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## Liquidity and Capital Resources 

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## Operating activities 

Cash flows from operating activities for 2012 decreased compared with 2011 primarily due to the disposal of CPILP which reduced cash inflows and increases in trade and other receivables and trade and other payables due to the timing of settlement of certain accounts. 

## Investing activities 

The cash flows used in investing activities for 2012 included $598 million for capital expenditures (most significantly, the Quality Wind and Halkirk projects) partly offset by $116 million of proceeds received on the sale of shares in Atlantic Power and the divestiture of the British Columbia hydro assets. Business acquisitions in 2011, including the New England facilities, significantly contributed to the year-over-year decrease in cash flows used in investing activities. 

## Capital expenditures 

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(1) Capital expenditures to be incurred over the life of the project are based on management’s estimates. 

(2) Capital expenditures include capitalized interest. Capital expenditures excluding capitalized interest are presented on the Statement of Cash Flows as payments to acquire property, plant and equipment and other assets. 

(3) Projected costs for projects completed in 2012 consist of certain costs that are expected to be incurred subsequent to the date of commercial operations such as site remediation, vendor optimization, project clean-up and project close-out costs. 

