Fourth Quarter and 2015 Fiscal Year End

Earnings Call June 15, 2015

Safe Harbor Statement This presentation contains "forward-looking statements,” as that term is used in the federal securities laws, about growth and diversification of our end markets; strengthened distribution channels; ongoing new order flow; reduced cash usage; growth in revenue, gross margin and backlog; attaining profitability; achievement of our EBITDA and cash goals; adequacy of liquidity and capital resources; improved operating leverage; new product development; shifts to larger markets for our products; benefits from our cost reduction initiatives; improving conditions with respect to foreign currencies; continued Nasdaq listing; implementation of a new Capstone finance business; collection of reserved accounts receivable; continued opportunities in Russia; growth of key markets; advantages of recent policy developments and compliance with government regulations. Forward-looking statements may be identified by words such as “expects," "objective," "intend," "targeted," "plan" and similar phrases. These forward-looking statements are subject to numerous assumptions, risks and uncertainties described in Capstone's Form 10-K, Form 10-Q and other recent filings with the Securities and Exchange Commission that may cause Capstone's actual results to be materially different from any future results expressed or implied in such statements. Because of the risks and uncertainties, Capstone cautions you not to place undue reliance on these statements, which speak only as of the date of this presentation. Capstone undertakes no obligation, and specifically disclaims any obligation, to release any revisions to any forward-looking statements to reflect events or circumstances after the date of this presentation or to reflect the occurrence of unanticipated events. "Capstone" and "Capstone MicroTurbine" are registered trademarks of Capstone Turbine Corporation. All other trademarks mentioned are the property of their respective owners.

1

FY15 Business In Review

2

• U.S. and European sanctions on Russia in response to the invasion of Ukraine devalue of the ruble and damage the Russian economy, impacting one of Capstone’s largest business partners, BPC Engineering

• A strengthening U.S. economy, combined with sluggish economies in the rest of the world, creates a strong USD versus other major currencies. Capstone sells nearly half of its product internationally

• Crude Oil prices fall from approximately $110 per barrel to $50 per barrel as global production increases and worldwide demand remains flat. U.S. rig count and drilling activity is severely impacted. Going into FY15, Capstone derived approximately 60% of its revenue from the Oil and Gas market

• As a result of this perfect storm of headwinds, annual product revenue drops for the first time since 2007, declining 18%

• Service revenue grows 7% for the year as FPP contracts increase and contribution margins continue to expand with improved product quality

• Strengthening service business did not offset the fall in product revenue, and Capstone does not reach EBITDA breakeven in Q415 as previously anticipated

Macro Drivers and Headwinds

DOWNTURN IN THE OIL MARKETS

STRONGER U.S.

DOLLAR

ONGOING GEOPOLITICAL

TENSIONS

DELAYED ORDERS AND SHIPMENTS

NEW

RUSSIAN SANCTIONS

CORPORATE FOCUS ON REDUCING

COSTS

SUSTAINED LOW COST GAS

ENVIRONMENT

DECLINING GRID

RELIABILITY

NEW GAS FLARING REGULATIONS

NEW TIER 4 EMISSIONS

REQUIREMENTS

47MW

2MW

7MW

28MW

2MW 5MW

3

Q4 Quarter Financial Results • Revenue: $29.9 million

• Product Revenue: $22.5 million

• Service Revenue: $7.3 million – second highest in Company history

• New Orders: $13.7 million – driven by substantial drop in Oil and Gas orders

• Backlog: $165.7 million – Book to Bill ratio of 0.6:1

• Gross Margin: $3.5 million; 12%

• Gross Margin: $5.4 million; 18% – without Q4 adjustments • Inventory turns: 4.0x • DSO 40 days – including BPC A/R reserve

• Cash used in Operations: $6.6 million

• Cash Balance: $32.2 million

C65 units on production floor preparing to ship

4

5

Accounting Adjustments (In millions, except per share data)

Q4FY15 % of Revenue FY2015 % of RevenueGross margin- GAAP 3.5$ 12% 18.3$ 16%Q4 Adjustments

Product shipped to BPC 0.7 0.7 Reserve for waste heat recovery generators 1.2 1.2

Adjusted gross margin - Non-GAAP 5.4$ 18% 20.2$ 17%

Loss from operations- GAAP (14.1)$ -47% (30.9)$ -27%Q4 Adjustments

Product shipped to BPC 0.7 0.7 Reserve for waste heat recovery generators 1.2 1.2 Bad debt reserve increase 7.1 9.9

Adjusted loss from operations - Non-GAAP (5.1)$ -17% (19.1)$ -17%

Net loss- GAAP (14.3)$ -48% (31.5)$ -27%Q4 Adjustments

Product shipped to BPC 0.7 0.7 Reserve for waste heat recovery generators 1.2 1.2 Bad debt reserve increase 7.1 9.9

Adjusted net loss - Non-GAAP (5.3)$ -17% (19.7)$ -17%

Net loss per common share (0.02)$ (0.06)$

2015 2014 2013Revenue 115.5$ 133.1$ 127.6$

Gross Margin (a) 20.2$ 21.7$ 14.4$ Gross Margin % 17% 16% 11%

Loss from operations (a) (19.1)$ (15.3)$ (22.0)$ Operating margin -17% -11% -17%

Net loss (a) (19.7)$ (16.3)$ (22.6)$ Net loss per common share (0.06)$ (0.05)$ (0.07)$

(a) FY2015 amounts are Adjusted Gross Margin, Adjusted Loss from Operations and Adjusted Net Loss, all of which are Non-GAAP measures.

FY15 Year in Review

6

• Total Revenue: $115.5 million – down 13% • Product Revenue: $89.4 million – down 18%

• Service Revenue: $26.1 million – up 7% • Product Backlog: $165.7 million – down 3% • Book to Bill ratio of 0.9:1

• FPP Service Contract Backlog $61.2M – up 30% • Gross Margin: $18.3 million; 16% – flat on 13% decline in revenue

• Gross Margin: $20.2 million; 17% without Q4 adjustments – up 100 basis points

• Cash used in Operations: $23.0 million

Microturbine Combustor

• Contributing to overall gross margin

• Record FPP contract backlog

• 8,500 unit install base provides scalability

• C200/C1000 reliability improving

• Lower product warranty expense

• Improved reliability decreases FPP costs and increases customer satisfaction

Global Customer Footprint

Strengthening Aftermarket

• Supporting 88 Distributors/9 OEM partners in 73 countries

• 3 Capstone service centers globally

• 1,000+ units under FPP and growing

• Establishing regional remanufacturing centers to lower logistical costs and service

• Improved alignment with Sales and Aftermarket

FPP Contract Backlog ($M)

7

$0

$10

$20

$30

$40

$50

$60

$70

$29.7FY 2011

$33.7FY 2012

$35.0FY 2013

$47.2FY 2014

$61.2FY 2015

Bearing Housings

SOUTH AMERICA

NORTH AMERICA

EMEA ASIA

Distributor Employees

Distribution Locations

OEMs

Distributors 31

188

42

3

19

124

41

23

283

15

145

28

TOTAL

88

740

152 41

0 5 1 9

Growing Channel to Market

Note: The above employee and location figures are based on data provided by distributors and have not been independently verified.

8

In millions

$1.5B Opportunity Pipeline

9

Asia, Australia and Russia $177

Europe $195

Africa and Middle East $96

U.S. and Canada $483

Mexico and Latin America $551

Global Updates

United States & Canada

• Received 3MW propane order for 3 high-profile Maui resorts • Groundbreaking C600 order for new OATI Data Center in Minnesota • Positive market indicators from key shale plays • CHP pipeline strong, expect strong bookings in June and July

Europe & Russia

• 2 new C1000 series orders from Sarlin for Finland and Baltics • New sales people added by Turner in the United Kingdom • New Hungarian Distributor developing strong project pipeline • Ruble appears to have stabilized and conditions improving • BPC diversifying business into CHP and in neighboring Belarus and Kazakhstan

Mexico & Latin America

• Shipped 8 x C800 + 16 x C30 for Los Ramones pipeline in Mexico • Shipped first CCHP C1000 to Colombia • Received first order for El Salvador – C200 for CHP • Received C1000 order for St. Croix – Propane CHP • Trained 14 aftermarket service providers in Brazil

10

Global Updates Asia & Australia

• Received 1.6MW order for prime power for an island in Indonesia • New Indonesian government is committed to providing power to every island, village,

and town – Capstone is well positioned • 3.2MW of orders for office buildings in Australia as part of overall green building program • Delivered 1.4MW of turbines for City of Sydney project – high-profile with follow on

order potential

Africa & Middle East

• New Distributors signed for Kuwait and Saudi Arabia • Exhibit at Saudi Aramco Workshop in Saudi Arabia • Distributors identified for Angola and Mozambique • Microturbine Power Systems (MTP) sales training completed with participants from

across the region

11

Policy Update

U.S. Federal Policy

• Bills supporting distributed generation that could be included in whole or in part within comprehensive energy legislation that is expected to be introduced mid-year:

• S.1201 - Clean Energy Grid Integration Act • S.1202 - HEAT Act • S.1213 - Free Market Energy Act of 2015

U.S. State Policy

• New York REV distribution model reform and New York Prize for microgrids • Energy resiliency policies/funding • Clean Power Plan compliance (EPA rule to be published in August) • California SGIP reform proceeding • AB674 and Utility Distributed Resource Planning proceeding • Midwest states creating new CHP incentives/consideration in energy policies

Global Policy

• EU Energy Union Framework focuses on energy efficiency, including CHP • UK industry decarburization roadmaps focus on heat and CO2 emission intensive sectors • Paris Climate Conference • World Bank ‘Zero Routine Flaring by 2030’ • Green Building Initiatives

12

13

Product Development

• Continuing to complete additional C200 reliability and performance improvement projects

• In development of new C200/C1000 features and benefits for broader market adoption, lower cost of ownership and reduced project installation costs

• Successfully modified products to meet new EU grid certifications (VDE, BDEW and CEI)

• Working to finalize an advanced battery technology solution (lithium iron phosphate & lithium titanate) to handle heavy cyclical load applications (drill rigs & pump jacks)

• Continue to drive improvements to liquid fuel product to support marine and truck markets

Research & Development

• New C250 continues to run well in the development test lab with next step field trials

• Proved out bi-metal bonding process (tensile strength) for C370, but unsuccessful with first attempt at high-speed operation of bi-metal turbine wheel

• DOE extended C370 design contract to September 2015 to support a second attempt at successful operation of the bi-metal turbine wheel

• Selected by the DOE’s Advanced Manufacturing Office to present C370 program at a Peer Review of key national R&D projects

• A lower cost AFA recuperator material to finish life testing and start field trials

Product Development and R&D

14

FY16 Business Strategy

• Flatten organizational structure to lower costs of $2M annually (after severance) and increase adaptability, as well as foster a culture of greater innovation and creativity

• Focus on geographical diversification by driving additional revenue from Mexico, South America, Africa, Middle East and Asia to offset slowdown in Russia

• Increase diversification vertically by increasing efforts to speed up the adoption rates in the Data Center, Truck and Marine markets to reduce impact of Oil and Gas vertical slowdown

• Continue to mature and educate our global distribution channel with a goal of adding 100 new sales people into the channel by December 31, 2015

• Accelerate service business growth to better leverage business and improve overall margins

• Continue to work with Russian distributor BPC on a COD basis while implementing repayment plan to systematically reduce reserved A/R balance each quarter

• Improve inventory management to reduce cash usage and help preserve cash position

FY16 Management Expectations

• Expect Q1 revenue to increase Y/Y due to crude oil and ruble stabilization

• Return to Y/Y double digit revenue growth and expand gross margins by 200 basis points

• Achieve EBITDA breakeven milestone in late FY16 on growing revenue and margins

FY16 Strategy & Expectations

FY16 Market Assumptions • Stabilization of the Russian market and the ruble creates a rebound in BPC’s business

• Oil prices continue to recover gradually and Oil and Gas activity sequentially increases each quarter as orders return from the U.S. shale plays as well as internationally

• The U.S. market for CHP continues to expand, fueled by sustained low natural gas prices and the continual maturation of Capstone’s global distribution network

• The lack of a FY16 price increase and strengthening foreign currencies will help drive additional international demand, ahead of FY17 expected price increases

• The new energy policy in Mexico drives additional revenue in both Oil and Gas as well as CHP verticals making Mexico one of Capstone’s largest markets

• FY15 efforts to geographically diversify the business should drive additional new record revenues from Central America, South America, Africa and the Middle East

• New Tier 4 emissions standards and new gas flaring regulations drive additional opportunities for Capstone and its 88 distribution partners

15

Long Term Goals

16

PAST PRESENT(1) 1-3

YEARS 3+

YEARS

Gross Margin -24% 17% 25% 35%

Operating Expenses 162% 34% 25% 20%

Operating Margin -185% -17% 5% 15%

Critical Power Market 0% 8% 12% 15%

Mobile Power Market 0% 1% 5% 10%

New Product Offerings C30 C65

C200 C1000 C250 C370

Financing Solutions None 3rd Party Capstone JV Capstone Finance

Positive operating margins driven by improved gross margins and operating leverage.

(1) Present margins exclude $1.2 million inventory charge, $0.7 million of product shipped to BPC and $9.9 million increase in bad debt reserves.

17

Appendix

5 Year - Financial Results

$0

$25

$50

$75

$100

$125

$150

$82FY 2011

$109FY 2012

$128FY 2013

$133FY 2014

$116FY 2015

Revenue (in millions)

-5%

0%

5%

10%

15%

20%

-1%FY 2011

5%FY 2012

11%FY 2013

16%FY 2014

16%FY 2015

Gross Margin

$0

$50

$100

$150

$200

$106FY 2011

$139FY 2012

$149FY 2013

$172FY 2014

$166FY 2015

Product Backlog (in millions)

0%

10%

20%

30%

40%

50%

41%FY 2011

34%FY 2012

28%FY 2013

28%FY 2014

43%FY 2015

OpEx as % of Revenue

18

Segment Revenues ($M)

$0

$25

$50

$75

$100

$32FY 2011

$50FY 2012

$84FY 2013

$68FY 2014

$64FY 2015

U.S. & Mexico

Asia & Australia

$0

$20

$40

$60

$80

$36FY 2011

$47FY 2012

$26FY 2013

$41FY 2014

$29FY 2015

Europe & Russia

Rest of World*

$0

$5

$10

$15

$20

$12FY 2011

$8FY 2012

$14FY 2013

$16FY 2014

$18FY 2015

$0

$5

$10

$15

$20

$2FY 2011

$4FY 2012

$4FY 2013

$8FY 2014

$5FY 2015

*Rest of World includes Africa, Middle East and South America 19

Significant Operating Leverage

Operating expenses have remained stable over time despite significant revenue growth. 20

www.capstoneturbine.com

NASDAQ: CPST