2016 Debentures The Corporation has unsecured subordinated convertible debentures (“2016 Debentures”) that are due on December 31, 2016. The Corporation originally issued $57,500 gross incurring transaction costs of $2,880. The 2016 Debentures bear an interest rate of 6.50% per annum payable semi-annually in arrears on June 30 and December 31 of each year. The 2016 Debentures are convertible into shares of the Corporation at the  option of the holder at a conversion price of 7.00 dollars per share. The face value of the debentures as at December 31, 2013 was $42,749 (December 31, 2012 – $42,749). As part of the acquisition of ReD, Capstone assumed redeemable, extendible, convertible unsecured subordinated debentures ("2017 Debentures")  due on December 31, 2017. ReD originally issued $34,500 in gross proceeds bearing interest of 6.75% per annum payable semi-annually in arrears on June 30 and December 31 of each year. Each $1,000 principal amount of the debentures are convertible, at the option of the holder, into 200 Capstone common shares and $0.76923 in cash, subject to further adjustment in accordance with the terms of the 2017 Debentures. The  terms of the 2017 Debentures also provide that they are redeemable by the Corporation in certain circumstances as well as other customary terms and conditions. During 2013, $6,972 of debentures were redeemed and $100 were converted to shares, resulting in$27,428 in principal value remaining outstanding as at December 31, 2013. (E) Long-term Debt Covenants 2017 Debentures NOTE 20. LIABILITY FORASSET RETIREMENT OBLIGATION For the year ended and as at December 31, 2013, the Corporation and its subsidiaries complied with all financial and non-financial debt covenants. The following table summarizes total principal payments required under each of the Corporation's facilities in the next five years and thereafter: The carrying value of these obligations is based on estimated cash flows required to settle these obligations in present day costs. The costs relate to site restoration and decommissioning of Cardinal, as well as the wind and hydro power facilities. The following table provides the underlying assumptions and reconciles the Corporation's total asset retirement obligation activity for the years ended December 31: (F) Long-term Debt Repayments Dec 31, 2013 Dec 31, 2012 Assumptions: Expected settlement date 2014 – 2062 2014 – 2062 Estimated settlement amount Nil – $3,205 Nil – $2,965 Inflation rate 2.0% 2.0% Credit adjusted discount rate 7.17% – 8.00% 8.0% – 12.5% Balance, beginning of year 2,096 2,412 Business acquisition 860 — Revision of estimates 138 (533) Accretion expense 199 217 Balance, end of year 3,293 2,096 Year of Repayment Within one year One year to five years Beyond five years Total Power 18,374 170,202 181,350 369,926 Utilities – water — 87,251 420,444 507,695 Corporate — 81,477 — 81,477 18,374 338,930 601,794 959,098 2013 ANNUAL REPORT  91