Financial Position The significant changes in the Consolidated Statements of Financial Position from December 31, 2011 to December 31, 2012 were as follows: (unaudited, $ millions) As at December 31 Increase (decrease) Explanation of increase (decrease) 2012 2011 Trade and other receivables 354 198 156 Primarily due to a $50 million deposit related to Shepard Energy Centre, the addition of Quality Wind, higher generation sales receivable from the Alberta Electric System Operator resulting from higher power prices in December 2012 compared with December 2011, the land lease renewal holdback related to the sale of the hydro facilities, timing of the settlement of sales receivables, and increased sales receivable related to Genesee 3 which experienced a forced outage in December 2011. Inventories 72 59 13 Primarily due to the increase in Genesee mine coal inventory. Other financial assets – current - 53 (53) Sold Atlantic Power shares. Net derivative financial instruments assets (liabilities) 13 (36) 49 Primarily due to increases in the fair value of derivative power contracts resulting from decreasing Alberta forward power prices. Finance lease receivable 461 58 403 Primarily due to the addition of Quality Wind. Other financial assets – non-current 60 42 18 Primarily due to the Sundance force majeure claim discussed under Contractual Obligations and Contingent Liabilities. Intangible assets 316 296 20 Primarily due to additions related to information technology systems and a long-term service agreement entered into at the Joffre facility. Property, plant and equipment 3,628 3,842 (214) Primarily due to depreciation and the disposal of the hydro facilities partly offset by capital expenditures (most significantly, the Halkirk project). Goodwill 22 46 (24) Primarily due to the impairment of the North East U.S. commercial plants. Trade and other payables 210 220 (10) Primarily due to a three-year Regional Greenhouse Gas Initiative compliance period related to the Company’s North East U.S. commercial plants accrued for in 2011 and settled in 2012, partly offset by higher natural gas accruals due to fuel purchases for the North East U.S. commercial plants. Loans and borrowings (including current portion) 1,659 1,480 179 $250 million debt issue partly offset by repayment of credit facility. Share capital 1,903 1,499 404 Common and preferred shares issued. Non-controlling interests 829 1,072 (243) Conversion of common limited partnership units of CPLP to common shares of Capital Power by EPCOR in April 2012 and distributions offset by earnings attributable to non-controlling interests. Capital Power Corporation Management’s Discussion and Analysis 2012 38