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CORPORATE OVERVIEW Building a Diversified Infrastructure Company. March 2014. Corporate Snapshot Developer, owner & operator of high quality infrastructure assets. Mission & Vision.

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Corporate overview building a diversified infrastructure company

CORPORATE OVERVIEWBuilding a Diversified Infrastructure Company

March 2014


Corporate snapshot developer owner operator of high quality infrastructure assets

Corporate SnapshotDeveloper, owner & operator of high quality infrastructure assets

Mission & Vision

Our mission is to provide investors with an attractive total return from responsibly managed long-term investments in core infrastructure in Canada & internationally. Our vision is to be a Canadian leader in owning and operating diversified infrastructure businesses that benefit the communities we serve, the people we employ, and our investors.

Investor Information

1 - Market capitalization is based on the closing price of the common shares on March 18, 2014 and includes Class B exchangeable units issued by a subsidiary of CSE.


Our portfolio utilities power infrastructure investments

Our PortfolioUtilities & power infrastructure investments

Notes:* CSE holds a 50% interest in Bristol Water.** CSE holds a 33% interest in Värmevärden.*** CSE’s investment in Chapais consists of a 31.3% interest in one of two classes of preferred shares, a 24.8% interest in Tranche A and B debt, and a 50% interest in Tranche C debt.


Utilities platform expect growing cash flow dividends

Utilities PlatformExpect growing cash flow & dividends

Regulated or contractual businesses that provide essential community infrastructure

PROFILE

KEY STATS

Includes 50% interest in Bristol Water, a growing regulated utility in the United Kingdom & a 33% interest in Värmevärden, a district heating business in Sweden.

Bristol Water

₤389M

C$520M

26%

RCV growth over 2010-2015 compared with industry average of 8%

.

RCV as at March 31, 2013

Size of capital expenditure program for 2010-2015

.

Värmevärden

317 KM

10

639 MWth

Heat production capacity

.

Length of distribution network

.

Number of communities the business operates in

.

FUTURE GROWTH

  • Future investments could include electricity transmission or distribution, or gas utilities


Power platform contractually defined cash flow

Power PlatformContractually defined cash flow

Power generation facilities with a clean energy profile & long-term contracts, & a pipeline of wind power projects

PROFILE

KEY STATS

Includes operating gas-fired, wind, biomass, hydro & solar power generation facilities & a pipeline of contracted wind power projects in Canada.

439MW

79MW

70

Net megawatts of installed capacity across Canada

Net capacity of current wind development project pipeline

.

Number of employees directly engaged in operation & development of power portfolio

.

  • Currently constructing two wind projects expected to be completed in 2014

  • .

FUTURE GROWTH

  • Continue to seek traditional & renewable power investment opportunities, including operating & development-stage projects as well as re-powering opportunities.


Behind the numbers

Behind the Numbers…

…Drinking water for 1.2 million people

…Clean electricity to power about 220,000 households

…Heat distributed within 10 communities with combined population of 170,000


A history of growth

Revenue2,3

Adjusted EBITDA1,2,3

Total Assets2

A History of Growth

In $ millions

In $ millions

In $ millions

1 – Excludes internalization costs.2 – Figures presented for 2004 to 2009 reflect Canadian Generally Accepted Accounting Principles (GAAP)3 – Adjusted EBITDA is defined on page 16.


A history of diversification

Adjusted EBITDA1 by Country

2013 AFFO1 by Business & Country2,3

A History of Diversification

17%

4%

5%

39%

78%

57%

2011

2012

CanadaSwedenUK

1 – Please refer to slides 16 and 17 for definitions of Adjusted EBITDA and AFFO, respectively.2 - Chart illustrates contribution for the businesses and excludes corporate component.3 – Excludes internalization costs..


Growth strategy focused on building across four pillars

Growth StrategyFocused on building across four pillars

Trillions of dollars of investment needed


Growth strategy focused on core markets within oecd

Growth StrategyFocused on core markets within OECD


Effective responsive partner committed to corporate citizenship

Effective, Responsive PartnerCommitted to corporate citizenship

  • “Erie Shores Wind Farm is generating more than just clean, renewable energy here in Bayham. It is generating interest and excitement that has translated into tourism dollars for our local businesses, generating revenue for the municipality in the form of taxes, generating profits for our farmers through their annual lease payments and generating a sense of community identity and pride.”

  • - (Former) Mayor Lynn Acre, Municipality of Bayham

“Cardinal Power’s consistent, reliable steam and air supply over the past 15 years has allowed our facility to succeed in challenging times.”

- Marc Harcus, Plant Manager, Casco Inc. – Cardinal

“We are indeed fortunate to have Cardinal Power located in our community and continue to find them to be a generous and involved corporate citizen.”

- (Former) Mayor Larry Dishaw, Township of Edwardsburgh/Cardinal


Health safety a company wide priority

Health & SafetyA company-wide priority

  • “A key value of Capstone is to foster a professional, safe work environment where our people have the tools and resources to excel and be successful. There is nothing more important than the well-being and safety of our employees and those who work with us.”

  • - Michael Bernstein, President & Chief Executive Officer

  • GOALS

  • Achieve zero accidents at our businesses & instill an industry-leading safety culture.

  • All accidents or near misses are preventable.

  • Identify the root causes of all incidents.

  • Assess the businesses’ health & safety performance quarterly & annually.

  • GUIDING PRINCIPLES

  • Our businesses are expected to build & encourage a proactive health & safety culture that is open, cooperative, constructive and collaborative.

  • All employees must take direct responsibility for their own personal safety as well as that of their colleagues and others.

  • As part of our continuous improvement culture, all businesses must strive to learn from historical incidents, take appropriate & timely action to prevent recurrence, & track results over time.

In 2013, the Whitecourt biomass facility was awarded a Certificate of Recognition by Alberta’s provincial government, reflecting high safety standards and programs at the facility.

In 2013, the Cardinal gas cogeneration facility achieved its 17thconsecutive year with no lost-time injuries


Why invest focused on delivering

Why Invest?Focused on delivering

High quality, diversified & low risk portfolio of infrastructure businesses providing essential services

Substantial investment in Bristol Water, a perpetual business we expect to generate growing cash flow

Sizable contracted power portfolio, including accretive wind projects

Strong operating performance supports stable, long-term cash flow for shareholders

Our mission is to provide investors with an attractive total return from responsibly managed long-term investments in core infrastructure in Canada & internationally


Contact

155 Wellington Street WestSuite 2930Toronto, Ontario M5V 3H1T: 416-649-1300

Email: [email protected]

Website: www.capstoneinfrastructure.com

Contact

Notice to Readers:This presentation 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 investors. 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.


Appendix definitions

  • A

APPENDIX: DEFINITIONS


Non gaap performance measures definitions

Non-GAAP Performance MeasuresDefinitions

  • This presentation contains figures that are performance measures not defined by International Financial Reporting Standards (IFRS). These non-GAAP and additional GAAP performance measures do not have any standardized meaning prescribed by IFRS and are, therefore, unlikely to be comparable to similar measures presented by other issuers. The non-GAAP and additional GAAP measures used in presentation are defined below.

  • Earnings before Interest Expense, Taxes, Depreciation and Amortization (EBITDA)

  • EBITDA is net income (loss), including that net income (loss) related to the non-controlling interest (“NCI”) and interest income and net pension interest income excluding interest expense, income taxes, depreciation and amortization. EBITDA represents Capstone’s continuing capacity to generate income from operations before taking into account management’s financing decisions and costs of consuming tangible capital assets and intangible assets, which vary according to their vintage, technological currency, and management’s estimate of their useful life. EBITDA is presented on the consolidated statement of income.

  • Adjusted EBITDA

  • Adjusted EBITDA is calculated as revenue less operating and administrative expenses and project development costs plus interest income and dividends or distributions received from equity accounted investments. Amounts attributed to any non-controlling interest are deducted. Adjusted EBITDA for investments in subsidiaries with non-controlling interests are included at Capstone’s proportionate ownership interest. The reconciliation of Adjusted EBITDA to EBITDA is provided below.


Non gaap performance measures definitions continued

Non-GAAP Performance MeasuresDefinitions (continued)

  • Adjusted Funds from Operations (AFFO)

  • Capstone’s definition of AFFO measures cash generated by activities of infrastructure business investments which is available for dividends and general corporate purposes. For wholly owned businesses, AFFO is equal to Adjusted EBITDA less interest paid, repayment of principal on debt income, taxes paid, scheduled repayment of debt principal, preferred share dividends and maintenance capital expenditures. For businesses that are not wholly owned and cash generated by the business is only available to Capstone through periodic dividends, AFFO is equal to dividends received. Also deducted are corporate expenses and dividends on preferred shares.

  • AFFO is calculated from Adjusted EBITDA by:

  • Deducting: - Adjusted EBITDA generated from businesses with significant non-controlling interests

  • Adding: - Dividends received from businesses with significant non-controlling interests

  • - Scheduled repayments of principal on loans receivable from equity accounted investments

  • Deducting items, for businesses without significant non-controlling interests:

  • - Interest paid

  • - Income taxes paid

  • - Dividends paid on the preferred shares included in shareholders’ equity

  • - Maintenance capital expenditure payments and

  • - Scheduled repayments of principal on debt, net of changes to the levelization liability up to repayment on June 6, 2012.

  • Payout Ratio

  • Payout ratio measures the proportion of cash generated that is available at corporate that is declared as dividends. The payout ratio is calculated as dividends declared divided by AFFO.


Appendix biographies

  • B

APPENDIX: BIOGRAPHIES


Biographies

Biographies

Michael BernsteinPresident and Chief Executive Officer

  • Michael Bernstein has served as President and Chief Executive Officer of Capstone Infrastructure Corporation since April 2009 and was formerly the President of Macquarie Infrastructure and Real Assets Canada Ltd. and a Senior Managing Director of the Macquarie Group.

  • From May 2005 to April 2009, Mr. Bernstein served as head of Infrastructure and Utilities Advisory for Macquarie Capital Markets Canada. From 1996 to 2005, Mr. Bernstein was a senior executive with CIBC World Markets’ Power & Utilities investment banking group where he provided advisory and M&A counsel to a range of corporate and government clients and played an integral role in numerous successful IPOs and capital raisings.

  • Mr. Bernstein has extensive experience in the Canadian infrastructure and utilities sector, having been involved in a wide range of significant projects and transactions. These include: advising on the concession for Autoroute A-25, Quebec's first public-private partnership (P3) project; working on the $4.25 billion agreement to refurbish and restart the Bruce A nuclear facility; advising Borealis Infrastructure Management on its acquisition of Teranet Income Fund; and working with the Province of Ontario on the restructuring of Ontario Hydro.

  • Born and raised in Montreal, Mr. Bernstein holds a BA in Economics and Philosophy from Dartmouth College, an MBA from the University of Western Ontario and the Chartered Financial Analyst designation. He is also the Vice Chairman of the Association of Power Producers of Ontario and serves as a board member of Youth-in-Motion, a charitable organization that helps youth to make meaningful life and career decisions.


Biographies1

Biographies

Michael SmerdonExecutive Vice President and Chief Financial Officer

  • Michael Smerdon serves as Executive Vice President and Chief Financial Officer of Capstone Infrastructure Corporation, a role he has held since August 2009. He was formerly a Managing Director of Macquarie Infrastructure and Real Assets Canada Ltd.

  • Mr. Smerdon joined the Macquarie group in 1998, where he managed and oversaw the acquisition and operation of diverse infrastructure assets in Canada and the United States. From 1998 to 2002, Mr. Smerdon served with Macquarie’s infrastructure advisory group where he advised governments and the private sector on a number of transportation and electricity projects including toll roads, electricity distribution, aviation services, parking facilities and rail infrastructure.

  • More recently, Mr. Smerdon served as a key member of the senior management team of New York-based Macquarie Infrastructure Partners Inc. (MIP), which manages two infrastructure funds totalling US$5.5 billion of investor capital. His responsibilities included managing Macquarie’s North American port investments as well as capital raisings for Macquarie Infrastructure Partners II. Prior to his role with MIP, Mr. Smerdon was responsible for managing a number of Macquarie’s infrastructure businesses, including the Detroit-Windsor Tunnel, Atlantic Aviation, Leisureworld and Parking Company of America Airports, among others, where he directed business planning, financial and operational reporting, capital structure management, and risk management and governance, including serving on each business’ board of directors.

  • Mr. Smerdon holds a Bachelor of Commerce degree from the University of British Columbia and a Master of Business Administration degree from the Richard Ivey School of Business at the University of Western Ontario. He also holds the Chartered Financial Analyst designation.


Biographies2

Biographies

  • Stu Miller serves as Executive Vice President, General Counsel and Corporate Secretary of Capstone Infrastructure and was formerly the Managing Director and General Counsel of the Macquarie Group’s private equity and infrastructure and specialized funds division in Canada.

  • Prior to joining Macquarie, Mr. Miller was the Executive Director, Corporate Services and Compliance of Fairmont Hotels & Resorts Inc. and was a Partner in the corporate finance and M&A group of McCarthy Tétrault LLP, a leading Canadian law firm.

  • Mr. Miller holds a combined MBA/JD degree from Osgoode Hall Law School and the Schulich School of Business and has extensive experience in corporate finance, M&A, corporate governance and securities law.  He is also a past recipient of the “Tomorrow’s Leader” Award at the National Post’s Canadian General Counsel Awards.

Stu MillerExecutive Vice President, General Counsel & Secretary


Biographies3

Biographies

  • Mr. Bittan is responsible for Capstone Infrastructure Corporation’s (TSX: CSE) business development initiatives. Mr. Bittan was formerly a Managing Director of Macquarie Canadian Infrastructure Management Limited and Chief Financial Officer of Macquarie Essential Assets Partnership (MEAP), an unlisted infrastructure fund, where he directed day-to-day operations, strategic planning, transactions and reporting. As a Senior Vice President of Macquarie Infrastructure and Real Assets Canada Ltd., he was responsible for the evaluation and management of infrastructure investments in North America.  

  • In his seven years with Macquarie, Mr. Bittan played an integral role in the acquisition and operation of diverse infrastructure businesses in Canada and the U.S., including regulated utilities, renewable energy, transportation and social infrastructure. He also led Capstone Infrastructure Corporation’s acquisitions of Clean Power Income Fund, Amherstburg Solar Park, Värmevärden (Swedish district heating portfolio) and Bristol Water. Mr. Bittan has served on the board of directors of several infrastructure and utility businesses including AltaLink, Access Roads Edmonton and Sea to Sky Highway and is currently a director of Bristol Water and Värmevärden.

  • Mr. Bittan holds an Honours Bachelor of Science degree and a Master of Management degree from the University of Toronto. He is also designated as a Chartered Accountant (Ontario) and Certified Public Accountant (Colorado).

Jack BittanSenior Vice President, Business Development


Biographies4

Biographies

  • Rob Roberti is responsible for overseeing Capstone Infrastructure Corporation’s gas cogeneration, wind, hydro, biomass and solar power generation businesses, including strategic planning, operational initiatives and enhancements, and finance. From 2007 to 2011, Mr. Roberti served as a Senior Vice President of Macquarie Infrastructure and Real Assets Canada Ltd. Mr. Roberti’s responsibilities also include identifying and assessing new investment opportunities for the Corporation in the power infrastructure sector, including renewable energy.  

  • Mr. Roberti was previously the Chief Financial Officer of Clean Power Income Fund, which was acquired by Capstone Infrastructure in 2007. He has extensive finance and project development experience in the power sector, particularly in renewable energy. As Principal of VERDE Finance Inc. (2005- 2007), an independent consulting firm offering financing solutions in the field of green energy, his clients included Clean Power Income Fund, The Ontario Power Authority, The Quantum Leap Company and Boreas Wind Partners. During this time, Mr. Roberti also served as the financial sector representative on the Independent Electricity System Operator (IESO) Technical Panel.

  • Prior to establishing VERDE Finance, Mr. Roberti served as Manager, Financing and Development with Regional Power, an operator and developer of hydroelectric projects across Canada. From 2000 to 2003, Mr. Roberti was Director, Project Finance at Probyn & Company and Treasurer of Clean Power Income Fund, playing a pivotal role in the establishment and initial public offering of the fund.  

  • Mr. Roberti holds a Bachelor of Commerce from the University of Toronto. He is a member of the Canadian Institute of Chartered Accountants and the CFA Institute. He has been a volunteer member of the Toronto Atmospheric Fund Investment Committee since 2006.

Rob RobertiSenior Vice President, Power Generation


Biographies5

Biographies

  • Jens Ehlers is a Senior Vice President with Capstone Infrastructure Corporation (TSX: CSE) where he is responsible for financial reporting and treasury management. He was previously a Senior Vice President with Macquarie Infrastructure and Real Assets Limited.  

  • Mr. Ehlers is a seasoned professional with 20 years of experience in financial analysis and management, reporting, strategic planning and risk management for both private and public entities in the financial services sector. He previously served as Vice President, Planning and Performance Measurement with Home Trust Company, a TSX 300 company with more than $10 billion in mortgage assets under administration, where he was responsible for financial planning and reporting. From 1993 to 2006, he held increasingly senior roles with Assuris, which administers an insolvency protection plan for life insurance policyholders, including five years as Vice President, where he directed all investment activities, oversaw technology-based productivity improvements and served as a key industry liaison.

  • Mr. Ehlers holds a Bachelor of Commerce degree in Finance and Computer Science from the University of Toronto. He also holds the Chartered Accountant and Chartered Financial Analyst designations.

Jens EhlersSenior Vice President, Finance


Biographies6

Biographies

  • Ms. Borg-Olivier is Senior Vice President, Communications for Capstone Infrastructure Corporation (TSX: CSE) where she leads the company’s strategic investor relations, public and employee communications initiatives. She was formerly a Vice President of Macquarie Infrastructure and Real Assets Canada Ltd.

  • Prior to joining Macquarie in 2006, Ms. Borg-Olivier was Director, Communications for a dual-listed biotechnology company, where she increased the company’s U.S. investor base and executed a corporate rebranding. From 1999 to 2003, Ms. Borg-Olivier was Executive Vice President at The Barnes Organization, where she was responsible for providing strategic investor relations counsel to a diverse client base spanning the retail, high technology, real estate, energy and manufacturing sectors.

  • Among her volunteer activities, Ms. Borg-Olivier has led numerous corporate fundraising and volunteering initiatives with a range of organizations, including Habitat for Humanity and United Way. Ms. Borg-Olivier holds an Honours Bachelor of Arts in International Relations from the University of Toronto and has been a member of the Canadian Investor Relations Institute (CIRI) since 2002. She currently serves on the CIRI Ontario Chapter Board of Directorsand holds the Certified Practitioner of Investor Relations (CPIR) designation.

Sarah Borg-OlivierSenior Vice President, Communications


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