Alberta desk electricity portfolio activities in 2012 accounted for an unrealized net gain of $8 million compared with an unrealized net loss of $53 million for 2011. The unrealized gain in 2012 primarily reflected the impact of decreases in Alberta forward power prices on the portfolio positions and the reversal of previously recognized unrealized net losses on contracts which settled in 2012. The unrealized net loss in 2011 primarily reflected the impact of increases in Alberta forward power prices on the portfolio position and the reversal of previously recognized unrealized gains on contracts which settled in 2011. Upon acquisition of the New England plants in the second quarter of 2011, the Company acquired heat rate options related to the Bridgeport and Tiverton facilities. The Tiverton heat rate options subsequently expired in 2011. In 2012, the Company recognized an unrealized loss of $15 million related to its Bridgeport heat rate options. This loss primarily resulted from increases in the underlying forward power prices and the reversal of the 2011 unrealized gain. In 2011, the Company recognized an unrealized gain of $9 million on the heat rate options related to the Bridgeport facility which primarily resulted from decreases in the underlying forward power prices. Natural gas portfolio activities in 2012 accounted for an unrealized net loss of $4 million which primarily reflected the impact of fluctuating forward natural gas prices on changes in the portfolio position during the fourth quarter of 2012. In the first quarter of 2012, the Company sold its investment in Atlantic Power shares resulting in an unrealized loss of $5 million representing the reversal of the unrealized gain which was recorded in the fourth quarter of 2011. The sale resulted in a realized gain of $4 million which was included in the Corporate category. The Company divested its limited partnership units of CPILP on November 4, 2011. In 2011, CPILP’s revenues included unrealized net losses of $10 million for changes in the fair value of foreign exchange contracts which were primarily due to an increase in the forward prices for U.S. dollars relative to Canadian dollars for the period ended November 4, 2011. Capital Power Corporation Management’s Discussion and Analysis 2012 35 ($ millions) Year ended December 31 2012 2011 2012 2011 Unrealized changes in fair value of energy and foreign exchange derivative instruments and Atlantic Power shares Revenues Adjusted EBITDA Unrealized gains (losses) on Alberta energy derivatives 12 (64) 8 (53) Unrealized (losses) gains on Bridgeport heat rate option (15) 9 (15) 9 Unrealized (losses) on natural gas derivatives (6) (12) (4) - (Reversal) of unrealized gain and unrealized gain on Atlantic Power shares (5) 5 (5) 5 Other 1 - 1 - (13) (62) (15) (39) Unrealized gains on CPILP natural gas contracts n/a - n/a 1 Unrealized losses on CPILP foreign exchange contracts n/a (10) n/a (10) n/a (10) n/a (9) (13) (72) (15) (48)