News Release

Capstone Infrastructure Corporation Announces Second Quarter 2015 Results

TORONTO, ONTARIO--(Marketwired - Aug. 10, 2015) - Capstone Infrastructure Corporation (TSX:CSE)(TSX:CSE.DB.A) (TSX:CSE.PR.A)(TSX:CPW.DB) today announced results for the 2015 fiscal year second quarter ended June 30. The Corporation's Management's Discussion and Analysis and unaudited consolidated financial statements are available at and on SEDAR at All amounts are in Canadian dollars.

Operational Highlights:

  • Commissioned the 25-megawatt Goulais wind facility
  • Secured all Renewable Energy Approvals for next phase of Ontario wind projects
  • Completed Cardinal refurbishment and successfully sold power into Ontario grid
  • Review with UK Competition and Markets Authority moved closer to conclusion

Financial Review

In millions of Canadian dollars or on a per share basis unless otherwise noted Quarter ended
June 30
Six months ended
June 30
2015 2014 2015 2014
Revenue 81.4 106.4 (23.5 ) 171.6 220.8 (22.3 )
Net income (5.6 ) 8.4 (166.0 ) (0.1 ) 27.9 (100.4 )
Adjusted EBITDA1,2 28.8 39.5 (27.2 ) 58.3 81.2 (28.2 )
AFFO1,3 0.9 12.1 (92.3 ) 7.4 32.0 (76.9 )
AFFO per share1,3 0.010 0.126 (92.4 ) 0.077 0.331 (76.7 )
Dividends per share 0.075 0.075 - 0.150 0.150 -
Payout ratio1 782% 60% n.m.f. 197% 45% n.m.f.
(1) "Adjusted EBITDA", "Adjusted Funds from Operations", and "Payout Ratio" are non-GAAP financial measures and do not have any standardized meaning prescribed by International Financial Reporting Standards ("IFRS"). As a result, these measures may not be comparable to similar measures presented by other issuers. Definitions of each measure are provided on page 6 and 7 of Management's Discussion and Analysis with reconciliation to IFRS measures provided on page 7.
(2) Adjusted EBITDA for investments in subsidiaries with non-controlling interests are included at Capstone's proportionate ownership interest.
(3) For businesses that are not wholly owned, the cash generated by the business is only available to Capstone through periodic dividends. For these businesses, AFFO is equal to distributions received.

"During a financially challenging second quarter, Capstone was active in commissioning the Goulais wind facility, securing the two remaining Renewable Energy Approvals for our five Ontario wind projects, initiating dispatchable operations at the Cardinal plant following the completion of a major refurbishment, and working with Bristol Water management as the CMA review of the company's business plan nears its conclusion," said Michael Bernstein, President and Chief Executive Officer. "Our financial performance was negatively affected primarily by Cardinal's new contract, and also by lower production in our power portfolio driven by poor weather conditions, lower regulated rates at Bristol Water and certain non-recurring factors. However, we anticipate improving results in the quarters ahead when the Bristol Water CMA successfully concludes, dividends begin to flow from Goulais and Saint-Philémon, and meteorological conditions return to normal."

Financial Highlights

Revenue was 24%, or $25.0 million, lower compared to the same quarter in 2014 and 22%, or $49.2 million less year to date. The decline was principally the result of the new contract at Cardinal, followed by lower regulated rates at Bristol Water, reduced production at Capstone's renewable energy facilities, and decreased power prices in Alberta affecting Whitecourt. Moderating the lower revenue were favourable foreign currency translation from Bristol Water and new contributions from Skyway 8, Saint-Philémon and Goulais.

Total expenses for the second quarter were 22%, or $12.6 million lower in 2015 and 21%, or $24.1 million lower year to date This reduction is primarily related to lower operating and fuel costs at Cardinal and was partially offset by higher project development costs.

Year to date, results for Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA) and Adjusted Funds from Operations (AFFO) are in line with management's expectations. In the second quarter, Adjusted EBITDA fell by 27%, or $10.7 million, and 28%, or $22.9 million in the year-to-date period because of declines in Capstone's power segment and lower regulated rates at Bristol Water. AFFO decreased 92%, or $11.2 million, in the quarter, and 77% or $24.6 million year to date largely because of Adjusted EBITDA factors, as well as deferred dividends at the Saint-Philémon wind facility and at Bristol Water.

Financial Position

At the end of the first quarter, Capstone had a debt-to-capitalization ratio of 73.8% on a book-value basis. Unrestricted cash and equivalents stood at $51.2 million, of which $22.6 million is available for general corporate purposes; undrawn corporate credit capacity was $24.2 million.

Subsequent Events

On July 9, 2015, Capstone executed an approximately $95.0 million refinancing of the Amherstburg Solar Park. The new project debt was used to repay Amherstburg's outstanding principal, swap break fees and closing costs. The new project debt fully amortizes over the remainder of the facility's power purchase agreement, which expires in 2031, and carries a fixed, annual interest rate of 3.49%. The net result is an increase in Capstone's annual cash flow from Amherstburg.

Bristol Water is nearing the conclusion of the CMA review process and provisional findings were released on July 10, 2015. These findings affirmed Bristol Water's position in several key areas, though there remain areas of disagreement with the CMA's findings, such as the pay-as-you-go ratio. Bristol Water participated in a final round of hearings on August 4, 2015 and presented additional documentation in support of an outcome that will best serve the company's customers, protect the integrity of the water system and place Bristol Water on a more equal footing to its peers in the UK. The final evaluation is expected by September 3, 2015. The CMA can seek an extension if necessary to complete its review.


The Corporation reiterates its forecast of annual Adjusted EBITDA between $115 million to $125 million and remains committed to its current dividend policy. On a year-to-date basis, the payout ratio, based on AFFO, is consistent with management's expectations. Management anticipates the atypically high payout ratio in the second quarter of 2015 will be greatly reduced in subsequent reporting periods as power generation returns to historical levels, dividends are received from new wind facilities, and dividends from Bristol Water resume following a successful conclusion of the CMA process. The long-term target remains an average payout ratio of between 70% and 80%.

Dividend Declarations

The Board of Directors today declared a quarterly dividend of $0.075 per common share for the quarter ending September 30, 2015. The dividend will be payable on October 30, 2015 to shareholders of record at the close of business on September 30, 2015.

The Board of Directors also declared a dividend on the Corporation's Cumulative 5-Year Rate Reset Preferred Shares, Series A (the "Preferred Shares") of $0.3125 per Preferred Share to be paid on or about October 30, 2015 to shareholders of record at the close of business on October 15, 2015. The dividend on the Preferred Shares covers the period from August 1, 2015 to October 31, 2015.

The Corporation will issue common shares in connection with the reinvestment of dividends to shareholders enrolled in the Corporation's Dividend Reinvestment Plan for the October 30, 2015 common share dividend payment. The price of common shares purchased with reinvested dividends will be the previous five-day volume weighted average trading share price on the Toronto Stock Exchange, less a 5% discount.

The dividends paid by the Corporation on its common shares and the Preferred Shares are designated "eligible" dividends for purposes of the Income Tax Act (Canada). An enhanced dividend tax credit applies to eligible dividends paid to Canadian residents.

A distribution of $0.075 per unit will also be paid on October 30, 2015 to holders of record on September 30, 2015 of Class B Exchangeable Units of MPT LTC Holding LP, which is a subsidiary entity of the Corporation.

Conference Call and Webcast

Capstone will host a conference call on Tuesday, August 11, 2015 at 8:30 a.m. EDT. From Canada or the US, dial +1-800-319-4610. From elsewhere, dial +1-604-638-5340. A replay of the call will be available until Tuesday, August 25, 2015. The event will be webcast live with an accompanying slide presentation on the Corporation's website at

About Capstone

Capstone's mission is to provide investors with an attractive total return from responsibly managed long-term investments in core infrastructure in Canada and internationally. The company's strategy is to develop, acquire and manage a portfolio of high quality utilities, power and transportation businesses, and public-private partnerships that operate in a regulated or contractually-defined environment and generate stable cash flow. Capstone currently has investments in utilities businesses in Europe and owns, operates and develops thermal and renewable power generation facilities in Canada with a total installed capacity of net 468 megawatts. Please visit for more information.

1 - See 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 available to the Corporation. Forward-looking statements and financial outlook are provided for the purpose of presenting information about management's current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. These statements and financial outlook use forward-looking words, such as "anticipate", "continue", "could", "expect", "may", "will", "intend", "estimate", "plan", "believe" or other similar words. These statements and financial outlook are subject to known and unknown risks and uncertainties that may cause actual results or events to differ materially from those expressed or implied by such statements and financial outlook and, accordingly, should not be read as guarantees of future performance or results. The forward-looking statements and financial outlook within this document are based on information currently available and what the Corporation currently believes are reasonable assumptions, including the material assumptions set out in the management's discussion and analysis of the results of operations and the financial condition of the Corporation ("MD&A") for the year ended December 31, 2014 under the heading "Results of Operations", as updated in subsequently filed MD&A of the Corporation (such documents are available under the Corporation's SEDAR profile at

Other potential 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 current state, including, with respect to industry conditions, general levels of economic activity, regulations, weather, taxes and interest rates; that there will be no material delays in the Corporation's wind development projects achieving commercial operation; that the Corporation's power infrastructure facilities will experience normal wind, hydrological and solar irradiation conditions, and ambient temperature and humidity levels; that there will be no material changes to the Corporation's facilities, equipment or contractual arrangements; that there will be no material changes in the legislative, regulatory and operating framework for the Corporation's businesses; that there will be no material delays in obtaining required approvals for the Corporation's power infrastructure facilities, or Värmevärden; that there will be no material changes in rate orders or rate structures for Bristol Water; that Bristol Water will implement rates prescribed in Ofwat's final determination while pursuing a more appropriate outcome through the Competition & Markets Authority; that there will be no material changes in environmental regulations for the power infrastructure facilities, Värmevärden or Bristol Water; that there will be no significant event occurring outside the ordinary course of the Corporation's businesses; the refinancing on similar terms of the Corporation's and its subsidiaries' various outstanding credit facilities and debt instruments which mature during the period in which the forward-looking statements and financial outlook relate; market prices for electricity in Ontario and the amount of hours Cardinal is dispatched; the price Whitecourt will receive for its electricity production considering the market price for electricity in Alberta, the impact of renewable energy credits, and Whitecourt's agreement with Millar Western, which includes sharing mechanisms regarding the price received for electricity sold by the facility; the re-contracting of the PPA for Sechelt; that there will be no material change from the expected amount and timing of capital expenditures by Bristol Water; that there will be no material changes to the Swedish Krona to Canadian dollar and UK pound sterling to Canadian dollar exchange rates; and that Bristol Water will operate and perform in a manner consistent with management's assumptions of the final regulatory outcome for AMP6, including, among others: real and inflationary changes in Bristol Water's revenue, Bristol Water's expenses changing in line with inflation and efficiency measures, and capital investment, leakage, customer service standards and asset serviceability targets being achieved.

Although the Corporation believes that it has a reasonable basis for the expectations reflected in these forward-looking statements and financial outlook, actual results may differ from those suggested by the forward-looking statements and financial outlook for various reasons, including: risks related to the Corporation's securities (dividends on common shares and preferred shares are not guaranteed; volatile market price for the Corporation's securities; shareholder dilution; and convertible debentures credit risk, subordination and absence of covenant protection); risks related to the Corporation and its businesses (availability of debt and equity financing; default under credit agreements and debt instruments; geographic concentration; foreign currency exchange rates; acquisitions, development and integration; environmental, health and safety; changes in legislation and administrative policy; and reliance on key personnel); risks related to the Corporation's power infrastructure facilities (power purchase agreements; completion of the Corporation's wind development projects; operational performance; contract performance and reliance on suppliers; land tenure and related rights; environmental; and regulatory environment); risks related to Värmevärden (operational performance; fuel costs and availability; industrial and residential contracts; environmental; regulatory environment; and labour relations); and risks related to Bristol Water (Ofwat price determinations; failure to deliver capital investment programs; economic conditions; operational performance; failure to deliver water leakage target; SIM and the serviceability assessment; pension plan obligations; regulatory environment; competition; seasonality and climate change; and labour relations). For a comprehensive description of these risk factors, please refer to the "Risk Factors" section of the Corporation's annual information form dated March 24, 2015, as supplemented by disclosure of risk factors contained in any subsequent annual information form, material change reports (except confidential material changes reports), business acquisition reports, interim financial statements, interim MD&A and information circulars filed by the Corporation with the securities commissions or similar authorities in Canada (which are available under the Corporation's SEDAR profile at

The assumptions, risks and uncertainties described above are not exhaustive and other events and risk factors could cause actual results to differ materially from the results and events discussed in the forward-looking statements and financial outlook. The forward-looking statements and financial outlook within this document reflect current expectations of the Corporation as at the date of this document and speak only as at the date of this document. Except as may be required by applicable law, the Corporation does not undertake any obligation to publicly update or revise any forward-looking statements and financial outlook.

This document is not an offer or invitation for the subscription or purchase of or a recommendation of securities. It does not take into account the investment objectives, financial situation and particular needs of any investors. Before making an investment in the Corporation, an investor or prospective investor should consider whether such an investment is appropriate to their particular investment needs, objectives and financial circumstances and consult an investment adviser if necessary.