CAPITAL POWER CORPORATION (Tabular amounts in millions of Canadian dollars, except share and per share amounts) Notes to the Consolidated Financial Statements There were no transactions in respect of the special voting limited share during the years ended 2012 and 2011 (December 31, 2012 and 2011 - 1 issued, nil). On December 18, 2012, the Company issued 6 million Cumulative Rate Reset Preferred Shares, series 3 (Series 3 Shares) priced at $25.00 per share for gross proceeds of $150 million, less issue costs of $5 million. Deferred tax assets of $1 million related to the share issue costs were recorded in the preferred share balance. The preferred shares pay fixed cumulative dividends of $1.15 per share per annum, yielding 4.60% per annum, payable on the last business day of March, June, September and December of each year, as and when declared by the board of directors of Capital Power, for the initial period ending December 31, 2018. The dividend rate will be reset on December 31, 2018 and every five years thereafter at a rate equal to the sum of the then five-year Government of Canada bond yield and 3.23%. The Series 3 Shares are redeemable by Capital Power, at its option, on December 31, 2018 and on December 31 of every fifth year thereafter. 111 Authorized shares Number of shares authorized Common shares unlimited Preference shares, issuable in series unlimited Special voting shares unlimited Special limited voting share one Issued, called up and fully paid shares Common shares Preference shares Special voting shares Number of shares Amount Number of shares Amount Number of shares Amount As at January 1, 2011 30,980,500 $ 698 5,000,000 $ 122 47,416,000 $ - Shares issued 1 18,515,000 463 - - - - Share issue costs - (20) - - - - Deferred taxes on share issue costs - 5 - - - - Shares exchanged 2 9,200,000 224 - - (9,200,000) - Share purchase options exercised (note 28) 273,507 7 - - - - As at December 31, 2011 58,969,007 $ 1,377 5,000,000 $ 122 38,216,000 $ - Shares issued - - 6,000,000 150 - - Share issue costs - - - (5) - - Deferred taxes on share issue costs - - - 1 - - Shares exchanged 2 9,775,000 230 - - (9,775,000) - Share purchase options exercised (note 28) 348,349 9 - - - - Dividend reinvestment plan 863,337 19 - - - - As at December 31, 2012 69,955,693 $ 1,635 11,000,000 $ 268 28,441,000 $ - 24. Share capital: 2 A subsidiary of EPCOR exchanged 9,775,000 (year ended December 31, 2011 - 9,200,000) of their exchangeable limited partnership units in CPLP on a one-for-one basis for common shares of Capital Power and subsequently entered into an agreement for a secondary offering of 9,775,000 common shares (year ended December 31, 2011 - 9,200,000) of Capital Power at an offering price of $23.55 per common share (year ended December 31, 2011 - $24.40). 1 Shares issued include issuances of 9,200,000 and 9,315,000 shares at $25.10 and $24.90 per common share respectively. Subsequent to these issuances, matching numbers of common limited partnership units of CPLP were issued to another subsidiary of the Company.