Our Company is embarking on exciting new phase in its evolution.

Capstone Infrastructure Corporation, formerly Macquarie Power and Infrastructure Corporation, is an independent, publicly listed company with 80 employees. We are focused on building and responsibly managing a high quality portfolio of infrastructure businesses in Canada and internationally with the goal of delivering a superior total return to investors.

Our new brand reflects our commitment to excellence, quality and growth and to realizing our vision of becoming the pre-eminent infrastructure company in Canada. The word capstone refers to a crowning achievement, element or event. In architectural terms, a capstone is the top or finishing stone of a building or structure.

The triangle in our new logo depicts the top stone of a structure while representing our company’s broad, stable foundation for continuing growth. The upward thrust of the triangle symbolizes that our company is well positioned for continued success. Our signature colour, orange, represents enthusiasm, creativity, determination, happiness and stimulation. These attributes are important to our company’s success and to the professional fulfillment and advancement of our employees.

Together with our investors, we are delighted to be embarking on an exciting new phase in our evolution.

Capstone Infrastructure offers investors access to the infrastructure asset class.

With Capstone Infrastructure Corporation, investors can participate in the infrastructure asset class and benefit from the reliable, long-term cash flow that infrastructure businesses typically generate. Our portfolio includes investments in power infrastructure and utilities…and we intend to grow.

Our investment merits include the following:

• A high quality portfolio of core infrastructure businesses that deliver attractive cash flow to shareholders
• An experienced management team with strong industry and investment community relationships that is committed to driving value for shareholders
• A sizable infrastructure market opportunity as infrastructure investment requirements in Canada and around the world continue to grow
• A unique value proposition for investors by virtue of our focus on core infrastructure, an asset class that typically has a low correlation to equities or bonds

We are committed to managing our businesses responsibly.

As physical assets that provide an essential service, Capstone Infrastructure’s various businesses have a social impact that we endeavour to manage responsibly. We seek to minimize the environmental footprint of our businesses and to demonstrate our commitment to social responsibility.

Cardinal Power, for example, offers financial support to Cardinal in Bloom, an annual beautification program that it initiated for the town of Cardinal that includes flower baskets and gardens tended by volunteers. Every year, Cardinal contributes to Christmas is for Kids, a holiday celebration for local children. The facility also supports local schools, providing bursaries to two high-achieving secondary school students and sponsoring the science and technology award at the local elementary school, to which the facility also donates computers and other educational tools, most recently including funds for the purchase of a SMART board learning tool.

Whitecourt Power, together with its employees, has a history of community involvement, supporting health organizations, schools, children’s sports teams and vital social services in the community of Whitecourt.

Likewise, Erie Shores has emerged as an important community attraction, and the facility’s employees conduct numerous tours for industry associations, students and other stakeholders to help build and broaden knowledge about wind power in Canada. Erie Shores also contributes to a local wind power interpretive centre that showcases the region’s leadership in embracing wind power.

Capstone Infrastructure is enhancing its renewable footprint with the Amherstburg Solar Park, which started commercial operations on June 30, 2011

The Amherstburg Solar Park, which commenced commercial operations in June 2011, is one of the largest solar power facilities in Canada, capable of producing about 37,600 megawatt hours of electricity annually, which is enough to power approximately 4,000 homes.

The project was designed and built by U.S.-based SunPower, a world leader in solar power with a 10-year track record of establishing successful commercial-scale facilities in Spain, Portugal, Germany, Italy and the United States. Upon the start of commercial operations, SunPower will also operate and maintain the facility on Capstone Infrastructure’s behalf under a long-term contract.

The Amherstburg Solar Park is using SunPower’s solar photovoltaic (PV) panels, which generate up to 50% more electricity than conventional solar panels and up to four times as much power as thin-film solar technology. The facility also uses the SunPower^® Tracker T20 system, which follows the sun during the day thereby increasing daily energy production by up to 30% more than fixed-tilt installations.

Notably, this project created about 100 jobs over the construction phase, with a majority of the labour sourced locally. Under the O&M contract, SunPower will be staffing the facility with a plant manager and two remote monitoring technicians. In addition, annual property taxes are expected to be in the range of $200,000, making the Amherstburg Solar Park an important contributor to local community services as well as to a greener environment.

The acquisition of Bristol Water has transformed Capstone Infrastructure's business

With this acquisition, Capstone Infrastructure is now a diversified core infrastructure company with power generation facilities and utility businesses across three geographic areas: Canada, Sweden and the United Kingdom.

As a regulated business, Bristol Water enjoys a secure competitive position. The regulatory framework administered by the United Kingdom Water Services Regulatory Authority provides for the recovery of operating costs and an allowance for a fair return. Bristol Water’s revenues have historically increased in line with the regulatory allowance and feature a real as well as an inflation component, thereby offering a natural inflation hedge. So investors can expect stable, long-term cash flow and value accretion.

As a perpetual business, Bristol Water significantly extends the life of Capstone Infrastructure’s cash flows, thereby helping to mitigate the contribution of Cardinal within our portfolio.

We expect our investment in Bristol Water to deliver a total return within our targeted 10 – 14% range (on a post-tax, post-foreign exchange hedging and on a levered basis and assuming 100% equity funding), which reflects the quality, stability and longevity of Bristol Water’s business.

Our partners in Bristol Water are Sociedad General de Aguas de Barcelona (Agbar), which holds a 30% interest, and ITOCHU Corporation, which holds a 20% interest. 
These partnerships help to position Capstone Infrastructure to participate in the water infrastructure sector globally, where the Organization for Economic Cooperation and Development estimates that the average annual global investment needed to repair, maintain, improve and build new water and wastewater infrastructure will be US$772 billion per year by 2015.

Capstone Infrastructure’s vision is to be the pre-eminent diversified infrastructure investment company in Canada, and the acquisition of Bristol Water brings us one step closer to that goal.

We are committed to diversifying our portfolio across new categories of infrastructure.

On March 31, 2011, Capstone Infrastructure completed its acquisition of a 33.3% interest in a district heating business in Sweden, adding a new category of infrastructure – utilities – to its portfolio.

District heating includes both heat production and heat distribution through underground piping to several buildings or industrial users within a community from a single facility. District heating has a long history in Sweden, where the first district heating system commenced operations in 1949.

Our district heating business consists of 11 regional operations – now named Värmevärden – that collectively run numerous facilities. These facilities burn various fuels, primarily wood and organic waste, to heat water or create steam that is then piped to approximately 4,000 supply points including large residential buildings and industrial customers.

From a customer perspective, district heating is attractive due to its convenience and competitive pricing in relation to other heat options. In addition, district heating makes the most of energy that would otherwise have been lost, such as waste from the forestry industry, waste heat from industry and organic waste.

This is a successful business with proven cash flow and an attractive carbon-neutral profile. This acquisition diversifies our portfolio internationally and by infrastructure category and is expected to contribute to the long-term sustainability of Capstone Infrastructure’s dividends to shareholders.