20. SHARE CAPITAL

The authorized share capital of the Company consists of an unlimited number of common shares with no par value and an unlimited number of preference shares.

COMMON SHARES

	2013		2012		2011
December 31,	Number of Shares	Amount	Number of Shares	Amount	Number of Shares	Amount
(millions of Canadian dollars; number of common shares in millions)
Balance at beginning of year	805	4,732	781	3,969	770	3,683
Common Shares issued1	13	582	10	388	-	-
Dividend Reinvestment and Share
Purchase Plan (DRIP)	8	361	8	297	7	229
Shares issued on exercise of stock options	5	69	6	78	4	57
Balance at end of year	831	5,744	805	4,732	781	3,969

1 Gross proceeds - $600 million (2012 - $400 million); net issuance costs - $18 million(2012 - $12 million).

PREFERENCE SHARES

	2013			2012		2011
December 31,	Number of Shares	Amount		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	5	125
Preference Shares, Series B	20	500		20	500	20	500
Preference Shares, Series D	18	450		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		-	-	-	-
Preference Shares, Series 5	8	206		-	-	-	-
Preference Shares, Series 7	10	250		-	-	-	-
Issuance costs		(111	)		(78)		(19	)
Balance at end of year		5,141			3,707		1,056

Characteristics of the preference shares are as follows:

	Initial Yield	Dividend1	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 3	4.0%	$1.000	$25	September 1, 2019	Series 4
Preference Shares, Series 5	4.4%	US$1.100	US$25	March 1, 2019	Series 6
Preference Shares, Series 75	4.4%	$1.100	$25	March 1, 2019	Series 8

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), 2.4% (Series 4) or 2.6% (Series 8)); or US$25 x (number of days in quarter/365) x (three-month United States Government treasury bill rate + 3.1% (Series K), 3.2% (Series M), 3.1% (Series 2) or 2.8% (Series 6)).

5 A cash dividend of $0.2381 per share will be payable on March 1, 2014 to Series 7 preference shareholders. The regular quarterly dividend of $0.275 per share will begin in the second quarter of 2014.

EARNINGS PER COMMON SHARE

Earnings per common share is calculated by dividing earnings attributable to common shareholders by the weighted average number of common shares outstanding. The weighted average number of shares outstanding has been reduced by the Company’s pro-rata weighted average interest in its own common shares of 15 million (2012 - 20 million; 2011 - 25 million), resulting from the Company’s reciprocal investment in 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.

December 31,	2013	2012	2011
(number of common shares in millions)
Weighted average shares outstanding	806	772	751
Effect of dilutive options	11	13	10
Diluted weighted average shares outstanding	817	785	761

For the year ended December 31, 2013, 6,327,500 anti-dilutive stock options (2012 - 5,733,000; 2011 - 48,000) with a weighted average exercise price of $44.85 (2012 - $38.32; 2011 - $32.02) were excluded from the diluted earnings per share calculation.

STOCK SPLIT

Effective May 25, 2011, a two-for-one split of the common shares of the Company was completed. All references to the number of shares outstanding, earnings per common share, diluted earnings per common share, dividends per common share and outstanding option information have been retroactively restated to reflect the impact of the stock split.

DIVIDEND REINVESTMENT AND SHARE PURCHASE PLAN

Under the DRIP, registered shareholders may reinvest dividends in common shares of the Company and make additional optional cash payments to purchase common shares, free of brokerage or other charges. Participants in the Company’s DRIP receive a 2% discount on the purchase of common shares with reinvested dividends.

SHAREHOLDER RIGHTS PLAN

The Shareholder Rights Plan is designed to encourage the fair treatment of shareholders in connection with any takeover offer for the Company. Rights issued under the plan become exercisable when a person and any related parties acquires or announces its intention to acquire 20% or more of the Company’s outstanding common shares without complying with certain provisions set out in the plan or without approval of the Company’s Board of Directors. Should such an acquisition occur, each rights holder, other than the acquiring person and related parties, will have the right to purchase common shares of the Company at a 50% discount to the market price at that time.