Cash flow per share Discretionary cash flow Capital Power uses discretionary cash flow as a measure of the Company’s ability to pay dividends to its shareholders and distributions to CPLP’s exchangeable common limited partnership unitholders from funds it generates from operations. The measure is calculated as funds from operations excluding non-controlling interests in CPILP less sustaining capital expenditures. Cash flow per share is calculated using the weighted average common shares of Capital Power Corporation and exchangeable common limited partnership units of CPLP that were outstanding during the period. The CPLP exchangeable common limited partnership units are exchangeable for common shares of Capital Power Corporation on a one-for-one basis. (unaudited) Year ended December 31 Three months ended December 31 2012 2011 2012 2011 Funds from operations excluding non-controlling interests in CPILP ($millions) 381 352 83 88 Weighted average common shares outstanding (millions) 66.82 44.25 69.84 55.64 Weighted average exchangeable common limited partnership units of CPLP outstanding (millions) 31.00 46.13 28.44 42.32 Weighted average shares and partnership units outstanding (millions) 97.82 90.38 98.28 97.96 Cash flow per share ($) 3.89 3.89 0.84 0.90 (unaudited, $millions) Year ended December 31 Three months ended December 31 2012 2011 2012 2011 Funds from operations excluding non-controlling interests in CPILP 381 352 83 88 Less sustaining capital expenditures 119 92 37 47 Less CPLP’s share of CPILP sustaining capital expenditures - 6 - 1 Adjusted funds from operations 262 254 46 40 Common share dividends declared 85 60 23 18 Distributions to exchangeable common limited partnership unitholders of CPLP declared 39 57 9 12 Preferred share dividends declared 6 6 2 2 Total dividends and distributions declared 130 123 34 32 Discretionary cash flow 132 131 12 8 21 Capital Power Corporation Management’s Discussion and Analysis 2012