Capstone Infrastructure Corporation Announces 20-Year Contract for Cardinal

Capstone Infrastructure Corporation
(TSX:CSE)(TSX:CSE.DB.A)(TSX:CSE.PR.A)(TSX:CPW.DB) (the "Corporation") today
announced it has signed a new 20-year non-utility generator contract (the
"Contract") with the Ontario Power Authority for its 156-megawatt ("MW")
Cardinal combined-cycle, natural gas-fired facility ("Cardinal"). The new
Contract will be effective January 1, 2015.


"This new contract allows Cardinal to continue providing reliable, affordable
electricity to Ontario ratepayers. It also provides certainty for our
shareholders on Cardinal's longevity and contribution to Capstone's cash flow
profile and dividend sustainability following 2014," said Michael Bernstein,
President and Chief Executive Officer. "We are proud to remain part of the local
community and look forward to delivering cost-effective, flexible electrical
capacity and energy to Ontarians over the next 20 years."


The New Contract and Cardinal's Future Operations

Starting in 2015, Cardinal will become a dispatchable facility rather than a
baseload generator, supplying electricity to the Ontario grid only when needed.
The new Contract provides Cardinal with a fixed monthly payment, escalating
annually according to a pre-defined formula, intended to cover Cardinal's fixed
operating costs and return on capital. Cardinal will also earn variable market
revenue from the electricity it delivers to Ontario's power grid, and will be
responsible for arranging its own gas supply. The Corporation expects to invest
approximately $30 million of capital over 2014 and 2015 to prepare Cardinal for
cycling, including purchasing a new rotor and related equipment to extend and
enhance the facility's capabilities. The new Contract will expire on December
31, 2034.


Under the new Contract, the Corporation currently expects Cardinal to generate
Adjusted Earnings before Interest, Taxes, Depreciation and Amortization
("Adjusted EBITDA") in the range of $7 million to $9 million in 2015. This
outlook reflects payments under the contract as well as anticipated market
revenue and fees for operations and maintenance ("O&M") services provided to
Ingredion Canada Incorporated's ("Ingredion") adjacent manufacturing facility.


In addition, the Corporation and the OPA have reached a mutually beneficial
agreement for Cardinal to provide additional operational flexibility to
Ontario's electricity system for the duration of its current power purchase
agreement, which expires on December 31, 2014.


The Corporation also announced today that Cardinal has entered into an agreement
with Ingredion to renew its energy savings agreement ("ESA") for a term of 20
years. This agreement includes O&M services to be provided to Ingredion for a
fee, an extension of the lease for the land on which the Cardinal facility is
located, and a royalty payable by Cardinal to Ingredion based on variable market
revenue from electricity sales.


"We are pleased with this new agreement," said Jim Zallie, Ingredion's
President, North America. "It provides Ingredion Canada with more options for
the future of its Cardinal facility and allows Cardinal Power to continue
serving Ontario's electricity needs."


Capstone's Dividend Profile

Based on the Corporation's current portfolio and with Cardinal's new Contract
secured, the Corporation intends to maintain its current common share dividend
level of $0.075 per common share quarterly or $0.30 per common share on an
annual basis, which it believes is sustainable over the long term. 


The Corporation targets an average long-term payout ratio range of approximately
70% to 80% of Adjusted Funds from Operations (AFFO), which it anticipates
achieving by 2017 when the Corporation's current pipeline of wind power projects
is expected to be fully commissioned and generating cash flow, and with the
increased dividends it expects to receive from Bristol Water over the next
regulatory period, which commences in April 2015 and concludes in March 2020. In
2015 and 2016, the Corporation's payout ratio may exceed 100% of AFFO,
reflecting Cardinal's reduced cash flow contribution starting in 2015. The
Corporation believes it has sufficient liquidity to fund its needs over this
period, including cash and cash equivalents on hand, operating cash flows from
its various businesses, and use of its corporate credit facility.


"We believe the cash flow generated by our current businesses and project
pipeline will more than sustain our dividend over the long term," said Mr.
Bernstein. "Over the past three years, we have deliberately refocused our
portfolio to reduce risk, extend our cash flow profile and establish a solid
platform for the future. In particular, our investments in Bristol Water and
Varmevarden have significantly improved the quality of Capstone's overall
investment profile by offering perpetual, increasing cash flow and the potential
for considerable organic growth. Similarly, our new power development arm
positions us to realize higher investment returns. The fundamental value of our
company is growing and we are confident in our ability to sustain our dividends
and to deliver an attractive total return to our shareholders as we complete the
build out of our development pipeline."


The Corporation's dividend policy is determined by the Board of Directors of the
Corporation and is based on a number of factors, including forecasts for
operating and financial results, anticipated cash flows, maintenance and capital
expenditure requirements, market activity and conditions, and the satisfaction
of solvency tests imposed under corporate law for the declaration of dividends
and other relevant factors.


Conference Call and Webcast

The Corporation will hold a conference call and webcast (with accompanying
slides) today at 5:30 p.m. EDT to discuss this announcement. To listen to the
call from Canada or the United States, dial 1-800-319-4610. If calling from
elsewhere, dial +1-604-638-5340. A replay of the call will be available until
Wednesday, April 9, 2014. For the replay, from Canada or the United States, dial
1-800-319-6413 and enter the code 1109#. From elsewhere, dial +1-604-638-9010
and enter the code 1109#. The event will be webcast live with an accompanying
slide presentation on the Corporation's website at
www.capstoneinfrastructure.com.


About Capstone Infrastructure Corporation

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 439 megawatts2. Please visit www.capstoneinfrastructure.com for more
information.




1.  See Notice to Readers. 
2.  Reflects Capstone's economic interest in its various power facilities. 



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,
2013 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 www.sedar.com). 


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 and no material changes in rate orders or
rate structures for the Corporation's power infrastructure facilities,
Varmevarden or Bristol Water; that there will be no material changes in
environmental regulations for the power infrastructure facilities, Varmevarden
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 Alberta; the re-contracting of the PPA for the
Sechelt hydro power generating station; that there will be no material change to
the accounting treatment for Bristol Water's business under International
Financial Reporting Standards, particularly with respect to accounting for
maintenance capital expenditures; that there will be no material change to the
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
AMP5 and those expected under AMP6, including, among others: real and
inflationary increases in Bristol Water's revenue, Bristol Water's expenses
increasing in line with inflation, 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; fuel costs and supply; contract
performance and reliance on suppliers; land tenure and related rights;
environmental; and regulatory environment); risks related to Varmevarden
(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 and
changes to Instrument of Appointment; 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 21, 2013, 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 www.sedar.com).


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 investor. 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.


FOR FURTHER INFORMATION PLEASE CONTACT: 
Capstone Infrastructure Corporation
Sarah Borg-Olivier
Senior Vice President, Communications
(416) 649-1325
sborgolivier@capstoneinfra.com
www.capstoneinfrastructure.com
Capstone Infrastructure (TSX:CSE.PR.A)
과거 데이터 주식 차트
부터 5월(5) 2024 으로 6월(6) 2024