CAPITAL POWER CORPORATION Basic earnings per share Diluted earnings per share Notes to the Consolidated Financial Statements (Tabular amounts in millions of Canadian dollars, except share and per share amounts) The earnings and weighted average number of common shares used in the calculation of basic earnings per share are as follows: The earnings used in the calculation of diluted earnings per share are as follows: The weighted average number of common shares for the purposes of diluted earnings per share reconciles to the weighted average number of common shares used in the calculation of basic earnings per share as follows: 3 For the year ended December 31, 2012, the average market price of the Company’s common shares was below the exercise price of all granted share purchase options described in note 28 and as a result none of the share purchase options had a dilutive effect on earnings per share. For the year ended December 31, 2011, the average market price of the Company’s common shares exceeded the exercise price of certain of the granted share purchase options described in note 28 and as a result had a dilutive effect on earnings per share. 2 The exchangeable limited partnership units issued to EPCOR may be exchanged for common shares of Capital Power on a one-for-one basis. For the year ended December 31, 2012, the potential exchange of such units for common shares of the Company were not included in the calculation of diluted earnings per share as they were anti-dilutive. For the year ended December 31, 2011 the potential exchange of such units for common shares of the Company had a dilutive impact as the potential exchange would remove the attribution of net income to non-controlling interests related to CPLP of $89 million. Additionally, the income tax provision of the Company would need to be adjusted to reflect the non-controlling interest’s share of CPLP income taxes of $16 million. 7. Earnings per share: 96 2012 2011 Weighted average number of common shares used in the calculation of basic earnings per share 66,818,697 44,253,610 Effect of dilutive share purchase options 3 - 133,446 Effect of exchangeable limited partnership units issued to EPCOR for common shares - 46,130,521 Weighted average number of common shares used in the calculation of diluted earnings per share 66,818,697 90,517,577 2012 2011 Earnings used in the calculation of basic earnings per share $ 56 $ 71 Effect of exchangeable limited partnership units issued to EPCOR for common shares 2 - 73 Earnings used in the calculation of diluted earnings per share $ 56 $ 144 2012 2011 Income for the period attributable to shareholders of the Company $ 62 $ 77 Preferred share dividends of the Company 1 (6) (6) Earnings used in the calculation of basic earnings per share $ 56 $ 71 2012 2011 Weighted average number of common shares used in the calculation of basic earnings per share 66,818,697 44,253,610 1 Includes preferred share dividends declared in respect of the years ended December 31, 2012 and 2011 respectively.