## Our Values 

## Our Strategy 

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. Our strategy to accomplish this mission includes: 

## Growing value through acquisitions that increase our scale, diversify our portfolio and expand future opportunities 

Our strategy is to develop, acquire and manage a portfolio of high quality power, utilities and transportation infrastructure businesses and public-private partnerships (P3s). Geographically, we are focusing our business development efforts primarily on North America, the United Kingdom, and Western and Northern Europe, with Australia and New Zealand remaining markets of interest. All are member countries of the Organization for Economic Cooperation and Development where there is relative political, legal, regulatory and economic stability and where we can effectively manage risks. 

When pursuing new investment opportunities, we are mindful of the quality of future cash flow streams and risks. We carefully screen each investment opportunity to ensure long-term accretion to cash flow and a strong strategic fit. Our goal is to realize a total return in the range of 10% on the investments we make. We seek to invest in: 

▶ A combination of lower risk opportunities where cash fl ow is contractually defined such as operating power facilities or P3s; 

▶ Utility-like opportunities that offer the potential for predictable cash flow and steady growth; and 

▶ Higher return investments such as our new power development projects or user-pay forms of infrastructure such as toll roads. 

## Integrity 

In all we do, we act honestly, ethically and fairly, abiding by both the spirit and letter of our commitments and by our Code of Conduct and Ethics. We are accountable for our decisions and seek to communicate with transparency. 

## Strive for Profi  tability 

We are committed to managing and growing our businesses profi tably, which supports an attractive total return for our investors. 

We plan to remain active on the growth front in 2014, with a particular focus on the utilities and P3s segments. And while we focus on wholly-owned businesses, we remain open to collaborating or co-investing with like-minded partners, an approach that has been successful for us at Bristol Water and Värmevärden. 

## Pursuing organic growth initiatives 

Bristol Water is a regulated business with a secure competitive position in a stable country and an attractive growth profi le that we expect to be a significant driver of value for Capstone’s shareholders in the years ahead. In the current regulatory period, which runs from 2010 to 2015, Bristol Water’s real regulated rate base will grow by approximately 26% compared with an industry average of approximately 8%. We currently anticipate similar growth in the next regulatory period, which spans from April 2015 to March 2020, subject to regulatory approval of the draft business plan Bristol Water submitted to the Water Services Regulation Authority (Ofwat) in December 2013. 

At Värmevärden, we are exploring the potential for the business to complete tack-on acquisitions and to increase its footprint in the fragmented Swedish district heating market. 

## Increasing our power development footprint 

Our power development arm, Capstone Power Development, is focused on developing, acquiring and re-powering clean electricity generation projects in North America, targeting markets where there is a defined need for new capacity and energy supply. These early or later-stage opportunities offer the prospect of substantially higher investment returns than operating assets while also broadening our pipeline and creating a quality destination for capital. We are also focused on advancing our new pipeline of wind projects on time and budget. These projects, currently slated to enter commercial operations between 2014 and 2016, will extend our weighted average PPA term remaining and strengthen our long-term cash fl ow profi le. 

