAP financial measure that assists management, investors and other stakeholders in analyzing the cash flow available for future growth capital investments, acquisitions and dividends to common
Slide 25: Additional Details
Additional Details Glossary Investor Information AMP Quick Facts As at Mar Asset management plan, which is developed by water utilities in the UK 31, 2015 every five years & approved by Ofwat. Common shares outstanding 93,724,617 (TSX:CSE) Annual long-term average production (LTA) An average product
Capstone Infrastructure — Q1 2015 Earnings Presentation on 6ix