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## Financial Highlights 

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(1) The consolidated financial highlights, except for adjusted EBITDA, normalized earnings attributable to common shareholders, normalized earnings per share, funds from operations, funds from operations excluding non-controlling interests in CPILP, cash flow per share, and discretionary cash flow, were prepared in accordance with GAAP. See Non-GAAP Financial Measures. 

(2) Diluted earnings per share was calculated after giving effect to share purchase options and the exchange of common limited partnership units of CPLP held by EPCOR which are exchangeable for common shares of Capital Power on a one-for-one basis. 

## Normalized earnings and normalized earnings per share 

Refer to Results by Plant Category and Other and Consolidated Other Expenses and Non-Controlling Interests for detailed discussion of the results for the year on a comparative basis. 

Normalized earnings and normalized earnings per share were determined by excluding the total of net unrealized changes in the fair value of derivative instruments (including forward bond contracts). Accordingly, these net unrealized changes reduced normalized earnings by $2 million for 2012 and by $55 million for 2011 before consideration of taxes and non-controlling interests. 

Additional significant adjustments to determine normalized earnings and normalized earnings per share were the exclusion of the second quarter pre-tax impairment of $74 million related to the North East U.S. plants and the fourth quarter pre-tax gain of $15 million on the sale of the British Columbia hydro facilities. See Significant Events. 

## Funds from operations 

Changes in funds from operations for 2012 compared with 2011 were consistent with the changes in net income attributable to shareholders of the Company. 

