Essential Annual General Meeting of Shareholders June 17, 2015
FORMAL PROCEEDINGS
AGENDA Formal proceedings Call to Order Notice of Meeting Quorum & Voting Procedure Minutes of Last Meeting Financial Statements & Auditors Report Nomination & Election of Directors Re-appointment of Auditors Other…
MANAGEMENTS PRESENTATION Michael Bernstein President and Chief Executive Officer
LAST 12 MONTHS Four objectives from 2014 AGM Maximize asset performance Manage business responsibly Advance growth initiatives Achieve successful AMP6 outcome at Bristol Water
BUILDING A STRONG FOUNDATION Diversified de Diversified, de-risked, risked extended portfolio 2005 Cardinal 2010 2015 2020 2025 2030 2035 2040 2045 2050 Perpetual Long-term visibility on cash flow duration Contract Length
BUILDING A STRONG FOUNDATION Diversified de Diversified, de-risked, risked extended portfolio 2010 Cardinal Whitecourt Erie Shores Hydros 2010 2015 2020 2025 2030 2035 2040 2045 2050 Perpetual Long-term visibility on…
BUILDING A STRONG FOUNDATION Diversified de Diversified, de-risked, risked extended portfolio 2015 Cardinal Whitecourt Erie Shores Hydros Amherstburg ReD Operating Skyway 8 St. Philemon Goulais Vrmevrden Bristol…
MAXIMIZE PERFORMANCE Improving performance at Bristol Water
RESPONSIBLE MANAGEMENT Efficiency, creativity, innovation Simplified corporate structure Lower administrative expenses in Q1 2015 Potential 25M and incremental future cash flows from OEFC lawsuit
RESPONSIBLE MANAGEMENT Cardinal: new contract and financial impact New 20-year contract signed in March 2014 Became effective January 1, 2015 Dispatchable operations rather than 24/7 Completion of 30 million life extension Gained…
RESPONSIBLE MANAGEMENT Whitecourt: secured new 15-year contract Free fuel from wood waste supplier Protection from current depressed prices in Alberta Ability to benefit when pool prices recover Potential for value of…
RESPONSIBLE MANAGEMENT Fiscal 2014 among Capstones best years financially 160.4 million Adjusted EBITDA Assets performed well Bristol Water contribution New contributions from ReD acquisition
ADVANCE GROWTH Proven execution success with wind projects Expanded portfolio of operating wind power facilities to 228.5 MW net Development projects largely completed on time and under budget Commissioned all near-term projects…
BRISTOL WATER Ofwat final determination Average SIM Score 11/12-13/14 90 80 70 60 50 Customer service levels among the best in the sector
BRISTOL WATER Ofwat final determination Average Water Charges 2014-15 Customer rates below average of comparable water systems
BRISTOL WATER Ofwat final determination Industry Bill Decreases 25% 20% 15% 10% Industry Average: 4.5% 5% -% Imposed rate reduction 4X higher than industry average
BRISTOL WATER Final stretch of regulatory review Ofwat set allowable total wholesale expenditure of 409 million 14% higher than Draft Determination of 359 million Average household bill falls to 164 in first year, then to 152…
BRISTOL WATER Final stretch of regulatory review Ofwat final determination rejected CMA review underway Arbitration process is going well Confident in an improved result Expert analysis supports better outcome Remains a valuable,…
FOUR OBJECTIVES Largely achieved our goals Strong portfolio performance Excellent financial results Good progress on several strategic priorities Uncertainty on Bristol Water Disappointing share price
MANAGEMENTS PRESENTATION Michael Smerdon Executive Vice President and Chief Financial Officer
FISCAL 2014 One of Capstones strongest years financially Revenue (M) Adjusted EBITDA (M)1 AFFO (M)1 +13.4% +24.9% +41.3% 1 - Adjusted EBITDA and Adjusted Funds from Operations are non-GAAP financial measures and do not have any…
Q1 2015 In line with forecast and reflecting Cardinal impact Revenue (M) Adjusted EBITDA (M)1 AFFO (M)1 -21.2% -29.3% -67.3% Represents contribution from Cardinal 1 - Adjusted EBITDA and Adjusted Funds from Operations are…
DEVELOPMENT PIPELINE Narrowing the gap STEADY SIX NEW WIND BRISTOL WATER OUTCOMES FOR PROJECTS PORTFOLIO Settlers Landing* Whitecourt contract Major efficiencies, Snowy Ridge* price support capex deferral, Ganaraska* Wind…
BRISTOL WATER CMA review of Ofwat business plan 14% real reduction in customer rates from Q2 2015 Any adjustments from CMA come into effect Q2 2016 Expect rate base to continue to grow for years to come
FINANCIAL POSITION Capital structure aligned to cash flow profile 70.8% 63.5M Debt to capitalization ratio1 Available liquidity2 2As at Mar 31, 2015, includes cash and equivalents for general corporate 1As at March 31, 2015…
SOLID FOUNDATION Fundamentally sound company Pathway to new cash flow Disciplined approach to financial and asset management Confident in Bristol Water CMA outcome Bristol Waters long-term prospects Well-managed, high-quality…
MANAGEMENTS PRESENTATION Michael Bernstein President and Chief Executive Officer
CREATING VALUE Four building blocks Responsible asset management Corporate efficiencies and savings Life-extension and recontracting Cardinal Whitecourt fuel supply and price support Bristol Water Existing Assets
CREATING VALUE Four building blocks Completed Skyway 8 Saint-Philmon Goulais In Progress Six other projects Existing Five in Ontario One in Saskatchewan Pipeline Existing Assets
CREATING VALUE Four building blocks Pursuing Ontario LRP Wind Solar New Storage Pipeline BC standard offer US opportunities Existing Pipeline Existing Assets
CREATING VALUE Four building blocks Potential M&A transactions M&A New Pipeline Existing Pipeline Existing Assets
CREATING VALUE Focus on the long term Track record of disciplined acquisitions Current acquisition environment is short-term focused Emphasis on organic growth
2015 PRIORITIES Delivering value to shareholders Secure improved outcome for Bristol Water Optimize asset performance Grow through development Pursue M&A at the right time and price
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