MANAGEMENT’S DISCUSSION AND ANALYSIS Corporate The composition of Capstone’s corporate long-term debt was as follows: Dec 31, 2013 Dec 31, 2012 As at Maturity Interest Rate Fair Value Carrying Value Fair Value Carrying Value Corporate credit facility 2016 3.52% 11,300 11,300 — — Convertible debentures - issued December 2009 2016 6.50% 42,963 41,068 44,416 40,631 Convertible debentures - assumed on acquisition of ReD 2017 6.75% 27,431 27,739 — — 81,694 80,107 44,416 40,631 During 2013, long-term debt at corporate increased $39,476 from 2012, primarily due to the acquisition of ReD and the refinancing of the CPC-Cardinal credit facility. Upon acquiring ReD, Capstone assumed $34,500 of redeemable, extendible convertible unsecured subordinated debentures, which remain obligations of ReD. Since acquisition,$6,972 of the debentures were redeemed and $100 were converted to shares of the Corporation, both at the holders' option. Capstone provides credit support for the ReD Debentures. On November 12, 2013, the Corporation entered into a new corporate credit facility to repay the CPC-Cardinal credit facility and provide financial flexibility for general corporate purposes, including future acquisitions. The corporate credit facility was structured as a revolver with $32,500 of  available credit. In January 2014, the available credit was increased by $17,500, bringing the total to $50,000 of credit of which $25,239 was drawn or committed as of December 31, 2013, of which $13,939 reflected committed letters of credit. Covenant compliance During 2013, Capstone complied with all covenants. Shareholders’ equity Shareholders’ equity comprised: As at Dec 31, 2013 Dec 31, 2012 Common shares 710,662 632,474 Class B exchangeable units 26,710 26,710 Preferred shares 72,020 72,020 Share capital 809,392 731,204 Other equity items  (1) 9,428 9,284 Accumulated other comprehensive income (loss) 17,013 (809) Retained earnings (deficit) (306,283) (320,831) Equity to Capstone shareholders 529,550 418,848 Non-controlling interests 138,613 91,610 Total shareholders’ equity 668,163 510,458 (1) Other equity items include the equity portion of convertible debentures, as well as the warrant and share option reserves. Capstone is authorized to issue an unlimited number of common shares as well as a limited number of preferred shares equal to 50% of the outstanding common shares. The increase in common shares outstanding was as follows: Year ended Dec 31, 2013 Year ended Dec 31, 2012 ($000s and 000s of shares) Shares Amount Shares Amount Opening balance 72,445 632,474 70,957 626,861 Shares issued  (1) 19,719 75,453 — (89) Dividend reinvestment plan (DRIP) 670 2,635 1,488 5,702 Conversion of convertible debentures 20 100 — — Ending balance 92,854 710,662 72,445 632,474 (1) During 2013, Capstone issued share capital in exchange for ReD shares on acquisition, which are net of$224 of transaction costs (2012 - $89). 38 CAPSTONE INFRASTRUCTURE CORPORATION