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## Power 

The composition of the power segment’s long-term debt was: 

<img src='content_image/217013.jpg'>

During 2013, long-term debt in the power segment increased by $52,015 primarily due to $77,041 of debt assumed from the acquisition of ReD. 

The increase was partially offset by $12,976 of scheduled debt repayments at Erie Shores, Amherstburg and the hydro facilities, as well as a $12,050 repayment of the CPC-Cardinal credit facility, as the Corporation entered into a new corporate credit facility. 

As at December 31, 2013, approximately 96.7% of the power segment's long-term debt was scheduled to amortize over the lives of the facilities' respective PPAs. All of the debt in the power segment is non-recourse to Capstone, except for a $5,000 limited recourse guarantee provided to the lenders of Erie Shores project debt by CPC, a $1,000 limited recourse guarantee provided by ReD to the lenders of the Amherst project and a $500 guarantee provided by ReD to lenders of the Fitzpatrick wind facility. 

## Covenant compliance 

All of the power segment’s long-term debt is subject to financial covenant requirements. Each debt agreement individually requires the respective business to maintain minimum debt service coverage ratios to allow for distributions to the Corporation. During 2013, Capstone's power segment complied with all covenants. 

## Utilities – water 

The composition of the utilities – water segment’s long-term debt was as follows: 

<img src='content_image/217021.jpg'>

(1) Certain of the terms loans are index-linked debt. The effective interest rate disclosed in the table is the sum of the real interest rates on the debt (2.701-3.635%) plus the Retail Price Index ("RPI"). Bristol Water pays interest on these loans based on the real interest rate, and the principal amount of the loan is indexed to RPI. 

Long-term debt for the utilities – water segment is used to fund current and ongoing capital expenditures to improve Bristol Water’s network. The increase in long-term debt is related to draws for cash requirements related to the capital expansion. 

As at December 31, 2013, approximately 80.2% of the utilities - water segments long-term debt had maturities of greater than 10 years. All of the debt in the utilities - water segment is non-recourse to Capstone. 

The preferred shares are classified as long-term debt on the basis that they are irredeemable. 

## Covenant compliance 

The principal debt agreements require Bristol Water to comply with covenants relating to the minimum levels of interest coverage and net debt in relation to regulatory capital value. During 2013, Bristol Water complied with all its covenants. 

