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## Other portfolio activities 

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(1) The financial results by plant category, except for adjusted EBITDA, were prepared in accordance with GAAP. See Non-GAAP Financial Measures. 

See Portfolio Optimization section for description of other portfolio activities. 

Lower revenues for 2012 compared with 2011 were primarily due to the termination of the manager contracts associated with the Company’s former interest in CPILP and lower natural gas sales partly offset by higher revenues related to emission trading in the California power market. 

Adjusted EBITDA increased in 2012 primarily due to natural gas trading gains. The increase in adjusted EBITDA for 2012 compared with 2011 was further impacted by a gain related to a change in the provision for estimated future losses on certain natural gas retail contracts. The revised estimate for the provision was based on a decrease in forward natural gas prices in 2012. North American forward gas prices have been decreasing primarily due to decreased demand and oversupply. The increase in adjusted EBITDA for 2012 compared with 2011 was partly offset by increased emission credit costs in 2012. 

## Corporate 

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(1) The financial results by plant category, except for adjusted EBITDA, were prepared in accordance with GAAP. See Non-GAAP Financial Measures. 

Corporate includes (i) revenues for cost recoveries, (ii) the cost of support services such as treasury, finance, internal audit, legal, human resources, corporate risk management, asset management, and environment, health and safety, and (iii) business development expenses. The cost recovery revenues are primarily intercompany revenues which are offset by interplant category transactions in the consolidated results. 

Adjusted EBITDA for 2012 reflected increased compensation costs resulting from performance in relation to the Company’s 2011 target performance metrics and recruitment for previously vacant positions and increased costs related to the Company’s corporate head office move in September 2011. These increased costs were partly offset by an unfavourable pension adjustment in 2011 based on an actuarial valuation of the Company’s supplemental pension plan obligation which incorporated refinements to estimates made at the time of the Company’s spinoff from EPCOR. Corporate results for 2012 included the first quarter realized gain on the sale of Atlantic Power shares. 

## Unrealized changes in fair value of energy and foreign exchange derivative instruments and Atlantic Power shares 

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(1) The financial results by plant category, except for adjusted EBITDA, were prepared in accordance with GAAP. See Non-GAAP Financial Measures. 

The Company’s financial results relating to its Alberta commercial plants and portfolio optimization, North East U.S. commercial plants and portfolio optimization, and other activities include unrealized changes in the fair value of energy and foreign exchange derivative instruments and, until its disposal in February 2012, the Company’s investment in Atlantic Power. 

When a derivative instrument contract settles, the unrealized fair value changes recorded in prior periods for that contract are reversed and included in this category. The gain or loss realized upon settlement is reflected in adjusted EBITDA for the appropriate plant portfolio optimization or Corporate category. 

