8. SHARE CAPITAL

PREFERENCE SHARES

	June 30, 2013			December 31, 2012
	Number of Shares	Amount		Number of Shares	Amount
(millions of Canadian dollars; number of preference shares in millions)
Preference Shares, Series A	5	125		5	125
Preference Shares, Series B	20	500		20	500
Preference Shares, Series D	18	450		18	450
Preference Shares, Series F	20	500		20	500
Preference Shares, Series H	14	350		14	350
Preference Shares, Series J	8	199		8	199
Preference Shares, Series L	16	411		16	411
Preference Shares, Series N	18	450		18	450
Preference Shares, Series P	16	400		16	400
Preference Shares, Series R	16	400		16	400
Preference Shares, Series 1	16	411		-	-
Preference Shares, Series 3	24	600		-	-
Issuance costs		(97	)		(78	)
Balance at end of period		4,699			3,707

Characteristics of the preference shares are as follows:

	Initial Yield	Dividend	1	Per Share Base Redemption Value2	Redemption and Conversion Option Date2,3	Right to Convert Into3,4
(Canadian dollars unless otherwise stated)
Preference Shares, Series A	5.5%	$1.375		$25	-	-
Preference Shares, Series B	4.0%	$1.000		$25	June 1, 2017	Series C
Preference Shares, Series D	4.0%	$1.000		$25	March 1, 2018	Series E
Preference Shares, Series F	4.0%	$1.000		$25	June 1, 2018	Series G
Preference Shares, Series H	4.0%	$1.000		$25	September 1, 2018	Series I
Preference Shares, Series J	4.0%	US$1.000		US$25	June 1, 2017	Series K
Preference Shares, Series L	4.0%	US$1.000		US$25	September 1, 2017	Series M
Preference Shares, Series N	4.0%	$1.000		$25	December 1, 2018	Series O
Preference Shares, Series P	4.0%	$1.000		$25	March 1, 2019	Series Q
Preference Shares, Series R	4.0%	$1.000		$25	June 1, 2019	Series S
Preference Shares, Series 1	4.0%	US$1.000		US$25	June 1, 2018	Series 2
Preference Shares, Series 35	4.0%	$1.000		$25	September 1, 2019	Series 4

1 The holder is entitled to receive a fixed, cumulative, quarterly preferential dividend per year, as declared by the Board of Directors of the Company.

2 Preference Shares, Series A may be redeemed any time at the Company’s option. For all other series of Preference Shares, the Company may at its option, redeem all or a portion of the outstanding Preference Shares for the Base Redemption Value per share plus all accrued and unpaid dividends on the Redemption Option Date and on every fifth anniversary thereafter.

3 The holder will have the right, subject to certain conditions, to convert their shares into Cumulative Redeemable Preference Shares of a specified series on the Conversion Option Date and every fifth anniversary thereafter.

4 Holders will be entitled to receive quarterly floating rate cumulative dividends per share at a rate equal to: $25 x (number of days in quarter/365) x (90-day Government of Canada treasury bill rate + 2.4% (Series C), 2.4% (Series E), 2.5% (Series G), 2.1% (Series I), 2.7% (Series O), 2.5% (Series Q), 2.5% (Series S) or 2.4% (Series 4)); or US$25 x (number of days in quarter/365) x (90-day United States Government treasury bill rate + 3.1% (Series K), 3.2% (Series M) or 3.1% (Series 2)).

5 A cash dividend of $0.2384 per share will be payable on September 1, 2013 to Series 3 shareholders. The regular quarterly dividend of $0.25 per share will begin in the fourth quarter of 2013.

EARNINGS PER COMMON SHARE

Earnings per common share is calculated by dividing earnings applicable to common shareholders by the weighted average number of common shares outstanding. The weighted average number of common shares outstanding has been reduced by the Company’s pro-rata weighted average interest in its own common shares of 16 million and 17 million (2012 - 18 million and 22 million) for the three and six months ended June 30, 2013, resulting from the Company’s reciprocal investment in Noverco Inc. (Noverco).

The treasury stock method is used to determine the dilutive impact of stock options. This method assumes any proceeds from the exercise of stock options would be used to purchase common shares at the average market price during the period.

	Three months ended June 30,		Six months ended June 30,
	2013	2012	2013	2012
(number of shares in millions)
Weighted average shares outstanding	806	770	797	763
Effect of dilutive options	11	13	12	12
Diluted weighted average shares outstanding	817	783	809	775

For both the three and six months ended June 30, 2013, 6,353,550 anti-dilutive stock options (2012 - nil for both the three and six months ended June 30) with a weighted average exercise price of $44.85 were excluded from the diluted earnings per common share calculation.