CAPSTONE'S STRENGTHS AND ABILITY TO DELIVER RESULTS Capstone is positioned to capitalize on emerging opportunities and trends in the global infrastructure market. A number of strengths enable us to  deliver on our mission. They include: Asset Management and Leadership We have significant expertise in infrastructure investment and management across core infrastructure categories in Canada and internationally, which equips us to offer tangible, proven knowledge and experience to governments and prospective partners. Our corporate management team comprises executives with decades of combined expertise in managing and financing infrastructure businesses.  Our employees with Capstone Power Development also bring decades of experience in successfully developing and delivering power projects in Canada and the United States. In addition, our Board of Directors comprises seasoned executives with a broad mix of skills in finance, operations, strategy, government and corporate governance. Access to Opportunities We have strong relationships within the infrastructure industry and with multinational partners, including, among others, Agbar and ITOCHU, our  partners in Bristol Water, and the Macquarie group, our partner in Värmevärden, which enhance our ability to forge new partnerships across borders  and to stimulate deal flow and access to unique opportunities. Capstone has proven its ability to successfully pursue growth opportunities internationally and to integrate new businesses into its portfolio with the  acquisitions of the Amherstburg Solar Park (2010), our interests in Bristol Water and Värmevärden (2011), and ReD (2013). Professionalism We bring a highly disciplined approach to managing our portfolio and to evaluating the growth opportunities we pursue, maintaining a focus on high quality, low risk businesses that will enhance value for shareholders while strengthening Capstone's reputation. We are committed to operational excellence, working closely with our managerial teams or investment partners to improve productivity, manage  costs and enhance long-term operations, and to ensuring a safe work environment for our employees and contractors. In addition, we are committed to professionalism and transparency in our governance practices and financial reporting, which was recognized in 2013 by the Chartered Professional Accountants of Canada with an Award of Excellence in Corporate Reporting. Agility We anticipate, plan for and have an ability to adapt to changes in our business and the competitive landscape in order to capitalize on and respond  quickly to value-building opportunities, reflecting the strength of our team and coordinated internal processes. Each of our businesses undergoes a comprehensive annual strategic and business planning exercise to assess progress against goals and to determine how we can further improve the efficiency, quality and performance of our operations. We likewise apply this discipline to the evaluation of growth opportunities, including completing a thorough financial analysis, and applying strong due diligence practices and risk management principles and procedures, which helps to safeguard Capstone’s performance. We continually monitor, analyze and seek to minimize the risks within our capital structure with a view to maintaining an optimal financing mix that aligns with the cash flows, risk profile and duration of our businesses and that generates value for shareholders. We also seek to maintain a flexible capital structure that enables us to capitalize on growth opportunities when they arise. We are focused on: • Ensuring an appropriate capital structure at the corporate and subsidiary level that aligns with the cash flow profile and duration of our businesses; • Maintaining sufficient liquidity to meet short- and medium-term operating needs; and • Building and maintaining strong relationships with investors and lenders. As a result, we believe we have access to the resources we need to support growth. 2013 ANNUAL REPORT  17 Capital Management Analysis