Capstone Infrastructure Corporation Declares December 2011 Dividend
TORONTO, ONTARIO (December 16, 2011) – Capstone Infrastructure Corporation (TSX: CSE; CSE.DB.A; CSE.PR.A – the “Corporation”) today declared a dividend on its common shares for the month of December 2011 of $0.055 per common share. The dividend will be paid on January 16, 2012 to common shareholders of record at the close of trading on December 30, 2011. The ex-dividend date is December 28, 2011.
The dividends paid by the Corporation on its common 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.
In respect of the Corporation’s January 16, 2012 common share dividend payment, the Corporation will issue common shares in connection with the reinvestment of dividends under the Corporation’s Dividend Reinvestment Plan. 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.
A distribution of $0.055 per unit will also be paid on January 16, 2012 to holders of record on December 30, 2011 of Class B Exchangeable Units of MPT LTC Holding LP, which is a subsidiary entity of the Corporation.
The Corporation’s common share dividend policy of $0.055 per share monthly remains in place until a determination on a new common share dividend policy is made by the Corporation’s board of directors (the “Board of Directors”). As previously disclosed, the Board of Directors intends to re-evaluate the Corporation’s common share dividend policy in the first half of 2012 as additional clarity becomes available on the post-2014 cash flow profile of the Cardinal gas cogeneration (“Cardinal”) facility following the expiry of Cardinal’s current power purchase agreement in the fourth quarter of 2014.
The Corporation’s dividend policy with respect to its Cumulative 5-Year Rate Reset Preferred Shares, Series A (the “preferred shares”) remains unchanged at $0.3125 per preferred share payable quarterly on the last day of January, April, July and October of each year, or $1.25 on an annualized basis, for the initial five-year period.
About Capstone Infrastructure Corporation
Capstone Infrastructure Corporation’s mission is to build and responsibly manage a high quality portfolio of infrastructure businesses in Canada and internationally in order to deliver a superior total return to shareholders through a combination of stable dividends and capital appreciation. The Corporation’s portfolio currently includes investments in gas cogeneration, wind, hydro, biomass and solar power generating facilities, representing approximately 370 MW of installed capacity, a 33.3% interest in a district heating business in Sweden, and a 70% interest in a regulated water utility in the United Kingdom. Please visit www.capstoneinfrastructure.com for more information.
Notice to Readers:
Certain of the statements contained within this document are forward-looking and reflect management’s expectations regarding Capstone Infrastructure Corporation’s (the “Corporation”) future growth, results of operations, performance and business based on information currently available to the Corporation. Forward-looking statements 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 use forward-looking words, such as “anticipate”, “continue”, “could”, “expect”, “may”, “will”, “estimate”, “believe” or other similar words. These statements 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, accordingly, should not be read as guarantees of future performance or results. The forward-looking statements within this document are based on information currently available and what the Corporation currently believes are reasonable assumptions, including the material assumptions for each of the Corporation’s assets 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, 2010 under the heading “Asset Performance”, as updated in subsequently filed interim MD&A of the Corporation and the material change report of the Corporation dated December 16, 2011 (such documents are available under the Corporation’s profile on www.sedar.com). Other material factors or assumptions that were applied in formulating the forward-looking statements 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; a full year of contribution from the Corporation’s Amherstburg Solar Park, Swedish district heating business (“Värmevärden”) and the UK water distribution business (“Bristol Water”); a TransCanada Pipelines Limited (“TCPL”) gas transportation rate of approximately $2.24 per gigajoule in 2012 and approximately $1.64 per gigajoule in 2013 and 2014; the level of gas mitigation revenue earned by the Corporation’s Cardinal Cogeneration facility (“Cardinal”); that there will be no unplanned material changes to the Corporation’s facilities, equipment or contractual arrangements, no unforeseen changes in the legislative and operating framework for the Corporation’s businesses, no delays in obtaining required approvals, no unforeseen changes in rate orders or rate structures for the Corporation’s power business, Värmevärden or Bristol Water, no unfavourable changes in environmental regulation and no significant event occurring outside the ordinary course of business; that there will be a stable regulatory environment and favourable decisions will be received from regulatory bodies concerning outstanding rate and other applications; that the Corporation’s senior credit facility, used to partially fund the Bristol Water acquisition, will be repaid on or prior to its maturity on October 3, 2012; refinancing of the credit facility in place at the Corporation’s Capstone Power Corporation and Cardinal Power of Canada, L.P. subsidiaries and the project financing of the Corporation’s hydro power facilities (that potentially include amortization profiles); the recapitalization of Värmevärden; the implementation of the Government of Ontario’s amendments to the application of the Global Adjustment Mechanism which comprises a portion of the revenue escalator in the power purchase agreements for Cardinal and the Corporation’s hydro facilities located in Ontario; the accounting treatment for Bristol Water’s business under International Financial Reporting Standards, particularly with respect to accounting for maintenance capital expenditures; the amount of capital expenditures by Bristol Water; the UK pound sterling to Canadian dollar exchange rate; and that Bristol Water will operate and perform in a manner consistent with the regulatory assumptions underlying its current asset management plan (“AMP”), 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.
Although the Corporation believes that it has a reasonable basis for the expectations reflected in these forward-looking statements, actual results may differ from those suggested by the forward-looking statements for various reasons, including risks related to: power infrastructure (operational performance; power purchase agreements (in particular, the risk associated with Cardinal’s power purchase agreement expiring in the fourth quarter of 2014); fuel costs and supply (including increases in the gas transportation rate charged by TCPL); contract performance; development risk; technology risk; default under credit agreements; land tenure and related rights; regulatory regime and permits; environmental, health and safety requirements; climate change and the environment; and force majeure) the Corporation (tax-related risks; variability and payment of dividends, which are not guaranteed; geographic concentration and non-diversification; insurance; environmental, health and safety regime; availability of financing; shareholder dilution; and the unpredictability and volatility of the common share price of the Corporation); the Corporation’s investment in Värmevärden (general business risks inherent in the district heating business; fuel costs and supply; reliance on industrial customers and ability of residential customers to cancel contracts on short notice; geographic concentration; government regulation; environmental health and safety liabilities; reliance on key personnel; labour relations; enforcement of indemnities against the vendors of Värmevärden; minority interest; and foreign exchange); and Bristol Water’s business (revenue is substantially influenced by price determinations made by Ofwat; failure to complete capital investment programs; failure to achieve water leakage targets; the imposition of penalties under Ofwat’s new comparative incentive mechanism; the economic downturn impacting the lending environment, as well as debt and capital markets, resulting in more costly financing and inflation negatively impacting leverage and key financial ratios, which may have a negative impact on credit ratings, as well as increasing the cost of capital expenditures; pension plan obligations may require Bristol Water to make additional contributions; failure to meet existing regulatory requirements and the potentially adverse impact of future legislative and regulatory changes; the ability for a Special Administrator to be appointed by the UK Secretary of State for the Environment, Food and Rural Affairs or Ofwat in certain circumstances (including the breach by Bristol Water of its license); foreign exchange; operational risks (including significant interruption of the provision of its services and catastrophic damage resulting in loss of life, environmental damage or economic and social disruption); development of competition within the water sector; reliance on key personnel; default under its Artesian loans, bonds, debentures or credit facility; geographic concentration; potential seasonality and climate change; labour relations; and enforcement of indemnities against the vendors of Bristol Water).
For a more comprehensive description of these and other possible risks, please see the risks set out in the annual information form of the Corporation for the year ended December 31, 2010, under the heading “Risk Factors”, as updated in subsequently filed interim MD&A, the business acquisition report filed June 14, 2011 in respect of the Corporation’s acquisition of Värmevärden and other filings by the Corporation with Canadian securities regulatory authorities (such documents are available under the Corporation’s profile on 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. The forward-looking statements 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 Canadian law, the Corporation does not undertake any obligation to publicly update or revise any forward-looking statements.