2016 ISR Action Report

KeyStones
FEBRUARY 2016
2016 ISR Action Report

Independent Equity Advisors
Editor: Ryan Irvine, BBA (Finance) Senior Analyst: Aaron Dunn, CFA
Editors Notes A unique research firm, KeyStone Financial has over a 10 year track record of successfully uncovering
undervalued growth and value stocks. Real companies, producing real revenue and earnings growth,
trading at low prices How do we do it? We simply dig deeper and search further into areas where
traditional big bank or large institutional research does not look providing you with independent
coverage on some of Canadas most exciting and undervalued stocks.
KeyStones Income Stock Report provides investors with independent, unbiased coverage on a wide
variety of income producing stocks from a cross-section of industries. Our Model Portfolio section
provides subscribers with ongoing coverage of up to 18 individual companies, categorized into 3 sepa-
rate risk profiles (Conservative, Moderate and Aggressive). Readers can use this information to assist
with the construction of their own income portfolios as well as to analyze the investment performance
of this publication.
Contents MARKET COMMENTARY
2015 ISR REVIEW
INVESTMENT STRATeGIES FOR 2016
15 COMPANY UPDATES
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KeyStones Income Stock Report Market Commentary February 2016
A TOUGH MARKET OVERALL IN 2015 AND EVEN TOUGHER START TO 2016
Markets in Canada had a tough year in 2015 with the TSX Composite Index losing 11% of its value (8.6% after
dividends). Unfortunately, investors did not get the relief they were hoping for from the January trading season.
2016 opened with one of the worst starts to a year on record and the index losing over 8% in the first dozen
days of trading. Markets have posted a partially recovery since but have been volatile, and if the start of the
year is any indicator, it will be another wild ride in 2016.
In our view, this recent volatility is just a continuation of the cycle we have seen repeat over the last 8 years.
Since the financial crisis, global investor sentiment has been on a figurative roller coaster riding high on
optimism to low on fear and then cycling back again. This recent pullback which began in April of last year has
been particularly strong, and since the start of this year the selling has been more or less indiscriminate,
impacting both low quality companies and high-quality companies that remain in excellent financial condition.
In spite of the challenges that the global economy continues to face (which has been the case throughout the 8
year period), we do believe that there will continue to be pockets of strength. In this market environment
characterized by abnormal volatility, investors who have acted on emotion have generally been the ones to
lose money. Investors who have remained calm and adhered to a fundamental investing strategy have had the
opportunity to benefit from the volatility and we believe that this will continue to be the case for the foreseeable
future.
Canadian Economy
The Canadian economy overall remains uncertain. Oil prices dont show much of any sign that they will recover
in the short-term, and for that reason, energy dependent regions and industries in Canada will likely continue to
be challenged. There is some hope that the low CND (which currently sits at around 0.726 per USD) will
eventually help to spark a resurgence of the Canadian manufacturing sector, particularly in Ontario. While it is
likely that this will (and already has) start to happen to an extent, it is also important to recognize that other
international currencies have also depreciated against the USD, including in Mexico which is one of Canadas
chief competitors for automotive manufacturing.
There will continue to be opportunities inside Canada which include companies that operate domestically and
sell products and services internationally. As well, there will be companies with a domestic focus that operate
within a specific segment of the economy or niche that we happen to find attractive. An example would be
current BUY recommendation Enercare (ECI) which rents waterheater and submetering equipment in the
Ontario market and has developed excellent momentum in its business over the past 2 to 3 years. Exchange
Income Corp (EIF), while having some exposure to non-domestic markets, also maintains solid operating and
financial momentum in its Canadian-based, aviation division.
Energy Prices
Weak oil & gas prices were the story in Canada in 2015 and for the start of 2016. The crude oil price for WTI
has fallen to the sub US$30 per barrel range after selling for US$107 only 17 months ago. The impact of weak
energy prices has been pronounced in Alberta but so far fairly muted in much of the rest of Canada. Within the
oil patch, profitability and share prices have plummeted and many companies likely will not be sustainable at
the current oil price. There has been some indiscriminate selling of strong companies with sustainable
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Copyright 2016 KeyStone Financial Publishing Corp.
profitability which have been labeled guilty by association to the energy sector. One example would be current
BUY recommendation AltaGas (ALA) which experienced a significant share price decline in spite of generally
stable cash flow in 2015 and a good growth profile. Although low oil prices have eliminated investment
opportunities in some areas it also opens them up in others. There are several industries (or segments within
industries) that benefit directly or indirectly from lower energy costs. Exchange Income Corp (EIF) is an
example of a current BUY recommendation that receives some moderate net benefit from lower oil prices due
to lower jet fuel costs in its specialty aviation division.
Interest Rates
The fear of rising interest rates and bond yields have been an omnipresent fear in the financial markets over
the past several years and have resulted in some weakness in certain interest sensitive sectors likes REITs,
utilities and pipelines and other lower growth dividend stocks. The U.S. Federal Reserve increased its federal
funds rate to 0.25%, in December, for the first time since the financial crisis. By itself, this move is rather
innocuous but it does signal to many a changing direction in U.S. monetary policy. We wouldnt read too
deeply into this move yet. The economic and interest rate situation in the U.S. remains somewhat tenuous. A
single rate increase doesnt mark the start of a trend and the Federal Reserve did elect to keep rates steady at
its last meeting in January. In Canada, it appears that, if anything, we are prepared to move in the opposite
direction, with the Central Bank cutting its short-term rate twice in 2015. In spite of investor concerns, longer-
term interest rates, while volatile, have remained stubbornly near historic lows. Rising interest rates are
generally preceded by signs that the economy is improving which should be considered a good thing. It is
important to add as well that rates could continue to rise significantly from current levels and still remain
historically low. There is really no way to predict where interest rates are going so it is usually prudent to have
a portfolio that isnt fully dependent on rates moving in one direction or another (or staying put). Right now it
looks like significantly higher rates are already priced into certain interest sensitive stocks and in some cases
this can create opportunities. Higher interest rates means higher income payments to bondholders and this
makes bonds more attractive to income investors. But bond yields are currently very low (1.23% for the 10
Year Canadian bond) and the one thing that bonds cant replicate is dividend growth. Transalta Renewables
(RNW) is one BUY recommendation that we believe may be overly-impacted by the fear of rising rates. The
company currently offers a yield of nearly 9% and announced two acquisitions and two dividend increases in
2015.
U.S. Economy
The U.S. seems to be a brighter light (albeit not too bright) in the global economic landscape. Unemployment
and jobless claims have been gradually declining since 2009. The unemployment rate which is currently
reported at about 5% is now within the range considered by most to be full employment. This has resulted in
reported wage growth which prompted the Federal Reserves rate increase in December. We dont want to get
caught in the trap of trying to forecast the macro-economy, but right now the U.S. appears to be one of the
healthier regions in the developed world. The sheer size of and diversity of the U.S. market provides an array
of different opportunities for growth. For this reason, we have sought to gain at least some exposure to the
U.S. as a general strategy for intelligent diversification. We have several active BUY recommendations on
companies with exposure to the U.S. economy, including Element Financial (EFN), Grenville Strategic
Royalties (GRC), Hardwood Distribution (HWD) and Vecima (VCM).
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Global Economy
There isnt a great deal to get excited about in the macroeconomic picture right now. The European Union
continues to mostly just tread water with Greeces debt debacle stepping in and out of the headlines from time
to time. Recently, a lot of the concern in the global picture has been focused on China where economic growth
is slowing. For several years, China was seen by many as being the growth engine of the global economy and
a continued slowdown (or even recession) in that region would weigh on already fragile investor sentiment.
Regardless of the bleak picture overall, we expect that there will be pockets of strength in the international
market. One current BUY recommendation with a portfolio of global assets is Brookfield Infrastructure
(BIP.UN). Although the company does have assets in 4 continents its revenue and cash flow are largely
independent of short-term economic volatility in the regions in which they operate.
In Closing
Our overall strategy in this market doesnt change. The focus continues to be on quality assets which free cash
flow to support a growing dividend. As value/growth investors, we view periods where the market has pulled as
potential opportunities. Currently, income yields in the dividend sector are at multi-year highs and in many
cases the companies continue operate very successfully with relatively low sensitivity to the overall economic
environment. This tells us that opportunities in this market do exist but we also believe it is prudent to remain
patient and selective by deploying capital gradually over time. This helps investors to make the volatility work in
their favor by reducing the risk of being caught in a short-term correction right after deploying significant capital
and by keep some capital available to make purchases when the market has its inevitable setbacks. For capital
that is already invested in the markets, we advise investors to remain calm. As long as your portfolio consists
of quality assets, then you should continue to receive a growing stream of dividend income and eventually a
recovery and resumption of growth in the share price. In the short-term, market volatility can impact even the
high-quality companies; however, over time, individual company fundamentals will generally prevail and
maintaining a portfolio of growing, profitable, financially stable businesses, which are purchased on reasonable
valuations, is an individuals best opportunity to generate long-term investment success in challenging market
conditions.

2015 ISR REVIEW
Recommendations in the ISR produced positive performance in 2015 with the recommended stocks gaining
4.8% in the Hybrid portfolio and 3.4% in the overall ISR overall. This compares to the TSX Composite Index
which declined -8.6% (including dividends). 2015 marks 6 consecutive, full years, since its first full year in
2010, that the ISR recommended companies have significantly outperformed the TSX Index on average.
6 Year Consolidated Performance BUY Recommendations

Hybrid ISR
Year Conservative Moderate Aggressive TSX Index
Portfolio Average
2015 4.8% 3.4% -3.7% 0.7% 11.4% -8.6%

2014 24.0% 13.2% 16.4% 18.5% 0.7% 10.6%
2013 23.1% 15.0% 6.4% 13.6% 25.0% 12.9%
2012 22.6% 16.1% 13.9% 8.6% 26.0% 7.2%
2011 14.9% 13.9% 19.6% 14.0% 8.8% -8.7%
2010 no data 26.4% 24.7% 18.2% 35.8% 17.6%
One of the strategies we have always emphasised is a focus on quality over investing in a large quantity of
companies. This can be illustrated by our actions in 2015. During the year, we recommended only 5 new
companies out of the thousands that were researched throughout the period. The performance of each
company from the recommendation date to the end of the year (plus dividends) averaged 19.2%. Rather than
casting a wide net, we focused on specific opportunities that we believed would outperform the overall market.
New Recommendations - 2015 Date Gain

WPT Industrial REIT (WIR.U) (in $C) Jan-12 28.9%
Element Financial (EFN) Feb-19 12.4%
Grenville Strategic Royalty (GRC) Feb-26 33.2%
Hardwoods Distribution Inc (HWD) Oct-08 9.8%
Sylogist Ltd. (SYZ) Dec-29 11.8%
Average 19.2%
We believe strongly that the consistent outperformance of ISR recommended companies validates the
investment strategy. Of course, not all of our recommendations work out and some of the companies were
down significantly in 2015. However, when we look at the results with 14 out of 24 companies producing a
positive gain for shareholders and 10 of total producing gains in the double digits, it is easy to see that a well-
managed portfolio, with focused diversification, can produce strong results, even when the market backdrop is
negative. It is also worth noting that these numbers were achieved with a low amount of trading. For example,
throughout the entire year, only 5 changes were made to the Hybrid portfolio (3 BUYs and 2 SELLs), which
demonstrates that solid performance can also be achieved without a large amount of activity in the portfolio.
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INVESTMENT STRATEGIES FOR 2016 AND BEYOND
1. Dont Get Caught Up in the Pandemonium or the Euphoria: Emotion is the enemy of investing
success and this cant be emphasised enough. The stock market has been abnormally volatility over
the past 8 years and we expect this to continue. Investors that have maintained calm and adhered to an
intelligent strategy have generally been the winners in this market and the investors that have traded
emotionally (either with excessive fear or greed) have generally lost money.
2. Invest Like a Businessperson: Dont look at your investments as pieces of paper or stock symbols.
Invest like you actually plan on owning a business instead of just trading a stock. Focus on profitable
companies with resilient business models that are growing earnings and cash flow per share, have
healthy financial leverage, and trade at a reasonable or attractive valuation relative to underlying
profitability. The discipline that this mentality encourages is highly beneficial to investing success.
3. Deploy Capital Slowing, Over Time: It is generally advisable to deploy capital gradually and aim to
build a portfolio over a period of 6 to 18 months. Deploying your capital gradually, over time, provides
you with the ability to purchase stock recommendations throughout the year, both as they initially
become available and as past recommendations temporarily become more attractive due to market
corrections.
4. Dont Be Afraid to Layer into Individual Stock Positions: Just as we recommended that you build
your total portfolio over time, it is sometimes prudent to build positions in individual stocks over time.
For certain opportunities (likely most in this market), it makes sense to breakdown a total position into
2, 3, or more, separate purchases. For example, if you ultimately intend on investing $10,000 in an
individual stock, then you can divide that into 2 separate $5,000 transactions or even 4 transactions at
$2,500.
5. Diversify by Sector and Geography: One look at the pitiful performance of Energy and Metals indices
over the past several years is a clear illustration of the importance of spreading your capital to different
sectors. Geographic diversification should also be emphasised. Finding companies with exposure to
economies outside of Canada helps to reduce portfolio risk and has also been a KeyStone strategy. We
would generally advise against investing in industries or companies that are largely dependent on
commodity prices (oil, gas, gold, copper, etc.).
6. Maintain Focused Diversification in the Your Portfolio: While diversification is critical, it is also
important to keep your portfolio focused. The actual number of companies in your portfolio may vary
over time but we generally recommend that investors target a range of 8 to 12 individual stocks. Too
few companies results in under-diversification. Too many companies will result in an unwieldy and
difficult to manage portfolio and can negatively impact investment return.

KeyStones Income Stock Report Company Update February 2016
COMPANY UPDATE SUMMARY:
1. AltaGas Ltd. (ALA) BUY Rating Maintained
2. Artis REIT (AX.UN) Rating Reduced to HOLD
3. Brookfield Infrastructure Partners (BIP.UN) BUY Rating Maintained
4. Dream Office REIT (D.UN) Rating Reduced to HOLD
5. Exchange Income Corporation (EIF) BUY Rating Maintained
6. Element Financial Corp (EFN) BUY Rating Maintained
7. Enercare Inc (ECI) BUY Rating Maintained
8. Gibson Energy Inc. (GEI) HOLD Rating Maintained
9. Grenville Strategic Royalty (GRC) Upgraded to BUY (from Short-Term: HOLD / Long-Term: BUY)
10. Hardwoods Distribution Inc (HWD) BUY Rating Maintained
11. Newalta Corporation (NAL) Downgraded to SELL (from Short-Term: HOLD / Long-Term: BUY)
12. Sylogist Ltd. (SYZ) BUY Rating Maintained
13. Transalta Renewables (RNW) BUY Rating Maintained
14. Vecima Networks Inc. (VCM) BUY Rating Maintained
15. WPT Industrial REIT (WIR.U) - Downgraded to Short-Term: HOLD / Long-Term: BUY (from BUY)
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AltaGas Ltd. (ALA: TSX) Rating: BUY

Portfolio: Hybrid / Moderate Fair Value Assessment: $39.60
Current Price: $32.21 Yield: 6.2%
Research Notes:
Third quarter of 2015 was strong with 19% growth in both FFO per share and adjusted EBITDA.
Funds from operations (FFO) per share for the first 9 months of 2015 were down 10% due to moderate
lower cash flow in the first half of the year.
In November, ALA announced that they had closed the acquisition of GWF Energy Holdings for a
purchase price of approximately US$642 million.
The portfolio consists of three natural gas-fired electrical generation facilities in northern California
totalling 523 MW, including the 330 MW Tracy facility, the 97 MW Hanford facility and the 96 MW
Henrietta facility.
All the facilities are fully contracted under Power Purchase Agreements with until the fourth quarter of
2022.
The Acquisition is expected to add approximately C$95 million in incremental contracted EBITDA per
year, be over 5 percent accretive to cash flow per share and be modestly accretive to earnings per
share in 2016, the first full year of ownership.
Total EBITDA is now split 50% Canadian and 50% U.S.
Nearly $5 billion in capital investment is planned through 2020 which the company expects to drive
50% EBITDA growth.
We are expecting FFO per share to be roughly flat for 2015 at around $3.60.
For 2016, we are expecting that the acquisition of GWF and commissioning of new growth projects
should result in moderate mid-single to low-double digit growth.
ALA has increased its dividend for 5 straight years; 12% increase in 2015.
The payout ratio remains healthy at approximately 55% of FFO.
Fair Value Assessment:
We are revising our fair value assessment to $39.60 based on a justified price-to-FFO multiple of 11
times our 2015 expected FFO per share of $3.60.
Conclusion:
ALA pulled back significantly in 2015 in spite of the underlying business actually demonstrating strong
resilience in a challenging market. The revision to the fair value assessment is not a reflection of a lower
outlook for ALA but rather a reflection of current market conditions. We expect to see cash flow per share
growth resume in 2016 and view the current valuation as attractive relative to the fundamentals of the business
and growth profile over the next 5 years.

Artis REIT (AX.UN: TSX) Rating: HOLD

Portfolio: Moderate Fair Value Assessment: $14.95
Research Notes:
Adjusted Funds from Operations (AFFO) per unit grew 9.7% in the third quarter to $0.34, and 9.8% in
for the first nine months of 2015 to $1.01.
Q3 2015 Same Property net operating income (NOI) growth was 5.5% over 2014.
The payout ratio in the third quarter also declined to 81.8% compared to 87.1% last year.
Occupancy remained strong at 94.6% across the portfolio.
AX.UNs portfolio is well diversified with NOI by asset class weighted 50.3% office, 25.6% retail, and
24.1% industrial.
Geographically, AX.UNs NOI is weighted 28% to the U.S., 35% to Alberta, and 37% to the remainder
of Canada.
60% of REITs tenants are government or national and top ten and top twenty tenants account for
11.6% and 19.2% of gross revenue, respectively.
AX.UN currently trades at a price-to-AFFO multiple of 8.4 times annualized AFFO (Q3).
We are revising our fair value assessment to $14.95 based on a justified price-to-AFFO multiple of 11
times Q3 2015 annualized AFFO per share of $1.36.
The fair value assessment also reflects a 25% discount to the REITs reported net asset value of
$19.95 per unit.
Conclusion:
AX.UNs unit price has been challenged along with the overall REIT sector for the last 2 to 3 years. This has
not been a factor of company or industry fundamentals but more so to negative investor sentiment which has
largely been attributable to concerns over rising interest rates (which we generally view as overblown). There
are also likely some more recent concerns about the REITs exposure to the Alberta market. AX.UN has
produced solid financial performance over the last year and has wide geographic diversification outside of
Alberta with 28% exposure to the U.S. AX.UN, along with several other REITs, provides investors with a stable
income yield that should be resilient to changing economic conditions. Although the fundamentals for AX.UN
appear quite strong, we have elected to reduce our rating to HOLD. The reason for this is that we are currently
conducting research for a 2016 REIT Sector Report (scheduled for Q2) in which we will review a wide variety
possible opportunities within the space.

Brookfield Infrastructure Partners (BIP.UN:TSX) Rating: BUY

Portfolio: Hybrid / Conservative Fair Value Assessment: $59.55
Research Notes:
Delivered year-to-date same store funds from operations (FFO) growth of 11% in Q3 on a constant
currency basis, surpassing the companys 6-9% organic growth target.
Funds from Operations (FFO) per unit on a constant unit basis grew by 18% year-over-year in Q3; 7%
reported growth in FFO per share after accounting for currency changes.
Results benefited from the contribution of the companys newly acquired communication infrastructure
assets in addition to solid organic growth across the business.
High quality, stable cash flow with 90% regulated or contracted, 70% indexed to inflation, and 60% with
no volume risk.
Acquisition strategy remains intact with 3 potential transactions announced in 2015.
Currently working to gain approval for acquisition of Asciano Limited (ASX: AIO), a high quality rail and
port logistics company in Australia with an enterprise value of approximately A$12 billion.
Strong organic growth prospects with $1.3 billion capital backlog to be commissioned over next 2-3
years in visible projects.
Targeting long-term distribution growth of 5-9%.
Targeting FFO per unit growth over the long term of 10% annually.
Current payout ratio of 67% of funds from operations.
23% compound growth in FFO per share since 2009.
12% compound growth in the dividend since 2009.
Conclusion:
BIP.UN continues to appeal to us at it provides a unique opportunity to gain exposure to a portfolio of high-
quality, global infrastructure assets that provide services critical to the global economy. The company
generates very stable revenue and cash flow which support a sustainable and growing dividend. As the size of
the company increases, it will be more difficult for it to post growth rates well into the double digits as it has in
the past. However, the growth strategy continues to be intact and the companys long-term targets of 10%
annual growth in FFO per unit and 5% to 9% in distributions are attractive given the lower risk nature of the
assets.

Dream Office REIT (D.UN: TSX) Rating: HOLD

Research Comments:
Total portfolio comparative net operating income (NOI) for the third quarter was $111.7 million,
compared to $113.5 million in Q3 2014.
Adjusted Funds from Operations (AFFO) per unit declined by 3.2% in the third quarter to $0.61 per unit.
Comparative portfolio average in-place net rent as at the end of Q3 was $18.73 per square foot, up
from $18.62 per square foot at Q2 2015 and $18.55 per square foot at Q3 2014.
58% of net NOI is from properties located in Ontario, Quebec and Atlantic Canada, 26% from Alberta,
15% from British Columbia, 6% from Saskatoon and Manitoba, and 2% from the U.S.
The REIT continues to see strength in Calgary suburban, Toronto downtown and Eastern Canada,
offset by declines in Western Canada, Calgary downtown and Toronto suburban.
D.UN ended the quarter with a stable net total debt-to-gross book value ratio of 48.0%.
With the REIT now yielding 14% it is clear that the market is expressing a lack of confidence in the
sustainability of the dividend and is pricing in a dividend reduction.
Currently, there are not any near term red flags evident that would indicate that any problems with the
distribution level.
AFFO continues to exceed distributions with a trailing twelve months payout ratio of 89%.
One concern we have is the increase in the Q3 payout ratio to 92% form 89% in the previous year.
We are revising our fair value assessment to $21.96 based on a justified price-to-AFFO multiple of 9
times Q3 2015 annualized AFFO per share of $2.44.
The fair value assessment also reflects a 34% discount to the REITs reported net asset value of
$33.27 per unit.
Conclusion:
Most of D.UNs fundamentals appear reasonably healthy; however, investor sentiment is firmly negative
against the REIT. Part of this sentiment is sector wide, but some of the concern specific to D.UN is the REITs
perceived exposure to Alberta and a generally weak outlook for rental rate growth in for office properties. There
is some concern that as leases expire over the next couple of years, REIT with exposure to Alberta will have
difficulty retaining tenants or acquiring new ones. The slight increase in the payout ratio above 90% is a
modest concern to us and we want to ensure that this does not become a trend. We have elected to reduce
our rating on D.UN to HOLD. We are also currently working on a 2016 REIT Sector Report (scheduled for Q2)
in which we will review our REIT holdings, look at new potential opportunities, and augment our strategy.
10

Exchange Income Corporation (EIF: TSX) Rating: BUY

Portfolio: Hybrid / Aggressive Fair Value Assessment: $31.87
Research Notes:
EIF was a very solid performer in 2015 generating shareholders a total return of 29% for the year.
We re-initiated coverage on EIF in Dec 2014, during a transitionary period for the company, just after
the announcement of the acquisition of Provincial Aerospace.
2015 has been a year of excellent success with EIF breaking records on a quarterly basis.
The third quarter was a continuation of this momentum.
Revenue increased by 48% to $212.8 million.
EBITDA increased by 94% to $54.1 million.
Free Cash Flow per share grew by 71% to $1.01 and the payout ratio significantly improved to 46%
compared to 71% the year before.
Organic growth in EBITDA was $9.0 million or 32%.
The acquisition of Provincial Aerospace was the largest contributor to EBITDA.
Regional One, fueled by our ongoing investments in additional aircraft, engines and parts, once again
delivered a strong contribution to EIFs results.
Legacy airlines, building momentum on strong performance in both the first and second quarters 2015,
grew EBITDA 37% as a result of investments in the fleet and ground assets in previous quarters, cost
control and efficiency initiatives and lower fuel prices, as well as recent expansion of operations in the
Kivalliq region.
With free cash flow per share of $2.05 for the first nine months of 2015, we are expecting full year
results to be greater than $2.55.
This would equate to a payout ratio of less than 75%.
We continue to anticipate growth in 2016 but unless they company completes a large scale acquisitions
(or multiple smaller ones), it wont generate the big step change in free cash flow as was the case with
the Provincial acquisition.
We are confident that management will continue their track record of successfully completing and
integrating large-scale acquisitions over time.
Conclusion:
EIF was a huge winner in 2015 due to the successful completion of its acquisition of Provincial and strong
organic growth. Organic growth should continue through 2016 and we anticipate further acquisitions over time
as part of the companys overall growth strategy. The underlying business is relatively stable and the company
is a net beneficiary of lower oil prices. At the current valuation of less than 10 times free cash flow, we continue
to see value in EIF from both a growth and income perspective over a time horizon of 1 to 3 years.
11

Element Financial Corp (EFN: TSX) Rating: BUY

Research Notes:
The company was updated on December 4th after the Q3 results and the Q4 results are due out early
March.
Total earning assets increased to $19.3 from $10.6 billion in Q3 with the GE Fleet acquisition adding
$7.0 billion.
77% of EFNs total earning assets are now attributable to the Fleet and Rail divisions.
Third quarter free adjusted operating cash flow per share was $0.32 ($0.34 pro-forma) compared to
$0.31 in Q2 and $0.25 in the same quarter last year.
Free adjusted operating cash flow per share for the first nine months of 2015 was $0.91 compared to
$0.49 in the previous year.
Free adjusted operating cash flow is reported on a pre-tax basis but EFN maintains 12 years of cash
tax deferral estimated at $4.50 per share.
The US market remains the main source for EFNs originations, earnings and asset growth represented
82% of EFNs Fleet originations during Q3.
As of the end of Q3, 73% of the companys finance assets were in the US compared to 63% the year
before.
The GE Fleet acquisition completed in Q3 is expected to result in integration savings of US$90 to
US$95 million within 18 months.
For 2016, the company reaffirmed its guidance for free adjusted operating cash flow of $2.25 per share
($1.61 after tax).
EFN introduced a small quarterly dividend of $0.025 per share in the third quarter which currently yields
0.7%.
While this is a meager yield at present, it does set the stage for further dividend growth.
Conclusion:
EFN is one of our U.S. focused ideas. Overall, we see better growth from the U.S. economy relative to Canada
and EFN provides exposure to that market. The companys growth over the last 12 to 18 months has been
impressive and the outlook continues to be highly positive for 2016. Currently, EFN is trading at 6.4 times
managements free adjusted operating cash flow guidance for the current year. This represents a very
attractive valuation if the company is able to achieve or even come close to its target. Past performance from
management has been encouraging and we remain optimistic on the companys prospects over the next 12 to
24 months.
12
Enercare Inc (ECI: TSX) Rating: BUY

Research Notes:
Total revenues Increase by 81% in Q3 2015 due primarily to the acquisition of Direct Energy at the end
of 2014.
Adjusted EBITDA increased 39% in the quarter to $61 million.
Free cash flow per share increased 55% to $0.33 per share and the payout ratio declined to 62%.
The acquisition of Direct Energy accounted for approximately 96% of the growth in adjusted EBITDA;
however, organic growth also continued to be a contributing factor.
For the first time in a decade, rental unit growth in the third quarter of 9,000 actually surpassed
customer attrition of 7,000.
Average Monthly Rental Rates also continue to improve reaching $38.65, a year-over-year increase of
44%.
A rental product added to the portfolio in Q3 2015 was worth 1.7x that of a unit lost to attrition.
The sub-metering side of the business also continues to gain traction with EBITDA increasing 82%
year-to-date and the division finally achieving positive free cash flow.
While the contribution from sub-metering remains relatively small, the number of contracted, installed
and billing units continues to grow and should eventually provide a solid stream of stable cash flow for
the business.
ECI maintains very positive momentum within its business which is allowing the company to
consistently grow free cash flow per share organically, albeit at a moderate pace.
The nature of ECIs business is one of stable revenue generation and that is one of the reasons we like
the company.
We are revising our fair value assessment to $16.80 based on a justified price-to-free cash flow multiple
of 12 times our 2016 estimated free cash flow per share of $1.40.
Conclusion:
ECI had an excellent quarter in Q3 which included the very noteworthy accomplishment of acquiring more
customers in the period that they lost to attrition. With rising rental rates, continued improvement in
submetering, as well as other initiatives, the reversal of the companys net attrition trend (if they can maintain
it) can be significant growth catalyst for the company. ECI has a stable business that provides a growing
stream of cash flow for its shareholders and we continue to see good value in the company for investors with a
minimum 2 to 3 year time horizon.
13

Gibson Energy Inc. (GEI: TSX) Rating: Short-Term: HOLD

Research Notes:
Overall, GEI has maintained strong profitability during this downturn in the energy market but the
companys more volatile business segments have declined with activity levels.
Adjusted EBITDA declined 17% in the third quarter and 14% for the first 3 quarter of 2015.
The Terminals and Pipelines segment continued to generate strong performance with segment profit up
10% in the third quarter and 24% for the first 9 months of the year as a result of significant capital
investments.
Free cash flow for the trailing twelve months was $228.3 million, or $1.81 per share, compared to $265
million, or $2.16 per share a year ago.
GEI announced a 2016 growth capital budget of $200 to $300 million, the majority of which will be
allocated to the Terminals & Pipelines segment which generates a stable revenue base.
The company is currently developing a number of projects which are intended to grow its fixed fee
revenues, and which by 2017 are expected to increase segment profit from take-or-pay contracts to
30% from just 13% in 2014.
Oil prices have continued to decline since the third quarter of 2015 which leads us to expect further
declines in segment profit from the companys margin based divisions.
GEIs dividend payout ratio of 67% of trailing free cash flow is healthy but moderately above the
companys long-term target of 50% to 60%.
We dont see any near term threat to the dividend sustainability, but if oil prices were to remain in the
high-$20 to low-$30 range (or lower) for an extended period, then it would be difficult to predict how this
would impact the company and the industry.
of 11 times our 2016 estimated free cash flow per share of $1.70.
Conclusion:
In spite of a challenging year in 2015, GEI has successfully moved forward with the advancement of several
growth projects which will improve the quality of cash flow as well as demonstrated a reasonably resilient
business model. New projects are expected to start contributing to cash flow in 2016 and 2017. The main
question is how much high-$20 to low-$30 oil will further impact the companys more cyclical segments and if
the growth in the more stable Terminal and Pipelines business will offset this to a significant degree. We do
see long-term value in GEI but have elected to maintain our HOLD rating on the stock; at least until the Q1
results are released.
14
Grenville Strategic Royalty Corp (GRC: TSX-V) Rating: BUY

Portfolio: Aggressive Fair Value Assessment: $0.88
Research Notes:
GRC was updated in November after the release of the Q3 results.

Q3 was a very positive quarter for GRC, with the highlight of the period being the contract buyouts
which have since totaled $12.1 million, including significant capital gains of $5.2 million.
Free cash flow (not including buyouts) for the third quarter was $1.18 million, or $0.01 per share,
compared to $0.94 million, or $0.008 per share, in the second quarter.
On December 9th, the company announced the completion of a $9.6 million in three new investments,
two of which are based in the U.S.
This was a significant announcement for the company and highlights a focus on larger sized royalty
deals.
With these investments, Grenville has since its inception deployed $56.9 million into 31 companies
through 55 investments.
We like the companys diversification across several different industries and geographically with greater
than 50% of revenues now coming from U.S.-based businesses.
Conclusion:
The announcement on December 9th was significant for the company and should result in meaningful cash flow
contribution starting in Q1. GRC does have an element of higher risk due to its focus on small to medium sized
enterprises; however, the diversification and royalty stream structure helps to mitigate some of this risk. With
the share price moving back into $0.70 range we have elected to upgrade our rating to BUY.
15

Hardwoods Distribution Inc (HWD: TSX) Rating: BUY

Research Notes:
HWD reported third quarter results in November and the fourth quarter and year end results are
expected around late March.
Third quarter revenue increased 25.3% to $152.1 million and EBITDA climbed 34.7% to $10.2 million,
all-time records for the company.
Earnings per share grew 40% to $0.35 in the quarter.
Sales from U.S. operations, which comprise approximately three quarters of the companys revenues,
increased by US$6.7 million, or 7.8%, to US$92.9 million, from US$86.2 million in the same period in
2014.
Sales in Canada, which comprise approximately one quarter of our revenues, increased by $3.2 million,
or 11.7%, year-over-year reflecting a combination of organic growth, as well as overall higher product
prices in Canada resulting from the stronger U.S. dollar.
HWD has a strong base of business in the U.S. and benefits from strength in the US housing sector
and dollar.
Most economic forecasts continue to predict a multi-year strengthening of the U.S. residential
construction market with housing starts still well long-term historical averages.
HWD expects that strong underlying fundamentals in the market will result in continued sales growth
through 2016.
of 14 times our 2016 estimated earnings per share of $1.33.
Conclusion:
HWD had another record quarter in Q3 and continues to benefit from a strengthening U.S. housing market and
dollar. We expect some volatility in housing data moving forward but the general trend appears to support
continued growth in housing starts back to long-term historical averages (with the potential to surpass them).
HWD has a strong base of business in the US and benefits from strength in the U.S. housing sector and dollar.
We continue to like the company for investors with a 2 to 3 year time horizon.
16
Newalta Corporation (NAL: TSX) Rating: SELL

Portfolio: Aggressive Fair Value Assessment: na
Research Notes:
NAL has been hit the hardest in the energy market downturn amongst the companies in the ISR
portfolios.
In response to declining oil prices, the company commenced cost rationalization programs to help
offset weak industry activity levels.
While the cost rationalization has so far been successful, the savings are barely offsetting lower
revenues and operating margins.
The companys most recent projection for 2016 assume oil prices in the US$47 to US$60 range for WTI
which is now well above todays price.
Looking at the financial sensitivity numbers provided by the company, it appears that the company may
struggle to remain profitable if oil prices were to remain in the high-$20 to low-$30 range.
At the very least, we would see potential for another dividend reduction in the event that oil prices do
not recover over the next 12 to 18 months.
We continue to believe that NAL has high leverage to a rising oil price but predicting such a rise in this
environment would be a speculation.
Conclusion:
We have elected to change our rating on NAL to SELL due to high level of uncertainty regarding whether or not
the company can remain profitable in the current energy environment.
17
Sylogist Ltd. (SYZ: TSX) Rating: BUY

Research Notes:
The company released their Q4 and year end results on January 12th.
Fourth quarter revenues increased 37% to $7.6 million and adjusted EBITDA for the quarter increased
118% to $1.6 million.
For the year, revenues were $27.4 million, an increase of 56% from $17.5 million in 2014.
Adjusted EBITDA of $9.5 million, an increase of 74% over the prior year.
Adjusted earnings were $9.3 million, or $0.37 per share, compared with $4.2 million or $0.19 per share,
in fiscal 2014, an increase of 123%.
Strong revenue growth was driven by software license sales (up 166%), recurring
subscription/maintenance (up 55%) and professional services (up 142%).
Over the past 3 years, the company has generated compound annual growth in revenue and adjusted
EBITDA of 43% and 34%, respectively.
Strong, compound growth over the past several years has largely been attributable to acquisitions.
Management expects that the acquisitions of Serenic Software and Epic Data will both pay back their
cash acquisition costs in periods of 2 years or less, and with the asset now largely integrated, they also
expect a material increase in organic growth heading into fiscal 2016.
The balance sheet is flush with $41 million, or $1.70 per share, in cash and the company has no debt.
SYZ intends to continue to grow its business through strategic acquisitions or investments to expand its
existing platform businesses.
Conclusion:
SYZ is our most recent recommendation. We have been following the company for several years but SYZ has
traded at a premium valuation which was well above what we would consider a reasonable range. A pullback
in the share price over the past 18 months coupled with continued growth in earnings and cash flow have
brought the valuation to a more reasonable level. At 16.5 times earnings (cash out), SYZ is not exactly cheap
but given the strong balance sheet, relatively stable business model, and growth profile, we see some long-
term value at the current price. Our time horizon on the stock is a minimum of 2 to 3 years.
18

Transalta Renewables (RNW: TSX) Rating: BUY

Portfolio: Hybrid / Conservative Fair Value Assessment: $13.87
Research Notes:
For the third quarter of 2015, adjusted EBITDA increased 95% to $57.7 million and free cash flow per
share increased 25% to $0.20.
For the first nine months of 2015, free cash flow grew 5.4% to $0.78 per share and the payout ratio
remained stable at 77%
The company announced two acquisitions and two dividend raises in 2015.
In May, RNW closed its previously announced $1.78 billion investment into Transalta Corps Australian
assets which consist of 575 MW of power generation from six operating assets and the South Hedland
project currently under construction, as well as the recently commissioned 270 km gas pipeline.
Concurrent with the closing of the transaction, RNW declared a 9% dividend increase as well as stated
the intention to increase the dividend by an additional 6-7% once South Hedland is fully commissioned
around mid-2017.
In November, the company announced a $540 million investment in 611 MW of highly contracted
hydro, wind and gas power generation assets located in Ontario and Quebec and another 5% dividend
increase.
RNWs existing business remains stable with power purchase contracts averaging approximately 15
years in length.
Through the use of Power Purchase Agreements (including TransAlta Corps PPAs) all of the
companys facilities, including the Australian Assets, are currently contracted, and RNW does not
expect to see any significant impact from a slowdown in the Canadian and Australian economies.
Conclusion:
From a financial perspective, RNW has exceeded our expectations. Although this was not been reflected in the
share price in 2015, we continue to see value in RNW as a high-yield utility with a moderate growth profile and
very stable cash flow. The valuation relative to free cash flow is attractive and not only do we believe that the
dividend is sustainable but we believe it will continue to grow over time. At a current yield of almost 9%, we
think that RNW presents a compelling income opportunity for investors with a long-term time horizon.
19

Vecima Networks Inc. (VCM: TSX) Rating: BUY

Portfolio: Hybrid / Aggressive Fair Value Assessment: $13.00
Research Notes:
Q1 fiscal 2016 was another record quarter for the company.

Revenue was $26.5 million, an increase of 14.7% over the same quarter last year and 10.4% over last
quarter.
Adjusted earnings per share for the quarter were $0.27 up 50% from $0.18 in the previous year.
VCM has now reported 3 straight years of double digit growth in earnings per share.
The outlook for 2016 appears very positive and the first quarter results support the case for another
year of solid earnings growth.
The company expects its 2016 product sales to continue to benefit from uptake of the TC600E, as well
as from the addition of TransQAM, the new MPEG-4 HD enabled Terrace QAM.
VCM has benefited by helping customers during their all digital expansion transitions and believes that
even more dramatic changes are coming to the cable industry which will provide additional
opportunities for the company to grow.
The company also has a cash rich balance sheet with $63.4 million or $2.83 per share in net cash
equating to 27% of its market cap in net cash.
Management has communicated its plan to eventually employ that capital into an acquisition when the
appropriate opportunity is available.
As the company continues to add cash to its balance sheet, its flexibility increases with respect to
making a significant acquisition or investment into its business.
Currently, VCM is trading at a price-to-adjusted earnings multiple of 12.8 times (9.4 times on a cash out
basis) and an enterprise-to-adjusted EBITDA multiple of 5.4 times.
Conclusion:
VCM has been a cash flow machine for several years but still remains largely underfollowed the market. We
are very impressed with the companys 3 straight years (coming on 4) of consistent growth in revenue and
earnings. We would generally expect hardware companies to trade at a lower valuation to software companies
due to the higher variable cost structure and less emphasis of licensing revenue. Even taking that into
consideration, we view VCM as very attractively valued when considering the growth profile and cash rich
balance sheet and we continue to rate the company a BUY.
20
WPT Industrial REIT (WIR.U: TSX) Rating: BUY

Portfolio: Hybrid / Aggressive Fair Value Assessment: US$12.32
Current Price: US$9.64 Yield: 7.9%
Research Notes:
Adjusted Funds from Operations (AFFO) per unit increased 3% to $0.218 in the third quarter of 2015,
equating to a payout ratio of 82.5%.
For the first nine months of 2015, AFFO per unit increased 5.8% to $0.637.
Acquisition activity has been generally light in 2015 which has been the case for most Canadian REITs.
WIR.U is the only Canadian REIT focused exclusively on U.S. industrial real estate with a specific focus
on the distribution sub-segment of U.S. industrial real estate market.
The REITs portfolio consists of 48 institutional-quality properties benefiting from US economic growth.
The distribution was increased 8.6% in Q3 to $0.0633 per month ($0.76 annualized).
WIR.U is on track to generate approximately $0.86 per unit in AFFO which results in an 88% payout
ratio at the new distribution level.
The REITs fundamentals continue to be solid except for the lack of a visible growth catalyst in the near
term.
In order to produce a significant level of growth, WIR.U will need to complete accretive acquisitions.
We are revising our fair value assessment to US$11.50 based on a justified price-to-AFFO multiple of
13 times our 2015 estimated AFFO per unit of US$0.86.
Conclusion:
WIR.U is unique in that it is the only Canadian REIT focused exclusively on the U.S. industrial segment. The
REIT also trades and pays distributions in U.S. dollars, which in addition to its fundamentals, is one of the
reasons that we believed the REIT provided an interesting investment opportunity. We anticipate that the REIT
will continue to grow per unit cash flow organically at a low-single digit rate. For WIR.U to generate more
significant levels of growth (as it has in the past), it will need to complete accretive acquisitions. As acquisition
activity was relatively light in 2015, we have elected to reduce our rating to Short-Term: HOLD / Long-Term:
BUY to reflect the less certain growth profile in the near term.
21
KeyStones Income Stock Report Definitions / Disclosures February 2016
Adjusted Funds from Operations (AFFO) Funds from Operations (FFO)

This is generally considered to be a proxy for free cash flow and is A measure of cash flow, FFO is the cash flow from operations before
widely used in specific industries (such as REITs). The value is changes in non-cash working capital.
generally computed as Funds from Operations less maintenance
capital expenditures.
P/B: Price-to-book ratio
Cash Flow from Operations (CFO; Operating Cash Flow) Calculated as a stocks market value (current closing price) divided by
The cash inflow that a company recieves during a period, resulting its latest quarters book value. While a lower P/B ratio could mean that
from operating activities (does not include Cash Flow from Investing or the stock is undervalued, it could also serve as a sign of weak
Financing). fundamentals, and as with most ratios, this varies a fair amount by
industry.
Current ratio
One of many ratios designed to evaluate short-term liquidity of a P/CF: Price-to-cash flow ratio
company. Calculated as current assets divided by current liabilities, Calculated as a companys current share price divided by its cash flow
this ratio gauges the level of cash resources relative to current per share (i.e., free cash flow divided by the number of companys
liabilities as a measure of cash obligations (the ratio should be greater shares outstanding) over the last four quarters (called TTM, or
than 1). trailing 12 months calculation). It is a measure of the markets
expectations regarding a firms future financial health.
D/E: Debt-to-equity ratio
A measure of a companys financial leverage calculated by dividing P/S: Price-to-sales ratio
long term debt by shareholders equity. It indicates what proportion of It is calculated as a stocks current market price divided by its sales
equity and debt the company is using to finance its assets (a lower (revenue) per share. When calculating this ratio, we use the companys
ratio indicates lower relative debt ratios). revenue from its latest four quarters, or on a TTM basis.
EBITDA ROE: Return on equity

Earnings before interest, taxes, depreciation, and amortization. A measure of a corporations profitability, calculated as net income
EBITDA is calculated as revenue minus expenses (excluding tax, divided by shareholders equity. ROE is often useful in comparing the
interest, depreciation, and amortization). profitability of a company to other firms in the same industry.
EPS: Earnings per share Tangible Book Value (TBV)
A companys earnings available to common shareholders, also known The total value of a companys assets, on its Balance Sheet, less any
as net income or net profit, divided by the number of shares liabilities and intangible assets such as goodwill. Also referred to as
outstanding. Shareholder Equity. (Also true asset values likely differ from Balance
Sheet Values, Tangible Book Value is generally considered a more
Fair Value accurate representation of value).
The price at which an analyst believes a companies stock should be
priced. Although this value is based on intelligent analysis, it in no way Times Interest Earned
is a representation of what the companies share price will be trading at The multiple of Net Income (before interest and taxes) to interest pay-
given any period of time. The analysis used to determine Fair Value is ments during the period. This assesses a companies ability and margin
based on numerous assumptions and uncertainties. Fair Value should of safety, with respect to meeting its interest obligations (a higher
be used only as a general guide to investing and should not be number is more attractive).
depended upon.
Yield
Free cash flow (FCF) The investment return resulting from income distributions. Calculated
Cash flow from operations less working capital requirements, as the annual or annualized interest or dividend distribution, divided by
sustaining capital expenditures and scheduled debt repayments. FCFE the cost of the original investment.
consists of cash inflows that are available to the shareholders of the
company.
Disclosure
Stock Holding Other
Companies KeyStone KeyStone Related Investment Related Company Business
Employees Companies Banking Client Relationship
AltaGas Ltd (ALA) No Yes No No No
Exchange Income Corp (EIF) No Yes No No No
Grenville Strategic Royalty (GRC) Yes Yes No No No
Disclaimer: The information in this publication is derived from sources believed to be reliable. Neither KeyStone Financial, its employees or any affiliated
parties guarantee the accuracy of this information or accept any liability for losses, financial or otherwise, arising from using these reports. These reports
contain forward looking data, which is based on estimates and assumptions. Actual results may differ significantly from the estimates contained in these
reports. Recommendations contained in these report do not consider the risk tolerance or financial situation of individual users. For personal financial
advice, it is recommended that you consult a qualified financial advisor.

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2016 ISR Action Report

 Contents MARKET COMMENTARY

2015 ISR REVIEW

INVESTMENT STRATeGIES FOR 2016

 Subscriptions ANNUAL subscription Send a cheque or money order payable to:

To order by Visa or MasterCard

All prices include shipping and handling charges.

A TOUGH MARKET OVERALL IN 2015 AND EVEN TOUGHER START TO 2016

Copyright 2016 KeyStone Financial Publishing Corp.

2015 ISR REVIEW

6 Year Consolidated Performance BUY Recommendations

2015 4.8% 3.4% -3.7% 0.7% 11.4% -8.6%

New Recommendations - 2015 Date Gain

INVESTMENT STRATEGIES FOR 2016 AND BEYOND

Copyright 2016 KeyStone Financial Publishing Corp.

COMPANY UPDATE SUMMARY:

1. AltaGas Ltd. (ALA) BUY Rating Maintained

2. Artis REIT (AX.UN) Rating Reduced to HOLD

3. Brookfield Infrastructure Partners (BIP.UN) BUY Rating Maintained

4. Dream Office REIT (D.UN) Rating Reduced to HOLD

5. Exchange Income Corporation (EIF) BUY Rating Maintained

6. Element Financial Corp (EFN) BUY Rating Maintained

7. Enercare Inc (ECI) BUY Rating Maintained

8. Gibson Energy Inc. (GEI) HOLD Rating Maintained

10. Hardwoods Distribution Inc (HWD) BUY Rating Maintained

12. Sylogist Ltd. (SYZ) BUY Rating Maintained

13. Transalta Renewables (RNW) BUY Rating Maintained

14. Vecima Networks Inc. (VCM) BUY Rating Maintained

AltaGas Ltd. (ALA: TSX) Rating: BUY

Fair Value Assessment:

Copyright 2016 KeyStone Financial Publishing Corp.

Artis REIT (AX.UN: TSX) Rating: HOLD

Fair Value Assessment:

Copyright 2016 KeyStone Financial Publishing Corp.

Brookfield Infrastructure Partners (BIP.UN:TSX) Rating: BUY

Copyright 2016 KeyStone Financial Publishing Corp.

Dream Office REIT (D.UN: TSX) Rating: HOLD

Fair Value Assessment:

Copyright 2016 KeyStone Financial Publishing Corp.

Exchange Income Corporation (EIF: TSX) Rating: BUY

Copyright 2016 KeyStone Financial Publishing Corp.

Element Financial Corp (EFN: TSX) Rating: BUY

Enercare Inc (ECI: TSX) Rating: BUY

Fair Value Assessment:

Copyright 2016 KeyStone Financial Publishing Corp.

Gibson Energy Inc. (GEI: TSX) Rating: Short-Term: HOLD

Fair Value Assessment:

Grenville Strategic Royalty Corp (GRC: TSX-V) Rating: BUY

GRC was updated in November after the release of the Q3 results.

Copyright 2016 KeyStone Financial Publishing Corp.

Hardwoods Distribution Inc (HWD: TSX) Rating: BUY

Fair Value Assessment:

Newalta Corporation (NAL: TSX) Rating: SELL

Sylogist Ltd. (SYZ: TSX) Rating: BUY

Copyright 2016 KeyStone Financial Publishing Corp.

Transalta Renewables (RNW: TSX) Rating: BUY

Copyright 2016 KeyStone Financial Publishing Corp.

Vecima Networks Inc. (VCM: TSX) Rating: BUY

Q1 fiscal 2016 was another record quarter for the company.

WPT Industrial REIT (WIR.U: TSX) Rating: BUY

Fair Value Assessment:

Adjusted Funds from Operations (AFFO) Funds from Operations (FFO)

EBITDA ROE: Return on equity

Contents MARKET COMMENTARY

Subscriptions ANNUAL subscription Send a cheque or money order payable to: