On November 21, 2012, Capital Power announced that its Board of Directors approved a Shareholder Rights Plan (Rights Plan) effective November 20, 2012. The objective of the Rights Plan is to ensure, to the extent possible, the fair treatment of all shareholders in connection with any take-over bid for the securities of the Company, and to provide the Board with sufficient time to evaluate unsolicited take-over bids and to explore and develop alternatives to maximize shareholder value. The Rights Plan will be presented to shareholders for ratification at Capital Power’s annual meeting on April 26, 2013 and, if ratified, will continue in force until the end of the annual meeting of shareholders in 2016. The Rights Plan will expire at the termination of the April 26, 2013 annual meeting of shareholders if not ratified by the shareholders. Contractual Obligations and Contingent Liabilities Shareholder Rights Plan (1) Capital Power’s obligation to make payments on a monthly basis for fixed and variable costs under the terms of its acquired PPAs will vary depending on generation volume and scheduled plant outages. Fixed costs include depreciation, decommissioning, return on equity, and return on debt and working capital. (2) Capital Power’s obligations for capital – growth projects include the K2, Port Dover & Nanticoke and Shepard Energy Centre projects. Capital Power Energy Centre is not included. (3) Natural gas transportation contracts are based on estimates subject to changes in regulated rates for transportation and have expiry terms ranging from 2013 to 2017. (4) Operating and maintenance contracts are related to a 10-year service agreement for Quality Wind which commenced November 2012 at a cost of approximately $5 million per year. (5) Capital Power’s decommissioning provisions reflect the undiscounted cash flow required to settle obligations for the retirement of its generation plants and Genesee coal mine. Capital Power Corporation Management’s Discussion and Analysis 2012 42 (unaudited, $ millions) Payments Due by Period 2013 2014 2015 2016 2017 Thereafter Total Acquired PPA obligations – fixed (1) 57 60 59 60 60 129 425 Acquired PPA obligations – variable (1) 36 35 35 37 38 187 368 Capital – growth projects (2) 635 742 - - - - 1,377 Energy purchase and transportation contracts (3) 105 21 11 11 11 52 211 Operating and maintenance contracts (4) 10 13 13 12 11 69 128 Environmental credits 13 14 11 9 7 2 56 Operating leases 5 5 5 5 5 59 84 Loans and borrowings 19 13 314 145 149 1,032 1,672 Interest on loans and borrowings 87 86 85 65 58 146 527 Net commodity contracts-for- differences 52 6 3 2 2 - 65 Decommissioning provisions (5) 2 2 2 3 2 320 331 Total 1,021 997 538 349 343 1,996 5,244