“WE ARE WORKING TO PROVIDE  OUR SHAREHOLDERS WITH  AN ATTRACTIVE TOTAL RETURN  ON THEIR INVESTMENT.” Michael Bernstein,  President and Chief Executive Officer We made steady progress toward achieving a new  PPA for Cardinal but did not cross the fi nish line Building for Tomorrow Perform Sustain Deliver 2013 ANNUAL REPORT  5 available to us. Over the past three years, we have deliberately re-focused our portfolio to reduce risk, extend our cash fl ow profi le and establish a solid platform for the future. In particular, our  investments in Bristol Water and Värmevärden have fundamentally  changed Capstone’s risk profile by offering perpetual, increasing  cash flow and the potential for considerable organic growth.  And the establishment of a new power development platform  positions us to deliver greater returns to our shareholders.  We were unsuccessful in finalizing a new power purchase  agreement (PPA) for Cardinal in 2013, although steady progress was made. We anticipate securing a new 20-year PPA for the  facility, and are working to bring the process to a conclusion in  advance of the December 31, 2014 expiry of Cardinal’s current  PPA. In the meantime, we are doing what we can to ready the  plant and team for the work that lies ahead to convert the  facility and prepare it for dispatchable operations. Cardinal is  an exceptionally high quality facility that delivers signifi cant  value to Ontario and to ratepayers — today, tomorrow and for  years to come. Combined, I believe these initiatives represent an infl ection  point for our company. Ten years after our debut as an income  fund, and through years of transition and some challenge,  Capstone today is poised to be a Canadian leader in owning and  operating diversified infrastructure businesses that benefi t the  communities we serve, the people we employ, and our investors.  As a result of the investment decisions made over the past few  years, our portfolio in 2014 has greater growth potential than it  did as recently as a few years ago, is significantly more diversifi ed  than the single asset we started with in 2004, and will increase in  value as our new wind projects move into commercial operations  and as Bristol Water’s regulated capital value grows.  As a shareholder myself, I recognize that the lack of clarity  surrounding Cardinal’s future has been frustrating for our investors.  Understandably, concern about this facility has overshadowed  the overall high quality of our portfolio and affected our share  price detrimentally. Yet the journey we began in 2009 to broaden Capstone’s scope,  diversify our portfolio and build for tomorrow has eff ectively  transformed our business and multiplied the opportunities  Improve performance by entering infrastructure segments that  diversify Capstone’s portfolio. Operate infrastructure businesses in a responsible and  sustainable manner. Maximize Capstone shareholders’ risk-adjusted return.