NON-GAAP AND ADDITIONAL GAAP PERFORMANCE MEASURE DEFINITIONS Earnings before Interest Expense, Taxes, Depreciation and Amortization (“EBITDA”) Adjusted EBITDA Adjusted Funds from Operations (“AFFO”) AFFO is calculated from Adjusted EBITDA by: Deducting:  Adding:  Deducting items for businesses without significant non-controlling interests: Payout Ratio MANAGEMENT’S DISCUSSION AND ANALYSIS While the accompanying consolidated financial statements have been prepared in accordance with IFRS, this MD&A also contains figures that are  performance measures not defined by 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 Corporation believes that these indicators are useful since they provide additional information about the Corporation’s earnings performance and cash generating capabilities and  facilitate comparison of results over different periods. The non-GAAP and additional GAAP measures used in this MD&A are defined below. EBITDA is net income (loss), including that net income (loss) related to the non-controlling interest (“NCI”), interest income and net pension interest  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 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. Capstone’s definition of AFFO measures cash generated by its infrastructure businesses that 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 and maintenance capital expenditures. For businesses that are not wholly owned, the cash generated by the business is only available to Capstone through periodic dividends. For these businesses, AFFO is equal to distributions received. Also deducted are corporate expenses and dividends on preferred shares. Payout ratio measures the proportion of cash generated that is declared as dividends to common shareholders. The payout ratio is calculated as dividends declared divided by AFFO. • Adjusted EBITDA generated from businesses with significant non-controlling interests •  Dividends received from businesses with significant non-controlling interests • Scheduled repayments of principal on loans receivable from equity accounted investments • Interest paid • Income taxes paid • Dividends paid on the preferred shares included in shareholders’ equity •  Maintenance capital expenditure payments • Scheduled repayments of principal on debt, net of changes to the levelization liability up to repayment on June 6, 2012 22 CAPSTONE INFRASTRUCTURE CORPORATION