Exhibit 99.4















Financial Statements

(Expressed in United States
dollars)



cummins
westport inc.



Years ended December 31, 2013
and 2012



































INDEPENDENT
AUDITORS’ REPORT





To the Shareholders of Cummins Westport Inc.



We have audited the accompanying
financial statements of Cummins Westport Inc. which comprise the balance sheets as at December 31, 2013 and December 31, 2012,
the statements of earnings and comprehensive income, stockholders’ equity, and cash flows for the years then ended, and notes,
comprising a summary of significant accounting policies and other explanatory information.

Management’s Responsibility
for the Financial Statements

Management is responsible for the
preparation and fair presentation of these financial statements in accordance with U.S. generally accepted accounting principles,
and for such internal control as management determines is necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted
auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures
to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment,
including the assessment of the risks of material misstatement of thefinancial statements, whether due to fraud or error.
In making those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation
of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the entity’s internal control. An audit
also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence
we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion.









Opinion

In our opinion, the financial statements
present fairly, in all material respects, the financial position of Cummins Westport Inc. as at December 31, 2013 and December
31, 2012, and its results of operations and its cash flows for the years then ended in accordance with U.S. generally accepted
accounting principles.



//s// KPMG LLP



Chartered Accountants



March 26, 2014

Vancouver, Canada





























CUMMINS
WESTPORT INC.

Balance Sheets

(Expressed in United States
dollars)



December 31, 2013 and 2012





|                                                                                                                      |  |   | 2013        |   |  |   | 2012        |  
|--------------------------------------------------------------------------------------------------------------------- |  | - | ----------- | - |  | - | ----------- | -
|                                                                                                                      |  |   |             |   |  |   |             |  
|Assets                                                                                                                |  |   |             |   |  |   |             |  
|                                                                                                                      |  |   |             |   |  |   |             |  
|Current assets:                                                                                                       |  |   |             |   |  |   |             |  
|Cash and cash equivalents                                                                                             |  | $ | 73,736,396  |   |  | $ | 44,370,492  |  
|Accounts receivable from Cummins Inc. (note 8)                                                                        |  |   | 1,768,715   |   |  |   | —           |  
|Other accounts receivable                                                                                             |  |   | 1,669,014   |   |  |   | 983,204     |  
|Income tax receivable                                                                                                 |  |   | 807,462     |   |  |   | 6,012,039   |  
|Prepaid expenses and other current assets                                                                             |  |   | 209,891     |   |  |   | 225,278     |  
|Deferred tax asset (note 6)                                                                                           |  |   | 13,957,861  |   |  |   | 7,303,687   |  
|                                                                                                                      |  |   | 92,149,339  |   |  |   | 58,894,700  |  
|Equipment, net of accumulated amortization of                                                                         |  |   |             |   |  |   |             |  
|$615,608 (2012 - $430,611)                                                                                            |  |   | 1,096,154   |   |  |   | 872,653     |  
|Deferred tax asset (note 6)                                                                                           |  |   | 21,698,275  |   |  |   | 9,786,173   |  
|                                                                                                                      |  |   |             |   |  |   |             |  
|                                                                                                                      |  | $ | 114,943,768 |   |  | $ | 69,553,526  |  
|                                                                                                                      |  |   |             |   |  |   |             |  
|Liabilities and Stockholders’
    Equity                                                                              |  |   |             |   |  |   |             |  
|                                                                                                                      |  |   |             |   |  |   |             |  
|Current liabilities:                                                                                                  |  |   |             |   |  |   |             |  
|Accounts payable and accrued liabilities                                                                              |  | $ | 4,151,525   |   |  | $ | 4,256,015   |  
|Accounts payable to Westport Innovations Inc. (note 8)                                                                |  |   | 3,620,547   |   |  |   | 2,169,932   |  
|Accounts payable to Cummins Inc. (note 8)                                                                             |  |   | —           |   |  |   | 2,974,906   |  
|Current portion of warranty liability (note 3)                                                                        |  |   | 28,481,977  |   |  |   | 13,317,134  |  
|Current portion of deferred revenue (note 4)                                                                          |  |   | 5,477,908   |   |  |   | 3,861,683   |  
|                                                                                                                      |  |   | 41,731,957  |   |  |   | 26,579,670  |  
|                                                                                                                      |  |   |             |   |  |   |             |  
|Long-term liability (note 6)                                                                                          |  |   | 2,000,147   |   |  |   | 1,311,560   |  
|Warranty liability (note 3)                                                                                           |  |   | 39,086,788  |   |  |   | 17,500,794  |  
|Deferred revenue (note 4)                                                                                             |  |   | 17,814,859  |   |  |   | 9,967,875   |  
|                                                                                                                      |  |   | 100,633,751 |   |  |   | 55,359,899  |  
|Stockholders’ equity (note 7):                                                                                        |  |   |             |   |  |   |             |  
|Common stock, $0.01 par value; 100,000 shares authorized;
2013 - 87,594 (2012 - 87,594) shares issued and outstanding |  |   | 876         |   |  |   | 876         |  
|Additional paid-in capital                                                                                            |  |   | 43,796,562  |   |  |   | 43,796,562  |  
|Deficit                                                                                                               |  |   | (29,487,421 | ) |  |   | (29,603,811 | )
|                                                                                                                      |  |   | 14,310,017  |   |  |   | 14,193,627  |  
|                                                                                                                      |  |   |             |   |  |   |             |  
|                                                                                                                      |  | $ | 114,943,768 |   |  | $ | 69,553,526  |  



See accompanying notes to financial statements.







CUMMINS
WESTPORT INC.

Statements of Earnings and Comprehensive
Income

(Expressed in United States
dollars)



Years ended December 31, 2013 and 2012



|                                        |  |   | 2013        |   |  |   | 2012        |  
|--------------------------------------- |  | - | ----------- | - |  | - | ----------- | -
|Revenue:                                |  |   |             |   |  |   |             |  
|Product revenue                         |  | $ | 256,593,517 |   |  | $ | 158,884,510 |  
|Parts revenue                           |  |   | 49,638,619  |   |  |   | 36,274,094  |  
|Other revenue                           |  |   | 4,418,829   |   |  |   | 2,857,040   |  
|Interest                                |  |   | 116,696     |   |  |   | 530,289     |  
|                                        |  |   | 310,767,661 |   |  |   | 198,545,933 |  
|                                        |  |   |             |   |  |   |             |  
|Cost of revenue and expenses (note 8):  |  |   |             |   |  |   |             |  
|Cost of product revenue                 |  |   | 204,871,597 |   |  |   | 105,727,243 |  
|Cost of parts revenue                   |  |   | 28,070,904  |   |  |   | 21,317,164  |  
|Cost of other revenue                   |  |   | 13,460,182  |   |  |   | 9,531,031   |  
|Research and development (note 5)       |  |   | 21,522,123  |   |  |   | 12,113,959  |  
|Marketing                               |  |   | 17,838,627  |   |  |   | 12,541,152  |  
|General and administrative              |  |   | 1,347,865   |   |  |   | 1,416,890   |  
|Foreign exchange gain                   |  |   | (7,077      | ) |  |   | (18,290     | )
|Interest and charges                    |  |   | 421,607     |   |  |   | 320,475     |  
|Amortization                            |  |   | 184,997     |   |  |   | 151,777     |  
|                                        |  |   | 287,710,825 |   |  |   | 163,101,401 |  
|                                        |  |   |             |   |  |   |             |  
|Earnings before income taxes            |  |   | 23,056,836  |   |  |   | 35,444,532  |  
|                                        |  |   |             |   |  |   |             |  
|Income tax recovery (expense) (note 6): |  |   |             |   |  |   |             |  
|Current                                 |  |   | (24,600,279 | ) |  |   | (16,362,336 | )
|Deferred                                |  |   | 18,566,276  |   |  |   | 6,516,578   |  
|                                        |  |   | (6,034,003  | ) |  |   | (9,845,758  | )
|                                        |  |   |             |   |  |   |             |  
|Net earnings and comprehensive income   |  | $ | 17,022,833  |   |  | $ | 25,598,774  |  



See accompanying notes to financial statements.











CUMMINS
WESTPORT INC.

Statements of Stockholders’
Equity

(Expressed in United States
dollars)



Years ended December 31, 2013 and 2012



|                           |  | Common stock |        | Additional paid-in |  |         |     |        
|-------------------------- |  | ------------ | ------ | ------------------ |  | ------- | --- | -------
|                           |  | Number       |        | Amount             |  | capital |     | Deficit
|                           |  |              |        |                    |  |         |     |        
|Balance, December 31, 2011 |  |              | 87,594 |                    |  |         | 876 |        
|                           |  |              |        |                    |  |         |     |        
|Dividends declared         |  |              | —      |                    |  |         | —   |        
|                           |  |              |        |                    |  |         |     |        
|Net earnings               |  |              | —      |                    |  |         | —   |        
|                           |  |              |        |                    |  |         |     |        
|Balance, December 31, 2012 |  |              | 87,594 |                    |  |         | 876 |        
|                           |  |              |        |                    |  |         |     |        
|Dividends declared         |  |              | —      |                    |  |         | —   |        
|                           |  |              |        |                    |  |         |     |        
|Net earnings               |  |              | —      |                    |  |         | —   |        
|                           |  |              |        |                    |  |         |     |        
|Balance, December 31, 2013 |  |              | 87,594 |                    |  | $       | 876 |        
|                           |  |              |        |                    |  |         |     |        

See accompanying notes to financial statements.











CUMMINS
WESTPORT INC.

Statements of Cash Flows

(Expressed in United States
dollars)



Years ended December 31, 2013 and 2012



|                                                        |  |   | 2013        |   |  |   | 2012        |  
|------------------------------------------------------- |  | - | ----------- | - |  | - | ----------- | -
|Cash provided by (used in):                             |  |   |             |   |  |   |             |  
|                                                        |  |   |             |   |  |   |             |  
|Operating:                                              |  |   |             |   |  |   |             |  
|Net earnings                                            |  | $ | 17,022,833  |   |  | $ | 25,598,774  |  
|Items not involving cash:                               |  |   |             |   |  |   |             |  
|Amortization                                            |  |   | 184,997     |   |  |   | 151,777     |  
|Unrealized foreign exchange                             |  |   | (41,376     | ) |  |   | 15,546      |  
|Deferred income tax recovery                            |  |   | (18,566,276 | ) |  |   | (6,516,578  | )
|Changes in non-cash working capital items:              |  |   |             |   |  |   |             |  
|Accounts receivable from Cummins Inc.                   |  |   | (1,768,715  | ) |  |   | 3,658,351   |  
|Income tax receivable                                   |  |   | 5,204,577   |   |  |   | (6,012,039  | )
|Other accounts receivable                               |  |   | (685,810    | ) |  |   | 75,112      |  
|Prepaid expenses and other current assets               |  |   | 15,387      |   |  |   | (135,863    | )
|Accounts payable and accrued liabilities                |  |   | 584,097     |   |  |   | 546,769     |  
|Income tax payable                                      |  |   | —           |   |  |   | (1,393,893  | )
|Accounts payable to Westport Innovations Inc.           |  |   | (15,307     | ) |  |   | 348,471     |  
|Accounts payable to Cummins Inc.                        |  |   | (3,463,547  | ) |  |   | 2,542,144   |  
|Deferred revenue                                        |  |   | 9,463,209   |   |  |   | 3,710,829   |  
|Warranty liability                                      |  |   | 36,750,837  |   |  |   | 10,988,043  |  
|                                                        |  |   | 44,684,906  |   |  |   | 33,577,443  |  
|                                                        |  |   |             |   |  |   |             |  
|Financing:                                              |  |   |             |   |  |   |             |  
|Dividend paid                                           |  |   | (14,951,880 | ) |  |   | (45,200,000 | )
|                                                        |  |   |             |   |  |   |             |  
|Investments:                                            |  |   |             |   |  |   |             |  
|Loan receivable from Cummins Inc.                       |  |   | —           |   |  |   | 19,408,872  |  
|Loan receivable from Westport Innovations Inc.          |  |   | —           |   |  |   | 19,408,872  |  
|Purchase of equipment                                   |  |   | (408,497    | ) |  |   | (212,386    | )
|                                                        |  |   | (408,497    | ) |  |   | 38,605,358  |  
|                                                        |  |   |             |   |  |   |             |  
|Effect of foreign currency on cash and cash equivalents |  |   | 41,376      |   |  |   | (15,546     | )
|                                                        |  |   |             |   |  |   |             |  
|Increase in cash and cash equivalents                   |  |   | 29,365,905  |   |  |   | 26,967,255  |  
|                                                        |  |   |             |   |  |   |             |  
|Cash and cash equivalents, beginning of year            |  |   | 44,370,492  |   |  |   | 17,403,237  |  
|                                                        |  |   |             |   |  |   |             |  
|Cash and cash equivalents, end of year                  |  | $ | 73,736,396  |   |  | $ | 44,370,492  |  
|                                                        |  |   |             |   |  |   |             |  
|Supplementary information:                              |  |   |             |   |  |   |             |  
|Interest received, net                                  |  | $ | 116,696     |   |  | $ | 209,814     |  
|Income taxes paid                                       |  |   | 26,041,482  |   |  |   | 15,507,564  |  
|Dividends declared but not yet paid                     |  |   | 1,954,563   |   |  |   | 1,731,048   |  
|                                                        |  |   |             |   |  |   |             |  



See accompanying notes to financial statements.









CUMMINS
WESTPORT INC.

Notes to Financial Statements

(Expressed in United States
dollars)



Years ended December 31, 2013 and 2012






| | 1. | Operations:
| | -- | -----------

Cummins Westport Inc. (the
Company) was formed under the terms of a joint venture agreement (the Agreement) dated March 7, 2001, subsequently revised on January
1, 2004 (the revised JVA), between Cummins Inc. (Cummins) and Westport Innovations Inc. (Westport) to develop, support and market
a comprehensive product line of low-emission, high performance engines and ancillary products using gaseous hydrocarbon fuels which
incorporate spark ignition and other proprietary intellectual property developed by Cummins and Westport. The Company is incorporated
under the laws of the State of Delaware.

On February 20, 2012, Cummins
and Westport amended the revised JVA to provide for, among other things, clarification concerning the scope of products to be
sold by the Company. In addition, the parties have revised certain economic terms of the revised JVA including profit distributions
to the parties.

The Company will focus future
product development on North American markets including engines for on-road applications between the displacement range of 5.9
litres through 12 litres, and to have these engines manufactured in Cummins North American plants.

The term of the joint venture
will now end on December 31, 2021 and can be terminated under certain circumstances by either party before the end of the term.



| | 2. | Significant accounting policies:
| | -- | --------------------------------

| | (a) | Basis of presentation:
| | --- | ----------------------

These financial statements
have been prepared in accordance with accounting principles generally accepted in the United States of America to present the assets,
liabilities, revenues and expenses of the Company and do not include any assets owned or liabilities held by Cummins or Westport
including any used by the shareholders in the provision of services to or production of goods for the Company.

Continuing operations of the
Company depend on the continuation of operational and manufacturing support from its shareholders when required.

These financial statements
were approved by the Board of Directors on March 26, 2014 and events subsequent to the balance sheet date, if any, have been disclosed
in these financial statements through this date.







CUMMINS
WESTPORT INC.

Notes to Financial Statements

(Expressed in United States dollars)



Years ended December 31, 2013 and 2012








| | 2. | Significant accounting policies (continued):
| | -- | --------------------------------------------

| | (b) | Use of estimates:
| | --- | -----------------

The preparation of financial
statements in conformity with accounting principles generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant
areas requiring the use of management estimates include determination of the product and parts warranty liability and the valuation
allowance for deferred income tax assets. Actual amounts may differ from the estimates applied in the preparation of these financial
statements.

| | (c) | Cash equivalents:
| | --- | -----------------

Cash equivalents are highly
liquid investments, such as term deposits with major financial institutions, having a term to maturity of three months or less
at the date of acquisition that are readily convertible to specified amounts of cash. Cash equivalents are considered as held for
trading and recorded at fair value with changes in fair value recognized in the statement of earnings.

| | (d) | Equipment:
| | --- | ----------

Equipment is recorded at cost.
Amortization is recorded commencing when the equipment is placed into service.



|Asset                            | Basis         | Years
|-------------------------------- | ------------- | -----
|                                 |               |      
|Production and testing equipment | Straight-line | 3 - 8
|Computer equipment               | Straight-line | 3    
|                                 |               |      



| | (e) | Warranty liability:
| | --- | -------------------

The Company provides warranty
coverage on products sold for a period ending two years from the date the products are put into service by customers. Warranty
liability represents the Company’s best estimate of warranty costs expected to be incurred during the warranty period. Furthermore,
the current portion of warranty liability represents the Company’s best estimate of the costs to be incurred in the next
twelve-month period. The Company uses historical failure rates and cost to repair defective products together with known information
to estimate the warranty liability. New product launches require a greater use of judgment in developing estimates until claims
experience becomes available. Product specific experience is typically available four or five quarters after product launch, with
a clear experience trend not evident until eight to twelve quarters after launch.







CUMMINS
WESTPORT INC.

Notes to Financial Statements

(Expressed in United States
dollars)



Years ended December 31, 2013 and 2012








| | 2. | Significant accounting policies (continued):
| | -- | --------------------------------------------

| | (e) | Warranty liability (continued):
| | --- | -------------------------------

The Company records warranty
expense for new products upon shipment using a factor based upon historical experience from previous engine generations in the
first year, a blend of actual product and historical experience in the second year and product specific experience thereafter.
The Company’s product warranty accrual reflects management’s best estimate of probable liability under its product
warranties. Periodically, the Company performs an analysis assessing the appropriateness of the outstanding warranty balance, and
adjustments to the estimated liability are made as considered necessary and reflected in results of operations in the period such
adjustments are determined. The ultimate amount payable by the Company and the timing will depend on actual failure rates and cost
to repair failures of its products. Since a number of the Company’s products are new in the market, historical data may not
necessarily reflect actual costs to be incurred and may result in significant fluctuations in the warranty liability.

| | (f) | Extended warranty:
| | --- | ------------------

The Company sells extended
warranty contracts that provide coverage in addition to the basic two-year coverage. Proceeds from the sale of these contracts
are deferred and amortized over the extended warranty period commencing at the end of the basic warranty period. On a periodic
basis, management reviews the estimated warranty costs expected to be incurred related to these contracts and recognizes a loss
to the extent such costs exceed the related deferred revenue.

| | (g) | Revenue recognition:
| | --- | --------------------

Product and parts revenue is
recognized when the products are shipped and title passes to the customer. Title typically transfers when products are shipped
from Cummins’ manufacturing facilities. Amounts received in advance of the revenue recognition criteria being met are recorded
as deferred revenue.

| | (h) | Cost of product revenue:
| | --- | ------------------------

Cost of product revenue includes
the cost to purchase the engine from Cummins, the cost to sell engines, and warranty costs.

| | (i) | Cost of parts revenue:
| | --- | ----------------------

Cost of parts revenue includes
the standard cost of the aftermarket engine parts as determined by Cummins, a reasonable selling and administrative cost that is
defined in the joint venture agreement, and warranty costs.







CUMMINS
WESTPORT INC.

Notes to Financial Statements

(Expressed in United States
dollars)



Years ended December 31, 2013 and 2012








| | 2. | Significant accounting policies (continued):
| | -- | --------------------------------------------

| | (j) | Research and development expenses:
| | --- | ----------------------------------

Research and development expenses
are expensed when incurred. Government grants received to fund research and development expenses are recognized as a reduction
in research and development expenses when received or receivable. Certain government grants are repayable only on the occurrence
of specified future events. If such events do not occur, no payment would be required. The liability to repay these government
grants is recognized during the period in which conditions arise that would cause the government grants to be repayable.

| | (k) | Foreign currency translation:
| | --- | -----------------------------

The functional currency of
the Company’s operations is the United States dollar. Assets and liabilities denominated in foreign currencies are translated
at rates in effect on the balance sheet date. Revenue and expenses denominated in foreign currencies are translated at the rate
in effect on the transaction date. Gains and losses on translation are included in the statement of earnings and comprehensive
income for the period.

| | (l) | Income taxes:
| | --- | -------------

Income taxes are accounted
for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable
to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases,
and operating loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred
income tax assets and liabilities of a change in tax rates is recognized in income taxes in the period that includes the enactment
date. To the extent that the realization of deferred tax assets is not considered to be more likely than not, a valuation allowance
is provided.

The Company measures a tax
uncertainty at the largest amount that is more likely than not to be upheld. In cases where the Company is charged interest and
penalties on uncertain tax positions which do not meet the recognition criteria, the Company includes these in interest expense
and other operating expense, respectively.









CUMMINS
WESTPORT INC.

Notes to Financial Statements

(Expressed in United States
dollars)



Years ended December 31, 2013 and 2012








| | 3. | Warranty liability:
| | -- | -------------------

Changes in the product warranty
accrual for the years ended December 31, 2013 and 2012 were as follows:



|                              |  | 2013 |             | 2012
|----------------------------- |  | ---- | ----------- | ----
|                              |  |      |             |     
|Balance, beginning of year    |  | $    | 30,817,928  |     
|                              |  |      |             |     
|Payments made                 |  |      | (28,530,732 | )   
|Accrual for engines sold      |  |      | 33,854,862  |     
|Warranty valuation adjustment |  |      | 31,426,707  |     
|                              |  |      |             |     
|Balance, end of year          |  |      | 67,568,765  |     
|                              |  |      |             |     
|Less: current portion         |  |      | 28,481,977  |     
|                              |  |      |             |     
|Non-current portion           |  | $    | 39,086,788  |     



During 2013, the Company experienced
increased costs to repair product defects. As a result, an increase in the overall warranty liability was recognized, which was
primarily related to the estimated base warranty liability.



| | 4. | Deferred revenue:
| | -- | -----------------

Deferred revenue represents
amounts charged to customers for extended warranty coverage contracts that have yet to be recognized as revenue. Changes in deferred
revenue balances for the years ended December 31, 2013 and 2012 are as follows:



|                                                      |  | 2013 |            | 2012
|----------------------------------------------------- |  | ---- | ---------- | ----
|                                                      |  |      |            |     
|Balance at the beginning of the year                  |  | $    | 13,829,558 |     
|Add: extended warranty coverage and other adjustments |  |      | 13,119,309 |     
|Less: revenue recognized during the year              |  |      | (3,656,100 | )   
|                                                      |  |      |            |     
|Balance at the end of the year                        |  |      | 23,292,767 |     
|                                                      |  |      |            |     
|Less: current portion                                 |  |      | 5,477,908  |     
|                                                      |  |      |            |     
|Non-current portion                                   |  | $    | 17,814,859 |     









CUMMINS
WESTPORT INC.

Notes to Financial Statements

(Expressed in United States
dollars)



Years ended December 31, 2013 and 2012








| | 5. | Research and development expenses:
| | -- | ----------------------------------

Research and development expenses
are recorded net of government program funding received or receivable. For the years ended December 31, 2013 and 2012, the
following research and development expenses had been incurred and program funding received or receivable:



|                                      |  | 2013 |            | 2012
|------------------------------------- |  | ---- | ---------- | ----
|                                      |  |      |            |     
|Research and development expenses     |  | $    | 22,567,558 |     
|Government funding                    |  |      | (1,045,435 | )   
|                                      |  |      |            |     
|Net research and development expenses |  | $    | 21,522,123 |     



Government funding was comprised
of funding mainly from the California Energy Commission and National Renewable Energy Laboratory.



| | 6. | Income taxes:
| | -- | -------------

| | (a) | The Company’s income tax recovery differs from
that calculated by applying the combined United States federal and state statutory rate of 37.34% (2012 - 36.78%) as follows:
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                     |  | 2013 |            | 2012
|---------------------------------------------------- |  | ---- | ---------- | ----
|                                                     |  |      |            |     
|Earnings before income taxes                         |  | $    | 23,056,836 |     
|                                                     |  |      |            |     
|Expected income tax expense                          |  | $    | (8,609,422 | )   
|                                                     |  |      |            |     
|Reduction (increase) in income taxes resulting from: |  |      |            |     
|Non-deductible expenses                              |  |      | (50,941    | )   
|Difference in tax rates                              |  |      | 262,830    |     
|Research and development tax credits                 |  |      | 2,643,593  |     
|Effect of tax uncertainties                          |  |      | (424,741   | )   
|Other                                                |  |      | 144,678    |     
|                                                     |  |      | 2,575,419  |     
|                                                     |  |      |            |     
|Total income tax expense                             |  | $    | (6,034,003 | )   









CUMMINS
WESTPORT INC.

Notes to Financial Statements

(Expressed in United States
dollars)



Years ended December 31, 2013 and 2012








| | 6. | Income taxes (continued):
| | -- | -------------------------

| | (b) | The tax effect of temporary differences that give
rise to significant portions of deferred tax assets (liabilities) at December 31, 2013 and 2012 are as follows:
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------



|                             |  | 2013 |            | 2012
|---------------------------- |  | ---- | ---------- | ----
|                             |  |      |            |     
|Deferred income tax assets:  |  |      |            |     
|Warranty liability           |  | $    | 26,120,689 |     
|Deferred revenue             |  |      | 8,697,929  |     
|Other                        |  |      | 837,518    |     
|                             |  |      |            |     
|                             |  | $    | 35,656,136 |     
|                             |  |      |            |     
|Allocated as follows:        |  |      |            |     
|Current deferred tax asset   |  | $    | 13,957,861 |     
|Long-term deferred tax asset |  |      | 21,698,275 |     
|                             |  |      |            |     
|                             |  | $    | 35,656,136 |     



In assessing the realizability
of deferred income tax assets, management considers whether it is more likely than not that some portion or all of the deferred
income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation
of future taxable income during the periods in which those differences become deductible.

The Company has generated taxable
income for the past seven years. Management believes it is more likely than not that all of the benefits of currently available
tax deductions will be realized in future years as a result of expected earnings. Therefore, at December 31, 2013, the Company
has recognized a deferred tax asset related to all of the benefits expected to be realized. No valuation allowance was required
as at December 31, 2013.

Tax years subsequent to December 31,
2008, remain open for examination by the Internal Revenue Service.









CUMMINS
WESTPORT INC.

Notes to Financial Statements

(Expressed in United States
dollars)



Years ended December 31, 2013 and 2012








| | 6. | Income taxes (continued):
| | -- | -------------------------

| | (c) | Long-term liability is tax provision which represents
the Company’s estimate of tax uncertainties associated with tax positions previously taken with respect to the Company’s
tax returns. A reconciliation of the change in the reserve for unrecognized tax benefits is as follows:
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                               |  | 2013 |           | 2012
|------------------------------ |  | ---- | --------- | ----
|                               |  |      |           |     
|Balance, beginning of year     |  | $    | 1,311,560 |     
|Additions                      |  |      | 1,088,586 |     
|Reductions                     |  |      | (400,000  | )   
|Settlements and re-assessments |  |      | —         |     
|                               |  |      |           |     
|                               |  | $    | 2,000,146 |     



The Company accrued interest
and penalties of $116,862 for the year ended December 31, 2013 related to these tax uncertainties.



| | 7. | Stockholders’ equity:
| | -- | ---------------------

| | (a) | Authorized:
| | --- | -----------

| |  | 100,000 common shares, voting, par value $0.01
| |  | ----------------------------------------------

| |  | 100,000 preferred shares, voting convertible, redeemable,
non-participating, par value $0.01
| |  | --------------------------------------------------------------------------------------------

| | (b) | Common shares:
| | --- | --------------

| |  | As at December 31, 2013,the Company has 87,594 issued and outstanding common shares, 50% of which are held by Westport and 50% by Cummins.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------

| | (c) | Preferred shares:
| | --- | -----------------

| |  | As at December 31, 2013 and 2012, the Company had
no issued or outstanding preferred shares.
| |  | --------------------------------------------------------------------------------------------









CUMMINS
WESTPORT INC.

Notes to Financial Statements

(Expressed in United States
dollars)



Years ended December 31, 2013 and 2012








| | 8. | Related party transactions:
| | -- | ---------------------------

| | (a) | Major expenses:
| | --- | ---------------

The majority of the Company’s
expenses including cost of product and parts revenue, research and development, general and administrative and marketing expenses
are incurred by Westport and Cummins and allocated to the Company pursuant to the revised JVA. The costs allocated by the respective
companies are as follows:



|2013                       |  | Westport |           | Cummins |  | Total
|-------------------------- |  | -------- | --------- | ------- |  | -----
|                           |  |          |           |         |  |      
|Equipment expenditures     |  | $        | —         |         |  | $    
|Cost of product revenue    |  |          | —         |         |  |      
|Cost of parts revenue      |  |          | —         |         |  |      
|Cost of other revenue      |  |          | —         |         |  |      
|Research and development   |  |          | 204,878   |         |  |      
|Marketing                  |  |          | 3,418,194 |         |  |      
|General and administrative |  |          | 1,179,092 |         |  |      
|Interest and charges       |  |          | 118,043   |         |  |      
|                           |  |          |           |         |  |      
|                           |  | $        | 4,920,207 |         |  | $    



|2012                       |  | Westport |           | Cummins |  | Total
|-------------------------- |  | -------- | --------- | ------- |  | -----
|                           |  |          |           |         |  |      
|Equipment expenditures     |  | $        | —         |         |  | $    
|Cost of product revenue    |  |          | —         |         |  |      
|Cost of parts revenue      |  |          | —         |         |  |      
|Cost of other revenue      |  |          | —         |         |  |      
|Research and development   |  |          | 222,598   |         |  |      
|Marketing                  |  |          | 2,830,476 |         |  |      
|General and administrative |  |          | 1,006,525 |         |  |      
|Interest and charges       |  |          | 113,991   |         |  |      
|                           |  |          |           |         |  |      
|                           |  | $        | 4,173,590 |         |  | $    



| | (b) | Due from (to) Cummins:
| | --- | ----------------------

As at December 31, 2013,
net amounts due from Cummins total $1,768,715 (2012 - payable to Cummins of $2,974,906).

Accounts receivable or payable
arise from product and parts sales net of reimbursable expenses. The amounts are non-interest bearing, unsecured and have no fixed
terms of repayment. The amounts are generally settled in the month following the month in which the receivable or payable is incurred.







CUMMINS
WESTPORT INC.

Notes to Financial Statements

(Expressed in United States
dollars)



Years ended December 31, 2013 and 2012








| | 8. | Related party transactions (continued):
| | -- | ---------------------------------------

| | (b) | Due from (to) Cummins (continued):
| | --- | ----------------------------------

Prior to December 15, 2012,
the Company has advanced funds to Cummins Inc. under a demand loan agreement with interest accruing monthly, and was calculated
using the three-month Prime Corporate Paper rate. For the year ended December 31, 2012, the Company charged interest of $228,901
to Cummins. This loan was fully repaid on December 15, 2012.

| | (c) | Due to Westport:
| | --- | ----------------

As at December 31, 2013, net
amounts due to Westport total $3,620,547 (2012 - $2,169,932).

The amounts payable to Westport
relate to costs incurred by Westport on behalf of the Company. The amounts are generally reimbursed by the Company to Westport
in the month following the month in which the payable is incurred.

Prior to December 15, 2012,
the Company has advanced funds to Westport under a demand loan agreement with interest accruing monthly, and was calculated using
the three-month Prime Corporate Paper rate. For the year ended December 31, 2012, the Company charged interest of $228,901 to Westport.
This loan was fully repaid on December 15, 2012.



| | 9. | Financial instruments:
| | -- | ----------------------

| | (a) | Fair values:
| | --- | ------------

Financial instruments of the
Company include cash and cash equivalents, accounts receivable, other accounts receivable, amounts due from (to) Cummins and Westport,
accounts payable and accrued liabilities. Cash and cash equivalents is carried at fair value based on quoted rates in an active
market. Accordingly, it is classified as Level 1 in the fair value hierarchy. The fair values of net accounts receivable and accounts
payable and accrued liabilities approximate their carrying values due to their short-term maturity. The fair values of accounts
and other receivable from (payable to) Cummins and Westport cannot be determined with sufficient reliability due to the related
party nature of the balances and the lack of a readily available market for these instruments.







CUMMINS
WESTPORT INC.

Notes to Financial Statements

(Expressed in United States
dollars)



Years ended December 31, 2013 and 2012








| | 9. | Financial instruments (continued):
| | -- | ----------------------------------

| | (b) | Credit risk:
| | --- | ------------

Pursuant to the revised JVA,
collection of accounts receivable is the sole responsibility of the Company, except for any bad debts arising out of decisions
made by Cummins, which may negatively impact the Company. Management believes that the Company is not exposed to significant credit
risk.

| | (c) | Foreign currency risk:
| | --- | ----------------------

The majority of the Company’s
revenues and expenses are denominated in United States dollars although the Company may from time to time enter into transactions
denominated in a foreign currency, primarily the Canadian dollar. Management believes that the Company is not exposed to significant
foreign currency risk.