TORONTO, ONTARIO--(Marketwired - Nov. 9, 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 third quarter ended September 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:

  • Started construction on two new wind projects in Ontario
  • Wind facilities completed in 2015 made positive financial contributions
  • Dispatched Cardinal and sold power into Ontario grid on 28 days
  • Submitted bids under the Ontario Large Renewable Procurement
  • Received final outcome on Bristol Water regulatory appeal after quarter-end

Financial Review

In millions of Canadian dollars or on a per share basis unless otherwise noted Quarter ended
Sept 30
Nine months ended
Sept 30
2015 2014 Variance (%) 2015 2014 Variance
Revenue 84.1 104.1 (19.2 ) 255.8 324.9 (21.3 )
Net income 5.0 6.8 (26.6 ) 4.9 34.7 (85.9 )
Adjusted EBITDA(1), (2) 26.7 32.2 (17.1 ) 85.0 113.3 (25.0 )
AFFO(1), (3) 1.9 5.4 (63.8 ) 9.3 37.4 (75.0 )
AFFO per share(1), (3) 0.020 0.056 (64.3 ) 0.096 0.388 (75.2 )
Dividends per share 0.075 0.075 -- 0.225 0.225 --
Payout ratio(1) 375 % 134 % n.m.f 234 % 58 % 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.

"The third quarter, which is traditionally one of Capstone's slowest quarters, was marked by continued momentum in organic growth, with the 10-megawatt Grey Highlands ZEP and 18-megawatt Ganaraska projects in Ontario now under construction and expected to be completed in the first and second quarters of 2016, respectively. We also finalized and submitted bids under Ontario's Large Renewable Procurement for a new solar park and an expansion of Erie Shores Wind Farm," said Michael Bernstein, President and Chief Executive Officer. "Cardinal's new contract continues to be reflected in lower financial performance compared to 2014; however, the plant is operating effectively as a dispatchable facility and provided power to Ontario's grid on 28 days during the quarter. Lastly, the final determination on the Bristol Water appeal from the Competition and Markets Authority (CMA) contained several important gains over the economic regulator's business plan and is expected to provide dividends to Capstone in line with expectations. Most importantly, the issue is now in the rear-view mirror, enabling Capstone management to sharpen its focus on maximizing the value of its portfolio and on growth opportunities."

Financial Highlights

Revenue was 19%, or $19.9 million, lower compared to the same quarter in 2014 and 21%, or $69.1 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. Excluding the effects of Cardinal and Bristol Water, Capstone's revenue grew as a result of new wind facilities commissioned since August 2014, reflecting contributions from Skyway 8, Saint-Philémon and Goulais.

Total expenses for the third quarter were 18%, or $10.0 million lower in 2015 and 20%, or $34.1 million lower year to date This reduction is primarily related to lower operating and fuel costs at Cardinal and was partially offset by higher one-time costs for Bristol Water restructuring and participating in the CMA process.

In the third quarter, Adjusted EBITDA fell by 17%, or $5.5 million, and 25%, or $28.4 million in the year-to-date period because of declines in Capstone's power segment and lower regulated rates at Bristol Water. Year to date, Adjusted EBITDA and Adjusted Funds from Operations (AFFO) are lower than last year but are s slightly ahead of management's expectations. AFFO decreased 64%, or $3.4 million, in the quarter, and 75% or $28 million year to date largely because of Adjusted EBITDA factors, as well as deferred dividends from Bristol Water. This was mitigated by new dividends from the Saint-Philémon wind facility.

Financial Position

At the end of the third quarter, Capstone had a debt-to-capitalization ratio of 74.8% on a fair-value basis. Unrestricted cash and equivalents stood at $41.2 million, of which $13.0 million is available for general corporate purposes. Subsequent to quarter end, Capstone increased the capacity of its corporate credit facility by $35 million, to a total of $125 million, with available undrawn capacity of $18.4 million.

Subsequent Events

On October 6, 2015 the CMA published its final determination for Bristol Water's AMP6 business plan, which runs until March 31, 2020. Overall, the CMA's price determination enables Bristol Water to deliver a good level of service to its customers, to protect the integrity of the water system and is expected to provide its owners, including Capstone, with dividends in line with expectations.

On October 6, 2015 Capstone and its existing lenders increased the capacity of its corporate credit facility by $35 million to increase the total facility to $125 million. The expanded portion of the corporate credit facility matures January 2016 and the remaining $90 million was extended by one year, to mature November 2018. The increased capacity enhances financial flexibility and may be used to fund ongoing development projects or other corporate purposes.

On October 9, 2015, the Goulais construction facility converted to a term facility maturing on September 30, 2034, which has regular principal and interest payments fully amortizing over the remaining term and bears interest at a fixed, annual rate of 5.156%.


The Corporation reiterates its forecast of 2015 Adjusted EBITDA between $115 million to $125 million and the Corporation 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. The atypically high payout ratio experienced in the second quarter of 2015 was moderated in the third quarter as wind resources improved and production returned closer to historical levels and dividends were received from the Saint-Philémon wind facility. The long-term target remains an average payout ratio of between 70% and 80%. Management expects the resumption of declared dividends from Bristol Water in subsequent quarters, now that the CMA process has concluded.

Dividend Declarations

The Board of Directors today declared a quarterly dividend of $0.075 per common share for the quarter ending December 31, 2015. The dividend will be payable on January 29, 2016 to shareholders of record at the close of business on December 31, 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 January 29, 2016 to shareholders of record at the close of business on January 15, 2016. The dividend on the Preferred Shares covers the period from November 1, 2015 to January 31, 2016.

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 January 29, 2016 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 January 29, 2016 to holders of record on December 31, 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, November 10, 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, November 24, 2015 at 1-855-669-9658 and code 1385#. From outside Canada or the US, the replay number is +1-604-674-8052 and enter the code 1385#.

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 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 the regulatory assumptions underlying the Competition and Market Authority's ("CMA") final determination, 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; service incentive mechanism ("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 change reports), business acquisition reports, interim financial statements, interim management's discussion and analysis 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.

Contact Information:

Capstone Infrastructure Corporation
Aaron Boles
Senior Vice President, Communications and Investor Relations
(416) 649-1325