<SEC-DOCUMENT>0001206774-13-000708.txt : 20130222
<SEC-HEADER>0001206774-13-000708.hdr.sgml : 20130222
<ACCEPTANCE-DATETIME>20130221195537
ACCESSION NUMBER:		0001206774-13-000708
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		8
CONFORMED PERIOD OF REPORT:	20130221
FILED AS OF DATE:		20130222
DATE AS OF CHANGE:		20130221

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Ballard Power Systems Inc.
		CENTRAL INDEX KEY:			0001453015
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRICAL INDUSTRIAL APPARATUS [3620]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			Z4
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-53543
		FILM NUMBER:		13632015

	BUSINESS ADDRESS:	
		STREET 1:		9000 GLENLYON PARKWAY
		CITY:			BURNABY
		STATE:			A1
		ZIP:			V5J 5J8
		BUSINESS PHONE:		206-903-8850

	MAIL ADDRESS:	
		STREET 1:		9000 GLENLYON PARKWAY
		CITY:			BURNABY
		STATE:			A1
		ZIP:			V5J 5J8

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	7076991 Canada Inc.
		DATE OF NAME CHANGE:	20090102
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>ballardpowersys_6k.htm
<DESCRIPTION>CURRENT REPORT OF FOREIGN ISSUER
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    <TD style="BORDER-TOP: #000000 1pt solid" width="100%">&nbsp;</TD></TR></TABLE><P align=center><B><FONT face="Arial">UNITED
STATES<BR></FONT></B><B><FONT face="Arial">SECURITIES AND EXCHANGE
COMMISSION</FONT></B><FONT face="Arial" size=2><BR></FONT><B><FONT face="Arial">Washington, D.C. 20549</FONT></B><FONT face="Arial" size=2>
</FONT></P>
<P align=center><B><FONT face="Arial" size=5>FORM 6-K</FONT></B><FONT face="Arial" size=2> </FONT></P>
<P align=center><FONT face="Arial">REPORT OF FOREIGN PRIVATE
ISSUER</FONT><FONT face="Arial" size=2><BR></FONT><FONT face="Arial">PURSUANT TO RULE 13a-16 OR 15d-16</FONT><FONT face="Arial" size=2><BR></FONT><FONT face="Arial">UNDER THE SECURITIES EXCHANGE ACT OF
1934</FONT><FONT face="Arial" size=2> </FONT></P>
<P align=center><B><FONT face="Arial">February 21, 2013</FONT></B><FONT face="Arial" size=2> </FONT></P>
<P align=center><FONT face="Arial">Commission File Number:
000-25270</FONT><FONT face="Arial" size=2> </FONT></P>
<DIV align=center>
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  <TR style="padding-bottom: 6pt" vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid; text-align: center" width="99%"><B><FONT face="Arial" size=5>Ballard Power Systems
  Inc.</FONT></B></TD></TR>
<TR style="padding-top: 6pt" vAlign=bottom>
    <TD style="text-align: center" width="99%"><FONT face="Arial" size=2>(Translation of registrant&#146;s name
      into English)</FONT></TD></TR>
  <TR>
    <TD width="99%">&nbsp;</TD></TR>
    <TR style="padding-bottom: 6pt" vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid; text-align: center" width="99%"><B><FONT face="Arial" size=2>Canada</FONT></B></TD></TR>
<TR style="padding-top: 6pt" vAlign=bottom>
    <TD style="text-align: center" width="99%"><FONT face="Arial" size=2>(Jurisdiction of incorporation or
      organization)</FONT></TD></TR>
  <TR>
    <TD width="99%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD style="text-align: center" width="99%"><B><FONT face="Arial" size=2>9000 Glenlyon
      Parkway</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD style="text-align: center" width="99%"><B><FONT face="Arial" size=2>Burnaby,
  BC</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD style="text-align: center" width="99%"><B><FONT face="Arial" size=2>V5J 5J8</FONT></B></TD></TR>
  <TR>
    <TD style="text-align: center" width="99%">&nbsp;</TD></TR>
    <TR style="padding-bottom: 6pt" vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid; text-align: center" width="99%"><B><FONT face="Arial" size=2>Canada</FONT></B></TD></TR>
<TR style="padding-top: 6pt" vAlign=bottom>
    <TD style="text-align: center" width="99%"><FONT face="Arial" size=2>(Address of principal executive
      office)</FONT></TD></TR></TABLE></DIV><BR>
<P align=justify><FONT face="Arial" size=2>Indicate by check mark whether the
registrant files or will file annual reports under cover of Form 20-F or Form
40-F:&nbsp;<FONT face=Wingdings>o</FONT></FONT><FONT face="Arial" size=2>
Form 20-F&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=Wingdings>x</FONT></FONT><FONT face="Arial" size=2>&nbsp;</FONT><FONT face="Arial" size=2>Form 40-F </FONT></P>
<P align=justify><FONT face="Arial" size=2>Indicate by check mark if the
registrant is submitting the Form 6-K in paper as permitted by Regulation S-T
Rule 101(b)(1): </FONT><FONT face=Wingdings size=2>o</FONT><FONT face="Arial" size=2> </FONT></P>
<P align=justify><FONT face="Arial" size=2>Indicate by check mark if the
registrant is submitting the Form 6-K in paper as permitted by Regulation S-T
Rule 101(b)(7): </FONT><FONT face=Wingdings size=2>o</FONT><FONT face="Arial" size=2> </FONT></P>
<P align=justify><FONT face="Arial" size=2>Indicate by check mark whether the
registrant by furnishing the information contained in this Form is also thereby
furnishing the information to the Commission pursuant to Rule 12g3-2(b) under
the Securities Exchange Act of 1934: </FONT><FONT face=Wingdings size=2>o</FONT><FONT face="Arial" size=2> Yes&nbsp;&nbsp; <FONT face=Wingdings>x</FONT></FONT><FONT face="Arial" size=2>&nbsp;</FONT><FONT face="Arial" size=2>No </FONT></P>
<P align=justify><FONT face="Arial" size=2>If "Yes" is marked, indicate below
the file number assigned to the registrant in connection with Rule 12g3-2(b):
n/a</FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=center><B><FONT face="Arial">SIGNATURES</FONT></B><FONT face="Arial" size=2> </FONT></P>
<P align=justify><FONT face="Arial" size=2>Pursuant to the requirements of
the Securities Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
</FONT></P>
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    <TD noWrap align=left width="50%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="48%" colSpan=2><B><FONT face="Arial" size=2>Ballard
      Power Systems Inc.</FONT></B></TD></TR>
  <TR>
    <TD width="99%" colSpan=4>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"><FONT face="Arial" size=2>Date: February 21, 2013</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=2>By:</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="38%"><FONT face="Arial" size=2>Tony Guglielmin</FONT></TD>
    <TD noWrap align=left width="10%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=2>Name:&nbsp;&nbsp;&nbsp;&nbsp;
    </FONT></TD>
    <TD noWrap align=left width="48%" colSpan=2><FONT face="Arial" size=2>Tony
    Guglielmin</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=2>Title:</FONT></TD>
    <TD noWrap align=left width="48%" colSpan=2><FONT face="Arial" size=2>Chief Financial
      Officer</FONT></TD></TR></TABLE><BR>
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<P align=center><B><FONT face="Arial">EXHIBIT INDEX</FONT></B><FONT face="Arial" size=2> </FONT></P>
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    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT><B><FONT face="Arial" size=2>Exhibit
    No.</FONT></B></FONT></TD>
    <TD noWrap align=left width="2%">&nbsp;&nbsp; &nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT><B><FONT face="Arial" size=2>Description</FONT></B></FONT></TD>
    <TD noWrap align=left width="96%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>99.1</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="97%" bgColor=#c0c0c0 colSpan=2><FONT face="Arial" size=2>Consolidated Financial Statements for the Years Ended
      December 31, 2012 and 2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=2>99.2</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="97%" colSpan=2><FONT face="Arial" size=2>Management's
      Discussion and Analysis for the Years Ended December 31, 2012 and
      2011</FONT></TD></TR></TABLE><BR>
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    <TD style="BORDER-BOTTOM: #000000 1pt solid" width="100%">&nbsp;</TD></TR></TABLE><BR>
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<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>exhibit99-1.htm
<DESCRIPTION>CONSOLIDATED FINANCIAL STATEMENTS
<TEXT>

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    <TD noWrap align=left width="25%">&nbsp;</TD>
    <TD noWrap align=left width="60%">
      <DIV><BR>&nbsp;<BR><BR><BR><BR>&nbsp;</DIV>
      <DIV>&nbsp;</DIV>
      <DIV>&nbsp;</DIV>
      <DIV>&nbsp;</DIV>
      <DIV>&nbsp;</DIV></TD>
    <TD noWrap align=left width="15%">&nbsp;</TD></TR>
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    <TD noWrap align=left width="25%">&nbsp;</TD>
    <TD noWrap align=left width="60%"><FONT style="FONT-FAMILY: arial" size=2>Consolidated
      Financial Statements<BR>(Expressed in U.S. dollars)</FONT></TD>
    <TD noWrap align=left width="15%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="25%">&nbsp;</TD>
    <TD noWrap align=left width="60%"><FONT style="FONT-FAMILY: arial" size=2>&nbsp; </FONT></TD>
    <TD noWrap align=left width="15%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="25%">&nbsp;</TD>
    <TD noWrap align=left width="60%"><FONT style="DISPLAY: inline; FONT-WEIGHT: bold"><FONT style="FONT-FAMILY: arial" size=4>BALLARD POWER SYSTEMS
    INC.</FONT></FONT></TD>
    <TD noWrap align=left width="15%">&nbsp;</TD></TR>
  <TR>
    <TD noWrap align=left width="25%">&nbsp;</TD>
    <TD noWrap align=left width="60%">&nbsp; </TD>
    <TD noWrap align=left width="15%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="25%">&nbsp;</TD>
    <TD noWrap align=left width="60%"><FONT style="FONT-FAMILY: arial" size=2><FONT face=Arial size=2>Years ended&nbsp;December 31, 2012 and 2011
      </FONT></FONT></TD>
    <TD noWrap align=left width="15%">&nbsp;</TD></TR>
  <TR>
    <TD noWrap align=left width="25%">&nbsp;</TD>
    <TD noWrap align=left width="60%">
      <DIV>&nbsp;</DIV>
      <DIV>&nbsp;</DIV>
      <DIV>&nbsp;</DIV>
      <DIV>&nbsp;</DIV>
      <DIV>&nbsp;</DIV>
      <DIV>&nbsp;</DIV>
      <DIV>&nbsp;</DIV>
      <DIV>&nbsp;</DIV>
      <DIV>&nbsp;</DIV>
      <DIV>&nbsp;</DIV>
      <DIV>&nbsp;</DIV></TD>
    <TD noWrap align=left width="15%">&nbsp;</TD></TR></TABLE><BR>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=justify><B><FONT face="Arial" size=4>MANAGEMENT&#146;S REPORT
</FONT></B></P>
<P style="PADDING-LEFT: 15pt" align=justify><B><FONT face="Arial">Management&#146;s Responsibility for the Financial Statements
and</FONT></B><B><FONT face="Arial" size=2> </FONT></B><B><FONT face="Arial">Report on Internal Control over Financial
Reporting</FONT></B></P>
<P style="PADDING-LEFT: 15pt" align=justify><FONT face="Arial" size=2>The
consolidated financial statements contained in this Annual Report have been
prepared by management in accordance with International Financial Reporting
Standards (&#147;IFRS&#148;) as issued by the International Accounting Standards Board.
The integrity and objectivity of the data in these consolidated financial
statements are management&#146;s responsibility. Management is also responsible for
all other information in the Annual Report and for ensuring that this
information is consistent, where appropriate, with the information and data
contained in the consolidated financial statements. </FONT></P>
<P style="PADDING-LEFT: 15pt" align=justify><FONT face="Arial" size=2>Management is responsible for establishing and maintaining adequate
internal control over financial reporting. Internal control over financial
reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of consolidated financial
statements for external reporting purposes in accordance with IFRS. Internal
control over financial reporting may not prevent or detect fraud or
misstatements because of limitations inherent in any system of internal control.
Management has assessed the effectiveness of the Corporation&#146;s internal control
over financial reporting based on the framework in Internal Control &#150; Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission, and concluded that the Corporation&#146;s internal control over financial
reporting was effective as of December 31, 2012. In addition, management
maintains disclosure controls and procedures to provide reasonable assurance
that material information is communicated to management and appropriately
disclosed. Some of the assets and liabilities include amounts, which are based
on estimates and judgments, as their final determination is dependent on future
events. </FONT></P>
<P style="PADDING-LEFT: 15pt" align=justify><FONT face="Arial" size=2>The
Board of Directors oversees management&#146;s responsibilities for financial
reporting through the Audit Committee, which consists of four directors who are
independent and not involved in the daily operations of the Corporation. The
Audit Committee meets on a regular basis with management and the external and
internal auditors to discuss internal controls over the financial reporting
process, auditing matters and financial reporting issues. The Audit Committee is
responsible for appointing the external auditors (subject to shareholder
approval), and reviewing and approving all financial disclosure contained in our
public documents and related party transactions. </FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P style="PADDING-LEFT: 15pt" align=justify><FONT face="Arial" size=2>The external auditors, KPMG LLP,
have audited the financial statements and expressed an unqualified opinion
thereon. KPMG has also expressed an unqualified opinion on the effective
operation of the internal controls over financial reporting as of December 31,
2012. The external auditors have full access to management and the Audit
Committee with respect to their findings concerning the fairness of financial
reporting and the adequacy of internal controls.</FONT></P><BR>

<div style="PADDING-LEFT: 15pt" align=justify>
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    <TD noWrap align=left width="50%"><FONT face="Arial" size=1>&#147;JOHN SHERIDAN&#148;</FONT></TD>
    <TD noWrap align=left width="49%"><FONT face="Arial" size=1>&#147;TONY GUGLIELMIN&#148;</FONT></TD></TR>
  <TR>
    <TD width="99%" colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD width="99%" colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD width="99%" colSpan=2>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"><FONT face="Arial" size=2>JOHN SHERIDAN</FONT></TD>
    <TD noWrap align=left width="49%"><FONT face="Arial" size=2>TONY GUGLIELMIN</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"><FONT face="Arial" size=2>President and</FONT></TD>
    <TD noWrap align=left width="49%"><FONT face="Arial" size=2>Vice President and</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"><FONT face="Arial" size=2>Chief Executive
Officer</FONT></TD>
    <TD noWrap align=left width="49%"><FONT face="Arial" size=2>Chief Financial
  Officer</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"><FONT face="Arial" size=2>February 20, 2013</FONT></TD>
    <TD noWrap align=left width="49%"><FONT face="Arial" size=2>February 20,
  2013</FONT></TD></TR></TABLE></div><BR>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR><IMG src="exhibit99-11x4x1.jpg" border=0> <BR>
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    <TD noWrap align=left width="55%"></TD>
    <TD noWrap align=left width="28%"><B><FONT face="Arial" size=1>KPMG LLP</FONT></B></TD>
    <TD noWrap align=left width="3%"><FONT face="Arial" size=1>Telephone</FONT></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1></FONT></TD>
    <TD noWrap align=left width="11%"><FONT face="Arial" size=1>(604) 691-3000</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="55%"></TD>
    <TD noWrap align=left width="28%"><B><FONT face="Arial" size=1>Chartered
      Accountants</FONT></B></TD>
    <TD noWrap align=left width="3%"><FONT face="Arial" size=1>Fax</FONT></TD>
    <TD noWrap align=right width="2%"><FONT face=Arial size=1>&nbsp;</FONT></TD>
    <TD noWrap align=left width="11%"><FONT face="Arial" size=1>(604) 691-3031</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="55%"></TD>
    <TD noWrap align=left width="28%"><FONT face="Arial" size=1>PO Box 10426 777 Dunsmuir
    Street</FONT></TD>
    <TD noWrap align=left width="3%"><FONT face="Arial" size=1>Internet</FONT></TD>
    <TD noWrap align=left width="2%"><FONT face=Arial size=1>&nbsp;</FONT></TD>
    <TD noWrap align=left width="11%"><FONT face="Arial" size=1>www.kpmg.ca</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="55%"></TD>
    <TD noWrap align=left width="28%"><FONT face="Arial" size=1>Vancouver BC V7Y 1K3</FONT></TD>
    <TD noWrap align=left width="3%"><FONT face=Arial size=1>&nbsp;</FONT></TD>
    <TD noWrap align=left width="2%"><FONT face=Arial size=1>&nbsp;</FONT></TD>
    <TD noWrap align=left width="11%"><FONT face=Arial size=1>&nbsp;</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="55%"></TD>
    <TD noWrap align=left width="28%"><FONT face="Arial" size=1>Canada</FONT></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="2%"><FONT face=Arial size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=left width="11%"></TD></TR></TABLE><BR>
<BR>
<P align=justify><B><FONT face="Arial" size=4>REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM </FONT></B></P>
<P align=justify><FONT face="Arial" size=2>To the Shareholders and Board of
Directors of Ballard Power Systems Inc. </FONT></P>
<P align=justify><FONT face="Arial" size=2>We have audited the accompanying
consolidated statements of financial position of Ballard Power Systems Inc. (the
&#147;Company&#148;) as at December 31, 2012 and December 31, 2011 and the related
consolidated statements of comprehensive loss, changes in equity and cash flows
for the years then ended. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.
</FONT></P>
<P align=justify><FONT face="Arial" size=2>We conducted our audits in
accordance with Canadian generally accepted auditing standards and the standards
of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
</FONT></P>
<P align=justify><FONT face="Arial" size=2>In our opinion, the consolidated
financial statements referred to above present fairly, in all material respects,
the consolidated financial position of the Company as at December 31, 2012 and
December 31, 2011, and its consolidated financial performance and its
consolidated cash flows for the years then ended in conformity with
International Financial Reporting Standards </FONT><FONT face="Arial" size=2>as issued by the International Accounting Standards Board</FONT><FONT face="Arial" size=2>.</FONT><B><FONT face="Arial" size=2> </FONT></B></P>
<P align=justify><FONT face="Arial" size=2>The accompanying consolidated
financial statements have been prepared assuming that the Company will continue
as a going concern. As discussed in note 2(e) to the consolidated financial
statements, the Company&#146;s ability to continue as a going concern and realize its
assets and discharge its liabilities and commitments in the normal course of
business is dependent on it having sufficient liquidity and achieving profitable
operations that are sustainable. These conditions indicate the existence of a
material uncertainty that casts substantial doubt about the Company's ability to
continue as a going concern. Management&#146;s plans in regard to these matters are
also described in note 2(e). The consolidated financial statements do not
include any adjustments that might result from the outcome of this material
uncertainty. </FONT></P>
<P align=center><IMG src="exhibit99-11x4x2.jpg" border=0></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR><IMG src="exhibit99-11x5x1.jpg" border=0> <BR>
<P align=justify><FONT face="Arial" size=2>We also have audited, in
accordance with the standards of the Public Company Accounting Oversight Board
(United States), the Company&#146;s internal control over financial reporting as of
December 31, 2012, based on the criteria established in Internal Control &#150;
Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO), and our report dated February 20, 2013 expressed an
unqualified opinion on the effectiveness of the Company&#146;s internal control over
financial reporting. </FONT></P><IMG src="exhibit99-11x5x2.jpg" border=0> <BR>
<P align=justify><FONT face="Arial" size=2>Chartered Accountants </FONT></P>
<P align=justify><FONT face="Arial" size=2>February 20, 2013<BR></FONT><FONT face="Arial" size=2>Vancouver,</FONT><B><FONT face="Arial" size=2>
</FONT></B><FONT face="Arial" size=2>Canada</FONT><B><FONT face="Arial" size=2> </FONT></B></P>
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    <TD noWrap align=left width="50%"></TD>
    <TD noWrap align=left width="35%"><B><FONT face="Arial" size=1>KPMG LLP</FONT></B></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>Telephone</FONT></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=left width="13%"><FONT face="Arial" size=1>(604) 691-3000</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"></TD>
    <TD noWrap align=left width="35%"><B><FONT face="Arial" size=1>Chartered Accountants</FONT></B></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>Fax</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="13%"><FONT face="Arial" size=1>(604)&nbsp;691-3031</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"></TD>
    <TD noWrap align=left width="35%"><FONT face="Arial" size=1>PO Box 10426 777 Dunsmuir
      Street</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>Internet</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="13%"><FONT face="Arial" size=1>www.kpmg.ca</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"></TD>
    <TD noWrap align=left width="35%"><FONT face="Arial" size=1>Vancouver BC V7Y 1K3</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="13%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"></TD>
    <TD noWrap align=left width="35%"><FONT face="Arial" size=1>Canada</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="13%"></TD></TR></TABLE><BR>
<BR>
<P align=justify><B><FONT face="Arial" size=4>REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM </FONT></B></P>
<P align=justify><FONT face="Arial" size=2>To the Shareholders and Board of
Directors of Ballard Power Systems Inc. </FONT></P>
<P align=justify><FONT face="Arial" size=2>We have audited Ballard Power
Systems Inc.&#146;s (&#147;the Company&#148;) internal control over financial reporting as of
December 31, 2012, based on the criteria established in</FONT><I><FONT face="Arial" size=2> </FONT></I><FONT face="Arial" size=2>Internal Control
&#150; Integrated Framework issued by the Committee of Sponsoring Organizations of
the Treadway Commission (COSO). The Company&#146;s management is responsible for
maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting,
included in the section entitled &#147;Management&#146;s Report on Disclosure Controls and
Procedures and Internal Controls over Financial Reporting&#148; under the heading
&#147;Internal control over financial reporting&#148; included in Management Discussion
and Analysis. Our responsibility is to express an opinion on the Company&#146;s
internal control over financial reporting based on our audit. </FONT></P>
<P align=justify><FONT face="Arial" size=2>We conducted our audit in
accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether effective internal control over
financial reporting was maintained in all material respects. Our audit included
obtaining an understanding of internal control over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating
the design and operating effectiveness of internal control based on the assessed
risk. Our audit also included performing such other procedures as we considered
necessary in the circumstances. We believe that our audit provides a reasonable
basis for our opinion. </FONT></P>
<P align=justify><FONT face="Arial" size=2>A company&#146;s internal control over
financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted
accounting principles. A company&#146;s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of
the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company&#146;s
assets that could have a material effect on the financial statements.
</FONT></P>
<P align=justify><FONT face="Arial" size=2>Because of its inherent
limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate. </FONT></P>
<P align=justify><FONT face="Arial" size=2>In our opinion, the Company
maintained, in all material respects, effective internal control over financial
reporting as of December 31, 2012, based on the criteria established in Internal
Control &#150; Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). </FONT></P>
<P align=center><IMG src="exhibit99-11x4x2.jpg" border=0></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR><IMG src="exhibit99-11x5x1.jpg" border=0> <BR>
<P align=justify><FONT face="Arial" size=2>We also have audited, in
accordance with Canadian generally accepted auditing standards and the standards
of the Public Company Accounting Oversight Board (United States), the
consolidated statements of financial position of the Company as of December 31,
2012 and December 31, 2011, and the related consolidated statements of
comprehensive loss, changes in equity and cash flows for the years then ended,
and our report dated February 20, 2013 expressed an unqualified opinion on those
consolidated financial statements. </FONT></P><IMG src="exhibit99-11x5x2.jpg" border=0> <BR>
<P align=justify><FONT face="Arial" size=2>Chartered Accountants </FONT></P>
<P align=justify><FONT face="Arial" size=2>February 20, 2013<BR>Vancouver,
Canada </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=justify><B><FONT face="Arial">BALLARD POWER SYSTEMS INC.
<BR></FONT></B><FONT face="Arial" size=2>Consolidated Statement of Financial
Position <BR></FONT><FONT face="Arial" size=1>(Expressed in thousands of U.S.
dollars)</FONT><FONT face="Arial" size=2> </FONT></P>
<TABLE style="FONT-SIZE: 10pt; LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%" colSpan=2><B><FONT face="Arial">December
      31,</FONT></B></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="4%" colSpan=2><FONT face="Arial">December 31,</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="83%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial">Note</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face="Arial">2012</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial">2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><B><FONT face="Arial">Assets</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD width="99%" colSpan=11>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial">Current
    assets:</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial">Cash and cash equivalents</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=left width="3%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial">$&nbsp;&nbsp;&nbsp;&nbsp; </FONT></B></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial">9,770</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial">$&nbsp;&nbsp;&nbsp;&nbsp;
      </FONT></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial">20,316</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial">Short-term
      investments</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial">12,068</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial">25,878</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial">Trade and other receivables</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial">7</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial">16,374</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial">17,164</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial">Inventories</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial">8</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial">11,277</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial">13,614</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial">Prepaid expenses and other current
      assets</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face="Arial">1,011</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial">934</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial">50,500</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial">77,906</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial">Assets classified as held for
      sale</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial">28</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; border-bottom: Black 1pt solid"></TD>
    <TD NOWRAP STYLE="text-align: right; width: 3%; border-bottom: Black 1pt solid"><B><FONT face="Arial">10,798</FONT></B></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; border-bottom: Black 1pt solid"></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; border-bottom: Black 1pt solid"></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; border-bottom: Black 1pt solid"></TD>
    <TD NOWRAP STYLE="text-align: right; width: 3%; border-bottom: Black 1pt solid"><FONT face="Arial">-</FONT></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; border-bottom: Black 1pt solid"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial">Total current
      assets</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial">61,298</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial">77,906</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD width="99%" colSpan=11>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial">Property, plant and
      equipment</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial">9</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial">24,316</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial">35,085</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial">Intangible assets</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial">10</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial">4,194</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial">2,249</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial">Goodwill</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial">11</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial">36,291</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial">48,106</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial">Investments</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial">12</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial">667</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial">635</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial">Long-term trade
      receivables</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial">7</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial">594</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial">1,126</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial">Other long-term assets</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face="Arial">187</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial">183</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial">Total assets</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial">$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial">127,547</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial">$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial">165,290</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD width="99%" colSpan=11>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><B><FONT face="Arial">Liabilities</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD width="99%" colSpan=11>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial">Current
      liabilities:</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial">Bank operating line</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial">13</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial">$</FONT></B></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial">9,358</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial">$</FONT></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial">4,587</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial">Trade and other
      payables</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial">14</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial">12,215</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial">22,693</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial">Deferred revenue</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial">3,705</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial">3,560</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial">Provisions</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial">15</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial">9,423</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial">9,573</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial">Finance lease liability</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial">13 &amp; 16</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial">1,043</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial">978</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial">Convertible
      debenture</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial">17</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial">2,924</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial">-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial">38,668</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial">41,391</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial">Liabilities classified
      as held for sale</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial">28</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial">1,423</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial">-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial">Total current liabilities</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial">40,091</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial">41,391</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR>
    <TD width="99%" colSpan=11>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial">Finance lease
      liability</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial">13 &amp; 16 </FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial">13,011</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial">13,749</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial">Deferred gain</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial">5,193</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial">5,653</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial">Provisions</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial">15</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial">5,089</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial">4,733</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial">Convertible debenture</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial">17</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial">-</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial">1,733</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial">Employee future
      benefits</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial">18</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial">6,161</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial">5,686</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial">Total liabilities</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial">69,545</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial">72,945</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR>
    <TD width="99%" colSpan=11>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial">Equity:</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Share capital</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial">19</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial">845,630</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial">837,686</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Treasury
shares</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial">19</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial">(313</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial">)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial">(515</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial">)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Contributed surplus</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial">19</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial">291,184</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial">289,219</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accumulated
      deficit</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial">(1,074,181</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial">)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial">(1,031,279</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial">)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Foreign currency reserve</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face="Arial">92</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial">209</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial">Total equity
      attributable to equity holders</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial">62,412</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial">95,320</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Dantherm Power A/S non-controlling interests</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face="Arial">(4,410</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><B><FONT face="Arial">)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial">(2,975</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Arial">)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial">Total equity</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial">58,002</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial">92,345</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial">Total liabilities and equity</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><B><FONT face="Arial">$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><B><FONT face="Arial">127,547</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial">$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face="Arial">165,290</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD></TR>
  <TR>
    <TD width="99%" colSpan=11>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial">Subsequent events (note 29)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial">See accompanying notes to consolidated
      financial statements.</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD></TR></TABLE><BR>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="25%"><FONT face="Arial" size=2>Approved on behalf of the
      Board:</FONT></TD>
    <TD noWrap align=left width="74%"></TD></TR>
  <TR>
    <TD width="99%" colSpan=2>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="25%"><FONT face="Arial" size=2>&#147;Ed Kilroy&#148;</FONT></TD>
    <TD noWrap align=left width="74%"><FONT face="Arial" size=2>&#147;Ian Bourne&#148;</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="25%"><FONT face="Arial" size=2>Director</FONT></TD>
    <TD noWrap align=left width="74%"><FONT face="Arial" size=2>Director</FONT></TD></TR></TABLE><BR>
<HR align=center width="100%" noShade SIZE=2>
<!--PART B-->
<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=left><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS
INC.<BR></FONT></B><FONT face="Arial" size=2>Consolidated Statement of
Comprehensive Loss<BR>For the year ended December 31</FONT><BR><FONT face="Arial" size=1>(</FONT><FONT face="Arial" size=1>Expressed in
thousands of U.S. dollars, except per share amounts and number of
shares)</FONT><FONT face="Arial" size=1> </FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=right width="87%"></TD>
    <TD noWrap align=right width="1%"><FONT face=Arial size=2>&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=2>Note</FONT></TD>
    <TD noWrap align=right width="1%"><FONT face=Arial size=2>&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=2>2012</FONT></B></TD>
    <TD noWrap align=right width="1%"><FONT face=Arial size=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="6%" colSpan=2><FONT face="Arial" size=2>2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="87%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" colSpan=3><FONT face="Arial" size=1>(restated &#150; note 28)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>Revenues:</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="5%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><FONT face="Arial" size=2>Product and service
      revenues</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=2>$&nbsp;&nbsp;</FONT></B></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=2>43,690</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=2>$&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=right width="5%"><FONT face="Arial" size=2>55,773</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face="Arial" size=2>Cost of product
      and service revenues</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>36,321</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face="Arial" size=2>48,494</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><FONT face="Arial" size=2>Gross margin</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=2>7,369</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><FONT face="Arial" size=2>7,279</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR>
    <TD width="100%" colSpan=10>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>Operating expenses:</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="5%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><FONT face="Arial" size=2>Research and product
      development</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=2>19,273</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face="Arial" size=2>24,896</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face="Arial" size=2>General and
      administrative</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>12,306</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face="Arial" size=2>11,455</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><FONT face="Arial" size=2>Sales and marketing</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=2>6,901</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><FONT face="Arial" size=2>8,515</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face="Arial" size=2>Total operating
      expenses</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>38,480</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face="Arial" size=2>44,866</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD width="100%" colSpan=10>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face="Arial" size=2>Results from
      operating activities</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>(31,111</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face="Arial" size=2>(37,587</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><FONT face="Arial" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Finance income and
      other</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=2>27</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=2>31</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face="Arial" size=2>195</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face="Arial" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Finance
    expense</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>27</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>(1,690</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face="Arial" size=2>(1,392</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><FONT face="Arial" size=2>Net finance expense</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=2>(1,659</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face="Arial" size=2>(1,197</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face="Arial" size=2>Gain (loss) on
      sale of property, plant and equipment</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>9</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>(69</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face="Arial" size=2>734</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><FONT face="Arial" size=2>Impairment loss on property,
      plant and equipment</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=2>9</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=2>(570</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face="Arial" size=2>(1,727</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face="Arial" size=2>Impairment loss
      on goodwill</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>11</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>(10,000</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face="Arial" size=2>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><FONT face="Arial" size=2>Loss before income
    taxes</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=2>(43,409</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face="Arial" size=2>(39,777</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face="Arial" size=2>Income tax
      expense</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>23</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>-</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face="Arial" size=2>(134</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><B><FONT face="Arial" size=2>Net
      loss from continuing operations</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=2>(43,409</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face="Arial" size=2>(39,911</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face="Arial" size=2>Net earnings
      (loss) from discontinued operations</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>28</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>(65</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face="Arial" size=2>3,755</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><B><FONT face="Arial" size=2>Net
      loss</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=2>$</FONT></B></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=2>(43,474</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=2>$</FONT></TD>
    <TD noWrap align=right width="5%"><FONT face="Arial" size=2>(36,156</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face="Arial" size=2>Foreign currency
      translation differences</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>(186</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face="Arial" size=2>363</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><FONT face="Arial" size=2>Defined benefit plan actuarial
      losses</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=2>18</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=2>(807</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face="Arial" size=2>(2,905</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face="Arial" size=2>Net gain (loss)
      on hedge of forward contracts</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>(20</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face="Arial" size=2>20</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><B><FONT face="Arial" size=2>Comprehensive loss</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=2>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=2>(44,487</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="5%"><FONT face="Arial" size=2>(38,678</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=2>)</FONT></TD></TR>
  <TR>
    <TD noWrap align=left width="87%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="5%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>Net loss attributable to:</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="5%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><FONT face="Arial" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ballard Power Systems
      Inc. from continuing operations</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=2>$</FONT></B></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=2>(42,070</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=2>$</FONT></TD>
    <TD noWrap align=right width="5%"><FONT face="Arial" size=2>(37,175</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face="Arial" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ballard Power Systems
      Inc. from discontinued operations</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>(65</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face="Arial" size=2>3,755</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><FONT face="Arial" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dantherm Power A/S
      non-controlling interest</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=2>(1,339</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><FONT face="Arial" size=2>(2,736</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Arial" size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face="Arial" size=2>Net
    loss</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>(43,474</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face="Arial" size=2>(36,156</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>)</FONT></TD></TR>
  <TR>
    <TD noWrap align=left width="87%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="5%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>Comprehensive loss attributable
      to:</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="5%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><FONT face="Arial" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ballard Power Systems
      Inc.</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=2>$</FONT></B></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=2>(43,059</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=2>$</FONT></TD>
    <TD noWrap align=right width="5%"><FONT face="Arial" size=2>(36,116</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face="Arial" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dantherm Power A/S
      non-controlling interest</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>(1,428</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face="Arial" size=2>(2,562</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><FONT face="Arial" size=2>Comprehensive loss</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=2>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=2>(44,487</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="5%"><FONT face="Arial" size=2>(38,678</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=2>)</FONT></TD></TR>
  <TR>
    <TD noWrap align=left width="87%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="5%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>Basic and diluted loss per share
      attributable to Ballard Power Systems Inc.</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="5%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><FONT face="Arial" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Continuing
      operations</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=2>$</FONT></B></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=2>(0.48</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=2>$</FONT></TD>
    <TD noWrap align=right width="5%"><FONT face="Arial" size=2>(0.44</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face="Arial" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Discontinued
      operations</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>$</FONT></B></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>(0.00</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>$</FONT></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face="Arial" size=2>0.04</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="Arial" size=2>Net loss</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=2>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=2>(0.48</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="5%"><FONT face="Arial" size=2>(0.40</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>Weighted average number of common
      shares outstanding</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>87,591,501</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face="Arial" size=2>&nbsp;&nbsp;84,440,970</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR></TABLE><BR>
<P align=left><FONT face="Arial" size=2>See accompanying notes to
consolidated financial statements.</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=left><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS
INC.<BR></FONT></B><FONT face="Arial" size=2>Consolidated Statement of
Changes in Equity<BR></FONT><FONT face="Arial" size=1>(Expressed in thousands
of U.S. dollars except per share amounts and number of shares)</FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=left width="74%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=center width="16%" colSpan=16><FONT face="Arial" size=1>Ballard Power Systems Inc. Equity</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed; BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=right width="1%"><FONT face="Arial" size=1>Dantherm</FONT><BR><FONT face="Arial" size=1>Power A/S</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed; BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=right width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=left width="74%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=right width="1%">&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=right width="1%"><FONT face="Arial" size=1>Number of</FONT><BR><FONT face="Arial" size=1>shares</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=right width="1%">&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=right width="1%"><FONT face="Arial" size=1>Share</FONT><BR><FONT face="Arial" size=1>capital</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=right width="1%">&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=right width="1%"><FONT face="Arial" size=1>Treasury</FONT><BR><FONT face="Arial" size=1>shares</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=right width="1%"><FONT face="Arial" size=1>Contributed</FONT><BR><FONT face="Arial" size=1>surplus</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=right width="1%"><FONT face="Arial" size=1>Accumulated</FONT><BR><FONT face="Arial" size=1>deficit</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=right width="1%"><FONT face="Arial" size=1>Foreign</FONT><BR><FONT face="Arial" size=1>currency</FONT><BR><FONT face="Arial" size=1>reserve</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed; BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=right width="1%">&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=right width="1%"><FONT face="Arial" size=1>Non-</FONT><BR><FONT face="Arial" size=1>controlling</FONT><BR><FONT face="Arial" size=1>interests</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed; BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=right width="1%">&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=right width="1%"><FONT face="Arial" size=1>Total</FONT><BR><FONT face="Arial" size=1>equity</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=right width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="74%" bgColor=#c0c0c0><FONT face="Arial" size=1>Balance,
      December 31, 2010</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>84,148,465</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>836,245</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;
    </FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(670</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp; </FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>289,444</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;
    </FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(995,023</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp; </FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;
    </FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(413</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;
    </FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>129,583</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="74%"><FONT face="Arial" size=1>Net loss</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>(33,420</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>(2,736</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>(36,156</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="74%" bgColor=#c0c0c0><FONT face="Arial" size=1>Non-dilutive
      financing</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(60</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(60</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="74%"><FONT face="Arial" size=1>Purchase of treasury
      shares</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>(327</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>(327</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="74%" bgColor=#c0c0c0><FONT face="Arial" size=1>RSUs
      redeemed</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>376,225</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>1,393</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>482</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(2,769</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>69</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(825</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="74%"><FONT face="Arial" size=1>Options exercised</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>25,834</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>48</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>(8</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>40</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR STYLE="background-color: Silver">
    <TD noWrap align=left width="74%"><FONT face="Arial" size=1>Share distribution
plan</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>2,612</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>2,612</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR>
    <TD NOWRAP ALIGN="LEFT" WIDTH="74%"><FONT face="Arial" size=1>Other
      comprehensive income (loss):</FONT></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-right: #000000 1pt dashed"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-right: #000000 1pt dashed"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD></TR>
  <TR STYLE="background-color: Silver">
    <TD noWrap align=left width="74%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign currency translation
      for</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>189</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>174</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>363</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR STYLE="background-color: Silver">
    <TD noWrap align=left width="74%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;foreign
      operations</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR>
    <TD NOWRAP ALIGN="LEFT" WIDTH="74%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Defined benefit plan actuarial
      loss</FONT></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><FONT face="Arial" size=1>(2,905</FONT></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-right: #000000 1pt dashed"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-right: #000000 1pt dashed"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><FONT face="Arial" size=1>(2,905</FONT></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR STYLE="background-color: Silver">
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="74%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net gain on hedge of forward
      contracts</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>20</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>20</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR>
    <TD NOWRAP ALIGN="LEFT" WIDTH="74%"><FONT face="Arial" size=1>Balance, December 31,
      2011</FONT></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><FONT face="Arial" size=1>84,550,524</FONT></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><FONT face="Arial" size=1>837,686</FONT></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><FONT face="Arial" size=1>(515</FONT></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"><FONT face=Arial size=1>$</FONT></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><FONT face="Arial" size=1>289,219</FONT></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><FONT face="Arial" size=1>(1,031,279</FONT></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><FONT face="Arial" size=1>209</FONT></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-right: #000000 1pt dashed"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><FONT face="Arial" size=1>(2,975</FONT></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-right: #000000 1pt dashed"><FONT face="Arial" size=1>)</FONT></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><FONT face="Arial" size=1>92,345</FONT></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD></TR>
  <TR STYLE="background-color: Silver">
    <TD noWrap align=left width="74%"><B><FONT face="Arial" size=1>Net
      loss</FONT></B></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>(42,135</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>(1,339</FONT></B></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed" noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>(43,474</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD></TR>
  <TR>
    <TD NOWRAP ALIGN="LEFT" WIDTH="74%"><B><FONT face="Arial" size=1>Acquisition (note 6)</FONT></B></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>7,136,237</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>7,493</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-right: #000000 1pt dashed"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-right: #000000 1pt dashed"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>7,493</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD></TR>
  <TR STYLE="background-color: Silver">
    <TD noWrap align=left width="74%"><B><FONT face="Arial" size=1>Additional investment in</FONT></B></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>(7</FONT></B></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed" noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>(7</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD></TR>
  <TR STYLE="background-color: Silver">
    <TD NOWRAP ALIGN="LEFT" WIDTH="74%"><B><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dantherm Power
      A/S</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-right: #000000 1pt dashed"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-right: #000000 1pt dashed"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD></TR>
  <TR>
    <TD NOWRAP ALIGN="LEFT" WIDTH="74%"><B><FONT face="Arial" size=1>Purchase of treasury shares</FONT></B></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>(6</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-right: #000000 1pt dashed"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-right: #000000 1pt dashed"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>(6</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD></TR>
  <TR STYLE="background-color: Silver">
    <TD noWrap align=left width="74%"><B><FONT face="Arial" size=1>DSUs redeemed</FONT></B></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>52,120</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>314</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>(358</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>(44</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD></TR>
  <TR>
    <TD NOWRAP ALIGN="LEFT" WIDTH="74%"><B><FONT face="Arial" size=1>RSUs redeemed</FONT></B></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>49,095</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>113</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>208</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>(415</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>40</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-right: #000000 1pt dashed"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-right: #000000 1pt dashed"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>(54</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD></TR>
  <TR STYLE="background-color: Silver">
    <TD noWrap align=left width="74%"><B><FONT face="Arial" size=1>Options exercised</FONT></B></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>13,501</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>24</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>(7</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>17</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR>
    <TD NOWRAP ALIGN="LEFT" WIDTH="74%"><B><FONT face="Arial" size=1>Share distribution plan</FONT></B></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>2,745</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-right: #000000 1pt dashed"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-right: #000000 1pt dashed"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>2,745</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD></TR>
  <TR STYLE="background-color: Silver">
    <TD noWrap align=left width="74%"><B><FONT face="Arial" size=1>Other comprehensive loss:</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR>
    <TD NOWRAP ALIGN="LEFT" WIDTH="74%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG>Foreign currency
      translation for</STRONG></FONT></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>(97</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-right: #000000 1pt dashed"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>(89</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-right: #000000 1pt dashed"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>(186</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD></TR>
  <TR>
    <TD NOWRAP ALIGN="LEFT" WIDTH="74%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG>foreign
      operations</STRONG></FONT></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-right: #000000 1pt dashed"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-right: #000000 1pt dashed"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD></TR>
  <TR STYLE="background-color: Silver">
    <TD noWrap align=left width="74%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG>Defined benefit plan
      actuarial loss</STRONG></FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>(807</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>(807</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD></TR>
  <TR>
    <TD NOWRAP ALIGN="LEFT" WIDTH="74%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG>Net loss on hedge of
      forward</STRONG></FONT></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>(20</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-right: #000000 1pt dashed"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-right: #000000 1pt dashed"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%"><B><FONT face="Arial" size=1>(20</FONT></B></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD></TR>
  <TR>
    <TD NOWRAP ALIGN="LEFT" WIDTH="74%" STYLE="border-bottom: #000000 1pt solid"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG>contracts</STRONG></FONT></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-bottom: #000000 1pt solid"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-bottom: #000000 1pt solid"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-bottom: #000000 1pt solid"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-bottom: #000000 1pt solid"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-bottom: #000000 1pt solid"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-bottom: #000000 1pt solid"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-bottom: #000000 1pt solid"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-bottom: #000000 1pt solid"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-bottom: #000000 1pt solid"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-bottom: #000000 1pt solid"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-bottom: #000000 1pt solid"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-bottom: #000000 1pt solid"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-bottom: #000000 1pt solid"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-bottom: #000000 1pt solid"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-bottom: #000000 1pt solid"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-bottom: #000000 1pt solid"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-bottom: #000000 1pt solid"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-right: #000000 1pt dashed; border-bottom: #000000 1pt solid"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-bottom: #000000 1pt solid"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-bottom: #000000 1pt solid"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-bottom: #000000 1pt solid"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-right: #000000 1pt dashed; border-bottom: #000000 1pt solid"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-bottom: #000000 1pt solid"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-bottom: #000000 1pt solid"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-bottom: #000000 1pt solid"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="1%" STYLE="border-bottom: #000000 1pt solid"></TD></TR>
  <TR STYLE="background-color: Silver">
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="74%"><B><FONT face="Arial" size=1>Balance, December 31, 2012</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=1>91,801,477</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=1>845,630</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=1>(313</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><STRONG><FONT face=Arial size=1>)</FONT></STRONG></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><STRONG><FONT face=Arial size=1>$</FONT></STRONG></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=1>291,184</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=1>(1,074,181</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=1>92</FONT></B></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed; BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=1>(4,410</FONT></B></TD>
    <TD style="BORDER-RIGHT: #000000 1pt dashed; BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=1>58,002</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD></TR></TABLE><BR>
<P align=left><FONT face="Arial" size=2>See accompanying notes to
consolidated financial statements.</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=left><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS
INC.<BR></FONT></B><FONT face="Arial" size=2>Consolidated Statement of Cash
Flows<BR>For the year ended December 31<BR></FONT><FONT face="Arial" size=1>(Expressed in thousands of U.S. dollars)</FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="91%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=2>Note</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=2>2012</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=2>2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>Cash provided by (used
    for):</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD align=left width="100%" colSpan=10>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>Operating activities:</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD align=left width="100%" colSpan=10>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%" bgColor=#c0c0c0><FONT face="Arial" size=2>Net loss for the
      year</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>(43,474</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>$&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>(36,156</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%"><FONT face="Arial" size=2>Adjustments for:</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%" bgColor=#c0c0c0><FONT face="Arial" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Compensatory
      shares</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>2,746</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>2,646</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%"><FONT face="Arial" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employee future
      benefits</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=2>(331</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=2>(172</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%" bgColor=#c0c0c0><FONT face="Arial" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and
      amortization</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>6,184</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>5,906</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%"><FONT face="Arial" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss (gain) on sale of
      property, plant and equipment</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=2>9</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=2>69</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=2>(734</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%" bgColor=#c0c0c0><FONT face="Arial" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impairment loss on
      property, plant and equipment</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>9</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>1,070</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>1,727</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%"><FONT face="Arial" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impairment loss on
      goodwill</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=2>11</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=2>11,815</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=2>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%" bgColor=#c0c0c0><FONT face="Arial" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unrealized loss (gain)
      on forward contracts</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>(285</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>285</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=2>(22,206</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=2>(26,498</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Arial" size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%" bgColor=#c0c0c0><FONT face="Arial" size=2>Changes in
      non-cash working capital:</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%"><FONT face="Arial" size=2>Trade and other
      receivables</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=2>65</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=2>(4,317</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%" bgColor=#c0c0c0><FONT face="Arial" size=2>Inventories</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>4,434</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>(1,293</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%"><FONT face="Arial" size=2>Prepaid expenses and other
      current assets</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=2>(151</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=2>42</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%" bgColor=#c0c0c0><FONT face="Arial" size=2>Trade and other
      payables</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>(10,459</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>(1,691</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%"><FONT face="Arial" size=2>Deferred revenue</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=2>166</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=2>1,052</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%" bgColor=#c0c0c0><FONT face="Arial" size=2>Warranty
      provision</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>5</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>(516</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=2>(5,940</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=2>(6,723</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Arial" size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%" bgColor=#c0c0c0><FONT face="Arial" size=2>Cash used by
      operating activities</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>(28,146</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>(33,221</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>)</FONT></TD></TR>
  <TR>
    <TD align=left width="100%" colSpan=10>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>Investing activities:</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD align=left width="100%" colSpan=10>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%" bgColor=#c0c0c0><FONT face="Arial" size=2>Net decrease
      (increase) in short-term investments</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>13,810</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>(3,370</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%"><FONT face="Arial" size=2>Additions to property, plant and
      equipment</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=2>(1,168</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=2>(4,107</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%" bgColor=#c0c0c0><FONT face="Arial" size=2>Net proceeds on
      sale of property, plant and equipment and other</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>424</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>3,666</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%"><FONT face="Arial" size=2>Net investments in associated
      companies</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=2>12</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=2>(32</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=2>36</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%" bgColor=#c0c0c0><FONT face="Arial" size=2>Other investment
      activities</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>(9</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=2>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=2>13,025</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Arial" size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=2>(3,775</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Arial" size=2>)</FONT></TD></TR>
  <TR>
    <TD align=left width="100%" colSpan=10>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>Financing activities:</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD align=left width="100%" colSpan=10>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%" bgColor=#c0c0c0><FONT face="Arial" size=2>Non-dilutive
      financing</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>-</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>(60</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%"><FONT face="Arial" size=2>Purchase of treasury
      shares</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=2>(6</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=2>(327</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%" bgColor=#c0c0c0><FONT face="Arial" size=2>Payment of
      finance lease liabilities</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>(999</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>(830</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%"><FONT face="Arial" size=2>Net proceeds from bank operating
      line</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=2>13</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=2>4,771</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=2>4,587</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%" bgColor=#c0c0c0><FONT face="Arial" size=2>Net proceeds on
      issuance of share capital</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>17</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>40</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%"><FONT face="Arial" size=2>Proceeds on issuance of
      convertible debenture from</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=2>17</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=2>862</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=2>1,718</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%"><FONT face="Arial" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dantherm Power A/S
      non-controlling interests</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>4,645</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>5,128</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD align=left width="100%" colSpan=10>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%" bgColor=#c0c0c0><FONT face="Arial" size=2>Effect of
      exchange rate fluctuations on cash and cash equivalents held</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>$</FONT></B></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>(70</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>$</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>247</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD align=left width="100%" colSpan=10>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>Increase (decrease) in cash and cash
      equivalents</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>$</FONT></B></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>(10,546</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>$</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>(31,621</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%"><B><FONT face="Arial" size=2>Cash and cash equivalents, beginning of period</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=2>20,316</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=2>51,937</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="91%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>Cash and cash equivalents, end of
      period</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=2>9,770</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=2>20,316</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR></TABLE><BR>
<P align=left><FONT face="Arial" size=2>Supplemental disclosure of cash flow
information (note 25).<BR>Cash flows of discontinued operations (note
28).<BR></FONT><FONT face="Arial" size=2>See accompanying notes to
consolidated financial statements.</FONT></P>
<HR align=center width="100%" noShade size="2">

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=justify><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS
INC.<BR></FONT></B><FONT face="Arial" size=2>Notes to Consolidated Financial
Statements<BR></FONT><FONT face="Arial" size=1>Years ended December 31, 2012,
and 2011<BR></FONT><FONT face="Arial" size=1>(Tabular amounts expressed in
thousands of U.S. dollars, except per share amounts and number of
shares)</FONT></P>
<TABLE style="BORDER-COLLAPSE: collapse; TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD style="BORDER-TOP: #000000 1.5pt solid" vAlign=top noWrap></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" width="100%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap>
      <P align=justify><B><FONT face="Arial" size=2>1.</FONT></B></P></TD>
    <TD width="100%">
      <P align=justify><B><FONT face="Arial" size=2>Reporting
      entity:</FONT></B></P></TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD width="100%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD width="100%">
      <P align=justify><FONT face="Arial" size=2>The principal business of
      Ballard Power Systems Inc. (the &#147;Corporation&#148;) is the design, development,
      manufacture, sale and service of fuel cell products for a variety of
      applications, focusing on motive power (material handling and buses) and
      stationary power (back-up power and distributed generation) markets; and
      engineering services for a variety of fuel cell applications. A fuel cell
      is an environmentally clean electrochemical device that combines hydrogen
      fuel with oxygen (from the air) to produce electricity. The Corporation&#146;s
      technology is based on proton exchange membrane (&#147;PEM&#148;) fuel
      cells.</FONT></P>
      <P align=justify><FONT face="Arial" size=2>The Corporation is a company
      domiciled in Canada and its registered office is located at 9000 Glenlyon
      Parkway, Burnaby, British Columbia, Canada, V5J 5J8. The consolidated
      financial statements of the Corporation as at and for the year ended
      December 31, 2012 comprise the Corporation and its subsidiaries (note
      3(a)).</FONT></P></TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD width="100%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap>
      <P align=justify><B><FONT face="Arial" size=2>2.</FONT></B></P></TD>
    <TD width="100%">
      <P align=justify><B><FONT face="Arial" size=2>Basis of
      preparation:</FONT></B></P></TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"></TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(a)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Statement of
      compliance:</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>These consolidated financial
      statements of the Corporation have been prepared in accordance with
      International Financial Reporting Standards (&#147;IFRS&#148;) as issued by the
      International Accounting Standards Board (&#147;IASB&#148;).</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>The consolidated financial
      statements were authorized for issue by the Board of Directors on February
      20, 2013.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(b)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Basis of
    measurement:</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>The consolidated financial
      statements have been prepared on the historical cost basis except for the
      following material items in the statement of financial
  position:</FONT></TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%">&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%">
      <UL style="FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; FONT-FAMILY: arial; TEXT-ALIGN: justify"><LI>Financial instruments classified as fair value through profit or
        loss and available-for-sale are measured at fair value;<BR>&nbsp;
        </LI><LI>Derivative financial instruments are measured at fair value;
        and<BR>&nbsp;
        </LI><LI>Employee future benefits liability is recognized as the net total of
        the present value of the defined benefit obligation, less the fair value
        of plan assets. </LI></UL></TD></TR></TABLE>
<P align=right><FONT face="Arial" size=1>12</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=justify><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS
INC.<BR></FONT></B><FONT face="Arial" size=2>Notes to Consolidated Financial
Statements<BR></FONT><FONT face="Arial" size=1>Years ended December 31, 2012,
and 2011<BR></FONT><FONT face="Arial" size=1>(Tabular amounts expressed in
thousands of U.S. dollars, except per share amounts and number of shares)
</FONT></P>
<TABLE style="BORDER-COLLAPSE: collapse; TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD style="BORDER-TOP: #000000 1.5pt solid" vAlign=top noWrap></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" width="100%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap>
      <P align=justify><B><FONT face="Arial" size=2>2.</FONT></B></P></TD>
    <TD width="100%">
      <P align=justify><B><FONT face="Arial" size=2>Basis of preparation
      (cont&#146;d):</FONT></B></P></TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD width="100%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap>
      <P align=justify><FONT face="Arial" size=2>(c)</FONT></P></TD>
    <TD width="100%">
      <P align=justify><FONT face="Arial" size=2>Functional and presentation
      currency:</FONT></P></TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD width="100%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD width="100%">
      <P align=justify><FONT face="Arial" size=2>These consolidated financial
      statements are presented in U.S. dollars, which is the Corporation&#146;s
      functional currency.</FONT></P></TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"></TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(d)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Use of
  estimates:</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>The preparation of the
      consolidated financial statements in conformity with IFRS requires the
      Corporation&#146;s management to make estimates and assumptions that affect the
      application of accounting policies and the reported amounts of assets,
      liabilities, income and expenses. Actual results may differ from these
      estimates.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>Estimates and underlying
      assumptions are reviewed on an ongoing basis. Revisions to accounting
      estimates are recognized in the period in which the estimates are revised
      and in any future periods affected.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>Significant areas having
      estimation uncertainty include revenue recognition, asset impairment,
      warranty provision, inventory provision, employee future benefits, and
      income taxes. These estimates and assumptions are discussed further in
      note 4.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(e)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Going concern:</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>These consolidated financial
      statements have been prepared assuming the Corporation will continue as a
      going concern. The Corporation is required to assess its ability to
      continue as a going concern or whether substantial doubt exists as to the
      Corporation&#146;s ability to continue as a going concern into the foreseeable
      future. While the Corporation believes that it has adequate liquidity in
      cash, working capital and non-core asset monetization opportunities (notes
      28 &amp; 29) to finance its operations, there are material risks and
      uncertainties that cause substantial doubt as to the Corporation&#146;s ability
      to continue as a going concern. The Corporation&#146;s ability to continue as a
      going concern and realize its assets and discharge its liabilities and
      commitments in the normal course of business is dependent upon the
      Corporation having adequate liquidity and achieving profitable operations
      that are sustainable. There are various risks and uncertainties affecting
      the Corporation including, but not limited to, the market acceptance and
      rate of commercialization of the Corporation&#146;s products, the ability of
      the Corporation to successfully execute its business plan, and general
      global economic conditions, certain of which are beyond the Corporation&#146;s
      control.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>The Corporation&#146;s strategy
      to mitigate these risks and uncertainties is to execute a business plan
      aimed at continued focus on Fuel Cell Products revenue growth, improving
      overall gross margins, managing operating expenses and working capital
      requirements, and securing additional financing to fund its operations as
      needed including the sale of non-core assets (notes 28 &amp; 29). Failure
      to implement this plan could have a material adverse effect on the
      Corporation&#146;s financial condition and or results of
  operations.</FONT></TD></TR></TABLE>
<P align=right><FONT face="Arial" size=1>13</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=justify><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS
INC.<BR></FONT></B><FONT face="Arial" size=2>Notes to Consolidated Financial
Statements<BR></FONT><FONT face="Arial" size=1>Years ended December 31, 2012,
and 2011<BR></FONT><FONT face="Arial" size=1>(Tabular amounts expressed in
thousands of U.S. dollars, except per share amounts and number of shares)
</FONT></P>
<TABLE style="BORDER-COLLAPSE: collapse; TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD style="BORDER-TOP: #000000 1.5pt solid" vAlign=top noWrap></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" width="100%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap>
      <P align=justify><B><FONT face="Arial" size=2>2.</FONT></B></P></TD>
    <TD width="100%">
      <P align=justify><B><FONT face="Arial" size=2>Basis of preparation
      (cont&#146;d): </FONT></B></P></TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD width="100%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap>
      <P align=justify><FONT face="Arial" size=2>(e)</FONT></P></TD>
    <TD width="100%">
      <P align=justify><FONT face="Arial" size=2>Going concern (cont&#146;d):
      </FONT></P></TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD width="100%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD width="100%">
      <P align=justify><FONT face="Arial" size=2>These consolidated financial
      statements do not include any adjustments or disclosures that would be
      required if assets are not realized and liabilities and commitments are
      not settled in the normal course of operations. </FONT></P></TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD width="100%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap>
      <P align=justify><B><FONT face="Arial" size=2>3.</FONT></B></P></TD>
    <TD width="100%">
      <P align=justify><B><FONT face="Arial" size=2>Significant accounting
      policies:</FONT></B></P></TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD width="100%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD width="100%">
      <P align=justify><FONT face="Arial" size=2>The accounting policies set
      out below have been applied consistently to all periods presented in these
      consolidated financial statements, unless otherwise indicated. </FONT></P>
      <P align=justify><FONT face="Arial" size=2>Certain prior year
      comparative figures have been reclassified to comply with current year
      presentation. </FONT></P></TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"></TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(a)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Basis of
      consolidation:</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>The consolidated financial
      statements include the accounts of the Corporation and its principal
      subsidiaries as follows:</FONT></TD></TR></TABLE><BR>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="95%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>Percentage
ownership</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="95%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>2012</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="95%" bgColor=#c0c0c0><FONT face="Arial" size=1>Ballard Fuel
      Cell Systems Inc.</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>100%</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="95%"><FONT face="Arial" size=1>Ballard Material Products
      Inc.</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>100%</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>100%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="95%" bgColor=#c0c0c0><FONT face="Arial" size=1>Ballard Power
      Corporation</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>100%</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>100%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="95%"><FONT face="Arial" size=1>Dantherm Power A/S</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>52% - 57%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>52%</FONT></TD></TR></TABLE><BR>
<TABLE style="BORDER-COLLAPSE: collapse; TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="99%">
      <P align=justify><FONT face="Arial" size=2>Subsidiaries are entities
      over which the Corporation exercises control, where control is defined as
      the power to govern financial and operating policies, generally owning
      greater than 50% of the voting rights. The financial statements of
      subsidiaries are included in the consolidated financial statements from
      the date that control commences until the date that control ceases.
      Intercompany balances and transactions are eliminated in the consolidated
      financial statements.</FONT></P>
      <P align=justify><FONT face="Arial" size=2>The Corporation acquired a
      45% interest in Dantherm Power A/S on January 18, 2010. The Corporation
      acquired an additional 7% interest in Dantherm Power A/S in August 2010
      and a further 5% interest in December 2012. As the Corporation obtained
      control over Dantherm Power A/S as of the date of acquisition of the 45%
      interest, Dantherm Power A/S has been consolidated since acquisition on
      January 18, 2010. </FONT></P>
      <P align=justify><FONT face="Arial" size=2>Acquisitions of
      non-controlling interest are accounted as transactions with equity holders
      in their capacity as equity holders; therefore no goodwill is recognized
      as a result of such transactions. </FONT></P></TD></TR></TABLE><BR>
<P align=right><FONT face="Arial" size=1>14</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=justify><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS
INC.<BR></FONT></B><FONT face="Arial" size=2>Notes to Consolidated Financial
Statements<BR></FONT><FONT face="Arial" size=1>Years ended December 31, 2012,
and 2011<BR></FONT><FONT face="Arial" size=1>(Tabular amounts expressed in
thousands of U.S. dollars, except per share amounts and number of
shares)</FONT></P>
<TABLE style="BORDER-COLLAPSE: collapse; TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD style="BORDER-TOP: #000000 1.5pt solid" vAlign=top noWrap></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" width="100%" colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap>
      <P align=justify><B><FONT face="Arial" size=2>3.</FONT></B></P></TD>
    <TD width="100%" colSpan=2>
      <P align=justify><B><FONT face="Arial" size=2>Significant accounting
      policies (cont&#146;d): </FONT></B></P></TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%" colSpan=2></TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(b)</FONT></TD>
    <TD width="100%" colSpan=2><FONT face="Arial" size=2>Foreign
      currency:</FONT></TD></TR>
  <TR>
    <TD></TD>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"></TD></TR>
  <TR>
    <TD></TD>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(i)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Foreign currency
      transactions</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>Transactions in foreign
      currencies are translated to the respective functional currencies of the
      Corporation and its subsidiaries at the exchange rate in effect at the
      transaction date. Monetary assets and liabilities denominated in other
      than the functional currency are translated at the exchange rates in
      effect at the balance sheet date. The resulting exchange gains and losses
      are recognized in earnings. Non-monetary assets and liabilities
      denominated in other than the functional currency that are measured at
      fair value are translated to the functional currency at the exchange rate
      at the date that the fair value was determined. Non-monetary items that
      are measured in terms of historical cost in other than the functional
      currency are translated using the exchange rate at the date of the
      transaction.</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(ii)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Foreign
  operations</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>The assets and liabilities
      of foreign operations are translated to presentation currency at exchange
      rates at the reporting date. The income and expenses of foreign operations
      are translated to presentation currency at exchange rates at the dates of
      the transactions. Foreign currency differences are recognized in other
      comprehensive income.</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(c)</FONT></TD>
    <TD width="100%" colSpan=2><FONT face="Arial" size=2>Financial
      instruments:</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(i)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Financial
assets</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>The Corporation initially
      recognizes loans and receivables and deposits on the date that they are
      originated and all other financial assets on the trade date at which the
      Corporation becomes a party to the contractual provisions of the
      instrument. The Corporation derecognizes a financial asset when the
      contractual rights to the cash flows from the asset expire, or when it
      transfers substantially all the risks and rewards of ownership of the
      financial asset.</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD width="100%"><I><FONT face="Arial" size=2>Financial assets at fair
      value through profit or loss</FONT></I></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>Financial assets are
      classified at fair value through profit or loss if they are held for
      trading or if the Corporation manages such investments and makes purchase
      and sale decisions based on their fair value in accordance with the
      Corporation&#146;s documented risk management or investment strategy. Financial
      assets at fair value through profit or loss are measured at fair value,
      and changes therein are recognized in net loss.</FONT></TD></TR></TABLE>
<P align=right><FONT face="Arial" size=1>15</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=justify><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS
INC.<BR></FONT></B><FONT face="Arial" size=2>Notes to Consolidated Financial
Statements<BR></FONT><FONT face="Arial" size=1>Years ended December 31, 2012,
and 2011<BR></FONT><FONT face="Arial" size=1>(Tabular amounts expressed in
thousands of U.S. dollars, except per share amounts and number of
shares)</FONT></P>
<TABLE style="BORDER-COLLAPSE: collapse; TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" align=left width="98%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"><B><FONT face=Arial size=2>3.</FONT></B></TD>
    <TD align=left width="99%" colSpan=2><B><FONT face=Arial size=2></FONT></B><B><FONT face=Arial size=2>Significant accounting
      policies (cont&#146;d):</FONT></B></TD></TR>
  <TR>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=left width="98%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"><FONT face=Arial size=2>(c)</FONT></TD>
    <TD align=left width="99%" colSpan=2><FONT face=Arial size=2>Financial
      instruments (cont&#146;d):</FONT></TD></TR>
  <TR>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD align=left width="98%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=Arial size=2>(i)</FONT></TD>
    <TD align=left width="98%"><FONT face=Arial size=2>Financial assets
      (cont&#146;d)</FONT></TD></TR>
  <TR>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD align=left width="98%">&nbsp;</TD></TR>
  <TR>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD align=left width="98%">
      <P align=justify><FONT face=Arial size=2>The Corporation&#146;s short-term
      investments, consisting of highly liquid interest bearing securities with
      maturities at the date of purchase between three months and three years,
      are classified as held for trading.</FONT></P>
      <P align=justify><FONT face=Arial size=2>The Corporation also periodically
      enters into platinum futures and foreign exchange forward contracts to
      limit its exposure to platinum price and foreign currency rate
      fluctuations. These derivatives are recognized initially at fair value and
      are recorded as either assets or liabilities based on their fair value.
      Subsequent to initial recognition, these derivatives are measured at fair
      value and changes to their value are recorded through net loss, unless
      these financial instruments are designated as hedges (note 3 (c)(iv)).
      </FONT></P>
      <P align=justify><I><FONT face=Arial size=2>Loans and receivables
      </FONT></I></P>
      <P align=justify><FONT face=Arial size=2>Loans and receivables are
      financial assets with fixed or determinable payments that are not quoted
      in an active market. Such assets are recognized initially at fair value
      and subsequently at amortized cost using the effective interest method,
      less any impairment losses. Loans and receivables are comprised of the
      Corporation&#146;s trade and other receivables.</FONT></P>
      <P align=justify><I><FONT face=Arial size=2>Cash and cash
      equivalents</FONT></I><FONT face=Arial size=2> </FONT></P>
      <P align=justify><FONT face=Arial size=2>Cash and cash equivalents consist
      of cash on deposit and highly liquid short-term interest-bearing
      securities with original maturities of three months or less and are
      initially measured at fair value, and subsequently measured at amortized
      cost, which approximates fair value due to the short-term and liquid
      nature of these assets. </FONT></P>
      <P align=justify><I><FONT face=Arial size=2>Available-for-sale financial
      assets </FONT></I></P>
      <P align=justify><FONT face=Arial size=2>Available-for-sale financial
      assets are non-derivative financial assets that are designated as
      available-for-sale and that are not classified in any of the previous
      categories. The Corporation&#146;s investment in Chrysalix Energy Limited
      Partnership (&#147;Chrysalix&#148;) is classified as available-for-sale financial
      assets. Subsequent to initial recognition, they are measured at fair value
      and changes therein, other than impairment losses and foreign currency
      differences, are recognized in other comprehensive income. When an
      investment is derecognized, the cumulative gain or loss in other
      comprehensive income is transferred to profit or loss.
  </FONT></P></TD></TR></TABLE><BR>
<P align=right><FONT face="Arial" size=1>16</FONT></P>
<HR align=center width="100%" noShade SIZE=2>


<!--PART c-->
<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=left><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS
INC.<BR></FONT></B><FONT face="Arial" size=2>Notes to Consolidated Financial
Statements<BR></FONT><FONT face="Arial" size=1>Years ended December 31, 2012,
and 2011<BR></FONT><FONT face="Arial" size=1>(Tabular amounts expressed in
thousands of U.S. dollars, except per share amounts and number of
shares)</FONT></P>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD style="BORDER-TOP: #000000 1.5pt solid" vAlign=top noWrap>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" width="100%" colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><STRONG><FONT face=Arial size=2>3.</FONT></STRONG></TD>
    <TD width="100%" colSpan=2>
      <P align=justify><B><FONT face="Arial" size=2>Significant accounting
      policies (cont&#146;d): </FONT></B></P></TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%" colSpan=2></TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(c)</FONT></TD>
    <TD width="100%" colSpan=2><FONT face="Arial" size=2>Financial
      instruments (cont&#146;d):</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD><FONT face=Arial size=2>&nbsp;</FONT></TD>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(i)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Financial assets
      (cont&#146;d)</FONT></TD></TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"></TD></TR>
  <TR>
    <TD><FONT face=Arial size=2>&nbsp;</FONT></TD>
    <TD><FONT face=Arial size=2>&nbsp;</FONT></TD>
    <TD width="100%"><I><FONT face="Arial" size=2>Determination of fair
      value</FONT></I></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>The fair value of financial
      assets at fair value through profit or loss and available-for-sale are
      determined by reference to their quoted closing bid price at the reporting
      date if they are traded in an active market. For derivative instruments
      (foreign exchange forward contracts, platinum futures contracts), fair
      value is estimated by Management based on their listed market price or
      broker quotes that include adjustments to take account of the credit risk
      of the Corporation and the counterparty when appropriate. The fair value
      of loans and receivables is estimated as the present value of future cash
      flows, discounted at the market rate of interest at the reporting
      date.</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD><FONT face=Arial size=2>&nbsp;</FONT></TD>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(ii)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Financial
    liabilities</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>Financial liabilities
      comprise the Corporation&#146;s trade and other payables. The financial
      liabilities are initially recognized on the date they are originated and
      are derecognized when the contractual obligations are discharged or
      cancelled or expire. These financial liabilities are recognized initially
      at fair value and subsequently are measured at amortized costs using the
      effective interest method, when materially different from the initial
      amount. Fair value is determined based on the present value of future cash
      flows, discounted at the market rate of interest.</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD><FONT face=Arial size=2>&nbsp;</FONT></TD>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(iii)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Share capital</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>Share capital is classified
      as equity. Incremental costs directly attributable to the issue of shares
      and share options are recognized as a deduction from equity. When share
      capital is repurchased, the amount of the consideration paid, including
      directly attributable costs, is recognized as a deduction from equity.
      Repurchased shares are classified as treasury shares and are presented as
      a deduction from equity. When treasury shares are subsequently reissued,
      the amount received is recognized as an increase in equity, and the
      resulting surplus or deficit on the transaction is transferred to or from
      retained earnings.</FONT></TD></TR></TABLE>
<P align=right><FONT face="Arial" size=1>17 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=left><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS
INC.<BR></FONT></B><FONT face="Arial" size=2>Notes to Consolidated Financial
Statements<BR></FONT><FONT face="Arial" size=1>Years ended December 31, 2012,
and 2011<BR></FONT><FONT face="Arial" size=1>(Tabular amounts expressed in
thousands of U.S. dollars, except per share amounts and number of
shares)</FONT></P>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD style="BORDER-TOP: #000000 1.5pt solid" vAlign=top noWrap>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" width="100%" colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><STRONG><FONT face=Arial size=2>3.</FONT></STRONG></TD>
    <TD width="100%" colSpan=2>
      <P align=justify><B><FONT face="Arial" size=2>Significant accounting
      policies (cont&#146;d): </FONT></B></P></TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%" colSpan=2></TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(c)</FONT></TD>
    <TD width="100%" colSpan=2><FONT face="Arial" size=2>Financial
      instruments (cont&#146;d):</FONT></TD></TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"></TD></TR>
  <TR>
    <TD><FONT face=Arial size=2>&nbsp;</FONT></TD>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(iv)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Derivative financial
      instruments, including hedge accounting</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD><FONT face=Arial size=2>&nbsp;</FONT></TD>
    <TD><FONT face=Arial size=2>&nbsp;</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>The Corporation periodically
      holds derivative financial instruments to hedge its foreign currency risk
      exposures that are designated as the hedging instrument in a hedge
      relationship.</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>On initial designation of
      the hedge, the Corporation formally documents the relationship between the
      hedging instrument and hedged item, including the risk management
      objectives and strategy in undertaking the hedge transaction, together
      with the methods that will be used to assess the effectiveness of the
      hedging relationship.</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>The Corporation makes an
      assessment, both at the inception of the hedge relationship as well as on
      an ongoing basis, whether the hedging instruments are expected to be
      &#147;highly effective&#148; in offsetting the changes in the fair value or cash
      flows of the respective hedged items during the period for which the hedge
      is designated, and whether the actual results of each hedge are within a
      range of 80-125 percent. For a cash flow hedge of a forecast transaction,
      the transaction should be highly probable to occur and should present an
      exposure to variations in cash flows that could ultimately affect reported
      net income.</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>Derivatives are recognized
      initially at fair value; attributable transaction costs are recognized in
      profit or loss as incurred. Subsequent to initial recognition, derivatives
      are measured at fair value, and changes therein are accounted for as
      described below.</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD><FONT face=Arial size=2>&nbsp;</FONT></TD>
    <TD><FONT face=Arial size=2>&nbsp;</FONT></TD>
    <TD width="100%"><I><FONT face="Arial" size=2>Cash flow
      hedges</FONT></I></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>When a derivative is
      designated as the hedging instrument in a hedge of the variability in cash
      flows attributable to a particular risk associated with a recognized asset
      or liability or a highly probable forecast transaction that could affect
      profit or loss, the effective portion of changes in the fair value of the
      derivative is recognized in other comprehensive income and presented in
      unrealized gains/losses on cash flow hedges in equity. The amount
      recognized in other comprehensive income is removed and included in profit
      or loss in the same period as the hedged cash flows affect profit or loss
      under the same line item in the statement of comprehensive income as the
      hedged item. Any ineffective portion of changes in the fair value of the
      derivative is recognized immediately in profit or
  loss.</FONT></TD></TR></TABLE>
<P align=right><FONT face="Arial" size=1>18 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=left><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS
INC.<BR></FONT></B><FONT face="Arial" size=2>Notes to Consolidated Financial
Statements<BR></FONT><FONT face="Arial" size=1>Years ended December 31, 2012,
and 2011<BR></FONT><FONT face="Arial" size=1>(Tabular amounts expressed in
thousands of U.S. dollars, except per share amounts and number of
shares)</FONT></P>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD style="BORDER-TOP: #000000 1.5pt solid" vAlign=top noWrap>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" width="100%" colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><STRONG><FONT face=Arial size=2>3.</FONT></STRONG></TD>
    <TD width="100%" colSpan=2>
      <P align=justify><B><FONT face="Arial" size=2>Significant accounting
      policies (cont&#146;d): </FONT></B></P></TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%" colSpan=2></TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(c)</FONT></TD>
    <TD width="100%" colSpan=2><FONT face="Arial" size=2>Financial
      instruments (cont&#146;d): </FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD><FONT face=Arial size=2>&nbsp;</FONT></TD>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(iv)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Derivative financial
      instruments, including hedge accounting (cont&#146;d)</FONT></TD></TR>
  <TR>
    <TD></TD>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"></TD></TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>If the hedging instrument no
      longer meets the criteria for hedge accounting, expires or is sold,
      terminated, exercised, or the designation is revoked, then hedge
      accounting is discontinued prospectively. The cumulative gain or loss
      previously recognized in other comprehensive income and presented in
      unrealized gains/losses on cash flow hedges in equity remains there until
      the forecast transaction affects profit or loss.</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>If the forecast transaction
      is no longer expected to occur, then the balance in other comprehensive
      income is recognized immediately in profit or loss. In other cases the
      amount recognized in other comprehensive income is transferred to profit
      or loss in the same period that the hedged item affects profit or
      loss.</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD><FONT face=Arial size=2>&nbsp;</FONT></TD>
    <TD><FONT face=Arial size=2>&nbsp;</FONT></TD>
    <TD width="100%"><I><FONT face="Arial" size=2>Other non-trading
      derivatives</FONT></I></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD><FONT face=Arial size=2>&nbsp;</FONT></TD>
    <TD><FONT face=Arial size=2>&nbsp;</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>When a derivative financial
      instrument is not held for trading, and is not designated in a qualifying
      hedge relationship, all changes in its fair value are recognized
      immediately in profit or loss.</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(d)</FONT></TD>
    <TD width="100%" colSpan=2><FONT face="Arial" size=2>Inventories:</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%" colSpan=2><FONT face="Arial" size=2>Inventories are
      recorded at the lower of cost and net realizable value. The cost of
      inventories is based on the first-in first-out principle, and includes
      expenditures incurred in acquiring the inventories, production or
      conversion costs and other costs incurred in bringing them to their
      existing location and condition. In the case of manufactured inventories
      and work in progress, cost includes materials, labor and appropriate share
      of production overhead based on normal operating capacity. Costs of
      materials are determined on an average per unit basis.</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%" colSpan=2><FONT face="Arial" size=2>Net realizable
      value is the estimated selling price in the ordinary course of business,
      less the estimated costs of completion and selling expenses. In
      establishing any impairment of inventory, management estimates the
      likelihood that inventory carrying values will be affected by changes in
      market demand, technology and design, which would impair the value of
      inventory on hand.</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(e)</FONT></TD>
    <TD width="100%" colSpan=2><FONT face="Arial" size=2>Property, plant
      and equipment:</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%" colSpan=2><FONT face="Arial" size=2>Property, plant
      and equipment are measured at cost less accumulated depreciation and
      accumulated impairment losses. Cost includes expenditure that is directly
      attributable to the acquisition of the asset. The cost of self-constructed
      assets includes the cost of materials, costs directly attributable to
      bringing the assets to a working condition for their intended use, and the
      costs of dismantling and removing items and restoring the site on which
      they are located.</FONT></TD></TR></TABLE>
<P align=right><FONT face="Arial" size=1>19 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=left><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS
INC.<BR></FONT></B><FONT face="Arial" size=2>Notes to Consolidated Financial
Statements<BR></FONT><FONT face="Arial" size=1>Years ended December 31, 2012,
and 2011<BR></FONT><FONT face="Arial" size=1>(Tabular amounts expressed in
thousands of U.S. dollars, except per share amounts and number of
shares)</FONT></P>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD style="BORDER-TOP: #000000 1.5pt solid" vAlign=top noWrap>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" width="100%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><STRONG><FONT face=Arial size=2>3.</FONT></STRONG></TD>
    <TD width="100%">
      <P align=justify><B><FONT face="Arial" size=2>Significant accounting
      policies (cont&#146;d): </FONT></B></P></TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"></TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(e)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Property, plant and
      equipment (cont&#146;d):</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD><FONT face=Arial size=2>&nbsp;</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>When parts of an item of
      property, plant and equipment have different useful lives, they are
      accounted for as separate items (major components).</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>Property, plant and
      equipment are depreciated from the date of acquisition or, in respect of
      internally constructed assets, from the time an asset is completed and
      ready for use, using the straight-line method less its residual value over
      the estimated useful lives of the assets as
follows:</FONT></TD></TR></TABLE><BR>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="81%" bgColor=#c0c0c0><FONT face="Arial" size=2>Building</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="17%" bgColor=#c0c0c0><FONT face="Arial" size=2>20
      years</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="81%"><FONT face="Arial" size=2>Building under finance lease</FONT></TD>
    <TD noWrap align=right width="17%"><FONT face="Arial" size=2>15 years</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="81%" bgColor=#c0c0c0><FONT face="Arial" size=2>Computer equipment</FONT></TD>
    <TD noWrap align=right width="17%" bgColor=#c0c0c0><FONT face="Arial" size=2>3 to 7 years</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="81%"><FONT face="Arial" size=2>Furniture and fixtures</FONT></TD>
    <TD noWrap align=right width="17%"><FONT face="Arial" size=2>5 to 14 years</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="81%" bgColor=#c0c0c0><FONT face="Arial" size=2>Furniture and fixtures under finance
lease</FONT></TD>
    <TD noWrap align=right width="17%" bgColor=#c0c0c0><FONT face="Arial" size=2>5 years</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD noWrap align=left width="81%"><FONT face="Arial" size=2>Leasehold improvements</FONT></TD>
    <TD noWrap align=right width="17%"><FONT face="Arial" size=2>The shorter of initial term of the respective lease
and</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD NOWRAP STYLE="text-align: left; width: 1%; background-color: White"></TD>
    <TD NOWRAP STYLE="text-align: left; width: 81%; background-color: White">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right; width: 17%; background-color: White"><FONT face="Arial" size=2>estimated useful life</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD NOWRAP STYLE="text-align: left; width: 1%; background-color: White"></TD>
    <TD NOWRAP STYLE="text-align: left; width: 81%; background-color: Silver"><FONT face="Arial" size=2>Production and test equipment</FONT></TD>
    <TD NOWRAP STYLE="text-align: right; width: 17%; background-color: Silver"><FONT face="Arial" size=2>4 to 15 years</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD NOWRAP STYLE="text-align: left; width: 1%; background-color: White"></TD>
    <TD NOWRAP STYLE="border-bottom: #000000 1.5pt solid; text-align: left; width: 81%; background-color: White"><FONT face="Arial" size=2>Production
      and test equipment under finance lease</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: #000000 1.5pt solid; text-align: right; width: 17%; background-color: White"><FONT face="Arial" size=2>5 years</FONT></TD></TR></TABLE><BR>
<P style="PADDING-LEFT: 15pt" align=justify><FONT face="Arial" size=2>Depreciation methods, useful lives and residual values are reviewed at
each financial year-end and adjusted if appropriate.</FONT></P>
<P style="PADDING-LEFT: 15pt" align=justify><FONT face="Arial" size=2>Gains
and losses on disposal of property, plant and equipment are determined by
comparing the proceeds from disposal with the carrying amount of property, plant
and equipment, and are recognized net within other income in profit or
loss.</FONT></P>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(f)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Leases:</FONT></TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"></TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>Leases where the Corporation
      assumes substantially all the risks and rewards of ownership are
      classified as finance leases. Upon initial recognition the leased asset is
      measured at an amount equal to the lower of its fair value and the present
      value of the minimum lease payments. Subsequent to initial recognition,
      the asset is accounted for in accordance with the accounting policy
      applicable to that asset. Other leases are operating leases and not
      recognized in the statement of financial position.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>Minimum lease payments made
      under finance leases are apportioned between the finance expense and the
      reduction of the outstanding liability. The finance expense is allocated
      to each period during the lease term so as to produce a constant periodic
      rate of interest on the remaining balance of the
  liability.</FONT></TD></TR></TABLE>
<P align=right><FONT face="Arial" size=1>20 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=left><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS
INC.<BR></FONT></B><FONT face="Arial" size=2>Notes to Consolidated Financial
Statements<BR></FONT><FONT face="Arial" size=1>Years ended December 31, 2012,
and 2011<BR></FONT><FONT face="Arial" size=1>(Tabular amounts expressed in
thousands of U.S. dollars, except per share amounts and number of
shares)</FONT></P>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD style="BORDER-TOP: #000000 1.5pt solid" vAlign=top noWrap>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" width="100%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><STRONG><FONT face=Arial size=2>3.</FONT></STRONG></TD>
    <TD width="100%">
      <P align=justify><B><FONT face="Arial" size=2>Significant accounting
      policies (cont&#146;d): </FONT></B></P></TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"></TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(f)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Leases
(cont&#146;d):</FONT></TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;</TD>
    <TD width="100%"></TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>Payments made under
      operating leases are recognized in income on a straight-line basis over
      the term of the lease. Lease incentives received are recognized as a
      reduction to the lease expense over the term of the lease.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(g)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Goodwill and intangible
      assets:</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>Goodwill is recognized as
      the fair value of the consideration transferred including the recognized
      amount of any non-controlling interest in the acquiree, less the fair
      value of the net identifiable assets acquired and liabilities assumed, as
      of the acquisition date. Subsequent to initial recognition, goodwill is
      measured at cost less accumulated impairment losses.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD><FONT face=Arial size=2>&nbsp;</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Goodwill acquired in a
      business combination is allocated to groups of cash generating units that
      are expected to benefit from the synergies of the
combination.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>Intangible assets consist of
      fuel cell technology acquired from third parties and are recorded at cost
      less accumulated amortization and impairment losses. Intangible assets
      less their residual values are amortized over their estimated useful lives
      of 5 years using the straight-line method from the date that they are
      available for use. Amortization methods, useful lives and residual values
      are reviewed annually and adjusted if appropriate. Costs incurred in
      establishing and maintaining patents and license agreements are expensed
      in the period incurred.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>Research costs are expensed
      as they are incurred. Product development costs are expensed as incurred
      except when they meet specific criteria for capitalization. Development
      activities involve a plan or design for the production of new or
      substantially improved products and processes. Development costs are
      capitalized only if costs can be measured reliably, the product or process
      is technically and commercially feasible, future economic benefits are
      probable and the Corporation intends to and has sufficient resources to
      complete development to use or sell the asset. Capitalized development
      costs are measured at cost less accumulated amortization and accumulated
      impairment losses. Capitalized development costs, if any, are amortized
      when commercial production begins, using the straight-line method over a
      period of 5 years.</FONT></TD></TR></TABLE>
<P align=right><FONT face="Arial" size=1>21 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=left><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS
INC.<BR></FONT></B><FONT face="Arial" size=2>Notes to Consolidated Financial
Statements<BR></FONT><FONT face="Arial" size=1>Years ended December 31, 2012,
and 2011<BR></FONT><FONT face="Arial" size=1>(Tabular amounts expressed in
thousands of U.S. dollars, except per share amounts and number of
shares)</FONT></P>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD style="BORDER-TOP: #000000 1.5pt solid" vAlign=top noWrap>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" width="100%" colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><STRONG><FONT face=Arial size=2>3.</FONT></STRONG></TD>
    <TD width="100%" colSpan=2>
      <P align=justify><B><FONT face="Arial" size=2>Significant accounting
      policies (cont&#146;d): </FONT></B></P></TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;</TD>
    <TD width="100%" colSpan=2></TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(h)</FONT></TD>
    <TD width="100%" colSpan=2><FONT face="Arial" size=2>Impairment:</FONT></TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%" colSpan=2></TD></TR>
  <TR>
    <TD><FONT face=Arial size=2>&nbsp;</FONT></TD>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(i)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Financial
assets</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"><FONT face="Arial" size=2>Financial assets not carried
      at fair value through profit or loss are assessed for impairment at each
      reporting date by determining whether there is objective evidence that
      indicates that a loss event has occurred after the initial recognition of
      the asset, and that the loss event had a negative effect on the estimated
      future cash flows of that asset that can be estimated
  reliably.</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>Impairment losses on
      available-for-sale investment securities are recognized by transferring
      the cumulative loss that has been recognized in other comprehensive
      income, and presented in accumulated other comprehensive loss in equity,
      to net loss. The cumulative loss that is removed from other comprehensive
      income and recognized in net loss is the difference between the
      acquisition cost, net of any principal repayment and amortization, and the
      current fair value less any impairment loss previously recognized in net
      loss. If subsequently the fair value of an impaired available-for-sale
      security increases, then the impairment loss is reversed, with the amount
      of the reversal recognized in net loss. However, any subsequent recovery
      in the fair value of an impaired available for sale equity security is
      recognized in other comprehensive income.</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD><FONT face=Arial size=2>&nbsp;</FONT></TD>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(ii)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Non-financial
    assets</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>The carrying amounts of the
      Corporation&#146;s non-financial assets other than inventories are reviewed at
      each reporting date to determine whether there is any indication of
      impairment. If any such indication exists, then the asset&#146;s recoverable
      amount is estimated. For goodwill and intangible assets that have
      indefinite useful lives, the recoverable amount is estimated
      annually.</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>The recoverable amount of an
      asset or cash-generating unit is the greater of its value in use and its
      fair value less costs to sell. In assessing value in use, the estimated
      future cash flows are discounted to their present value using a pre-tax
      discount rate that reflects current market assessments of the time value
      of money and the risks specific to the asset. Fair value less costs to
      sell is defined as the estimated price that would be received on the sale
      of the asset in an orderly transaction between market participants at the
      measurement date. For the purposes of impairment testing, assets that
      cannot be tested individually are grouped together into the smallest group
      of assets that generates cash inflows from continuing use that are largely
      independent of the cash inflows of other groups of assets. Cash-generating
      units to which goodwill has been allocated reflects the lowest level at
      which goodwill is monitored for internal reporting
  purposes.</FONT></TD></TR></TABLE>
<P align=right><FONT face="Arial" size=1>22 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=left><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS
INC.<BR></FONT></B><FONT face="Arial" size=2>Notes to Consolidated Financial
Statements<BR></FONT><FONT face="Arial" size=1>Years ended December 31, 2012,
and 2011<BR></FONT><FONT face="Arial" size=1>(Tabular amounts expressed in
thousands of U.S. dollars, except per share amounts and number of
shares)</FONT></P>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD style="BORDER-TOP: #000000 1.5pt solid" vAlign=top noWrap>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" width="100%" colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><STRONG><FONT face=Arial size=2>3.</FONT></STRONG></TD>
    <TD width="100%" colSpan=2>
      <P align=justify><B><FONT face="Arial" size=2>Significant accounting
      policies (cont&#146;d): </FONT></B></P></TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%" colSpan=2></TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(h)</FONT></TD>
    <TD width="100%" colSpan=2><FONT face="Arial" size=2>Impairment
      (cont&#146;d):</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD><FONT face=Arial size=2>&nbsp;</FONT></TD>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(ii)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Non-financial assets
      (cont&#146;d)</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"><FONT face="Arial" size=2>An impairment loss is
      recognized if the carrying amount of an asset or its cash-generating unit
      exceeds its estimated recoverable amount. Impairment losses are recognized
      in net loss. Impairment losses recognized in respect of the
      cash-generating units are allocated first to reduce the carrying amount of
      any goodwill allocated to the units, and then to reduce the carrying
      amounts of the other assets in the unit on a pro-rata basis.</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>An impairment loss in
      respect of goodwill is not reversed. In respect of other assets,
      impairment losses recognized in prior periods are assessed at each
      reporting date for any indications that the loss has decreased or no
      longer exists. An impairment loss is reversed only to the extent that the
      asset&#146;s carrying amount does not exceed the carrying amount that would
      have been determined, net of depreciation or amortization, if no
      impairment loss had been recognized.</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(i)</FONT></TD>
    <TD width="100%" colSpan=2><FONT face="Arial" size=2>Provisions:</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%" colSpan=2><FONT face="Arial" size=2>A provision is
      recognized if, as a result of a past event, the Corporation has a present
      legal or constructive obligation that can be estimated reliably, and it is
      probable that an outflow of economic benefits will be required to settle
      the obligation. Provisions are determined by discounting the expected
      future cash flows at a pre-tax rate that reflects current market
      assessments of the time value of money and the risk specific to the
      liability. The unwinding of the discount is recognized as a finance
      cost.</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD><FONT face=Arial size=2>&nbsp;</FONT></TD>
    <TD width="100%" colSpan=2><I><FONT face="Arial" size=2>Warranty
      provision</FONT></I></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%" colSpan=2><FONT face="Arial" size=2>A provision for
      warranty costs is recorded on product sales at the time the sale is
      recognized. In establishing the warranty provision, management estimates
      the likelihood that products sold will experience warranty claims and the
      estimated cost to resolve claims received, taking into account the nature
      of the contract and past and projected experience with the
    products.</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD><FONT face=Arial size=2>&nbsp;</FONT></TD>
    <TD width="100%" colSpan=2><I><FONT face="Arial" size=2>Decommissioning
      liabilities</FONT></I></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%" colSpan=2><FONT face="Arial" size=2>Legal obligations
      to retire tangible long-lived assets are recorded at fair value at
      acquisition with a corresponding increase in asset value. These include
      assets leased under operating leases. The liability is accreted over the
      life of the asset to fair value and the increase in asset value is
      depreciated over the remaining useful life of the
  asset.</FONT></TD></TR></TABLE>
<P align=right><FONT face="Arial" size=1>23 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=left><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS
INC.<BR></FONT></B><FONT face="Arial" size=2>Notes to Consolidated Financial
Statements<BR></FONT><FONT face="Arial" size=1>Years ended December 31, 2012,
and 2011<BR></FONT><FONT face="Arial" size=1>(Tabular amounts expressed in
thousands of U.S. dollars, except per share amounts and number of
shares)</FONT></P>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD style="BORDER-TOP: #000000 1.5pt solid" vAlign=top noWrap>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" width="100%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><STRONG><FONT face=Arial size=2>3.</FONT></STRONG></TD>
    <TD width="100%">
      <P align=justify><B><FONT face="Arial" size=2>Significant accounting
      policies (cont&#146;d): </FONT></B></P></TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"></TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(j)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Revenue
    recognition:</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>The Corporation generates
      revenues primarily from product sales and services. Product revenues are
      derived primarily from standard equipment and material sales contracts and
      from long-term fixed price contracts. Service revenues are derived
      primarily from cost-plus reimbursable contracts</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>On standard equipment and
      material sales contracts, revenues are recognized when (i) significant
      risks and rewards of ownership of the goods has been transferred to the
      buyer; (ii) the Corporation retains neither continuing managerial
      involvement to the degree usually associated with ownership nor effective
      control over the goods sold; (iii) the amount of revenue can be measured
      reliably; (iv) it is probable that the economic benefits associated with
      the sale will accrue to the Corporation; and (v) the costs incurred, or to
      be incurred, in respect of the transaction can be measured reliably.
      Provisions are made at the time of sale for warranties.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD><FONT face=Arial size=2>&nbsp;</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>On cost-plus reimbursable
      contracts, revenues are recognized as costs are incurred, and include
      applicable fees earned as services are provided.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>On long-term fixed price
      service contracts, revenues are recognized on the percentage-of-completion basis over the duration of the contract, which consists of
      recognizing revenue on a given contract proportionately with its
      percentage of completion at any given time. The percentage of completion
      is determined by dividing the cumulative costs incurred as at the balance
      sheet date by the sum of incurred and anticipated costs for completing a
      contract.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>The cumulative effect of
      changes to anticipated revenues and anticipated costs for completing a
      contract are recognized in the period in which the revisions are
      identified. In the event that the anticipated costs exceed the anticipated
      revenues on a contract, such loss is recognized in its entirety in the
      period it becomes known.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD><FONT face=Arial size=2>&nbsp;</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Deferred revenue represents
      cash received from customers in excess of revenue recognized on
      uncompleted contracts.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(k)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Finance income and
      costs:</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>Finance income comprises of
      interest income on funds invested, gains on the disposal of
      available-for-sale financial assets and changes in the fair value of
      financial assets at fair value through profit or loss. Interest income is
      recognized as it accrues in income, using the effective interest
      method.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>Finance costs comprise
      interest expense on capital leases, unwinding of the discount on
      provisions, changes in the fair value of financial assets at fair value
      through profit or loss and impairment losses recognized on financial
      assets.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD><FONT face=Arial size=2>&nbsp;</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Foreign currency gains and
      losses are reported on a net basis.</FONT></TD></TR></TABLE>
<P align=right><FONT face="Arial" size=1>24 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>


<!--PART D-->
<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<TABLE style="LINE-HEIGHT: normal; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=justify width="100%"><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS INC.</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=justify width="100%"><FONT face="Arial" size=2>Notes to
      Consolidated Financial Statements</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=justify width="100%"><FONT face="Arial" size=1>Years ended
      December 31, 2012, and 2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=justify width="100%"><FONT face="Arial" size=1>(Tabular amounts
      expressed in thousands of U.S. dollars, except per share amounts and
      number of shares)</FONT></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=justify width="100%">&nbsp;</TD></TR></TABLE><BR>
<TABLE style="LINE-HEIGHT: normal; BORDER-COLLAPSE: collapse; TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="1%"><B><FONT face="Arial" size=2>3</FONT></B><STRONG><FONT face=Arial size=2>.</FONT></STRONG></TD>
    <TD vAlign=top noWrap align=justify width="98%"><B><FONT face="Arial" size=2>Significant accounting policies (cont&#146;d):</FONT></B></TD></TR>
  <TR>
    <TD vAlign=top noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD vAlign=top noWrap align=justify width="98%"></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=2>(l)</FONT></TD>
    <TD vAlign=top noWrap align=justify width="98%"><FONT face="Arial" size=2>Income
      taxes:</FONT></TD></TR>
  <TR>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap width="98%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top align=left width="1%"></TD>
    <TD vAlign=top width="98%"><FONT face="Arial" size=2>The Corporation
      follows the asset and liability method of accounting for income taxes.
      Under this method, deferred income taxes are recognized for the deferred
      income tax consequences attributable to differences between the financial
      statement carrying values of assets and liabilities and their respective
      income tax bases (temporary differences) and for loss carry-forwards. The
      resulting changes in the net deferred tax asset or liability are included
      in income.</FONT></TD></TR>
  <TR>
    <TD vAlign=top align=left width="99%" colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top align=left width="1%"></TD>
    <TD vAlign=top width="98%"><FONT face="Arial" size=2>Deferred tax
      assets and liabilities are measured using enacted, or substantively
      enacted, tax rates expected to apply to taxable income in the years in
      which temporary differences are expected to be recovered or settled. The
      effect on deferred income tax assets and liabilities, of a change in tax
      rates, is included in income in the period that includes the substantive
      enactment date. Deferred income tax assets are reviewed at each reporting
      date and are reduced to the extent that it is no longer probable that the
      related tax benefit will be realized.</FONT></TD></TR>
  <TR>
    <TD vAlign=top align=left width="99%" colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=2>(m)&nbsp; </FONT></TD>
    <TD vAlign=top width="98%"><FONT face="Arial" size=2>Employee
      benefits:</FONT></TD></TR>
  <TR>
    <TD vAlign=top width="99%" colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="1%"></TD>
    <TD vAlign=top width="98%"><I><FONT face="Arial" size=2>Defined
      contribution plans</FONT></I></TD></TR>
  <TR>
    <TD vAlign=top width="1%"></TD>
    <TD vAlign=top noWrap width="98%"><FONT face="Arial" size=2>&nbsp;</FONT></TD></TR>
  <TR>
    <TD vAlign=top width="1%"></TD>
    <TD vAlign=top width="98%"><FONT face="Arial" size=2>A defined
      contribution plan is a post-employment benefit plan under which an entity
      pays fixed contributions into a separate entity and will have no legal or
      constructive obligation to pay further amounts. Obligations for
      contributions to defined contribution pension plans are recognized as an
      employee benefit expense in profit or loss in the periods during which
      services are rendered by employees. Prepaid contributions are recognized
      as an asset to the extent that a cash refund or a reduction in future
      payments is available. Contributions to a defined contribution plan that
      are due more than 12 months after the end of the period in which the
      employees render the service are discounted to their present
    value.</FONT></TD></TR>
  <TR>
    <TD vAlign=top width="99%" colSpan=2>&nbsp; </TD></TR>
  <TR>
    <TD vAlign=top width="1%"></TD>
    <TD vAlign=top width="98%"><I><FONT face="Arial" size=2>Defined benefit
      plans</FONT></I></TD></TR>
  <TR>
    <TD vAlign=top width="99%" colSpan=2>&nbsp; </TD></TR>
  <TR>
    <TD vAlign=top width="1%"></TD>
    <TD vAlign=top width="98%"><FONT face="Arial" size=2>A defined benefit
      plan is a post-employment benefit plan other than a defined contribution
      plan. The Corporation&#146;s net obligation in respect of defined benefit
      pension plans is calculated separately for each plan by estimating the
      amount of future benefit that employees have earned in return for their
      service in the current and prior periods; that benefit is discounted to
      determine its present value. Any unrecognized past service costs and the
      fair value of any plan assets are deducted. The discount rate is the yield
      at the reporting date on AA credit-rated bonds that have maturity dates
      approximating the terms of the Corporation&#146;s obligations and that are
      denominated in the same currency in which the benefits are expected to be
      paid. The calculation is performed annually by a qualified actuary using
      the projected unit credit method.</FONT></TD></TR></TABLE>
<P align=right><FONT face="Arial" size=1>25 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<TABLE style="LINE-HEIGHT: normal; BORDER-COLLAPSE: collapse; TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS INC.</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=2>Notes to Consolidated Financial
      Statements</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>Years ended December 31, 2012,
      and 2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>(Tabular amounts expressed in
      thousands of U.S. dollars, except per share amounts and number of
      shares)</FONT></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="100%">&nbsp;</TD></TR></TABLE>
<BR>
<TABLE style="LINE-HEIGHT: normal; BORDER-COLLAPSE: collapse; TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD vAlign=top noWrap><STRONG><FONT face=Arial size=2>3.
      </FONT></STRONG></TD>
    <TD width="100%"><STRONG><FONT face=Arial size=2>Significant
      accounting policies (cont&#146;d):</FONT></STRONG></TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;</TD>
    <TD width="100%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(m)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Employee benefits
      (cont&#146;d):</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><I><FONT face="Arial" size=2>Defined benefit plans
      (cont&#146;d)</FONT></I></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>When the calculation results
      in a benefit to the Corporation, the recognized asset is limited to the
      total of any unrecognized past service costs and the present value of
      economic benefits available in the form of any future refunds from the
      plan or reductions in future contributions to the plan. In order to
      calculate the present value of economic benefits, consideration is given
      to any minimum funding requirements that apply to any plan in the
      Corporation. An economic benefit is available to the Corporation if it is
      realizable during the life of the plan, or on settlement of the plan
      liabilities.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>As a result of the
      curtailment of the pension plan in 2009, there is no current service cost
      associated with the plan.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>The Corporation recognizes
      all actuarial gains and losses arising from defined benefit plans
      immediately in other comprehensive income, and reports them in retained
      earnings.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><I><FONT face="Arial" size=2>Other long-term employee
      benefits</FONT></I></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>The Corporation&#146;s net
      obligation in respect of long-term employee benefits other than pension
      plans is the amount of future benefit that employees have earned in return
      for their service in the current and prior periods; that benefit is
      discounted to determine its present value, and the fair value of any
      related assets is deducted. The discount rate is the yield at the
      reporting date on AA credit-rated bonds that have maturity dates
      approximating the terms of the Corporation&#146;s obligations. The calculation
      is performed using the projected unit credit method. Any actuarial gains
      and losses are recognized in other comprehensive income or loss in the
      period in which they arise.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><I><FONT face="Arial" size=2>Termination
      benefits</FONT></I></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>Termination benefits are
      recognized as an expense when the Corporation is committed demonstrably,
      without realistic possibility of withdrawal, to a formal detailed plan to
      either terminate employment before the normal retirement date, or to
      provide termination benefits as a result of an offer made to encourage
      voluntary redundancy. Termination benefits for voluntary redundancies are
      recognized as an expense if the Corporation has made an offer of voluntary
      redundancy, it is probable that the offer will be accepted, and the number
      of acceptances can be estimated reliably. If benefits are payable more
      than 12 months after the reporting period, then they are discounted to
      their present value.</FONT></TD></TR></TABLE>
<P align=right><FONT face="Arial" size=1>26 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<TABLE style="LINE-HEIGHT: normal; BORDER-COLLAPSE: collapse; TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS INC.</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=2>Notes to Consolidated Financial
      Statements</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>Years ended December 31, 2012,
      and 2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>(Tabular amounts expressed in
      thousands of U.S. dollars, except per share amounts and number of
      shares)</FONT></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="100%">&nbsp;</TD></TR></TABLE><BR>
<TABLE style="LINE-HEIGHT: normal; BORDER-COLLAPSE: collapse; TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD vAlign=top noWrap><STRONG><FONT face=Arial size=2>3.</FONT></STRONG></TD>
    <TD width="100%"><STRONG><FONT face=Arial size=2>Significant
      accounting policies (cont&#146;d):</FONT></STRONG></TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(m)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Employee benefits
      (cont&#146;d):</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><I><FONT face="Arial" size=2>Short-term employee
      benefits</FONT></I></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>Short-term employee benefit
      obligations are measured on an undiscounted basis and are expensed as the
      related service is provided.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>A liability is recognized
      for the amount expected to be paid under short-term cash bonus or profit
      sharing plans if the Corporation has a present legal or constructive
      obligation to pay this amount as a result of past service provided by the
      employee, and the obligation can be estimated reliably.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(n)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Share-based compensation
      plans:</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>The Corporation uses the
      fair-value based method of accounting for share-based compensation for all
      awards of shares and share options granted. The resulting compensation
      expense, based on the fair value of the awards granted, excluding the
      impact of any non-market service and performance vesting conditions, is
      charged to income over the period that the employees unconditionally
      become entitled to the award, with a corresponding increase to contributed
      surplus. Fair values of share options are calculated using the
      Black-Scholes valuation method as of the grant date and adjusted for
      estimated forfeitures. For awards with graded vesting, the fair value of
      each tranche is calculated separately and recognized over its respective
      vesting period. Non-market vesting conditions are considered in making
      assumptions about the number of awards that are expected to vest. At each
      reporting date, the Corporation reassesses its estimates of the number of
      awards that are expected to vest and recognizes the impact of any revision
      in the income statement with a corresponding adjustment to contributed
      surplus.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>The Corporation issues
      shares and share options under its share-based compensation plans as
      described in note 19. Any consideration paid by employees on exercise of
      share options or purchase of shares, together with the amount initially
      recorded in contributed surplus, is credited to share
capital.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(o)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Earnings (loss) per
      share:</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>Basic earnings (loss) per
      share is computed using the weighted average number of common shares
      outstanding during the period, adjusted for treasury shares. Diluted
      earnings per share is calculated using the treasury stock
  method.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>Under the treasury stock
      method, the dilution is calculated based upon the number of common shares
      issued should deferred share units (&#147;DSUs&#148;), restricted share units
      (&#147;RSUs&#148;), and &#147;in the money&#148; options, if any, be exercised. When the
      effects of outstanding stock-based compensation arrangements would be
      anti-dilutive, diluted loss per share is not
  calculated.</FONT></TD></TR></TABLE>
<P align=right><FONT face="Arial" size=1>27 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<TABLE style="LINE-HEIGHT: normal; BORDER-COLLAPSE: collapse; TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS INC.</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=2>Notes to Consolidated Financial
      Statements</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>Years ended December 31, 2012,
      and 2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>(Tabular amounts expressed in
      thousands of U.S. dollars, except per share amounts and number of
      shares)</FONT></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="100%">&nbsp;</TD></TR></TABLE><BR>
<TABLE style="LINE-HEIGHT: normal; BORDER-COLLAPSE: collapse; TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD vAlign=top noWrap><STRONG><FONT face=Arial size=2>3.</FONT></STRONG></TD>
    <TD width="100%"><STRONG><FONT face=Arial size=2>Significant
      accounting policies (cont&#146;d):</FONT></STRONG></TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(p)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Government assistance and
      investment tax credits:</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>Government assistance and
      investment tax credits are recorded as either a reduction of the cost of
      the applicable assets, or credited against the related expense incurred in
      the statement of comprehensive loss, as determined by the terms and
      conditions of the agreements under which the assistance is provided to the
      Corporation or the nature of the expenditures which gave rise to the
      credits. Government assistance and investment tax credit receivables are
      recorded when their receipt is reasonably assured.</FONT></TD></TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="100%">&nbsp;</TD></TR>
  <TR>
    <TD><FONT face=Arial size=2>(q)</FONT></TD>
    <TD width="100%"><FONT face=Arial size=2>Segment
      reporting:</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>An operating segment is a
      component of the Corporation that engages in business activities from
      which it may earn revenues and incur expenses, including revenues and
      expenses that relate to transactions with any of the Corporation&#146;s other
      components. Segment results include items directly attributable to a
      segment as well as those that can be allocated on a reasonable basis.
      Unallocated items comprise mainly corporate assets, head office expenses,
      and income tax assets and liabilities.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp; </TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2><STRONG>4.</STRONG></FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2><STRONG><FONT face="Arial" size=2>Critical judgments in applying accounting policies
      and key sources of estimation uncertainty: </FONT></STRONG></FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%">
      <P><FONT face="Arial" size=2>The preparation of the consolidated
      financial statements in conformity with IFRS requires the Corporation&#146;s
      management to make estimates and assumptions that affect the application
      of accounting policies and the reported amounts of assets, liabilities,
      income and expenses. Actual results may differ from these
      estimates.</FONT></P>
      <P align=justify><FONT face="Arial" size=2>Estimates and underlying
      assumptions are reviewed on an ongoing basis. Revisions to accounting
      estimates are recognized in the period in which the estimates are revised
      and in any future periods affected. </FONT></P>
      <P align=justify><I><FONT face="Arial" size=2>Critical judgments in
      applying accounting policies: </FONT></I></P>
      <P align=justify><FONT face="Arial" size=2>At this time, the
      Corporation&#146;s management has concluded that there are no critical
      judgments that management has made in the process of applying the
      Corporation&#146;s accounting policies. </FONT></P>
      <P align=justify><I><FONT face="Arial" size=2>Key sources of estimation
      uncertainty: </FONT></I></P>
      <P align=justify><FONT face="Arial" size=2>The following are key
      assumptions concerning the future and other key sources of estimation
      uncertainty that have a significant risk of resulting in a material
      adjustment to the reported amount of assets, liabilities, income and
      expenses within the next fiscal year.</FONT></P></TD></TR></TABLE>
<P align=right><FONT face="Arial" size=1>28 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<TABLE style="LINE-HEIGHT: normal; BORDER-COLLAPSE: collapse; TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS INC.</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=2>Notes to Consolidated Financial
      Statements</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>Years ended December 31, 2012,
      and 2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>(Tabular amounts expressed in
      thousands of U.S. dollars, except per share amounts and number of
      shares)</FONT></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="100%">&nbsp;</TD></TR></TABLE><BR>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD vAlign=top noWrap><STRONG><FONT face=Arial size=2>4.</FONT></STRONG></TD>
    <TD width="100%"><STRONG><FONT face=Arial size=2>Critical
      judgments in applying accounting policies and key sources of estimation
      uncertainty (cont&#146;d):</FONT></STRONG></TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(a)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Revenue
    recognition:</FONT></TD></TR>
  <TR>
    <TD width="100%" colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>Revenues under certain
      contracts for product and engineering development services, provide for
      receipt of payment based on achieving defined milestones or on the
      performance of work under product development programs. Revenues are
      recognized under these contracts based on management&#146;s estimate of
      progress achieved against these milestones or on the proportionate
      performance method of accounting. Changes in management&#146;s estimated costs
      to complete a contract may result in an adjustment to previously
      recognized revenues.</FONT></TD></TR>
  <TR>
    <TD width="100%" colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(b)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Asset
  impairment:</FONT></TD></TR>
  <TR>
    <TD width="100%" colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>The carrying amounts of the
      Corporation&#146;s non-financial assets, other than inventories, are reviewed
      at each reporting date to determine whether there is any indication of
      impairment. If any such indication exists, then the asset&#146;s recoverable
      amount is estimated.</FONT></TD></TR>
  <TR>
    <TD width="100%" colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>The Corporation&#146;s most
      significant estimates and assumptions involve values associated with
      goodwill and intangible assets. These estimates and assumptions include
      those with respect to future cash inflows and outflows, discount rates,
      asset lives, and the determination of cash generating units. At least
      annually, the carrying value of goodwill and intangible assets is reviewed
      for potential impairment. Among other things, this review considers the
      fair value of the cash-generating units based on discounted estimated
      future cash flows. This review involves significant estimation
      uncertainty, which could affect the Corporation&#146;s future results if the
      current estimates of future performance and fair values
  change.</FONT></TD></TR>
  <TR>
    <TD width="100%" colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(c)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Warranty
  provision:</FONT></TD></TR>
  <TR>
    <TD width="100%" colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>In establishing the warranty
      provision, management estimates the likelihood that products sold will
      experience warranty claims and the cost to resolve claims received. In
      making such determinations, the Corporation uses estimates based on the
      nature of the contract and past and projected experience with the
      products. Should these estimates prove to be incorrect, the Corporation
      may incur costs different from those provided for in the warranty
      provision. Management reviews warranty assumptions and makes adjustments
      to the provision at each reporting date based on the latest information
      available, including the expiry of contractual obligations. Adjustments to
      the warranty provision are recorded in cost of product and service
      revenues.</FONT></TD></TR></TABLE>
<P align=right><FONT face="Arial" size=1>29 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<TABLE style="LINE-HEIGHT: normal; BORDER-COLLAPSE: collapse; TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS INC.</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=2>Notes to Consolidated Financial
      Statements</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>Years ended December 31, 2012,
      and 2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>(Tabular amounts expressed in
      thousands of U.S. dollars, except per share amounts and number of
      shares)</FONT></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="100%">&nbsp;</TD></TR></TABLE><BR>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD vAlign=top noWrap><STRONG><FONT face=Arial size=2>4.</FONT></STRONG></TD>
    <TD width="100%"><STRONG><FONT face=Arial size=2>Critical
      judgments in applying accounting policies and key sources of estimation
      uncertainty (cont&#146;d):</FONT></STRONG></TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(d)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Inventory
    provision:</FONT></TD></TR>
  <TR>
    <TD width="100%" colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>In determining the lower of
      cost and net realizable value of inventory and in establishing the
      appropriate impairment amount for inventory obsolescence, management
      estimates the likelihood that inventory carrying values will be affected
      by changes in market pricing or demand for the products and by changes in
      technology or design which could make inventory on hand obsolete or
      recoverable at less than the recorded value. Management performs regular
      reviews to assess the impact of changes in technology and design, sales
      trends and other changes on the carrying value of inventory. Where it is
      determined that such changes have occurred and will have an impact on the
      value of inventory on hand, appropriate adjustments are made. If there is
      a subsequent increase in the value of inventory on hand, reversals of
      previous write-downs to net realizable value are made. Unforeseen changes
      in these factors could result in additional inventory provisions, or
      reversals of previous provisions, being required.</FONT></TD></TR>
  <TR>
    <TD width="100%" colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(e)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Employee future
      benefits:</FONT></TD></TR>
  <TR>
    <TD width="100%" colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>The present value of the
      defined benefit obligation is determined by discounting the estimated
      future cash outflows using interest rates of high-quality corporate bonds
      that have terms to maturity approximating the terms of the related pension
      liability.</FONT></TD></TR>
  <TR>
    <TD width="100%" colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>Determination of benefit
      expense requires assumptions such as the discount rate to measure
      obligations, expected plan investment performance, expected healthcare
      cost trend rate, and retirement ages of employees. Actual results will
      differ from the recorded amounts based on these estimates and
      assumptions.</FONT></TD></TR>
  <TR>
    <TD width="100%" colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(f)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Income taxes:</FONT></TD></TR>
  <TR>
    <TD width="100%" colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>Deferred tax assets and
      liabilities are measured using enacted, or substantively enacted, tax
      rates expected to apply to taxable income in the years in which temporary
      differences are expected to be recovered or settled. The effect on
      deferred income tax assets and liabilities, of a change in tax rates, is
      included in income in the period that includes the substantive enactment
      date. Management reviews the deferred income tax assets at each reporting
      period and records adjustments to the extent that it is no longer probable
      that the related tax benefit will be realized.</FONT></TD></TR></TABLE>
<P align=right><FONT face="Arial" size=1>30 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<TABLE style="LINE-HEIGHT: normal; BORDER-COLLAPSE: collapse; TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS INC.</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=2>Notes to Consolidated Financial
      Statements</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>Years ended December 31, 2012,
      and 2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>(Tabular amounts expressed in
      thousands of U.S. dollars, except per share amounts and number of
      shares)</FONT></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="100%">&nbsp;</TD></TR></TABLE><BR>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD><STRONG><FONT face=Arial size=2>5.</FONT></STRONG></TD>
    <TD width="100%" colSpan=2><STRONG><FONT face=Arial size=2>Recent accounting pronouncements:</FONT></STRONG></TD></TR>
  <TR>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%" colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%" colSpan=2><FONT face="Arial" size=2>The following is
      an overview of accounting standard changes that the Corporation will be
      required to adopt in future years. Except as otherwise noted below for
      IFRS 9, IAS 32 and amendments to IFRS 7, the standards are effective for
      the annual periods beginning on or after January 1, 2013, with earlier
      application permitted. The Corporation does not expect to adopt any of
      these standards before their effective dates.</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(a)</FONT></TD>
    <TD width="100%" colSpan=2><FONT face="Arial" size=2>IFRS 9 &#150;
      </FONT><I><FONT face="Arial" size=2>Financial
  Instruments:</FONT></I></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%" colSpan=2><FONT face="Arial" size=2>In November 2009,
      the International Accounting Standards Board (&#147;IASB&#148;) published IFRS 9
      Financial Instruments. This new standard simplifies the classification and
      measurement of financial assets set out in IAS 39 Financial Instruments:
      Recognition and Measurement. Financial assets are to be measured at
      amortized cost or fair value. They are to be measured at amortized cost if
      the two following conditions are met:</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD vAlign=top noWrap align=center><FONT face="Arial" size=2>a)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>the assets are held within a
      business model whose objective is to collect contractual cash flows;
      and</FONT></TD></TR>
  <TR>
    <TD></TD>
    <TD vAlign=top noWrap align=center>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    </TD>
    <TD width="100%">&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD vAlign=top noWrap align=center><FONT face="Arial" size=2>b)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>the contractual cash flows
      are solely payments of principal and interest on the outstanding
      principal.</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%" colSpan=2><FONT face="Arial" size=2>All other
      financial assets are to be measured at fair value through net earnings.
      The entity may, if certain conditions are met, elect to use the fair value
      option instead of measurement at amortized cost. As well, the entity may
      choose upon initial recognition to measure non-trading equity investments
      at fair value through comprehensive income. Such a choice is
      irrevocable.</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%" colSpan=2><FONT face="Arial" size=2>In October 2010,
      the IASB issued revisions to IFRS 9, adding the requirements for
      classification and measurement of financial liabilities contained in IAS
      39 and further points. For financial liabilities measured at fair value
      through net earnings using the fair value option, the amount of change in
      a liability&#146;s fair value attributable to changes in its credit risk is
      recognized directly in other comprehensive income.</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%" colSpan=2><FONT face="Arial" size=2>In December 2011,
      the IASB deferred the mandatory effective date of IFRS 9 to fiscal years
      beginning on or after January 1, 2015. Early adoption is permitted under
      certain conditions. An entity is not required to restate comparative
      financial periods for its first-time application of IFRS 9, but must
      comply with the new disclosure requirements.</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%" colSpan=2><FONT face="Arial" size=2>The Corporation
      intends to adopt IFRS 9 in its financial statements for the fiscal year
      beginning on January 1, 2015. The extent of the impact of adoption has not
      yet been determined.</FONT></TD></TR></TABLE>
<P align=right><FONT face="Arial" size=1>31 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<TABLE style="LINE-HEIGHT: normal; BORDER-COLLAPSE: collapse; TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS INC.</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=2>Notes to Consolidated Financial
      Statements</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>Years ended December 31, 2012,
      and 2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>(Tabular amounts expressed in
      thousands of U.S. dollars, except per share amounts and number of
      shares)</FONT></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="100%">&nbsp;</TD></TR></TABLE><BR>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD vAlign=top noWrap><STRONG><FONT face=Arial size=2>5.</FONT></STRONG></TD>
    <TD vAlign=top width="100%" colSpan=2><STRONG><FONT face=Arial size=2>Recent accounting pronouncements
      (cont&#146;d):</FONT></STRONG></TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD vAlign=top width="100%" colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(b)</FONT></TD>
    <TD vAlign=top width="100%" colSpan=2><FONT face="Arial" size=2>IFRS 10
      &#150; </FONT><I><FONT face="Arial" size=2>Consolidated Financial
      Statements:</FONT></I></TD></TR>
  <TR>
    <TD vAlign=top colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top></TD>
    <TD vAlign=top width="100%" colSpan=2><FONT face="Arial" size=2>In May
      2011, the IASB published IFRS 10 </FONT><I><FONT face="Arial" size=2>Consolidated Financial Statements </FONT></I><FONT face="Arial" size=2>which is a replacement of SIC-12 </FONT><I><FONT face="Arial" size=2>Consolidation &#150; Special Purpose Entities</FONT></I><FONT face="Arial" size=2>, and certain parts of IAS 27 <EM>Consolidated and
      Separate Financial Statements</EM><FONT face="Arial" size=2>. IFRS 10
      uses control as the single basis for consolidation, irrespective of the
      nature of the investee, employing the following factors to identify
      control:</FONT></FONT></TD></TR>
  <TR>
    <TD vAlign=top colSpan=3>&nbsp;&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top></TD>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) &nbsp;&nbsp;&nbsp;&nbsp;
</FONT></TD>
    <TD vAlign=top width="100%"><FONT face="Arial" size=2>power over the
      investee;</FONT></TD></TR>
  <TR>
    <TD vAlign=top colSpan=3>&nbsp; </TD></TR>
  <TR>
    <TD vAlign=top></TD>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>&nbsp;&nbsp;&nbsp;&nbsp; b)</FONT></TD>
    <TD vAlign=top width="100%"><FONT face="Arial" size=2>exposure or
      rights to variable returns from involvement with the
investee;</FONT></TD></TR>
  <TR>
    <TD vAlign=top colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top></TD>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>&nbsp;&nbsp;&nbsp;&nbsp; c)</FONT></TD>
    <TD vAlign=top width="100%"><FONT face="Arial" size=2>the ability to
      use power over the investee to affect the amount of the investor&#146;s
      returns.</FONT></TD></TR>
  <TR>
    <TD vAlign=top colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top></TD>
    <TD vAlign=top width="100%" colSpan=2><FONT face="Arial" size=2>IFRS 10
      shall be applied to fiscal years beginning on or after January 1,
      2013.</FONT></TD></TR>
  <TR>
    <TD vAlign=top colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top></TD>
    <TD vAlign=top width="100%" colSpan=2><FONT face="Arial" size=2>The
      Corporation intends to adopt IFRS 10 for the fiscal year beginning on
      January 1, 2013. The Corporation does not expect IFRS 10 to have a
      material impact on its financial statements.</FONT></TD></TR>
  <TR>
    <TD vAlign=top colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(c)</FONT></TD>
    <TD vAlign=top width="100%" colSpan=2><FONT face="Arial" size=2>IFRS 11
      &#150; </FONT><I><FONT face="Arial" size=2>Joint
  Arrangements:</FONT></I></TD></TR>
  <TR>
    <TD vAlign=top colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top></TD>
    <TD vAlign=top width="100%" colSpan=2><FONT face="Arial" size=2>In May
      2011, the IASB published IFRS 11 </FONT><I><FONT face="Arial" size=2>Joint Arrangements </FONT></I><FONT face="Arial" size=2>which
      supersedes IAS 31 <EM>Interests in Joint Ventures </EM><FONT face="Arial" size=2>and SIC-13 </FONT><I><FONT face="Arial" size=2>Jointly Controlled Entities &#150; Non-Monetary Contributions by
      Venturers</FONT></I><FONT face="Arial" size=2>. IFRS 11 requires that
      joint ventures be accounted for using the equity method of accounting and
      eliminates the need for proportionate consolidation. This new standard
      shall be applied to fiscal years beginning on or after January 1,
      2013.</FONT></FONT></TD></TR>
  <TR>
    <TD vAlign=top colSpan=3>&nbsp;&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top></TD>
    <TD vAlign=top width="100%" colSpan=2><FONT face="Arial" size=2>The
      Corporation intends to adopt IFRS 11 for the fiscal year beginning on
      January 1, 2013. The Corporation does not expect IFRS 11 to have a
      material impact on its financial statements.</FONT></TD></TR>
  <TR>
    <TD vAlign=top colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(d)</FONT></TD>
    <TD vAlign=top width="100%" colSpan=2><FONT face="Arial" size=2>IFRS 12
      &#150; </FONT><I><FONT face="Arial" size=2>Disclosure of Interests in Other
      Entities:</FONT></I></TD></TR>
  <TR>
    <TD vAlign=top colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top></TD>
    <TD vAlign=top width="100%" colSpan=2><FONT face="Arial" size=2>In May
      2011, the IASB published IFRS 12 </FONT><I><FONT face="Arial" size=2>Disclosure of Interests in Other Entities </FONT></I><FONT face="Arial" size=2>which requires that an entity disclose information
      on the nature of and risks associated with its interests in other entities
      (i.e. subsidiaries, joint arrangements, associates or unconsolidated
      structured entities) and the effects of those interests on its financial
      statements. IFRS 12 shall be applied to fiscal years beginning on or after
      January 1, 2013.</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%" colSpan=2><FONT face="Arial" size=2>The Corporation
      intends to adopt IFRS 12 for the fiscal year beginning on January 1, 2013.
      The Corporation does not expect IFRS 12 to have a material impact on its
      financial statements.</FONT></TD></TR></TABLE>
<P align=right><FONT face="Arial" size=1>32 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>


<!--PART E-->
<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<TABLE style="LINE-HEIGHT: normal; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS INC.</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=2>Notes to Consolidated Financial
      Statements</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>Years ended December 31, 2012,
      and 2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>(Tabular amounts expressed in
      thousands of U.S. dollars, except per share amounts and number of
      shares)</FONT></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="100%">&nbsp;</TD></TR></TABLE><BR>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD vAlign=top noWrap><STRONG><FONT face=Arial size=2>5.</FONT></STRONG></TD>
    <TD width="100%">
      <P align=left><B><FONT face="Arial" size=2>Recent accounting
      pronouncements (cont&#146;d):</FONT></B></P></TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"></TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(e)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>IFRS 13 &#150; </FONT><I><FONT face="Arial" size=2>Fair Value Measurement:</FONT></I></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD WIDTH="100%" STYLE="text-align: justify"><FONT face="Arial" size=2>In May 2011, the IASB
      published IFRS 13 </FONT><I><FONT face="Arial" size=2>Fair Value
      Measurement </FONT></I><FONT face="Arial" size=2>to establish a single
      framework for fair value measurement of financial and non-financial items.
      IFRS 13 defines fair value as the price that would be received to sell an
      asset or paid to transfer a liability in an orderly transaction between
      market participants at the measurement date. It also requires disclosure
      of certain information on fair value measurements. IFRS 13 shall be
      applied to fiscal years beginning on or after January 1,
2013.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD WIDTH="100%" STYLE="text-align: justify"><FONT face="Arial" size=2>The Corporation intends to
      adopt IFRS 13 for the fiscal year beginning on January 1, 2013. The
      Corporation does not expect IFRS 13 to have a material impact on its
      financial statements.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(f)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Amendments to IAS 19 &#150;
      </FONT><I><FONT face="Arial" size=2>Employee Benefits:</FONT></I></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD WIDTH="100%" STYLE="text-align: justify"><FONT face="Arial" size=2>In June 2011, the IASB
      issued amendments to IAS 19 </FONT><I><FONT face="Arial" size=2>Employee Benefits</FONT></I><FONT face="Arial" size=2>. The
      amendments to IAS 19 make significant changes to the recognition and
      measurement of defined benefit pension expense and termination benefits,
      and to enhance the disclosures for all employee benefits. Actuarial gains
      and losses are renamed &#147;remeasurements&#148; and will be recognized immediately
      in other comprehensive income (&#147;OCI&#148;).</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD WIDTH="100%" STYLE="text-align: justify"><FONT face="Arial" size=2>Remeasurements recognized in
      OCI will not be recycled through profit or loss in subsequent periods. The
      amendments also accelerate the recognition of past service costs whereby
      they are recognized in the period of a plan amendment. The annual expense
      for a funded benefit plan will be computed based on the application of the
      discount rate to the net defined benefit asset or liability. The
      amendments to IAS 19 will also impact the presentation of pension expense
      as benefit cost will be split between (i) the cost of benefits accrued in
      the current period (service cost) and benefit changes (past-service cost,
      settlements and curtailments); and (ii) finance expense or
    income.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD WIDTH="100%" STYLE="text-align: justify"><FONT face="Arial" size=2>A number of other amendments
      have been made to recognition, measurement and classification, including
      those re-defining short-term and other long-term benefits guidance on the
      treatment of taxes related to benefit plans, guidance on risk/cost sharing
      factors and expanded disclosures.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD WIDTH="100%" STYLE="text-align: justify"><FONT face="Arial" size=2>The amendments to IAS 19
      shall be applied to fiscal years beginning on or after January 1, 2013.
      The Corporation intends to adopt the amendments in its financial
      statements for the fiscal year beginning on January 1, 2013. The
      Corporation&#146;s current accounting policy for employee benefits for the
      presentation of pension expense and the immediate recognition of actuarial
      gains and losses in OCI is consistent with the requirements in the
      standard. However, additional disclosures and the computation of annual
      expense based on the application of the discount rate to the net defined
      benefit asset or liability will be required in relation to the revised
      standard.</FONT></TD></TR></TABLE>
<P align=right><FONT face="Arial" size=1>33 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<TABLE style="LINE-HEIGHT: normal; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS INC.</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=2>Notes to Consolidated Financial
      Statements</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>Years ended December 31, 2012,
      and 2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>(Tabular amounts expressed in
      thousands of U.S. dollars, except per share amounts and number of
      shares)</FONT></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="100%">&nbsp;</TD></TR></TABLE><BR>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD vAlign=top noWrap><B><FONT face="Arial" size=2>5.</FONT></B></TD>
    <TD width="100%"><B><FONT face="Arial" size=2>Recent accounting
      pronouncements (cont&#146;d):</FONT></B></TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"></TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face=Arial size=2>(g)</FONT></TD>
    <TD width="100%">
      <P align=justify><FONT face="Arial" size=2>Amendments to IAS 1 &#150;
      </FONT><I><FONT face="Arial" size=2>Financial Statement Presentation:
      </FONT></I></P></TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD width="100%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD width="100%">
      <P align=justify><FONT face="Arial" size=2>In June 2011, the IASB
      issued amendments to IAS 1 </FONT><I><FONT face="Arial" size=2>Presentation of Financial Statements</FONT></I><FONT face="Arial" size=2>. Items of other comprehensive income and the
      corresponding tax expense are required to be grouped into those that will
      and will not subsequently be reclassified through net earnings. These
      amendments shall be applied to fiscal years beginning on or after July 1,
      2012. </FONT></P></TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD width="100%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD width="100%">
      <P align=justify><FONT face="Arial" size=2>The Corporation intends to
      adopt the amendments to IAS 1 for the fiscal year beginning on January 1,
      2013. The Corporation does not expect the amendments to IAS 1 to have a
      material impact on its financial statements. </FONT></P></TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD width="100%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face=Arial size=2>(h)</FONT></TD>
    <TD width="100%">
      <P align=justify><FONT face="Arial" size=2>Amendments to other
      standards</FONT><I><FONT face="Arial" size=2>:</FONT></I>&nbsp;</P></TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD width="100%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD width="100%"><FONT face="Arial" size=2>In addition,
      there have been amendments to existing standards, including IFRS 7
      </FONT><I><FONT face="Arial" size=2>Financial Instruments:
      Disclosure</FONT></I><FONT face="Arial" size=2>, IAS 27 </FONT><I><FONT face="Arial" size=2>Separate Financial Statements</FONT></I><FONT face="Arial" size=2>, IAS 28 </FONT><I><FONT face="Arial" size=2>Investments in Associates and Joint Ventures</FONT></I><FONT face="Arial" size=2>, and IAS 32 </FONT><I><FONT face="Arial" size=2>Financial Instruments: Presentation</FONT></I><FONT face="Arial" size=2>. IFRS 7 amendments require disclosure about the effects of
      offsetting financial assets and financial liabilities and related
      arrangements on an entity&#146;s financial position. IAS 27 addresses
      accounting for subsidiaries, jointly controlled entities and associates in
      non-consolidated financial statements. IAS 28 has been amended to include
      joint ventures in its scope and to address the changes in IFRS 10 to 13.
      IAS 32 addresses inconsistencies when applying the offsetting
      requirements, and is effective for annual periods beginning on or after
      January 1, 2014. The Corporation does not expect the amendments to have a
      material impact on its financial statements. </FONT></TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD width="100%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><STRONG><FONT face=Arial size=2>6.</FONT></STRONG></TD>
    <TD width="100%">
      <P align=justify><B><FONT face="Arial" size=2>Acquisition:</FONT></B></P></TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD width="100%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD width="100%"><FONT face=Arial size=2>On August 1, 2012
      (&#147;acquisition date&#148;), the Corporation completed an agreement to acquire
      key assets and product lines from IdaTech, LLC (&#147;IdaTech&#148;). In exchange
      for 7,136,237 of the Corporation&#146;s common shares valued at $7,493,000
      based on the Corporation&#146;s share price at the acquisition date, the
      Corporation acquired IdaTech&#146;s key assets including fuel cell systems
      inventory, prepaid right to inventory, and product lines for backup power
      applications, distributor and customer relationships, a license to
      intellectual property, the right to assume control of a manufacturing
      facility, and certain property, plant and equipment.</FONT></TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD width="100%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD width="100%"><FONT face=Arial size=2>The prepaid right
      to inventory and other current assets of approximately $2,728,000 relates
      to a contract manufacturing agreement including a supply commitment
      whereby IdaTech will provide additional units of finished goods inventory
      to the Corporation prior to January 1, 2013. An additional payment of
      approximately $500,000 for the additional units will be made to IdaTech
      when the Corporation receives payment from its customers as the units are
      sold. </FONT></TD></TR></TABLE>
<P align=right><FONT face="Arial" size=1>34 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR><TABLE style="LINE-HEIGHT: normal; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS INC.</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=2>Notes to Consolidated Financial
      Statements</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>Years ended December 31, 2012,
      and 2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>(Tabular amounts expressed in
      thousands of U.S. dollars, except per share amounts and number of
      shares)</FONT></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="100%">&nbsp;</TD></TR></TABLE><BR>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD vAlign=top noWrap><B><FONT face="Arial" size=2>6.</FONT></B></TD>
    <TD width="100%"><B><FONT face="Arial" size=2>Acquisition
      (cont&#146;d):</FONT></B></TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"></TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD width="100%"><FONT face=Arial size=2>The acquisition has
      been accounted for using the acquisition method of accounting and,
      accordingly, the acquired assets and liabilities have been included in the
      consolidated financial statements since the date of acquisition, and
      revenues since the acquisition date totaling $5,087,000 are reported in
      the Fuel Cell Products segment. The intangible assets arising from this
      acquisition are amortized over their estimated useful life of 5 years. Pro
      forma revenue and net loss attributable to the Corporation as if the
      assets were acquired on January 1, 2012 cannot be determined, as reliable
      information is not available.</FONT></TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD width="100%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD width="100%">
      <P align=justify><FONT face="Arial" size=2>Acquisition costs of
      $274,000 were incurred in 2012 as a result of the transaction, and are
      recognized in general and administrative expenses. </FONT></P></TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD width="100%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD width="100%">
      <P align=justify><FONT face="Arial" size=2>The following is the fair
      value of the identified assets acquired, and liabilities assumed at the
      date of acquisition:</FONT></P></TD></TR></TABLE><BR>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="95%" bgColor=#c0c0c0><FONT face="Arial" size=1>Net assets acquired:</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="95%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventories</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;
    </FONT></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>1,895</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="95%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepaid right to
      inventory and other current assets</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>2,728</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="95%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Property, plant and
      equipment</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>861</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="95%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Intangible
    assets</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>2,886</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="95%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Trade and other
      payables</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>(431</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="95%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Warranty provision</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(446</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="95%"><FONT face="Arial" size=1>Total purchase consideration</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>7,493</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD></TR></TABLE><BR>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD vAlign=top noWrap><B><FONT face="Arial" size=2>7.</FONT></B></TD>
    <TD width="100%"><B><FONT face="Arial" size=2>Trade and other
      receivables:</FONT></B></TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"></TD></TR></TABLE>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="91%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>December 31,</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>December 31,</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="91%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>2012</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="91%" bgColor=#c0c0c0><FONT face="Arial" size=1>Trade receivables</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;
    </FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>16,709</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;
    </FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>16,343</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="91%"><FONT face="Arial" size=1>Other</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>259</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>1,947</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="91%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>16,968</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>18,290</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="91%"><FONT face="Arial" size=1>Less:
      Non-current trade receivables</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>(594</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>(1,126</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="91%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>16,374</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>17,164</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR></TABLE><BR>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD vAlign=top noWrap><B><FONT face="Arial" size=2>8.</FONT></B></TD>
    <TD width="100%"><B><FONT face="Arial" size=2>Inventories:</FONT></B></TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"></TD></TR></TABLE>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="95%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="2%" colSpan=2><FONT face="Arial" size=1>December 31,</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="2%" colSpan=2><FONT face="Arial" size=1>December 31,</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="95%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="2%" COLSPAN="2" STYLE="border-bottom: #000000 1pt solid; text-align: right"><FONT face="Arial" size=1>2012</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="2%" COLSPAN="2" STYLE="border-bottom: #000000 1pt solid; text-align: right"><FONT face="Arial" size=1>2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="95%" bgColor=#c0c0c0><FONT face="Arial" size=1>Raw materials
      and consumables</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>4,702</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>8,353</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="95%"><FONT face="Arial" size=1>Work-in-progress</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>1,646</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>1,820</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="95%" bgColor=#c0c0c0><FONT face="Arial" size=1>Finished goods</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>4,929</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>3,441</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="95%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>11,277</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>13,614</FONT></TD></TR></TABLE><BR>
<P align=justify><FONT face="Arial" size=1>35 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<TABLE style="LINE-HEIGHT: normal; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS INC.</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=2>Notes to Consolidated Financial
      Statements</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>Years ended December 31, 2012,
      and 2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>(Tabular amounts expressed in
      thousands of U.S. dollars, except per share amounts and number of
      shares)</FONT></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="100%">&nbsp;</TD></TR></TABLE><BR>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD><STRONG><FONT face=Arial size=2>8.</FONT></STRONG></TD>
    <TD width="100%">
      <P align=justify><B><FONT face="Arial" size=2>Inventories (cont&#146;d):
      </FONT></B></P></TD></TR>
  <TR>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%">&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>In 2012, changes in raw
      materials and consumables, finished goods and work-in-progress recognized
      as cost of product and service revenues amounted to $19,218,000 (2011 -
      $37,227,000).</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>In 2012, the write-down of
      inventories to net realizable value amounted to $717,000 (2011 -
      $486,000). There were no reversals of previously recorded write-downs in
      2012 or 2011. Write-downs and reversals are included in either cost of
      product and service revenues, or research and product development expense,
      depending on the nature of inventory.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><B><FONT face="Arial" size=2>9.</FONT></B></TD>
    <TD width="100%"><B><FONT face="Arial" size=2>Property, plant and
      equipment:</FONT></B></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR></TABLE>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="83%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>Balance at</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>Reclassified</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>Balance at</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>December 31,</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>as held for</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>December 31,</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="83%"><B><FONT face="Arial" size=1>Cost</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>Additions</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%" colSpan=2><FONT face="Arial" size=1>Disposals</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>sale</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>2012</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial" size=1>Land</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;
    </FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>1,220</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;
    </FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;
    </FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>- </FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(1,220</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;
    </FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial" size=1>Building</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>3,666</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>(3,666</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial" size=1>Building under finance
      lease</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>12,180</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>12,180</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial" size=1>Computer equipment</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>6,423</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>276</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>(54</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>(701</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>5,944</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial" size=1>Furniture and fixtures</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>834</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>1</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(23</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(57</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>755</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial" size=1>Furniture and fixtures under finance
      lease</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>317</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>317</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial" size=1>Leasehold improvements</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>10,086</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>125</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(1,032</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>9,179</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial" size=1>Production and test equipment</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>45,091</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>1,670</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>(1,493</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>(13,161</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>32,107</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD NOWRAP STYLE="text-align: left; width: 83%; background-color: #c0c0c0; border-bottom: Black 1pt solid"><FONT face="Arial" size=1>Production and test equipment
      under finance lease</FONT> </TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; background-color: #c0c0c0; border-bottom: Black 1pt solid"></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; background-color: #c0c0c0; border-bottom: Black 1pt solid"></TD>
    <TD NOWRAP STYLE="text-align: right; width: 1%; background-color: #c0c0c0; border-bottom: Black 1pt solid"><FONT face="Arial" size=1>3,667</FONT></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; background-color: #c0c0c0; border-bottom: Black 1pt solid"></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; background-color: #c0c0c0; border-bottom: Black 1pt solid"></TD>
    <TD NOWRAP STYLE="text-align: right; width: 1%; background-color: #c0c0c0; border-bottom: Black 1pt solid"><FONT face="Arial" size=1>-</FONT></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; background-color: #c0c0c0; border-bottom: Black 1pt solid"></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; background-color: #c0c0c0; border-bottom: Black 1pt solid"></TD>
    <TD NOWRAP STYLE="text-align: right; width: 1%; background-color: #c0c0c0; border-bottom: Black 1pt solid"><FONT face="Arial" size=1>-</FONT></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; background-color: #c0c0c0; border-bottom: Black 1pt solid"></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; background-color: #c0c0c0; border-bottom: Black 1pt solid"></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; background-color: #c0c0c0; border-bottom: Black 1pt solid"></TD>
    <TD NOWRAP STYLE="text-align: right; width: 1%; background-color: #c0c0c0; border-bottom: Black 1pt solid"><FONT face="Arial" size=1>-</FONT></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; background-color: #c0c0c0; border-bottom: Black 1pt solid"></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; background-color: #c0c0c0; border-bottom: Black 1pt solid"></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; background-color: #c0c0c0; border-bottom: Black 1pt solid"></TD>
    <TD NOWRAP STYLE="text-align: right; width: 1%; background-color: #c0c0c0; border-bottom: Black 1pt solid"><FONT face="Arial" size=1>3,667</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="83%"><FONT face="Arial" size=1>Total</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>83,484</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>2,072</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>(1,570</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>(19,837</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>64,149</FONT></TD></TR></TABLE><BR>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="86%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>Balance at</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>Reclassified</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>Balance at</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="86%"><B><FONT face="Arial" size=1>Depreciation and impairment</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>December 31,</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD align=right width="2%" colSpan=2><FONT face="Arial" size=1>Impairment</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>as held
      for</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>December 31</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="86%"><B><FONT face="Arial" size=1>loss</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="2%" colSpan=2><FONT face="Arial" size=1>Depreciation</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>loss</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>Disposals</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>sale</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>2012</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="86%" bgColor=#c0c0c0><FONT face="Arial" size=1>Land</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>- </FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;
    </FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="86%"><FONT face="Arial" size=1>Building</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>2,199</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>154</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>(2,353</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="86%" bgColor=#c0c0c0><FONT face="Arial" size=1>Building under
      finance lease</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>1,488</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>813</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>2,301</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="86%"><FONT face="Arial" size=1>Computer equipment</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>5,676</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>241</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>(54</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>(493</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>5,370</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="86%" bgColor=#c0c0c0><FONT face="Arial" size=1>Furniture and
      fixtures</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>788</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>12</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(23</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(57</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>720</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="86%"><FONT face="Arial" size=1>Furniture and fixtures
      under</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>37</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>63</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>100</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="86%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; finance lease</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="86%" bgColor=#c0c0c0><FONT face="Arial" size=1>Leasehold
      improvements</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>4,963</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>694</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(767</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>4,890</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="86%"><FONT face="Arial" size=1>Production and test
      equipment</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>32,806</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>3,003</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>1,070</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>(975</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>(10,352</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>25,552</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="86%" bgColor=#c0c0c0><FONT face="Arial" size=1>Production and
      test equipment</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>442</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>458</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>900</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="86%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      under finance lease</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="86%"><FONT face="Arial" size=1>Total</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>48,399</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>5,438</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>1,070</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>(1,052</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>(14,022</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>) </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>39,833</FONT></TD></TR></TABLE><BR>
<P align=right><FONT face="Arial" size=1>36 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<TABLE style="LINE-HEIGHT: normal; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS INC.</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=2>Notes to Consolidated Financial
      Statements</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>Years ended December 31, 2012,
      and 2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>(Tabular amounts expressed in
      thousands of U.S. dollars, except per share amounts and number of
      shares)</FONT></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="100%">&nbsp;</TD></TR></TABLE><BR>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=2>9.</FONT></B></TD>
    <TD noWrap align=left width="98%"><B><FONT face="Arial" size=2>Property, plant and equipment (cont&#146;d):</FONT></B></TD></TR>
  <TR>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="98%"></TD></TR></TABLE>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="86%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>Balance at</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>Balance at</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="86%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>December 31</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>December 31</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="86%"><B><FONT face="Arial" size=1>Cost</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#ffffff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>2010</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>Additions</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>Disposals</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="86%" bgColor=#c0c0c0><FONT face="Arial" size=1>Land</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;
    </FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>1,220</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;
    </FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;
    </FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;
    </FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>1,220</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="86%"><FONT face="Arial" size=1>Building</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>3,666</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>3,666</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="86%" bgColor=#c0c0c0><FONT face="Arial" size=1>Building under finance
      lease</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>12,180</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>12,180</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="86%"><FONT face="Arial" size=1>Computer equipment</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>6,339</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>403</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>(319</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>6,423</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="86%" bgColor=#c0c0c0><FONT face="Arial" size=1>Furniture and fixtures</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>741</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>93</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>834</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="86%"><FONT face="Arial" size=1>Furniture and fixtures under finance
      lease</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>317</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>317</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="86%" bgColor=#c0c0c0><FONT face="Arial" size=1>Leasehold improvements</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>7,518</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>2,568</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>10,086</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="86%"><FONT face="Arial" size=1>Production and test equipment</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>45,382</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>2,785</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>(3,076</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>45,091</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="86%" bgColor=#c0c0c0><FONT face="Arial" size=1>Production and test equipment under finance lease</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>2,078</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>1,589</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>3,667</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="86%"><FONT face="Arial" size=1>Total</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>79,124</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>7,755</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>(3,395</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>83,484</FONT></TD></TR></TABLE><BR>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="84%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>Balance at</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>Balance at</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%"></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>December 31</FONT></TD>
    <TD noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right width="2%" colSpan=2><FONT face="Arial" size=1>Impairment</FONT></TD>
    <TD noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>December 31</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="84%"><B><FONT face="Arial" size=1>Depreciation and impairment loss</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>2010</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="2%" colSpan=2><FONT face="Arial" size=1>Depreciation</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>loss</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>Disposals</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%" bgColor=#c0c0c0><FONT face="Arial" size=1>Land</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;
    </FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;
    </FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;
    </FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;
    </FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;
    </FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%"><FONT face="Arial" size=1>Building</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>2,044</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>155</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>2,199</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%" bgColor=#c0c0c0><FONT face="Arial" size=1>Building under finance
      lease</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>652</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>836</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>1,488</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%"><FONT face="Arial" size=1>Computer equipment</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>5,347</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>345</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>(16</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>5,676</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%" bgColor=#c0c0c0><FONT face="Arial" size=1>Furniture and fixtures</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>682</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>106</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>788</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%"><FONT face="Arial" size=1>Furniture and fixtures under finance
      lease</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>37</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>37</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%" bgColor=#c0c0c0><FONT face="Arial" size=1>Leasehold improvements</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>4,442</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>521</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>4,963</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%"><FONT face="Arial" size=1>Production and test equipment</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>28,889</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>3,292</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>1,727</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>(1,102</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>32,806</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%" bgColor=#c0c0c0><FONT face="Arial" size=1>Production and test equipment
      under finance</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>123</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>319</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>442</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="84%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; lease</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=bottom noWrap align=left width="84%"><FONT face="Arial" size=1>Total</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=bottom noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=bottom noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=bottom noWrap align=right width="1%"><FONT face="Arial" size=1>42,179</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=bottom noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=bottom noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=bottom noWrap align=right width="1%"><FONT face="Arial" size=1>5,611</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=bottom noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=bottom noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=bottom noWrap align=right width="1%"><FONT face="Arial" size=1>1,727</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=bottom noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=bottom noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=bottom noWrap align=right width="1%"><FONT face="Arial" size=1>(1,118</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=bottom noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=bottom noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=bottom noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=bottom noWrap align=right width="1%"><FONT face="Arial" size=1>48,399</FONT></TD></TR></TABLE><BR>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="95%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>Balance at</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>Balance at</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="95%"><B><FONT face="Arial" size=1>Carrying amounts</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>December 31, 2012</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>December 31, 2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="95%" bgColor=#c0c0c0><FONT face="Arial" size=1>Land</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>1,220</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="95%"><FONT face="Arial" size=1>Building</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>1,467</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="95%" bgColor=#c0c0c0><FONT face="Arial" size=1>Building under
      finance lease</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>9,879</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>10,692</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="95%"><FONT face="Arial" size=1>Computer equipment</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>574</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>747</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="95%" bgColor=#c0c0c0><FONT face="Arial" size=1>Furniture and
      fixtures</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>35</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>46</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="95%"><FONT face="Arial" size=1>Furniture and fixtures under
      finance lease</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>217</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>280</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="95%" bgColor=#c0c0c0><FONT face="Arial" size=1>Leasehold
      improvements</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>4,289</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>5,123</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="95%"><FONT face="Arial" size=1>Production and test
      equipment</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>6,555</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>12,285</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="95%" bgColor=#c0c0c0><FONT face="Arial" size=1>Production and test equipment under
      finance lease</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>2,767</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>3,225</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="95%"><FONT face="Arial" size=1>Total</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>24,316</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>35,085</FONT></TD></TR></TABLE><BR>
<P align=right><FONT face="Arial" size=1>37 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<TABLE style="LINE-HEIGHT: normal; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS INC.</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=2>Notes to Consolidated Financial
      Statements</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>Years ended December 31, 2012,
      and 2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>(Tabular amounts expressed in
      thousands of U.S. dollars, except per share amounts and number of
      shares)</FONT></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="100%">&nbsp;</TD></TR></TABLE><BR>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=2>9.</FONT></B></TD>
    <TD noWrap align=left width="99%"><B><FONT face="Arial" size=2>Property, plant and equipment
      (cont&#146;d):</FONT></B></TD></TR>
  <TR>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="99%">&nbsp;</TD></TR>
  <TR>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="99%"><EM><FONT face=Arial size=2>Leased assets</FONT></EM></TD></TR>
  <TR>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="99%">&nbsp;</TD></TR>
  <TR>
    <TD noWrap align=left width="1%"></TD>
    <TD ALIGN="LEFT" WIDTH="99%" STYLE="text-align: justify"><FONT face=Arial size=2>The Corporation
      leases certain assets under finance lease agreements including the
      Corporation&#146;s head office building in Burnaby, British Columbia and
      certain production and test equipment.</FONT></TD></TR>
  <TR>
    <TD noWrap align=left width="1%"></TD>
    <TD align=left width="99%">&nbsp;</TD></TR>
  <TR>
    <TD noWrap align=left width="1%"></TD>
    <TD align=left width="99%"><EM><FONT face=Arial size=2>Disposals</FONT></EM></TD></TR>
  <TR>
    <TD noWrap align=left width="1%"></TD>
    <TD align=left width="99%">&nbsp;</TD></TR>
  <TR>
    <TD noWrap align=left width="1%"></TD>
    <TD ALIGN="LEFT" WIDTH="99%" STYLE="text-align: justify"><FONT face=Arial size=2>The total loss on
      sale of property, plant and equipment was $69,000 in 2012. In 2011, a gain
      on sale of property, plant and equipment of $734,000 was
    recognized.</FONT></TD></TR>
  <TR>
    <TD noWrap align=left width="1%"></TD>
    <TD align=left width="99%">&nbsp;</TD></TR>
  <TR>
    <TD noWrap align=left width="1%"></TD>
    <TD align=left width="99%"><EM><FONT face=Arial size=2>Impairment
      loss</FONT></EM></TD></TR>
  <TR>
    <TD noWrap align=left width="1%"></TD>
    <TD align=left width="99%">&nbsp;</TD></TR>
  <TR>
    <TD noWrap align=left width="1%"></TD>
    <TD ALIGN="LEFT" WIDTH="99%" STYLE="text-align: justify"><FONT face=Arial size=2>During the year
      ended December 31, 2012, impairment losses of $1,070,000 (2011 -
      $1,727,000) were recognized, of which $570,000 related to the obsolescence
      of production and test equipment. The remaining $500,000 related to the
      impairment of assets held for sale (note 28). No impairment losses were
      reversed in 2012 or 2011.</FONT></TD></TR>
  <TR>
    <TD noWrap align=left width="1%"></TD>
    <TD align=left width="99%">&nbsp;</TD></TR>
  <TR>
    <TD noWrap align=left width="1%"><STRONG><FONT face=Arial size=2>10.</FONT></STRONG></TD>
    <TD align=left width="99%"><STRONG><FONT face=Arial size=2>Intangible
      assets:</FONT></STRONG></TD></TR></TABLE><BR>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="100%"><FONT face="Arial" size=1>Fuel cell
      technology</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" align=right width="1%"><FONT face="Arial" size=1>Accumulated</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>Net
      carrying</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="100%"><FONT face="Arial" size=1>Balance</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>Cost</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="1%"><FONT face="Arial" size=1>amortization</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>amount</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="100%" bgColor=#c0c0c0><FONT face="Arial" size=1>At January 1, 2011</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>43,443</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>40,468</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>2,975</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="100%"><FONT face="Arial" size=1>Amortization</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>726</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>(726</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="100%" bgColor=#c0c0c0><FONT face="Arial" size=1>At December 31, 2011</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>43,443</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>41,194</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>2,249</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>Acquisition through business combination</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>2,886</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>2,886</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="100%" bgColor=#c0c0c0><FONT face="Arial" size=1>Amortization</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>941</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(941</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="100%"><FONT face="Arial" size=1>At December 31, 2012</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>46,329</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>42,135</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>4,194</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD></TR></TABLE><BR>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD WIDTH="100%" STYLE="text-align: justify"><FONT face="Arial" size=2>Amortization and impairment
      losses of fuel cell technology and development costs are allocated to
      research and product development expense. There were no impairment losses
      recorded in 2012 and 2011.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><B><FONT face="Arial" size=2>11.</FONT></B></TD>
    <TD width="100%"><B><FONT face="Arial" size=2>Goodwill:</FONT></B></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD WIDTH="100%" STYLE="text-align: justify"><FONT face="Arial" size=2>For the purpose of
      impairment testing, goodwill is allocated to the Corporation&#146;s cash-generating units which represent the lowest level within the Corporation
      at which the goodwill is monitored for internal management purposes, which
      is not higher than the Corporation&#146;s operating segments (note
    26).</FONT></TD></TR></TABLE>
<P align=right><FONT face="Arial" size=1>38 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<TABLE style="LINE-HEIGHT: normal; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS INC.</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=2>Notes to Consolidated Financial
      Statements</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>Years ended December 31, 2012,
      and 2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>(Tabular amounts expressed in
      thousands of U.S. dollars, except per share amounts and number of
      shares)</FONT></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="100%">&nbsp;</TD></TR></TABLE><BR>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"><STRONG><FONT face=Arial size=2>11.</FONT></STRONG></TD>
    <TD noWrap align=left width="99%"><B><FONT face="Arial" size=2>Goodwill
      (cont&#146;d):</FONT></B></TD></TR>
  <TR>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="99%">&nbsp;</TD></TR>
  <TR>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="99%"><FONT face=Arial size=2>The
      aggregate carrying amount of goodwill allocated to each cash-generating
      unit is as follows:</FONT></TD></TR></TABLE><BR>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="95%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="2%" colSpan=2><FONT face="Arial" size=1>December 31,</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="2%" colSpan=2><FONT face="Arial" size=1>December 31,</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="95%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>2012</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="95%" bgColor=#c0c0c0><FONT face="Arial" size=1>Fuel cell
      products</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>36,291</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>46,291</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD noWrap align=left width="95%"><FONT face="Arial" size=1>Contract automotive</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="95%" bgColor=#c0c0c0><FONT face="Arial" size=1>Material products</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>1,815</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="95%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>36,291</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>48,106</FONT></TD></TR></TABLE><BR>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD ALIGN="LEFT" WIDTH="99%" STYLE="text-align: justify"><FONT face="Arial" size=2>The impairment testing for the above
      cash-generating units requires a comparison of the carrying value of the
      asset to the higher of (i) value in use; and (ii) fair value less costs to
      sell. Value in use is defined as the present value of future cash flows
      expected to be derived from the asset in its current state.</FONT></TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="99%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="99%"><I><FONT face="Arial" size=2>Fuel Cell Products</FONT></I></TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="99%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="1%"></TD>
    <TD ALIGN="LEFT" WIDTH="99%" STYLE="text-align: justify"><FONT face="Arial" size=2>The Corporation&#146;s fair value test is in
      effect a modified market capitalization assessment, whereby the fair value
      of the Fuel Cell Products segment is calculated by first calculating the
      value of the Corporation at December 31, 2012 based on the average closing
      share price in the month of December, adding a reasonable estimated
      control premium of 25% to determine the Corporation&#146;s enterprise value on
      a controlling basis after adjusting for excess cash balances, and
      deducting the fair value of the Materials Product segment from this
      enterprise value, arriving at the fair value of the Fuel Cell Products
      segment. Based on the fair value test, the Corporation has determined that
      the fair value of the Fuel Cell Products segment was deficient compared to
      its carrying value, resulting in a $10,000,000 impairment loss recognized
      against goodwill. The $46,291,000 of goodwill associated with the Fuel
      Cell Products segment as of December 31, 2011 was written down to
      $36,291,000 as of December 31, 2012.</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="99%"><FONT face="Arial" size=2>&nbsp;</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="1%"></TD>
    <TD ALIGN="LEFT" WIDTH="99%" STYLE="text-align: justify"><FONT face="Arial" size=2>In addition to the fair value test, the
      Corporation also performed a value in use test on the Fuel Cell Products
      segment, comparing the carrying value of the segment to the present value
      of future cash flows expected to be derived from the segment. The
      principal factors used in the discounted cash flow analysis requiring
      judgment are the projected results of operations, the discount rate based
      on the weighted average cost of capital (&#147;WACC&#148;), and terminal value
      assumptions for each reporting unit. The Corporation&#146;s value in use test
      was based on a WACC of 20%; an average estimated compound annual growth
      rate of approximately 35% from 2012 to 2017; and a terminal year earnings
      before interest, taxes, depreciation and amortization (&#147;EBITDA&#148;)
      multiplied by a terminal value multiplier of 4.0. The value in use
      assessment resulted in an estimated fair value for the Fuel Cell Products
      segment that is consistent with that determined under the fair value, less
      costs to sell, assessment.</FONT></TD></TR></TABLE><BR>
<P align=right><FONT face="Arial" size=1>39 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<TABLE style="LINE-HEIGHT: normal; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS INC.</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=2>Notes to Consolidated Financial
      Statements</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>Years ended December 31, 2012,
      and 2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>(Tabular amounts expressed in
      thousands of U.S. dollars, except per share amounts and number of
      shares)</FONT></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="100%">&nbsp;</TD></TR></TABLE><BR>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD><STRONG><FONT face=Arial size=2>11.</FONT></STRONG></TD>
    <TD width="100%"><STRONG><FONT face=Arial size=2>Goodwill (cont&#146;d):</FONT></STRONG></TD></TR>
  <TR>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%">&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><I><FONT face="Arial" size=2>Material
      Products</FONT></I></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>The Material Products
      segment was disposed of on January 31, 2013 (note 29). As a result, the
      fair value of the Material Products segment, determined based on a fair
      value less costs to sell assessment, compared the segment&#146;s carrying value
      as of December 31, 2012 against the actual net proceeds received on
      disposition on January 31, 2013. As a result of the assessment, the
      Corporation determined that the fair value of the Material Products
      segment was deficient to its carrying value, resulting in a $1,815,000
      write-off of goodwill and $500,000 write-down of property, plant and
      equipment associated with the Material Products segment. The impairment
      losses relating to the Material Products segment are included in net loss
      from discontinued operations (note 28).</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><B><FONT face="Arial" size=2>12.</FONT></B></TD>
    <TD width="100%"><B><FONT face="Arial" size=2>Investments:</FONT></B></TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;</TD>
    <TD width="100%"></TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD width="100%"><FONT face=Arial size=2>Investments are
      comprised of the following:</FONT></TD></TR></TABLE>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="90%" colSpan=4><FONT face=Arial size=2></FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="99%" colSpan=13></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="87%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="4%" COLSPAN="4" STYLE="border-top: #000000 1.5pt solid; text-align: center"><FONT face=Arial size=1>December 31,
      2012</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD NOWRAP ALIGN="CENTER" WIDTH="4%" COLSPAN="4" STYLE="border-top: #000000 1.5pt solid; text-align: center"><FONT face=Arial size=1>December 31, 2011</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="87%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%" STYLE="text-align: right"><FONT face=Arial size=1>Percentage</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%" STYLE="text-align: right"><FONT face=Arial size=1>Percentage</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="87%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="2%" COLSPAN="2" STYLE="border-bottom: #000000 1pt solid; text-align: right"><FONT face=Arial size=1>Amount</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%" STYLE="border-bottom: #000000 1pt solid; text-align: right"><FONT face=Arial size=1>ownership</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="2%" COLSPAN="2" STYLE="border-bottom: #000000 1pt solid; text-align: right"><FONT face=Arial size=1>Amount</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD NOWRAP ALIGN="RIGHT" WIDTH="1%" STYLE="border-bottom: #000000 1pt solid; text-align: right"><FONT face=Arial size=1>ownership</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=Arial size=1>Chrysalix Energy Limited Partnership</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>659</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>15.0</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>%</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>627</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>15.0</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="87%"><FONT face=Arial size=1>Other</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face=Arial size=1>8</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face=Arial size=1>8</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="87%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>667</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>635</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR></TABLE><BR>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"><FONT face="Arial" size=2>Chrysalix Energy Limited
      Partnership (&#147;Chrysalix&#148;) is accounted for as an available-for-sale
      financial asset and recorded at fair value. During 2012, the Corporation
      made additional capital contributions of $44,000 (2011 - $103,000) in
      Chrysalix, which was offset by cash distributions received from Chrysalix
      of $12,000 (2011 - $139,000).</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>The Corporation maintains a
      19.9% interest in AFCC Automotive Fuel Cell Cooperation Corp. (&#147;AFCC&#148;),
      which is accounted for as an available-for-sale financial asset and
      recorded at fair value of $1. The Corporation has no obligation to fund
      any of AFCC&#146;s operating expenses.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><B><FONT face="Arial" size=2>13.</FONT></B></TD>
    <TD width="100%"><B><FONT face="Arial" size=2>Bank
      facilities:</FONT></B></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"><FONT face="Arial" size=2>The Corporation has a demand
      revolving facility (&#147;Bank Operating Line&#148;) in which an operating line of
      credit of up to CDN $10,000,000 is made available to be drawn upon by the
      Corporation. The Bank Operating Line is utilized to assist in financing
      the day-to-day operating activities and short-term working capital
      requirements of the business. Outstanding amounts are charged interest at
      the bank&#146;s prime rate minus 0.50% per annum and are repayable on demand by
      the bank. During 2012, the Corporation was advanced $17,331,000 (2011 -
      $14,265,000) under the bank operating line of which $12,560,000 (2011 -
      $9,678,000) was repaid during the year. At December 31, 2012, $9,358,000
      (2011 - $4,587,000) was outstanding on the Bank Operating
  Line.</FONT></TD></TR>
  <TR>
    <TD colSpan=2></TD></TR></TABLE>
<P align=right><FONT face="Arial" size=1>40 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>



<!--PART F-->
<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=justify><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS
INC.<BR></FONT></B><FONT face="Arial" size=2>Notes to Consolidated Financial
Statements<BR></FONT><FONT face="Arial" size=1>Years ended December 31, 2012,
and 2011</FONT><FONT face="Arial" size=2> <BR></FONT><FONT face="Arial" size=1>(Tabular amounts expressed in thousands of U.S. dollars, except per share
amounts and number of shares)</FONT></P>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD style="BORDER-TOP: #000000 1.5pt solid" vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" width="100%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><B><FONT face="Arial" size=2>13.</FONT></B></TD>
    <TD width="100%"><B><FONT face="Arial" size=2>Bank facilities (cont&#146;d):</FONT></B></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>The Corporation also has a CDN $3,323,000 capital
      leasing facility (&#147;Leasing Facility&#148;) which can be utilized to finance the
      acquisition and lease of operating equipment (notes 9 &amp; 16). Interest
      is charged on outstanding amounts at the bank&#146;s prime rate per annum and
      is repayable at the option of the bank, if there has been, in the opinion
      of the bank, a material adverse change in the financial condition of the
      Corporation. At December 31, 2012, $2,546,000 was outstanding on the
      Leasing Facility which is included in the finance lease liability. The
      remaining $11,508,000 finance lease liability relates to the lease of the
      Corporation&#146;s head office building.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>Both the Bank Operating Line and Leasing Facility
      are secured by a hypothecation of the Corporation&#146;s cash, cash equivalents
      and short-term investments.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><B><FONT face="Arial" size=2>14. </FONT></B></TD>
    <TD width="100%"><B><FONT face="Arial" size=2>Trade and other payables:</FONT></B></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR></TABLE>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="85%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="5%" colSpan=2><FONT face="Arial" size=1>December 31,</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="5%" colSpan=2><FONT face="Arial" size=1>December 31,</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="85%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>2012</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="85%" bgColor=#c0c0c0><FONT face="Arial" size=1>Trade accounts
      payable</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>5,256</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>10,195</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="85%"><FONT face="Arial" size=1>Compensation payable</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>2,046</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>6,615</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="85%" bgColor=#c0c0c0><FONT face="Arial" size=1>Other
      liabilities</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>4,669</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>5,427</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="85%"><FONT face="Arial" size=1>Taxes payable</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>244</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>456</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="85%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>12,215</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>22,693</FONT></TD></TR>
  <TR>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="85%">&nbsp;</TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="3%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="3%"></TD></TR>
  <TR>
    <TD noWrap align=left width="1%"><STRONG><FONT face=Arial size=2>15.</FONT></STRONG></TD>
    <TD noWrap align=left width="85%"><STRONG><FONT face=Arial size=2>Provisions:</FONT></STRONG></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="3%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="3%"></TD></TR></TABLE>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=left width="68%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD align=right width="2%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="2%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="68%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="2%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="2%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="2%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="2%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="3%" colSpan=2><FONT face="Arial" size=1>Warranty</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="2%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" align=right width="3%" colSpan=2><FONT face="Arial" size=1>Decommissioning</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="2%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="2%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="2%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="2%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="68%"><FONT face="Arial" size=1>Balance</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" colSpan=2><FONT face="Arial" size=1>Legal</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right width="3%" colSpan=2><FONT face="Arial" size=1>Restructuring</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" colSpan=2><FONT face="Arial" size=1>provision</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" colSpan=2><FONT face="Arial" size=1>liabilities</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face="Arial" size=1>Total</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="68%" bgColor=#c0c0c0><FONT face="Arial" size=1>At January 1,
      2011</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>1,371</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>78</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>8,570</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>3,102</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>13,121</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="68%"><FONT face="Arial" size=1>Provisions made during the
      year</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>50</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>1,356</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>2,097</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>1,706</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>5,209</FONT></TD>
    <TD noWrap align=left width="2%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="68%" bgColor=#c0c0c0><FONT face="Arial" size=1>Provisions used
      during the year</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>(897</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>(401</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>(716</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>(2,014</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="68%"><FONT face="Arial" size=1>Provisions reversed during the
      year</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>(1,721</FONT></TD>
    <TD noWrap align=left width="2%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>(1,721</FONT></TD>
    <TD noWrap align=left width="2%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="68%" bgColor=#c0c0c0><FONT face="Arial" size=1>Effect of movements in exchange rates</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>(4</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>(29</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>(181</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>(75</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>(289</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="68%"><FONT face="Arial" size=1>At December 31, 2011</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>520</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>1,004</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>8,049</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>4,733</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="2%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>14,306</FONT></TD>
    <TD noWrap align=left width="2%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="68%" bgColor=#c0c0c0><FONT face="Arial" size=1>Assumed through
      business combination</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>447</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>447</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="68%"><FONT face="Arial" size=1>Provisions made during the
      year</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>1,937</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>1,514</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>250</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>3,701</FONT></TD>
    <TD noWrap align=left width="2%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="68%" bgColor=#c0c0c0><FONT face="Arial" size=1>Provisions used
      during the year</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>(528</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>(2,060</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>(1,309</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>(3,897</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="68%"><FONT face="Arial" size=1>Provisions reversed during the
      year</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>(373</FONT></TD>
    <TD noWrap align=left width="2%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>(373</FONT></TD>
    <TD noWrap align=left width="2%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="68%" bgColor=#c0c0c0><FONT face="Arial" size=1>Effect of movements in exchange rates</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>8</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>41</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>173</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>106</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>328</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="68%"><FONT face="Arial" size=1>At December 31, 2012</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>922</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>8,501</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>5,089</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="2%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>14,512</FONT></TD>
    <TD noWrap align=left width="2%"></TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" width="99%" colSpan=21></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="68%" bgColor=#c0c0c0><FONT face="Arial" size=1>Current</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>922</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>8,501</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>9,423</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="68%"><FONT face="Arial" size=1>Non-current</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>5,089</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>5,089</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="68%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>922</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>8,501</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>5,089</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>14,512</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD></TR></TABLE><BR>
<P align=right><FONT face="Arial" size=1>41 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=justify><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS
INC.<BR></FONT></B><FONT face="Arial" size=2>Notes to Consolidated Financial
Statements<BR></FONT><FONT face="Arial" size=1>Years ended December 31, 2012,
and 2011</FONT><FONT face="Arial" size=2> <BR></FONT><FONT face="Arial" size=1>(Tabular amounts expressed in thousands of U.S. dollars, except per share
amounts and number of shares)</FONT></P>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD style="BORDER-TOP: #000000 1.5pt solid" vAlign=top noWrap>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" width="100%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><B><FONT face="Arial" size=2>15.</FONT></B> </TD>
    <TD width="100%"><B><FONT face="Arial" size=2>Provisions
      (cont&#146;d):</FONT></B> </TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"></TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><I><FONT face="Arial" size=2>Restructuring</FONT></I>
    </TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>During 2012, the Corporation
      incurred $1,931,000 of restructuring charges due primarily to a 7%
      workforce reduction and a minor restructuring focused on overhead cost
      reduction. The estimated restructuring costs primarily include employee
      termination benefits and are expected to be paid in 2013. Restructuring
      charges are recognized in general and administrative expenses.</FONT>
  </TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><I><FONT face="Arial" size=2>Warranty
      provision</FONT></I> </TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>During the year, the
      warranty provision increased by $452,000, due in part to the assumption of
      warranty provisions as part of the acquisition of key assets and product
      lines from IdaTech (note 6).</FONT> </TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><I><FONT face="Arial" size=2>Decommissioning
      liabilities</FONT></I> </TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>Provisions for
      decommissioning liabilities have been recorded for the Corporation&#146;s two
      leased locations in Burnaby, British Columbia, comprising the
      Corporation&#146;s head office building and manufacturing facilities, and are
      related to site restoration obligations at the end of their respective
      lease terms. Due to the long-term nature of the liability, the most
      significant uncertainty in estimating the provision is the costs that will
      be incurred. The Corporation has determined a range of reasonable possible
      outcomes of the total costs for the head office building and manufacturing
      facility. In determining the fair value of the decommissioning
      liabilities, the estimated future cash flows have been discounted at 2%
      per annum.</FONT> </TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>The Corporation performed an
      assessment of the estimated cash flows required to settle the obligations
      for the two buildings as of December 31, 2012, resulting in an additional
      provision of $100,000 recorded against decommissioning liabilities. The
      remaining provision increase during 2012 was due to accretion costs. The
      total undiscounted amount of the estimated cash flows required to settle
      the obligation for one of the buildings is $2,372,000, which is expected
      to be settled at the end of the lease term in 2025. The total undiscounted
      amount of the estimated cash flows required to settle the obligation for
      the second building is $3,994,000, which is expected to be settled at the
      end of the operating lease term of 2019.</FONT></TD></TR>
  </TABLE>
<P align=right><FONT face="Arial" size=1>42</FONT></P>

<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=justify><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS
INC.<BR></FONT></B><FONT face="Arial" size=2>Notes to Consolidated Financial
Statements<BR></FONT><FONT face="Arial" size=1>Years ended December 31, 2012,
and 2011</FONT><FONT face="Arial" size=2> <BR></FONT><FONT face="Arial" size=1>(Tabular amounts expressed in thousands of U.S. dollars, except per share
amounts and number of shares)</FONT></P>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD style="BORDER-TOP: #000000 1.5pt solid" vAlign=top noWrap>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" width="100%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><B><FONT face="Arial" size=2>16.</FONT></B></TD>
    <TD width="100%"><B><FONT face="Arial" size=2>Finance lease
      liability</FONT></B></TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"></TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>The Corporation leases
      certain assets under finance lease agreements (note 9). The finance leases
      have imputed interest rates ranging between 2.25% to 7.35% per annum and
      expire between December 2014 and February 2025.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>The future minimum lease
      payments for the Corporation&#146;s finance leases are as follows:</FONT></TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%">&nbsp;</TD></TR></TABLE>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="94%"><FONT face="Arial" size=1>Year ending December
31</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="3%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Arial" size=1>2013</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>1,924</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="94%"><FONT face="Arial" size=1>2014</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>2,329</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Arial" size=1>2015</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>1,734</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="94%"><FONT face="Arial" size=1>2016</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>1,914</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Arial" size=1>2017</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>1,401</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="94%"><FONT face="Arial" size=1>Thereafter</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>11,135</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Arial" size=1>Total minimum
      lease payments</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>20,437</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="94%"><FONT face="Arial" size=1>Less: Imputed interest</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>(6,383</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Arial" size=1>Total finance
      lease liability</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>14,054</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="94%"><FONT face="Arial" size=1>Less: Current portion of finance lease
      liability</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>(1,043</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Arial" size=1>Non-current portion of finance lease
    liability</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>13,011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR></TABLE><BR>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>At December 31, 2012,
      $2,546,000 was outstanding on the Leasing Facility which is included in
      the finance lease liability. The remaining $11,508,000 finance lease
      liability relates to the lease of the Corporation&#146;s head office
      building.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><B><FONT face="Arial" size=2>17.</FONT></B></TD>
    <TD width="100%"><B><FONT face="Arial" size=2>Convertible
      debenture</FONT></B></TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"></TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>The convertible debenture
      relates to financing to Dantherm Power A/S by the non-controlling partner
      and is redeemable at the option of Dantherm Power A/S subject to approval
      by all convertible debenture holders on or after January 1, 2013 including
      interest which is accrued at 12%. Prior to December 31, 2013 (the
      &#147;Maturity Date&#148;), the convertible debenture holders may elect to convert
      all or part of the debenture into shares of Dantherm Power A/S. The
      conversion price for convertible debenture notes entered into prior to
      January 1, 2012, of approximately DKK 9,120,000, is DKK 3.40 per share.
      Convertible debenture notes of approximately DKK 5,066,000 entered into
      since January 1, 2012 have a conversion price of DKK 0.14 per share. This
      conversion feature was determined to have a nominal value. The Maturity
      Date may be extended to December 31, 2014 with approval of the subscribers
      (note 29). During 2012, an additional $862,000, of convertible debt
      financing was advanced to Dantherm Power A/S by a non-controlling partner.
      At December 31, 2012, the convertible debt outstanding was $2,924,000,
      which includes $417,000 of interest payable.</FONT></TD></TR></TABLE>
<P align=right><FONT face="Arial" size=1>43 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=justify><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS
INC.<BR></FONT></B><FONT face="Arial" size=2>Notes to Consolidated Financial
Statements<BR></FONT><FONT face="Arial" size=1>Years ended December 31, 2012,
and 2011</FONT><FONT face="Arial" size=2> <BR></FONT><FONT face="Arial" size=1>(Tabular amounts expressed in thousands of U.S. dollars, except per share
amounts and number of shares)</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD style="BORDER-TOP: #000000 1.5pt solid" width="100%">&nbsp;</TD></TR>
  <TR>
    <TD width="100%"><FONT face="Arial" size=2><STRONG>18. Employee future
      benefits:</STRONG></FONT></TD></TR></TABLE><BR>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="69%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid; text-align: center" noWrap width="13%" colSpan=7><FONT face="Arial" size=1>2012</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid; text-align: center" noWrap width="2%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid; text-align: center" noWrap width="12%" colSpan=7><FONT face="Arial" size=1>2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="69%"></TD>
    <TD noWrap align=left width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=right width="3%" colSpan=2><FONT face="Arial" size=1>Pension</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=right width="4%" colSpan=2><FONT face="Arial" size=1>Other</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=right width="3%" colSpan=2><FONT face="Arial" size=1>Pension</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=right width="4%" colSpan=2><FONT face="Arial" size=1>Other</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="69%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" colSpan=2><FONT face="Arial" size=1>plan</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face="Arial" size=1>benefit plan</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" colSpan=2><FONT face="Arial" size=1>plan</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face="Arial" size=1>benefit plan</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="69%" bgColor=#c0c0c0><FONT face="Arial" size=1>Plan
      assets</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>9,344</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>8,223</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="69%"><FONT face="Arial" size=1>Plan obligations</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>(14,652</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>(853</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>(13,329</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>(580</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="69%" bgColor=#c0c0c0><FONT face="Arial" size=1>Employee future benefit plans deficit</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(5,308</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>(853</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>(5,106</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>(580</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR></TABLE><BR>
<P style="PADDING-LEFT: 18pt" align=justify><FONT face="Arial" size=2>The
Corporation maintains a defined benefit pension plan covering existing and
former employees in the United States. The benefits under the pension plan are
based on years of service and salary levels accrued as of December 31, 2009. In
2009, amendments were made to the defined benefit pension plan to freeze
benefits accruing to employees at their respective years of service and salary
levels obtained as of December 31, 2009. Certain employees in the United States
are also eligible for post-retirement healthcare, life insurance and other
benefits.</FONT></P>
<P style="PADDING-LEFT: 18pt" align=justify><FONT face="Arial" size=2>The
Corporation accrues the present value of its obligations under employee future
benefit plans and the related costs, net of the present value of plan
assets.</FONT></P>
<P style="PADDING-LEFT: 18pt" align=justify><FONT face="Arial" size=2>The
measurement date used to determine pension and other post-retirement benefit
obligations and expense is December 31 of each year. The most recent actuarial
valuation of the employee future benefit plans for funding purposes was as of
January 1, 2012. The next actuarial valuation of the employee future benefit
plans for funding purposes is expected to be performed as of January 1,
2013.</FONT></P>
<P style="PADDING-LEFT: 18pt" align=justify><FONT face="Arial" size=2>The
Corporation expects contributions of approximately $210,000 to be paid to its
defined benefit plans in 2013. Information about the Corporation&#146;s employee
future benefit plans, in aggregate, is as follows: </FONT></P>
<P style="PADDING-LEFT: 18pt" align=justify><FONT STYLE="font: x-small Arial">Movement in the present value of the defined benefit
plan obligations: </FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="72%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid; text-align: center" noWrap width="12%" colSpan=7><FONT face="Arial" size=1>2012</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid; text-align: center" noWrap width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid; text-align: center" noWrap width="12%" colSpan=7><FONT face="Arial" size=1>2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="72%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="4%" colSpan=2><FONT face="Arial" size=1>Pension</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%" colSpan=2><FONT face="Arial" size=1>Other</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%" colSpan=2><FONT face="Arial" size=1>Pension</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="4%" colSpan=2><FONT face="Arial" size=1>Other</FONT></TD>
    <TD noWrap align=left width="2%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="72%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face="Arial" size=1>Plan</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" colSpan=2><FONT face="Arial" size=1>benefit plan</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" colSpan=2><FONT face="Arial" size=1>plan</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face="Arial" size=1>benefit plan</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="72%" bgColor=#c0c0c0><FONT face="Arial" size=1>Defined benefit
      plan obligations at January 1</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>13,329</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>580</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>10,819</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>491</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="72%"><FONT face="Arial" size=1>Current service cost</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>20</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>6</FONT></TD>
    <TD noWrap align=left width="2%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="72%" bgColor=#c0c0c0><FONT face="Arial" size=1>Interest
      cost</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>565</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>31</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>587</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>25</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="72%"><FONT face="Arial" size=1>Benefits paid</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>(318</FONT></TD>
    <TD noWrap align=left width="2%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>(60</FONT></TD>
    <TD noWrap align=left width="2%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>(251</FONT></TD>
    <TD noWrap align=left width="2%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>(44</FONT></TD>
    <TD noWrap align=left width="2%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="72%" bgColor=#c0c0c0><FONT face="Arial" size=1>Benefits
      payable</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>46</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>48</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="72%"><FONT face="Arial" size=1>Actuarial losses in other comprehensive
    income</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>1,030</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>282</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>2,126</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>102</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="72%" bgColor=#c0c0c0><FONT face="Arial" size=1>Defined benefit plan obligations at December
      31</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>14,652</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>853</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>13,329</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>580</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD></TR></TABLE><BR>
<P align=right><FONT face="Arial" size=1>44 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=justify><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS
INC.<BR></FONT></B><FONT face="Arial" size=2>Notes to Consolidated Financial
Statements<BR></FONT><FONT face="Arial" size=1>Years ended December 31, 2012,
and 2011</FONT><FONT face="Arial" size=2> <BR></FONT><FONT face="Arial" size=1>(Tabular amounts expressed in thousands of U.S. dollars, except per share
amounts and number of shares)</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD style="BORDER-TOP: #000000 1.5pt solid" width="100%">&nbsp;</TD></TR>
  <TR>
    <TD width="100%"><FONT face="Arial" size=2><STRONG>18. Employee future
      benefits: (cont&#146;d):</STRONG></FONT></TD></TR></TABLE><BR>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="70%"><FONT face=Arial size=2>Movement in the present value of plan assets:</FONT><BR>&nbsp;</TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap style="text-align: center" width="14%" colSpan=7></TD>
    <TD noWrap style="text-align: center" width="1%"></TD>
    <TD noWrap style="text-align: center" width="12%" colSpan=7></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="70%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid; text-align: center" noWrap width="14%" colSpan=7><FONT face="Arial" size=1>2012</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid; text-align: center" noWrap width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid; text-align: center" noWrap width="12%" colSpan=7><FONT face="Arial" size=1>2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="70%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="5%" colSpan=2><FONT face="Arial" size=1>Pension</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="4%" colSpan=2><FONT face="Arial" size=1>Other</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="4%" colSpan=2><FONT face="Arial" size=1>Pension</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="5%" colSpan=2><FONT face="Arial" size=1>Other</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="70%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" colSpan=2><FONT face="Arial" size=1>plan</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face="Arial" size=1>benefit plan</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face="Arial" size=1>plan</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" colSpan=2><FONT face="Arial" size=1>benefit plan</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="70%" bgColor=#c0c0c0><FONT face="Arial" size=1>Fair value of
      plan assets at January 1</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>8,223</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>8,360</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="70%"><FONT face="Arial" size=1>Expected return on plan
      assets</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>574</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>582</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="70%" bgColor=#c0c0c0><FONT face="Arial" size=1>Employer&#146;s
      contributions</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>360</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>60</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>210</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>44</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="70%"><FONT face="Arial" size=1>Benefits paid</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>(318</FONT></TD>
    <TD noWrap align=left width="2%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>(60</FONT></TD>
    <TD noWrap align=left width="2%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>(252</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>(44</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="70%" bgColor=#c0c0c0><FONT face="Arial" size=1>Actuarial (losses) gains in other comprehensive
      income</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>505</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>(677</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="70%"><FONT face="Arial" size=1>Fair value of plan assets at December 31</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>9,344</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>8,223</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD></TR>
  <TR>
    <TD noWrap width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="99%" colSpan=17>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="70%"><FONT face="Arial" size=2>Pension plan assets
      comprise:</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" width="99%" colSpan=17>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="70%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="3%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="3%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face="Arial" size=1>2012</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" colSpan=2><FONT face="Arial" size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="70%" bgColor=#c0c0c0><FONT face="Arial" size=1>Cash and cash
      equivalents</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>3%</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1></FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>3%</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="70%"><FONT face="Arial" size=1>Equity securities</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>70%</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1></FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>70%</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="70%" bgColor=#c0c0c0><FONT face="Arial" size=1>Debt securities</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>27%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>27%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="70%"><FONT face="Arial" size=1>Total</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="3%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="3%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>100%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>100%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1></FONT></TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="99%" colSpan=17>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="70%"><FONT face="Arial" size=2>Expense recognized in net
      income:</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" width="99%" colSpan=17>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="70%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid; text-align: center" noWrap width="14%" colSpan=7><FONT face="Arial" size=1>2012</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid; text-align: center" noWrap width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid; text-align: center" noWrap width="12%" colSpan=7><FONT face="Arial" size=1>2011</FONT> &nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="70%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="5%" colSpan=2><FONT face="Arial" size=1>Pension</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="4%" colSpan=2><FONT face="Arial" size=1>Other</FONT></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="4%" colSpan=2><FONT face="Arial" size=1>Pension</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="5%" colSpan=2><FONT face="Arial" size=1>Other</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="70%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" colSpan=2><FONT face="Arial" size=1>plan</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>benefit
      plan</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face="Arial" size=1>plan </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" colSpan=2><FONT face=Arial size=1>benefit
      plan</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="70%" bgColor=#c0c0c0><FONT face="Arial" size=1>Current service
      cost</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>20</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>6</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="70%"><FONT face="Arial" size=1>Interest on
obligations</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>565</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>31</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>587</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>25</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="70%" bgColor=#c0c0c0><FONT face="Arial" size=1>Expected
      (return) on plan assets</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>(574</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>(582</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="70%"><FONT face="Arial" size=1>Benefits payable</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>47</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>48</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="70%" bgColor=#c0c0c0><FONT face="Arial" size=1>Expense recognized in net income</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>38</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>51</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>53</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>31</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="70%"><FONT face="Arial" size=1>Actuarial (gain) loss on plan
      assets and plan obligations</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="70%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; recognized in
      other comprehensive income</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>525</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>282</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>2,803</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>102</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="70%" bgColor=#c0c0c0><FONT face="Arial" size=1>Total expense
      (income) recognized in net income and</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="70%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; other
      comprehensive income</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>563</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>333</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>2,856</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>133</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR></TABLE><BR>
<P style="PADDING-LEFT: 18pt" align=justify><FONT face="Arial" size=2>The
expense recognized in net income is recorded in Finance expense.</FONT></P>
<P align=right><FONT face="Arial" size=1>45 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=justify><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS
INC.<BR></FONT></B><FONT face="Arial" size=2>Notes to Consolidated Financial
Statements<BR></FONT><FONT face="Arial" size=1>Years ended December 31, 2012,
and 2011</FONT><FONT face="Arial" size=2> <BR></FONT><FONT face="Arial" size=1>(Tabular amounts expressed in thousands of U.S. dollars, except per share
amounts and number of shares)</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD style="BORDER-TOP: #000000 1.5pt solid" width="100%">&nbsp;</TD></TR>
  <TR>
    <TD width="100%"><FONT face="Arial" size=2><STRONG>18. Employee future
      benefits: (cont&#146;d):</STRONG></FONT></TD></TR></TABLE><BR>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top align=left width="99%" colSpan=16><FONT face=Arial size=2>Expense (income) recognized
      in other comprehensive income:</FONT><BR>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="76%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid; TEXT-ALIGN: center" noWrap width="11%" colSpan=7><FONT face=Arial size=1>2012</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid; TEXT-ALIGN: center" noWrap width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid; TEXT-ALIGN: center" noWrap width="10%" colSpan=6><FONT face=Arial size=1>2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="76%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>Pension</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>Other</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>Pension</FONT></TD>
    <TD noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>Other</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="76%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>plan</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>benefit plan</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>plan</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>benefit plan</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="76%" bgColor=#c0c0c0><FONT face=Arial size=1>Actuarial loss on defined benefit plan obligations</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>1,030</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>282</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1></FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>2,126</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>102</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="76%"><FONT face=Arial size=1>Expected return
      on plan assets</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>574</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>582</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="76%" bgColor=#c0c0c0><FONT face=Arial size=1>Actual (return) loss on plan assets</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>(1,126</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>68</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="76%"><FONT face=Arial size=1>Plan expenses</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>47</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>27</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="76%" bgColor=#c0c0c0><FONT face=Arial size=1>Actuarial (gain) loss recognized in other comprehensive</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="76%" bgColor=#c0c0c0><FONT face=Arial size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; income</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>525</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>282</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>2,803</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>102</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD width="1%">&nbsp;</TD>
    <TD width="99%" colSpan=16>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD VALIGN="TOP" ALIGN="LEFT" WIDTH="99%" COLSPAN="16" STYLE="text-align: justify"><FONT face=Arial size=2>Cumulative actuarial gains and losses recognized in other
      comprehensive income:</FONT></TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" width="99%" colSpan=16>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="76%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid; TEXT-ALIGN: center" noWrap width="11%" colSpan=7><FONT face=Arial size=1>2012</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid; TEXT-ALIGN: center" noWrap width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid; TEXT-ALIGN: center" noWrap width="10%" colSpan=6><FONT face=Arial size=1>2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="76%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>Pension</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>Other</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>Pension</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>Other</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="76%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>Plan</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>benefit plan</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>plan</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>benefit plan</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="76%" bgColor=#c0c0c0><FONT face=Arial size=1>Cumulative amount at January 1</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>2,823</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>(30</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)
      </FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>20</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>(132</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="76%"><FONT face=Arial size=1>Recognized during the period</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>525</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>282</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>2,803</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>102</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="76%" bgColor=#c0c0c0><FONT face=Arial size=1>Cumulative amount at December
      31</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>3,348</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>252</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>2,823</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>(30</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)</FONT></TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="99%" colSpan=16>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=right width="1%"></TD>
    <TD VALIGN="TOP" ALIGN="LEFT" WIDTH="98%" COLSPAN="15" STYLE="text-align: justify"><FONT face=Arial size=2>The significant actuarial assumptions adopted in measuring the fair
      value of benefit obligations at December 31, 2012 and 2011 were as
      follows:</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" width="99%" colSpan=16>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="76%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid; TEXT-ALIGN: center" noWrap width="11%" colSpan=7><FONT face=Arial size=1>2012</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid; TEXT-ALIGN: center" noWrap width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid; TEXT-ALIGN: center" noWrap width="10%" colSpan=6><FONT face=Arial size=1>2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="76%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>Pension</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>Other</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>Pension</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>Other</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="76%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>plan</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>benefit plan</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>plan</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>benefit plan</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="76%" bgColor=#c0c0c0><FONT face=Arial size=1>Discount rate</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>3.87%</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1></FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>3.02%</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1></FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>4.3%</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1></FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>4.3%</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="76%"><FONT face=Arial size=1>Rate of compensation
increase</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>n/a</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>n/a</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>n/a</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>n/a</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="99%" colSpan=16>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=right width="1%"></TD>
    <TD VALIGN="TOP" ALIGN="LEFT" WIDTH="98%" COLSPAN="15" STYLE="text-align: justify"><FONT face=Arial size=2>The significant actuarial assumptions adopted in determining net
      expense for the years ended December 31, 2012 and 2011 were as
      follows:</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" width="99%" colSpan=16>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="76%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid; TEXT-ALIGN: center" noWrap width="11%" colSpan=7><FONT face=Arial size=1>2012</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid; TEXT-ALIGN: center" noWrap width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid; TEXT-ALIGN: center" noWrap width="10%" colSpan=6><FONT face=Arial size=1>2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="76%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>Pension</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>Other</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>Pension</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>Other</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="76%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>plan</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>benefit plan</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>plan</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>benefit plan</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="76%" bgColor=#c0c0c0><FONT face=Arial size=1>Discount rate</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>4.3%</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1></FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>4.3%</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1></FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>5.5%</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1></FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>5.5%</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="76%"><FONT face=Arial size=1>Expected return
      on plan assets</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>7.0%</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=Arial size=1></FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>n/a</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>7.0%</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=Arial size=1></FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>n/a</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="76%" bgColor=#c0c0c0><FONT face=Arial size=1>Rate of compensation
      increase</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>n/a</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>n/a</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>n/a</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>n/a</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR></TABLE><BR>
<P align=right><FONT face="Arial" size=1>46 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=justify><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS
INC.<BR></FONT></B><FONT face="Arial" size=2>Notes to Consolidated Financial
Statements<BR></FONT><FONT face="Arial" size=1>Years ended December 31, 2012,
and 2011</FONT><FONT face="Arial" size=2> <BR></FONT><FONT face="Arial" size=1>(Tabular amounts expressed in thousands of U.S. dollars, except per share
amounts and number of shares)</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD style="BORDER-TOP: #000000 1.5pt solid" width="100%">&nbsp;</TD></TR>
  <TR>
    <TD width="100%"><FONT face="Arial" size=2><STRONG>18. Employee future
      benefits: (cont&#146;d):</STRONG></FONT></TD></TR></TABLE><BR>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD noWrap align=left width="1%"></TD>
    <TD VALIGN="TOP" ALIGN="LEFT" WIDTH="99%" COLSPAN="4" STYLE="border-bottom: #000000 1.5pt solid; text-align: justify"><FONT face=Arial size=2>The assumed health care cost trend rates applicable to
      the other benefit plans at December 31, 2012 and 2011 were as
      follows:</FONT><BR>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="92%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>2012</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="92%" bgColor=#c0c0c0><FONT face=Arial size=1>Initial medical
      health care cost trend rate</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>8.0%</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>8.0%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="92%"><FONT face=Arial size=1>Initial dental health care cost
      trend rate</FONT></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>5.0%</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>5.0%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="92%" bgColor=#c0c0c0><FONT face=Arial size=1>Cost trend rate
      declines to medical and dental</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>5.0%</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1></FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>5.0%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="92%"><FONT face=Arial size=1>Year that the medical rate
      reaches the rate it is assumed to remain at</FONT></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>2018</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>2017</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="92%" bgColor=#c0c0c0><FONT face=Arial size=1>Year that the dental rate reaches the rate it is assumed
      to remain at</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>2012</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>2011</FONT></TD></TR></TABLE><BR>
<P style="PADDING-LEFT: 18pt" align=justify><FONT face="Arial" size=2>A
one-percentage-point change in assumed health care cost trend rates would not
have a material impact on the Corporation&#146;s financial statements. </FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="99%"><B><FONT face="Arial" size=2>19.
      Equity:</FONT></B></TD></TR>
  <TR>
    <TD noWrap align=left width="99%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="99%"><FONT face="Arial" size=2>(a) Authorized and
    issued:</FONT></TD></TR></TABLE><BR>
<P style="PADDING-LEFT: 18pt" align=justify><FONT face="Arial" size=2>Unlimited number of common shares, voting, without par value.</FONT></P>
<P style="PADDING-LEFT: 18pt" align=justify><FONT face="Arial" size=2>Unlimited number of preferred shares, issuable in series. </FONT></P>
<P style="PADDING-LEFT: 18pt" align=justify><FONT face="Arial" size=2>At
December 31, 2012, 91,801,477 (2011 &#150; 84,550,524) common shares are issued and
outstanding. </FONT></P>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD width="100%"><FONT face="Arial" size=2>(b) Share option
    plan:</FONT></TD></TR>
  <TR>
    <TD width="100%"></TD></TR></TABLE>
<P style="PADDING-LEFT: 18pt" align=justify><FONT face="Arial" size=2>The
Corporation has options outstanding under a consolidated share option plan. All
directors, officers and employees of the Corporation, and its subsidiaries, are
eligible to participate in the share option plans although as a matter of
policy, options are currently not issued to directors. Option exercise prices
are denominated in both Canadian and U.S. dollars, depending on the residency of
the recipient. Canadian dollar denominated options have been converted to U.S.
dollars using the year-end exchange rate for presentation purposes.</FONT></P>
<P style="PADDING-LEFT: 18pt" align=justify><FONT face="Arial" size=2>All
options have a term of seven to ten years from the date of grant unless
otherwise determined by the board of directors. One-third of the options vest
and may be exercised, at the beginning of each of the second, third and fourth
years after granting. </FONT></P>
<P align=right><FONT face="Arial" size=1>47 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=justify><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS
INC.<BR></FONT></B><FONT face="Arial" size=2>Notes to Consolidated Financial
Statements<BR></FONT><FONT face="Arial" size=1>Years ended December 31, 2012,
and 2011</FONT><FONT face="Arial" size=2> <BR></FONT><FONT face="Arial" size=1>(Tabular amounts expressed in thousands of U.S. dollars, except per share
amounts and number of shares)</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD style="BORDER-TOP: #000000 1.5pt solid" width="100%">&nbsp;</TD></TR>
  <TR>
    <TD width="100%"><FONT face="Arial" size=2><STRONG>19. Equity (cont&#146;d):</STRONG></FONT></TD></TR></TABLE><BR>

<P align=justify><FONT face="Arial" size=2>(b)</FONT><FONT face="Arial" size=2> </FONT><FONT face="Arial" size=2>Share option plan (cont&#146;d):
</FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD noWrap align=left width="1%"></TD>
    <TD COLSPAN="6" STYLE="border-bottom: #000000 1.5pt solid; text-align: justify; width: 99%; vertical-align: top"><FONT face=Arial size=2>As at December 31, 2012, options
      outstanding from the consolidated share option plan was as
    follows:</FONT><BR>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=left width="90%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>Options
      for</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>Weighted average</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="90%"><FONT face=Arial size=1>Balance</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>common shares</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>exercise price</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><FONT face=Arial size=1>At January 1, 2011</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>6,682,589</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>10.84</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="90%"><FONT face=Arial size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Options granted</FONT></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>1,874,369</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>1.99</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><FONT face=Arial size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Options exercised</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>(25,834</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>1.27</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="90%"><FONT face=Arial size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Options forfeited</FONT></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>(260,016</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=Arial size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>7.62</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="90%" bgColor=#c0c0c0><FONT face=Arial size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Options expired</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>(655,139</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>46.52</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="90%"><FONT face=Arial size=1>At December 31,
      2011</FONT></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>7,615,969</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=Arial size=1>$</FONT></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>5.54</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><FONT face=Arial size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Options granted</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>1,009,640</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>1.51</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="90%"><FONT face=Arial size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Options exercised</FONT></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>(13,501</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=Arial size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>1.22</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><FONT face=Arial size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Options forfeited</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>(1,271,663</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>5.33</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="90%"><FONT face=Arial size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Options expired</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>(435,394</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=Arial size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>35.75</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="90%" bgColor=#c0c0c0><FONT face=Arial size=1>At December 31, 2012</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>6,905,051</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>3.22</FONT></TD></TR></TABLE>&nbsp;<BR>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD noWrap align=left width="1%"></TD>
    <TD COLSPAN="14" STYLE="border-bottom: #000000 1.5pt solid; text-align: justify; width: 99%; vertical-align: top"><FONT face=Arial size=2>The following table summarizes
      information about the Corporation&#146;s share options outstanding as at
      December 31, 2012:</FONT><BR>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="3%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="77%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid; TEXT-ALIGN: center" noWrap width="11%" colSpan=6><FONT face=Arial size=1>Options
outstanding</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid; TEXT-ALIGN: center" noWrap width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid; TEXT-ALIGN: center" noWrap width="6%" colSpan=4><FONT face=Arial size=1>Options
  exercisable</FONT></TD></TR>
  <TR>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="77%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>Weighted</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%" colSpan=2></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="2%" colSpan=2></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="77%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>average</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%" colSpan=2><FONT face=Arial size=1>Weighted</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="2%" colSpan=2><FONT face=Arial size=1>Weighted</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="77%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>remaining</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%" colSpan=2><FONT face=Arial size=1>average</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="2%" colSpan=2><FONT face=Arial size=1>average</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=right width="77%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>Number</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>contractual
      life</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%" colSpan=2><FONT face=Arial size=1>exercise</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>Number</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="2%" colSpan=2><FONT face=Arial size=1>exercise</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>Range of exercise price</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="77%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>outstanding</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>(years)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" colSpan=2><FONT face=Arial size=1>price</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>exercisable</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" colSpan=2><FONT face=Arial size=1>price</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>$0.81 &#150; $1.96</FONT></TD>
    <TD noWrap align=right width="77%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>2,621,207</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>4.8</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face=Arial size=1>1.54</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>1,422,290</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>1.57</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>$2.11 &#150;
      $2.41</FONT></TD>
    <TD noWrap align=right width="77%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>2,635,131</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>4.8</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face=Arial size=1>2.24</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>1,257,197</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face=Arial size=1>2.29</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>$3.12 &#150; $5.11</FONT></TD>
    <TD noWrap align=right width="77%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>533,034</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>2.2</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face=Arial size=1>4.81</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>533,034</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>4.81</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>$5.82 &#150;
      $7.99</FONT></TD>
    <TD noWrap align=right width="77%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>880,619</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>2.2</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face=Arial size=1>7.28</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>880,619</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face=Arial size=1>7.28</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>$10.00 &#150; $14.76</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="77%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>235,060</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>0.5</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face=Arial size=1>14.07</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>235,060</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>14.07</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD NOWRAP STYLE="text-align: left; width: 3%; border-bottom: Black 1.5pt solid"></TD>
    <TD NOWRAP STYLE="text-align: right; width: 77%; border-bottom: Black 1.5pt solid"></TD>
    <TD NOWRAP STYLE="text-align: right; width: 1%; border-bottom: Black 1.5pt solid"></TD>
    <TD NOWRAP STYLE="text-align: right; width: 3%; border-bottom: Black 1.5pt solid"><FONT face=Arial size=1>6,905,051</FONT></TD>
    <TD NOWRAP STYLE="text-align: right; width: 1%; border-bottom: Black 1.5pt solid"></TD>
    <TD NOWRAP STYLE="text-align: right; width: 3%; border-bottom: Black 1.5pt solid"><FONT face=Arial size=1>4.1</FONT></TD>
    <TD NOWRAP STYLE="text-align: right; width: 1%; border-bottom: Black 1.5pt solid"></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; border-bottom: Black 1.5pt solid"><FONT face=Arial size=1>$</FONT></TD>
    <TD NOWRAP STYLE="text-align: right; width: 2%; border-bottom: Black 1.5pt solid"><FONT face=Arial size=1>3.22</FONT></TD>
    <TD NOWRAP STYLE="text-align: right; width: 1%; border-bottom: Black 1.5pt solid"></TD>
    <TD NOWRAP STYLE="text-align: right; width: 3%; border-bottom: Black 1.5pt solid"><FONT face=Arial size=1>4,328,200</FONT></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; border-bottom: Black 1.5pt solid"></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; border-bottom: Black 1.5pt solid"><FONT face=Arial size=1>$</FONT></TD>
    <TD NOWRAP STYLE="text-align: right; width: 1%; border-bottom: Black 1.5pt solid"><FONT face=Arial size=1>4.02</FONT></TD></TR></TABLE><BR>
<P style="PADDING-LEFT: 18pt" align=justify><FONT face="Arial" size=2>During
2012, compensation expense of $1,274,000 (2011 - $1,743,000) was recorded in net
income as a result of fair value accounting for share options granted. The share
options granted during the year had a weighted average fair value of $0.80 (2011
- $1.14) and vesting periods of three years. </FONT></P>
<P align=right><FONT face="Arial" size=1>48 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>


<!--PART G-->
<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<TABLE style="LINE-HEIGHT: normal; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS INC.</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=2>Notes to Consolidated Financial
      Statements</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>Years ended December 31, 2012,
      and 2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>(Tabular amounts expressed in
      thousands of U.S. dollars, except per share amounts and number of
      shares)</FONT></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="100%">&nbsp;</TD></TR></TABLE><BR>
<TABLE cellSpacing=0 cellPadding=0 border=0 style="text-align: justify">

  <TR>
    <TD vAlign=top noWrap><STRONG><FONT face=Arial size=2>19.</FONT></STRONG></TD>
    <TD width="100%">
      <P align=justify><B><FONT face="Arial" size=2>Equity (cont&#146;d):
      </FONT></B></P></TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"></TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(b)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Share option plan
      (cont&#146;d):</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>The fair values of the
      options granted were determined using the Black-Scholes valuation model
      under the following weighted average
assumptions:</FONT></TD></TR></TABLE><BR>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="92%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>2012</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="92%" bgColor=#c0c0c0><FONT face="Arial" size=1>Expected
      life</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>5
years</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>5
  years</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="92%"><FONT face="Arial" size=1>Expected dividends</FONT></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>Nil</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>Nil</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="92%" bgColor=#c0c0c0><FONT face="Arial" size=1>Expected
      volatility</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>62%</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>63%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="92%"><FONT face="Arial" size=1>Risk-free interest rate</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>2%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>3%</FONT></TD></TR></TABLE><BR>
<TABLE cellSpacing=0 cellPadding=0 border=0 style="text-align: justify">

  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(c)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Share distribution
      plan:</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"><FONT face="Arial" size=2>The Corporation has a
      consolidated share distribution plan that permits the issuance of common
      shares for no cash consideration to employees of the Corporation to
      recognize their past contribution and to encourage future contribution to
      the Corporation. At December 31, 2012, there were 873,441 (2011 &#150; 440,268)
      shares available to be issued under this plan.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>No compensation expense was
      recorded against income during the years ended December 31, 2012 and 2011
      for shares distributed, and to be distributed, under the
plan.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(d)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Deferred share
    units:</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>Deferred share units
      (&#147;DSUs&#148;) are granted to the board of directors and executives. Eligible
      directors may elect to receive all or part of their annual retainers and
      executives may elect to receive all or part of their annual bonuses in
      DSUs. Each DSU is redeemable for one common share in the capital of the
      Corporation after the director or executive ceases to provide services to
      the Corporation. Shares will be issued from the Corporation&#146;s share
      distribution plan.</FONT></TD></TR></TABLE><BR>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="93%"><FONT face="Arial" size=1>Balance</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%" colSpan=2><FONT face="Arial" size=1>DSUs for common
      shares</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="93%" bgColor=#c0c0c0><FONT face="Arial" size=1>At January 1,
      2011 and December 31, 2011</FONT></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;290,797</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="93%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DSUs
      granted</FONT></TD>
    <TD noWrap align=right width="5%"><FONT face="Arial" size=1>249,785</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="93%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DSUs
      exercised</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face="Arial" size=1>(90,337</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="93%"><FONT face="Arial" size=1>At December 31, 2012</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="5%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;450,245</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD></TR></TABLE><BR>
<P style="PADDING-LEFT: 18pt" align=justify><FONT face="Arial" size=2>During
2012, compensation expense of $176,000 was recorded in net income. No
compensation expense was recorded against income during the year ended December
31, 2011. </FONT></P>
<P align=right><FONT face="Arial" size=1>49 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<TABLE style="LINE-HEIGHT: normal; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS INC.</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=2>Notes to Consolidated Financial
      Statements</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>Years ended December 31, 2012,
      and 2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>(Tabular amounts expressed in
      thousands of U.S. dollars, except per share amounts and number of
      shares)</FONT></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="100%">&nbsp;</TD></TR></TABLE><BR>

<TABLE cellSpacing=0 cellPadding=0 border=0 style="text-align: justify">

  <TR>
    <TD vAlign=top noWrap><STRONG><FONT face=Arial size=2>19.</FONT></STRONG></TD>
    <TD width="100%">
      <P align=justify><B><FONT face="Arial" size=2>Equity (cont&#146;d):
      </FONT></B></P></TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"></TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(e)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Restricted share
      units:</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>Restricted share units
      (&#147;RSUs&#148;) are granted to employees and executives. Each RSU is convertible
      into one common share. The RSUs vest after a specified number of years
      from the date of issuance, and under certain circumstances, are contingent
      on achieving specified performance criteria.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>The Corporation has two
      plans under which RSUs may be granted, the consolidated share distribution
      plan and the market purchase RSU plan. Awards under the consolidated share
      distribution plan (note 19 (c)) are satisfied by the issuance of treasury
      shares on maturity. Awards granted under the market purchase RSU Plan are
      satisfied by shares purchased on the open market by a trust established
      for that purpose. No common shares were repurchased in 2012. During 2011,
      the Corporation repurchased 230,211 common shares through the trust for
      cash consideration of $327,000 for the purpose of funding future grants
      under the Market Purchase RSU Plan. As at December 31, 2012 the
      Corporation held 183,629 shares as treasury
shares.</FONT></TD></TR></TABLE><BR>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="89%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; text-align: center" noWrap width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; text-align: center" noWrap width="8%" colSpan=7><FONT face="Arial" size=1>RSUs for common shares</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="89%"></TD>
    <TD noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=right width="3%" colSpan=2><FONT face="Arial" size=1>Share</FONT></TD>
    <TD noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>Market</FONT></TD>
    <TD noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="89%"><FONT face="Arial" size=1>Balance</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" colSpan=2><FONT face="Arial" size=1>Distribution Plan</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>Purchase Plan</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>Total RSUs</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="89%" bgColor=#c0c0c0><FONT face="Arial" size=1>At January 1,
      2011</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>851,970</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,059,098</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>1,911,068</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="89%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RSUs
    granted</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>1,351,516</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>1,351,516</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="89%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RSUs
      exercised</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>(660,522</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(371,626</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(1,032,148</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="89%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RSUs
      forfeited</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>(4,975</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>(52,084</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>(57,059</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="89%" bgColor=#c0c0c0><FONT face="Arial" size=1>At December 31,
      2011</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>186,473</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,986,904</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>2,173,377</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="89%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RSUs
    granted</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,352,784</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>245,897</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>1,598,681</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="89%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RSUs
      exercised</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>(84,530</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(124,884</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(209,414</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="89%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RSUs
      forfeited</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>(122,044</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>(602,893</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>(724,937</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="89%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RSUs
      transferred</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>652,625</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(652,625</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="89%"><FONT face="Arial" size=1>At December 31, 2012</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>1,985,308</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>852,399</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>2,837,707</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD></TR></TABLE><BR>
<P style="PADDING-LEFT: 18pt" align=justify><FONT face="Arial" size=2>In
December 2012, 652,625 unvested RSUs previously granted under the Market
Purchase Plan were cancelled and new RSUs were reissued from the Share
Distribution Plan with identical terms.</FONT></P>
<P style="PADDING-LEFT: 18pt" align=justify><FONT face="Arial" size=2>The
fair value of RSU grants is measured based on the stock price of the shares
underlying the RSU on the date of grant. During 2012, compensation expense of
$1,296,000 (2011 - $870,000) was recorded against income. </FONT></P>
<P align=right><FONT face="Arial" size=1>50 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>

<TABLE style="LINE-HEIGHT: normal; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS INC.</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=2>Notes to Consolidated Financial
      Statements</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>Years ended December 31, 2012,
      and 2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>(Tabular amounts expressed in
      thousands of U.S. dollars, except per share amounts and number of
      shares)</FONT></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="100%">&nbsp;</TD></TR></TABLE><BR>
<TABLE cellSpacing=0 cellPadding=0 border=0 style="text-align: justify">

  <TR>
    <TD vAlign=top noWrap><B><FONT face="Arial" size=2>20.</FONT></B></TD>
    <TD width="100%"><B><FONT face="Arial" size=2>Operating
      leases:</FONT></B></TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%">&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>The Corporation leases a
      facility at its Burnaby, Canada location, which has been assessed as an
      operating lease. The facility has a lease term expiring in 2019, with
      renewal options after that date. Lease payments of $2,434,000 were
      expensed in 2012.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>At December 31, 2012, the
      Corporation is committed to payments under operating leases as
      follows:</FONT></TD></TR></TABLE><BR>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="95%" bgColor=#c0c0c0><FONT face="Arial" size=1>Less than 1 year</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>2,520</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="95%"><FONT face="Arial" size=1>1-3 years</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>5,327</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="95%" bgColor=#c0c0c0><FONT face="Arial" size=1>4-5
    years</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>5,499</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="95%"><FONT face="Arial" size=1>Thereafter</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>8,228</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="95%" bgColor=#c0c0c0><FONT face="Arial" size=1>Total minimum lease payments</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>21,574</FONT></TD></TR></TABLE><BR>
<TABLE cellSpacing=0 cellPadding=0 border=0 style="text-align: justify">

  <TR>
    <TD vAlign=top noWrap><B><FONT face="Arial" size=2>21.</FONT></B></TD>
    <TD width="100%"><B><FONT face="Arial" size=2>Commitments and
      contingencies:</FONT></B></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"><FONT face="Arial" size=2>As of December 31, 2012, the
      Corporation has agreed to pay royalties in respect of sales of certain
      fuel cell-based stationary power products under two development programs
      with Canadian government agencies. The total combined royalty is limited
      in any year to 4% of revenue from such products. Under the terms of the
      Utilities Development Program (Phase 1) with the Governments of Canada and
      British Columbia, total royalties are payable to a maximum equal to the
      original amount of the government contributions of CDN$5,351,000. As of
      December 31, 2012, no royalties have been incurred for Phase 1. Under the
      terms of the Utilities Development Program (Phase 2) with Technology
      Partnerships Canada (&#147;TPC&#148;), total royalties are payable to a maximum of
      CDN$38,329,000. As of December 31, 2012, a total of CDN $5,320,000 in
      royalty repayments have been made for Phase 2. The Corporation has made no
      Phase 2 royalty repayments in 2012 and 2011. On January 15, 2013, the
      Corporation reached a settlement agreement with TPC to terminate all
      existing and future potential royalties payable under the Utilities
      Development Program (Phase 2) in exchange for a final repayment of CDN
      $1,930,000 (note 29).</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD><FONT face=Arial size=2>&nbsp;</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>At December 31, 2012, the
      Corporation has outstanding commitments aggregating up to a maximum of
      $329,000 (2011 - $867,000) relating primarily to purchases of property,
      plant and equipment.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD><FONT face=Arial size=2>&nbsp;</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>The Corporation is also
      committed to make future investments totaling $56,000 in Chrysalix (note
      12).</FONT></TD></TR></TABLE>
<P align=right><FONT face="Arial" size=1>51</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<TABLE style="LINE-HEIGHT: normal; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS INC.</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=2>Notes to Consolidated Financial
      Statements</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>Years ended December 31, 2012,
      and 2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>(Tabular amounts expressed in
      thousands of U.S. dollars, except per share amounts and number of
      shares)</FONT></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="100%">&nbsp;</TD></TR></TABLE><BR>

<TABLE cellSpacing=0 cellPadding=0 border=0 style="text-align: justify">

  <TR>
    <TD vAlign=top noWrap><B><FONT face="Arial" size=2>21.</FONT></B></TD>
    <TD width="100%"><B><FONT face="Arial" size=2>Commitments and
      contingencies (cont&#146;d):</FONT></B></TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"></TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>The Corporation has agreed
      to pay royalties in respect of sales of Ballard fuel cells or fuel cell
      systems under a July 31, 1996 Fuel Cell Bus Program Agreement (&#147;FC Bus
      Agreement&#148;), with Province of British Columbia, BC Transit, and BC
      Transportation Financing Authority (&#147;BCTFA&#148;). Under the terms of FC Bus
      Agreement, the royalty payable is at a rate of 2% on deferred sales of
      such products for commercial transit application to a maximum of
      $2,211,000 (CDN$ 2,200,000). No royalties have been paid to
  date.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>On December 31, 2008, the
      Corporation completed a restructuring transaction with Superior Plus
      Income Fund (&#147;Superior Plus&#148;), which included an indemnification agreement
      (the &#147;Indemnity Agreement&#148;), which sets out the parties&#146; continuing
      obligations to the other. The Indemnity Agreement provides for the
      indemnification by each of the parties to the other for breaches of
      representations and warranties or covenants, as well as, in the
      Corporation&#146;s case, any liability relating to the business which is
      suffered by Superior Plus. The Corporation&#146;s indemnity to Superior Plus
      with respect to representation relating to the existence of the
      Corporation&#146;s tax pools immediately prior to the completion of the
      Arrangement is limited to an aggregate of $7,388,000 (CDN $7,350,000) with
      a threshold amount of $503,000 (CDN $500,000) before there is an
      obligation to make a payment. The Indemnity Agreement also provides for
      adjustments to be paid by the Corporation, or to the Corporation,
      depending on the final determination of the amount of 2008 Canadian
      non-capital losses, scientific research and development expenditures and
      investment tax credits, to the extent that such amounts are more or less
      than the amounts estimated at the time the Arrangement was executed. At
      December 31, 2012, no amount payable or receivable has been accrued as a
      result of the Indemnity Agreement.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><B><FONT face="Arial" size=2>22.</FONT></B></TD>
    <TD width="100%"><B><FONT face="Arial" size=2>Personnel
      expenses:</FONT></B></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD><FONT face=Arial size=2>&nbsp;</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Personnel expenses are
      included in cost of product and services revenues, research and product
      development expense, general and administrative expense, and sales and
      marketing expense.</FONT></TD></TR></TABLE><BR>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="92%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="3%" colSpan=2><FONT face="Arial" size=1>December 31,</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="3%" colSpan=2><FONT face="Arial" size=1>December 31,</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="92%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" colSpan=2><FONT face="Arial" size=1>2012</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" colSpan=2><FONT face="Arial" size=1>2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="92%" bgColor=#c0c0c0><FONT face="Arial" size=1>Salaries and
      employee benefits</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>45,836</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>51,662</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="92%"><FONT face="Arial" size=1>Share-based compensation (note 19)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>2,582</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>2,377</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="92%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>48,418</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>54,039</FONT></TD></TR></TABLE><BR>
<P align=right><FONT face="Arial" size=1>52 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<TABLE style="LINE-HEIGHT: normal; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS INC.</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=2>Notes to Consolidated Financial
      Statements</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>Years ended December 31, 2012,
      and 2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>(Tabular amounts expressed in
      thousands of U.S. dollars, except per share amounts and number of
      shares)</FONT></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="100%">&nbsp;</TD></TR></TABLE><BR>

<TABLE cellSpacing=0 cellPadding=0 border=0 style="text-align: justify">

  <TR>
    <TD vAlign=top noWrap><STRONG><FONT face=Arial size=2>23.</FONT></STRONG></TD>
    <TD width="100%">
      <P align=justify><B><FONT face="Arial" size=2>Income taxes:
      </FONT></B></P></TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"></TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(a)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Current tax
    expense:</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>The components of income tax
      benefit / (expense) included in the determination of the profit (loss)
      from continuing operations comprise of:</FONT></TD></TR></TABLE><BR>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="92%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>2012</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>2011</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="92%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>Current tax expense</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="92%"><FONT face="Arial" size=1>Current period income
    tax</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="92%" bgColor=#c0c0c0><FONT face="Arial" size=1>Withholding
      tax</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>134</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="92%"><FONT face="Arial" size=1>Adjustment for prior periods</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="92%" bgColor=#c0c0c0><FONT face="Arial" size=1>Total current tax expense</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>134</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="99%" colSpan=8>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="92%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>Deferred tax expense</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="92%"><FONT face="Arial" size=1>Origination and reversal of
      temporary differences</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>14,967</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>(8,044</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="92%" bgColor=#c0c0c0><FONT face="Arial" size=1>Adjustments for
      prior periods</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>2,146</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(1,037</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="92%"><FONT face="Arial" size=1>Change in unrecognized deductible temporary
      differences</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>(17,113</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>9,081</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="92%" bgColor=#c0c0c0><FONT face="Arial" size=1>Total deferred tax expense</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" width="99%" colSpan=8>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="92%" bgColor=#c0c0c0><FONT face="Arial" size=1>Total income tax expense</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>134</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="99%" colSpan=8>&nbsp;</TD></TR>
  <TR vAlign=bottom style="text-align: justify">
    <TD align=left width="1%"><FONT face=Arial size=2>&nbsp;</FONT></TD>
    <TD ALIGN="LEFT" WIDTH="99%" COLSPAN="8" STYLE="line-height: normal; text-align: justify"><FONT face="Arial" size=2>The Corporation&#146;s effective income tax rate differs
      from the combined Canadian federal and provincial statutory income tax
      rate for companies. The principal factors causing the difference are as
      follows:</FONT></TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" width="99%" colSpan=8>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="92%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>2012</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="92%" bgColor=#c0c0c0><FONT face="Arial" size=1>Net loss before income taxes</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(43,409</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(39,777</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="92%"><FONT face="Arial" size=1>Expected tax expense (recovery)
      at 25.0% (2011 &#150; 26.5%)</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>(10,852</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>(10,541</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="92%" bgColor=#c0c0c0><FONT face="Arial" size=1>Increase
      (reduction) in income taxes resulting from:</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="92%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-deductible
      portion of capital gain (loss)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>2,839</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="92%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-deductible
      expenses (non-taxable income)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>3,512</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>840</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="92%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expiry of
      losses and investment tax credits</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>27,539</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="92%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investment
      tax credits earned</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(3,848</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(4,352</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="92%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign
      tax rate differences</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>(6</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>11</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="92%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in
      unrecognized deductible temporary differences</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(16,345</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>11,337</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="92%"><FONT face="Arial" size=1>Income taxes</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>134</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD></TR></TABLE><BR>
<TABLE cellSpacing=0 cellPadding=0 border=0 style="text-align: justify">

  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(b)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Unrecognized deferred tax
      liabilities:</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"><FONT face="Arial" size=2>At December 31, 2012, the
      Corporation did not recognize any deferred tax liabilities resulting from
      taxable temporary differences for financial statement and income tax
      purposes.</FONT></TD></TR></TABLE>
<P align=right><FONT face="Arial" size=1>53 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<TABLE style="LINE-HEIGHT: normal; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS INC.</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=2>Notes to Consolidated Financial
      Statements</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>Years ended December 31, 2012,
      and 2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>(Tabular amounts expressed in
      thousands of U.S. dollars, except per share amounts and number of
      shares)</FONT></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="100%">&nbsp;</TD></TR></TABLE><BR>


<TABLE cellSpacing=0 cellPadding=0 border=0 style="text-align: justify">

        <TR>
    <TD NOWRAP STYLE="vertical-align: top"><B><FONT face="Arial" size=2>23.</FONT></B></TD>
    <TD><B><FONT face="Arial" size=2>Income taxes (cont&#146;d):
</FONT></B></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top">&nbsp;</TD>
    <TD>&nbsp;&nbsp;</TD></TR>
<TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(c)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Unrecognized deferred tax
      asset:</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"><FONT face="Arial" size=2>At December 31, 2012, the
      Corporation did not have any deferred tax assets resulting from the
      following deductible temporary differences for financial statement and
      income tax purposes.</FONT></TD></TR></TABLE><BR>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="90%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face="Arial" size=1>2012</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face="Arial" size=1>2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><FONT face="Arial" size=1>Scientific
      research expenditures</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>57,285</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>46,587</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="90%"><FONT face="Arial" size=1>Investment in associated
      companies</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>18,364</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>17,965</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><FONT face="Arial" size=1>Accrued warranty
      liabilities</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>30,359</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>31,370</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="90%"><FONT face="Arial" size=1>Losses from operations carried
      forward</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>75,290</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>66,095</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><FONT face="Arial" size=1>Capital losses
      carried forward</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>9,423</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>90,238</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="90%"><FONT face="Arial" size=1>U.S. investment tax
      credits</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>626</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>835</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><FONT face="Arial" size=1>Investment tax
      credits</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>22,451</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>17,984</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="90%"><FONT face="Arial" size=1>Property, plant and equipment and intangible
      assets</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>206,860</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>197,744</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="90%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>420,658</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>468,818</FONT></TD></TR></TABLE><BR>
<P style="PADDING-LEFT: 18pt" align=justify><FONT face="Arial" size=2>Deferred tax assets have not been recognized in respect of these
deductible temporary differences because it is not probable that future taxable
profit will be available against which the Corporation can utilize the
benefits.</FONT></P>
<P style="PADDING-LEFT: 18pt" align=justify><FONT face="Arial" size=2>The
Corporation has available to carry forward the following as at December 31:
</FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="89%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face="Arial" size=1>2012</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face="Arial" size=1>2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="89%" bgColor=#c0c0c0><FONT face="Arial" size=1>Canadian
      scientific research expenditures</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>57,285</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>46,587</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="89%"><FONT face="Arial" size=1>Canadian losses from
      operations</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>29,710</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>23,075</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="89%" bgColor=#c0c0c0><FONT face="Arial" size=1>Canadian
      investment tax credits</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>22,451</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>17,984</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="89%"><FONT face="Arial" size=1>German losses from operations
      for corporate tax purposes</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>241</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>227</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="89%" bgColor=#c0c0c0><FONT face="Arial" size=1>U.S. federal
      losses from operations</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>13,543</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>13,287</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="89%"><FONT face="Arial" size=1>U.S. state losses from
      operations</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>1,702</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>1,972</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="89%" bgColor=#c0c0c0><FONT face="Arial" size=1>U.S. research
      and development and investment tax credits</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>626</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>825</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD NOWRAP STYLE="text-align: left; width: 1%"></TD>
    <TD NOWRAP STYLE="text-align: left; width: 89%"><FONT face="Arial" size=1>U.S. capital losses</FONT></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%"></TD>
    <TD NOWRAP STYLE="text-align: right; width: 3%"><FONT face="Arial" size=1>9,423</FONT></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%"></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%"></TD>
    <TD NOWRAP STYLE="text-align: right; width: 3%"><FONT face="Arial" size=1>90,237</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="89%" bgColor=#c0c0c0><FONT face="Arial" size=1>Denmark losses from operations</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>30,094</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>27,534</FONT></TD></TR></TABLE><BR>
<P style="PADDING-LEFT: 18pt" align=justify><FONT face="Arial" size=2>The
Canadian scientific research expenditures may be carried forward indefinitely.
The Canadian losses from operations may be used to offset future Canadian
taxable income and expire over the period from 2029 to 2032.</FONT></P>
<P align=right><FONT face="Arial" size=1>54</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<TABLE style="LINE-HEIGHT: normal; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS INC.</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=2>Notes to Consolidated Financial
      Statements</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>Years ended December 31, 2012,
      and 2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>(Tabular amounts expressed in
      thousands of U.S. dollars, except per share amounts and number of
      shares)</FONT></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="100%">&nbsp;</TD></TR></TABLE><BR>


<TABLE cellSpacing=0 cellPadding=0 border=0 style="text-align: justify">

        <TR>
    <TD NOWRAP STYLE="vertical-align: top"><P align=justify><B><FONT face="Arial" size=2>23.</FONT></B></P></TD>
    <TD><P align=justify><B><FONT face="Arial" size=2>Income taxes (cont&#146;d):
</FONT></B></P></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top">&nbsp;</TD>
    <TD>&nbsp;&nbsp;</TD></TR>
<TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=2>(c)</FONT></TD>
    <TD width="100%"><FONT face="Arial" size=2>Unrecognized deferred tax
      assets (cont&#146;d):</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"><FONT face="Arial" size=2>The German and Denmark
      losses from operations may be used to offset future taxable income in
      Germany and Denmark for corporate tax and trade tax purposes and may be
      carried forward indefinitely.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>The U.S. federal losses from
      operations may be used to offset future U.S. taxable income and expire
      over the period from 2013 to 2032. The U.S. states losses from operations
      arising in California may be used to offset future state taxable income
      and may be carried forward for ten years. The U.S. federal and state
      research and development and investment tax credits are available to
      reduce future U.S. taxable income and expire over the period from 2013 to
      2031. The U.S. capital losses are available to reduce U.S. capital gains
      and expire in 2013.</FONT></TD></TR>
  <TR>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD></TD>
    <TD width="100%"><FONT face="Arial" size=2>The Canadian investment tax
      credits may be used to offset future Canadian income taxes otherwise
      payable and expire as follows:</FONT></TD></TR></TABLE><BR>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="96%" bgColor=#c0c0c0><FONT face="Arial" size=1>2013</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>121</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="96%"><FONT face="Arial" size=1>2014</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>107</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="96%" bgColor=#c0c0c0><FONT face="Arial" size=1>2016</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>96</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="96%"><FONT face="Arial" size=1>2017</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>105</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="96%" bgColor=#c0c0c0><FONT face="Arial" size=1>2019</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>2,643</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD noWrap align=left width="96%"><FONT face="Arial" size=1>2020</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>1,925</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="96%" bgColor=#c0c0c0><FONT face="Arial" size=1>2021</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>1,814</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="96%"><FONT face="Arial" size=1>2022</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>1,637</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="96%" bgColor=#c0c0c0><FONT face="Arial" size=1>2029</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>4,763</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="96%"><FONT face="Arial" size=1>2030</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>3,261</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="96%" bgColor=#c0c0c0><FONT face="Arial" size=1>2031</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>3,032</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="96%"><FONT face="Arial" size=1>2032</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>2,947</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="96%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>22,451</FONT></TD></TR></TABLE><BR>
<P align=justify><B><FONT face="Arial" size=2>24. Related party transactions:
</FONT></B></P>
<P style="PADDING-LEFT: 18pt" align=justify><FONT face="Arial" size=2>Related
parties include shareholders with a significant ownership interest in the
Corporation, together with its subsidiaries and affiliates and the Corporation&#146;s
key management personnel. The revenue and costs recognized from transactions
with such parties reflect the prices and terms of sales and purchase
transactions with related parties, which are in accordance with normal trade
practices. Transactions between the Corporation and its subsidiaries are
eliminated on consolidation.</FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="92%"><FONT face="Arial" size=1>Balances with related
      parties:</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" colSpan=2><FONT face="Arial" size=1>2012</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" colSpan=2><FONT face="Arial" size=1>2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="92%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trade
      receivables</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="92%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trade
      payables</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>100</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>260</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="92%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest
      payable</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>417</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>141</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="92%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Convertible
      debenture payable</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>2,507</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>1,592</FONT></TD></TR></TABLE><BR>
<P align=right><FONT face="Arial" size=1>55 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>

<TABLE style="LINE-HEIGHT: normal; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face="Arial" size=2>BALLARD POWER SYSTEMS INC.</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=2>Notes to Consolidated Financial
      Statements</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>Years ended December 31, 2012,
      and 2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><FONT face="Arial" size=1>(Tabular amounts expressed in
      thousands of U.S. dollars, except per share amounts and number of
      shares)</FONT></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="100%">&nbsp;</TD></TR></TABLE><BR>

<P align=justify><B><FONT face="Arial" size=2>24. Related party transactions
(cont&#146;d): </FONT></B></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="92%"><FONT face="Arial" size=1>Transactions during the year
      with related parties:</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>2012</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" colSpan=2><FONT face="Arial" size=1>2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="92%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenues</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="92%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>309</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>744</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="92%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Finance expense</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>289</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>151</FONT></TD></TR></TABLE><BR>
<P style="padding-left: 18pt" align=justify><FONT face="Arial" size=2>The Corporation provides key
management personnel, being board directors and executive officers, certain
benefits, in addition to their salaries. Key management personnel also
participate in the Corporation&#146;s share-based compensation plans (note 19).
</FONT></P>
<P style="padding-left: 18pt" align=justify><FONT face="Arial" size=2>In addition to cash and equity
compensation, the Corporation provides the executive officers with certain
personal benefits, including car allowance, medical benefit program, long and
short-term disability coverage, life insurance and an annual medical and
financial planning allowance.</FONT></P>
<P style="padding-left: 18pt" align=justify><FONT face="Arial" size=2>In accordance with the
employment agreements of the executive officers, the Corporation is required to
provide notice of 12 months plus one month for every year of employment
completed with the Corporation, to a maximum of 24 months, or payment in lieu of
such notice, consisting of the salary, bonus and other benefits that would have
been earned during such notice period. If there is a change of control, and if
the executive officer&#146;s employment is terminated, including a constructive
dismissal, within 2 years following the date of a change of control, the
executive officer is entitled to a payment equivalent to payment in lieu of a 24
month notice period. </FONT></P>
<P style="padding-left: 18pt" align=justify><FONT face="Arial" size=2>Key management personnel
compensation is comprised of: </FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="91%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" colSpan=2><FONT face="Arial" size=1>2012</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" colSpan=2><FONT face="Arial" size=1>2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="91%" bgColor=#c0c0c0><FONT face="Arial" size=1>Salaries and
      employee benefits</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>2,412</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>3,744</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="91%"><FONT face="Arial" size=1>Post-employment retirement
      benefits</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>63</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>79</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="91%" bgColor=#c0c0c0><FONT face="Arial" size=1>Termination
      benefits</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>425</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="91%"><FONT face="Arial" size=1>Share-based compensation (note 19)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>1,396</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>1,136</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="91%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>3,871</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>5,384</FONT></TD></TR></TABLE><BR>
<P align=justify><B><FONT face="Arial" size=2>25. Supplemental disclosure of
cash flow information: </FONT></B></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="91%"><FONT face="Arial" size=1>Non-cash financing and investing
      activities:</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" colSpan=2><FONT face="Arial" size=1>2012</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" colSpan=2><FONT face="Arial" size=1>2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="91%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Compensatory
      shares</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>427</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>2,046</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="91%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares issued for acquisition
      (note 6)</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>7,493</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>-</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="91%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Assets acquired under finance lease</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>1,906</FONT></TD></TR></TABLE><BR>
<P align=right><FONT face="Arial" size=1>56</FONT></P>
<HR align=center width="100%" noShade SIZE=2>



<!--PART H-->
<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=justify><B><FONT face=Arial size=2>BALLARD POWER SYSTEMS
INC.<BR></FONT></B><FONT face=Arial size=2>Notes to Consolidated Financial
Statements<BR></FONT><FONT face=Arial size=1>Years ended December 31, 2012, and
2011<BR></FONT><FONT face=Arial size=1>(Tabular amounts expressed in thousands
of U.S. dollars, except per share amounts and number of shares)</FONT></P>
<TABLE style="BORDER-COLLAPSE: collapse; TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD style="BORDER-TOP: #000000 1.5pt solid" vAlign=top noWrap>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" width="100%">&nbsp;
  </TD></TR></TABLE>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD width="1%"><STRONG><FONT face=Arial size=2>26.</FONT></STRONG></TD>
    <TD width="99%"><FONT face=Arial size=2><STRONG>Operating
      segments:</STRONG></FONT></TD></TR>
  <TR>
    <TD width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="99%">&nbsp;</TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="99%">
      <P align=justify><FONT face=Arial size=2>The Corporation&#146;s business has
      three market segments:</FONT></P>
      <UL style="TEXT-ALIGN: justify">
        <LI><B><FONT face=Arial size=2>Fuel Cell Products</FONT></B><FONT face=Arial size=2>: fuel cell products and services for motive power
        (material handling and bus markets) and stationary power (backup power
        and distributed generation markets) applications; and engineering
        services for a variety of fuel cell applications;<BR>&nbsp;</FONT> </li>
        <LI><B><FONT face=Arial size=2>Contract Automotive</FONT></B><FONT face=Arial size=2>: contract manufacturing services provided primarily
        for Daimler AG;<BR>&nbsp;</FONT> </LI>
        <LI><B><FONT face=Arial size=2>Material Products (Discontinued
        Operation)</FONT></B><FONT face=Arial size=2>: carbon fiber products
        primarily for automotive transmissions and gas diffusion layers (&#147;GDL&#148;)
        for fuel cells.</FONT><B><FONT face=Arial size=2> </FONT></B></LI></UL>
      <P align=justify><FONT face=Arial size=2>In 2012, the Corporation decided
      to dispose of its Material Products segment, which was subsequently sold
      on January 31, 2013 (note 29). As a result, the Material Products segment
      has been classified and accounted for as a discontinued operation (note
      28) at December 31, 2012 and has not been included in the segment
      disclosures.</FONT></P>
      <P align=justify><FONT face=Arial size=2>In 2011, the Corporation
      completed its manufacturing services contract for the supply of automotive
      fuel cell modules to Daimler AG. As a result, the Contract Automotive
      segment ceased to be an operating segment as of December 31,
      2011.</FONT></P>
      <P align=justify><FONT face=Arial size=2>Segment revenues and segment
      income (loss) represent the primary financial measures used by senior
      management in assessing performance and allocating resources, and include
      the revenues, cost of product and service revenues and expenses for which
      management is held accountable. Segment expenses include research and
      product development costs directly attributable to individual segments.
      </FONT></P>
      <P align=justify><FONT face=Arial size=2>Costs associated with shared
      services and other shared costs are allocated based on headcount and
      square footage. Corporate amounts include expenses for research and
      product development that are not attributable to individual segments,
      sales and marketing, and general and administrative, which apply generally
      across all segments and are reviewed separately by senior management.
      </FONT></P>
      <P align=justify><FONT face=Arial size=2>A significant portion of the
      Corporation&#146;s production, testing and lab equipment, and facilities, as
      well as intellectual property, are common across the segments. Therefore,
      management does not classify asset information on a segmented basis.
      Instead, performance assessments of these assets and related resource
      allocations are done on a company-wide basis.
</FONT></P></TD></TR></TABLE>
<P align=right><FONT face=Arial size=1>57 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=justify><B><FONT face=Arial size=2>BALLARD POWER SYSTEMS
INC.<BR></FONT></B><FONT face=Arial size=2>Notes to Consolidated Financial
Statements<BR></FONT><FONT face=Arial size=1>Years ended December 31, 2012, and
2011<BR></FONT><FONT face=Arial size=1>(Tabular amounts expressed in thousands
of U.S. dollars, except per share amounts and number of shares)</FONT></P>
<TABLE style="BORDER-COLLAPSE: collapse; TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD style="BORDER-TOP: #000000 1.5pt solid" vAlign=top noWrap>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" width="100%">&nbsp;
  </TD></TR></TABLE>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD width="1%"><STRONG><FONT face=Arial size=2>26.</FONT></STRONG></TD>
    <TD width="99%"><FONT face=Arial size=2><STRONG>Operating segments
      (cont&#146;d):</STRONG></FONT></TD></TR>
  <TR>
    <TD width="1%" >&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="99%" ></TD></TR></TABLE>

<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="88%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid; TEXT-ALIGN: right" noWrap width="4%" colSpan=2><FONT face=Arial size=1>2012</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid; TEXT-ALIGN: right" noWrap width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid; TEXT-ALIGN: right" noWrap width="4%" colSpan=2><FONT face=Arial size=1>2011</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><B><FONT face=Arial size=1>Total revenues</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="88%"><FONT face=Arial size=1>Fuel Cell
      Products</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>43,690</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>46,468</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=Arial size=1>Contract Automotive</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>9,305</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="88%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>43,690</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>55,773</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><B><FONT face=Arial size=1>Segment income (loss) for the year </FONT></B><B><FONT face=Arial size=1><SUP>(1)</SUP></FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="88%"><FONT face=Arial size=1>Fuel Cell
      Products</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=Arial size=1>$</FONT></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>850</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=Arial size=1>$</FONT></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>(1,475</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=Arial size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=Arial size=1>Contract Automotive</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>1,803</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="88%"><FONT face=Arial size=1>Total</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>850</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>328</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=Arial size=1>Corporate amounts</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="88%"><FONT face=Arial size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Research and product
      development</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>(12,754</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=Arial size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>(17,945</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=Arial size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=Arial size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and
      administrative</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>(12,306</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>(11,455</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="88%"><FONT face=Arial size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sales and marketing</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>(6,901</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=Arial size=1>)</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>(8,515</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=Arial size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=Arial size=1>Net finance loss</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>(1,659</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>(1,197</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="88%"><FONT face=Arial size=1>Gain (loss) on
      sale of property, plant and equipment</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>(69</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=Arial size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>734</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=Arial size=1>Impairment loss on property, plant and equipment</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>(570</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>(1,727</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="88%"><FONT face=Arial size=1>Impairment loss on goodwill</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>(10,000</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=Arial size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=Arial size=1>Loss before income tax and
      discontinued operations</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>(43,409</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>(39,777</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)</FONT></TD></TR></TABLE>
<DIV style="PADDING-LEFT: 18pt" align=justify><FONT face=Arial size=1><SUP>(1)
</SUP>Research and product development costs directly related to segments are
included in segment income (loss) for the year.</FONT></DIV>
<P style="PADDING-LEFT: 18pt" align=justify><FONT face=Arial size=2>In 2012,
revenues from the Fuel Cell Products segment included sales to two customers of
$6,152,000 and $5,500,000, respectively, which exceeded 10% of total revenue.
</FONT></P>
<P style="PADDING-LEFT: 18pt" align=justify><FONT face=Arial size=2>In 2011,
sales to a single customer of $18,119,000 exceeded 10% of total revenue, of
which $9,899,000 were included in revenues from the Fuel Cell Products segment
and $8,220,000 were included in revenues from the Contract Automotive
segment.</FONT></P>
<P style="PADDING-LEFT: 18pt" align=justify><FONT face=Arial size=2>Revenues
from continuing operations by geographic area, which are attributed to countries
based on customer location for the years ended December 31, is as follows:
</FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="89%"><FONT face=Arial size=1>Revenues</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid; TEXT-ALIGN: right" noWrap width="4%" colSpan=2><FONT face=Arial size=1>2012</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid; TEXT-ALIGN: right" noWrap width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid; TEXT-ALIGN: right" noWrap width="4%" colSpan=2><FONT face=Arial size=1>2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="89%" bgColor=#c0c0c0><FONT face=Arial size=1>Canada</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>9,669</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>9,300</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="89%"><FONT face=Arial size=1>U.S.</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>11,346</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>13,284</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="89%" bgColor=#c0c0c0><FONT face=Arial size=1>Germany</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>2,664</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>19,086</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="89%"><FONT face=Arial size=1>Denmark</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>1,716</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>2,631</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="89%" bgColor=#c0c0c0><FONT face=Arial size=1>Belgium</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>4,119</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>4,992</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="89%"><FONT face=Arial size=1>South
      Africa</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>6,887</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>-</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="89%" bgColor=#c0c0c0><FONT face=Arial size=1>Brazil</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>2,810</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="89%"><FONT face=Arial size=1>Other countries</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>7,289</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>3,670</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="89%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>43,690</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>55,773</FONT></TD></TR></TABLE><BR>
<P align=right><FONT face=Arial size=1>58 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=justify><B><FONT face=Arial size=2>BALLARD POWER SYSTEMS
INC.<BR></FONT></B><FONT face=Arial size=2>Notes to Consolidated Financial
Statements<BR></FONT><FONT face=Arial size=1>Years ended December 31, 2012, and
2011<BR></FONT><FONT face=Arial size=1>(Tabular amounts expressed in thousands
of U.S. dollars, except per share amounts and number of shares)</FONT></P>
<TABLE style="BORDER-COLLAPSE: collapse; TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD style="BORDER-TOP: #000000 1.5pt solid" vAlign=top noWrap>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" width="100%">&nbsp;
  </TD></TR></TABLE>

<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD width="1%"><STRONG><FONT face=Arial size=2>26.</FONT></STRONG></TD>
    <TD width="99%"><FONT face=Arial size=2><STRONG>Operating segments
      (cont&#146;d):</STRONG></FONT></TD></TR>
  <TR>
    <TD width="1%" ></TD>
    <TD width="99%" >&nbsp;</TD></TR>
  <TR>
    <TD width="1%" >&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="99%" >
      <P align=justify><FONT face=Arial size=2>Non-current assets by geographic
      area is as follows:</FONT></P></TD></TR>
  <TR>
    <TD width="1%" ></TD>
    <TD width="99%" >&nbsp;</TD></TR>
</TABLE>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="89%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>December 31,</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>December 31,</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="89%"><FONT face=Arial size=1>Non-current assets</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>2012</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="89%" bgColor=#c0c0c0><FONT face=Arial size=1>Canada</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>63,935</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>76,728</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="89%"><FONT face=Arial size=1>U.S.</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>251</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>8,635</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="89%" bgColor=#c0c0c0><FONT face=Arial size=1>Denmark</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>1,318</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>1,962</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="89%"><FONT face=Arial size=1>Germany</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>59</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>59</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="89%" bgColor=#c0c0c0><FONT face=Arial size=1>Mexico</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>686</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>-</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="89%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>66,249</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>87,384</FONT></TD></TR></TABLE>
<BR>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD vAlign=top width="1%"><STRONG><FONT face=Arial size=2>27.</FONT></STRONG></TD>
    <TD vAlign=top width="99%"><FONT face=Arial size=2><STRONG>Financial
      instruments:</STRONG></FONT></TD></TR>
  <TR>
    <TD vAlign=top width="1%" >&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD vAlign=top width="99%" >&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="1%" ><FONT face=Arial size=2>(a)</FONT></TD>
    <TD vAlign=top width="99%" >
      <P align=justify><FONT face=Arial size=2>Fair value: </FONT></P>
      <P align=justify><FONT face=Arial size=2>The Corporation&#146;s financial
      instruments consist of cash and cash equivalents, short-term investments,
      accounts receivables, long-term investments, accounts payable and accrued
      liabilities, and obligations under capital lease. The fair values of cash
      and cash equivalents, accounts receivable, accounts payable and accrued
      liabilities approximate carrying value because of the short-term nature of
      these instruments. The Corporation&#146;s investments (note 12) are not
      actively traded, therefore management estimates fair value using valuation
      techniques that require inputs that are unobservable, including inputs
      made available by its investees (i.e. Level 3 of the fair value
      hierarchy). The interest rates applied to the obligations under capital
      lease are not considered to be materially different from market rates,
      thus the carrying value of obligations under capital lease approximate
      fair value. The carrying value of short-term investments equal their fair
      values as they are classified as held for trading.</FONT></P>
      <P align=justify><FONT face=Arial size=2>Fair value measurements
      recognized in the balance sheet must be categorized in accordance with the
      following levels:</FONT></P></TD></TR></TABLE>
<BR>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD vAlign=top noWrap><FONT face=Arial size=2>(i)</FONT></TD>
    <TD vAlign=top width="100%"><FONT face=Arial size=2>Level 1: quoted prices
      (unadjusted) in active markets for identical assets or
    liabilities;</FONT></TD></TR>
  <TR>
    <TD vAlign=top noWrap ></TD>
    <TD vAlign=top noWrap >&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD vAlign=top width="100%" ></TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap><FONT face=Arial size=2>(ii)</FONT></TD>
    <TD vAlign=top width="100%"><FONT face=Arial size=2>Level 2: inputs other
      than quoted prices included in Level 1 that are observable for the asset
      or liability, either directly (i.e. as prices) or indirectly (i.e.,
      derived from prices);</FONT></TD></TR>
  <TR>
    <TD vAlign=top></TD>
    <TD vAlign=top colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap><FONT face=Arial size=2>(iii)</FONT></TD>
    <TD vAlign=top width="100%"><FONT face=Arial size=2>Level 3: inputs for
      the asset or liability that are not based on observable market data
      (unobservable inputs).</FONT></TD></TR>
  <TR>
    <TD vAlign=top noWrap ></TD>
    <TD vAlign=top noWrap ></TD>
    <TD vAlign=top width="100%" >&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap ></TD>
    <TD vAlign=top width="100%"  colSpan=2>
      <P align=justify><FONT face=Arial size=2>The Corporation categorized the
      fair value measurement of its short-term investments in Level 1 as they
      are primarily derived directly from reference to quoted (unadjusted)
      prices in active markets.</FONT></P></TD></TR></TABLE>
<P align=right><FONT face=Arial size=1>59 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=justify><B><FONT face=Arial size=2>BALLARD POWER SYSTEMS
INC.<BR></FONT></B><FONT face=Arial size=2>Notes to Consolidated Financial
Statements<BR></FONT><FONT face=Arial size=1>Years ended December 31, 2012, and
2011<BR></FONT><FONT face=Arial size=1>(Tabular amounts expressed in thousands
of U.S. dollars, except per share amounts and number of shares)</FONT></P>
<TABLE style="BORDER-COLLAPSE: collapse; TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD style="BORDER-TOP: #000000 1.5pt solid" vAlign=top noWrap>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" width="100%">&nbsp;
  </TD></TR></TABLE>
<DIV align=justify>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD vAlign=top width="1%"><STRONG><FONT face=Arial size=2>27.
      </FONT></STRONG></TD>
    <TD vAlign=top width="99%"><FONT face=Arial size=2><STRONG>Financial
      instruments (cont&#146;d):</STRONG></FONT></TD></TR>
  <TR>
    <TD vAlign=top width="1%" >&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD vAlign=top width="99%" >&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="1%" ><FONT face=Arial size=2>(b)</FONT></TD>
    <TD vAlign=top width="99%">
      <P align=justify><FONT face=Arial size=2>Financial risk
      management:</FONT></P></TD></TR>
<TR>
    <TD vAlign=top width="1%" ></TD>
    <TD vAlign=top width="99%">
      <P align=justify><FONT face=Arial size=2>&nbsp;</FONT></P></TD></TR>
  <TR>
    <TD vAlign=top width="1%" ></TD>
    <TD vAlign=top width="99%" >
      <P align=justify><FONT face=Arial size=2>The Corporation primarily has
      exposure to currency exchange rate risk, interest rate risk and credit
      risk. These risks arise primarily from the Corporation&#146;s holdings of
      Canadian dollar denominated cash and cash equivalents and short-term
      investments. </FONT></P></TD></TR>
<TR>
    <TD vAlign=top width="1%" ></TD>
    <TD vAlign=top width="99%">
      <P align=justify><FONT face=Arial size=2>&nbsp;</FONT></P></TD></TR>
</TABLE></DIV>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="79%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid; TEXT-ALIGN: center" noWrap width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid; TEXT-ALIGN: center" noWrap width="19%" colSpan=11><FONT face=Arial size=1>2012</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="79%"></TD>
    <TD align=right width="1%"></TD>
    <TD align=right width="4%" colSpan=2><FONT face=Arial size=1>Canadian
      dollar</FONT></TD>
    <TD noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>U.S.
      dollar</FONT></TD>
    <TD noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%"></TD>
    <TD noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="79%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>portfolio<SUP>(1)</SUP></FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>portfolio</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>Other</FONT> <FONT face=Arial size=1><SUP>(1)</SUP></FONT></TD>
    <TD noWrap align=right width="1%"><FONT face=Arial size=1><SUP></SUP></FONT></TD>
    <TD noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>Total</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="79%" bgColor=#c0c0c0><FONT face=Arial size=1>Cash and cash equivalents</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>5,419</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>3,591</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>760</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>9,770</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="79%"><FONT face=Arial size=1>Short-term investments</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>12,068</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>12,068</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="79%" bgColor=#c0c0c0><FONT face=Arial size=1>Total cash, cash equivalents and short-term</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="79%" bgColor=#c0c0c0><FONT face=Arial size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;investments</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>17,487</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>3,591</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>760</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>21,838</FONT></TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="99%" colSpan=13>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: black 1.5pt solid; WIDTH: 79%; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left" noWrap width="79%"></TD>
    <TD style="BORDER-TOP: black 1.5pt solid; WIDTH: 1%; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" noWrap width="1%"></TD>
    <TD style="BORDER-TOP: black 1.5pt solid; WIDTH: 19%; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" noWrap width="19%" colSpan=11><FONT face=Arial size=1>2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="79%" bgColor=#ffffff></TD>
    <TD noWrap align=right width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=right width="4%" bgColor=#ffffff colSpan=2><FONT face=Arial size=1>Canadian dollar</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=right width="4%" bgColor=#ffffff colSpan=2><FONT face=Arial size=1>U.S. dollar</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=right width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=right width="3%" bgColor=#ffffff></TD>
    <TD noWrap align=right width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=right width="3%" bgColor=#ffffff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="79%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>portfolio<SUP>(1)</SUP></FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>portfolio</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>Other</FONT> <FONT face=Arial size=1><SUP>(1)</SUP></FONT></TD>
    <TD noWrap align=right width="1%"><FONT face=Arial size=1><SUP></SUP></FONT></TD>
    <TD noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>Total</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="79%" bgColor=#c0c0c0><FONT face=Arial size=1>Cash and cash equivalents</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>9,421</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>10,284</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>611</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>20,316</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="79%"><FONT face=Arial size=1>Short-term investments</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>25,878</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>25,878</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="79%" bgColor=#c0c0c0><FONT face=Arial size=1>Total cash, cash equivalents and short-term</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="79%" bgColor=#c0c0c0><FONT face=Arial size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;investments</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>35,299</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>10,284</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>611</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>46,194</FONT></TD></TR></TABLE>
<DIV style="PADDING-LEFT: 18pt" align=justify><FONT face=Arial size=1><SUP>(1)</SUP> U.S. dollar equivalent</FONT></DIV>
<P style="PADDING-LEFT: 18pt" align=justify><FONT face=Arial size=2>Changes
arising from these risks could impact the Corporation&#146;s reported investment and
other income through either changes to investment income or foreign exchange
gains or losses. Reported finance income and expenses and other income are as
follows: </FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="87%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid; TEXT-ALIGN: right" noWrap width="4%" colSpan=2><FONT face=Arial size=1>2012</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid; TEXT-ALIGN: right" noWrap width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid; TEXT-ALIGN: right" noWrap width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid; TEXT-ALIGN: right" noWrap width="4%" colSpan=2><FONT face=Arial size=1>2011</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=Arial size=1>Investment income</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>249</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>303</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="87%"><FONT face=Arial size=1>Other
      income</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>(11</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=Arial size=1>)</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=Arial size=1>Pension costs</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>(29</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>(37</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="87%"><FONT face=Arial size=1>Foreign exchange loss</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>(178</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=Arial size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>(71</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=Arial size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=Arial size=1>Finance income (loss) and
      other</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>31</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>195</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="87%"><FONT face=Arial size=1>Finance expense</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>(1,690</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face=Arial size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>(1,392</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face=Arial size=1>)</FONT></TD></TR></TABLE><BR>
<P style="PADDING-LEFT: 18pt" align=justify><FONT face=Arial size=2>The
Corporation did not realize any material gains or losses on its accounts
receivable or its financial liabilities measured at amortized cost.</FONT></P>
<P align=right><FONT face=Arial size=1>60 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=justify><B><FONT face=Arial size=2>BALLARD POWER SYSTEMS
INC.<BR></FONT></B><FONT face=Arial size=2>Notes to Consolidated Financial
Statements<BR></FONT><FONT face=Arial size=1>Years ended December 31, 2012, and
2011</FONT><FONT face=Arial size=2> <BR></FONT><FONT face=Arial size=1>(Tabular
amounts expressed in thousands of U.S. dollars, except per share amounts and
number of shares)</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD style="BORDER-TOP: #000000 1.5pt solid" width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" width="99%">&nbsp;</TD></TR>
  <TR>
    <TD width="1%"><STRONG><FONT face=Arial size=2>27. </FONT></STRONG></TD>
    <TD width="99%"><FONT face=Arial size=2><STRONG>Financial instruments
      (cont&#146;d):</STRONG></FONT></TD></TR>
  <TR>
    <TD width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="99%">&nbsp;</TD></TR>
  <TR>
    <TD width="1%">
      <P align=justify><FONT face=Arial size=2>(b)</FONT></P></TD>
    <TD width="99%">
      <P align=justify><FONT face=Arial size=2>Financial risk management
      (cont&#146;d):</FONT></P></TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="99%">&nbsp;</TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="99%">
      <P align=justify><I><FONT face=Arial size=2>Foreign currency exchange rate
      risk (cont&#146;d) </FONT></I></P>
      <P align=justify><FONT face=Arial size=2>Foreign currency exchange rate
      risk is the risk that the fair value of deferred cash flows of a financial
      instrument will fluctuate because of changes in foreign exchange rates.
      The Corporation is exposed to currency risks primarily due to its holdings
      of Canadian dollar denominated cash equivalents and short-term investments
      and its Canadian dollar denominated purchases and accounts payable.
      Substantially all receivables are denominated in U.S. dollars.</FONT></P>
      <P align=justify><FONT face=Arial size=2>The Corporation limits its
      exposure to foreign currency risk by holding Canadian denominated cash,
      cash equivalents and short-term investments in amounts up to 100% of
      forecasted twelve month Canadian dollar net expenditures and up to 50% of
      the following twelve months of forecasted Canadian dollar net
      expenditures, thereby creating a natural hedge. Periodically, the
      Corporation also enters into forward foreign exchange contracts to further
      limit its exposure. At December 31, 2012, the Corporation had Canadian
      dollar cash, cash equivalents and short-term investments of CDN
      $17,398,000. </FONT></P></TD></TR></TABLE><BR>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="98%" colSpan=6><FONT face=Arial size=2>The
      following exchange rates applied during the year ended December 31,
      2012:</FONT></TD></TR>
  <TR>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="98%" colSpan=6>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="90%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="4%" colSpan=2><FONT face=Arial size=1>$U.S. to
      $1.00 CDN</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="3%" colSpan=2><FONT face=Arial size=1>$CDN to
      $1.00 $U.S.</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><FONT face=Arial size=1>January 1, 2012 Opening rate</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>0.983</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face=Arial size=1>1.017</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="90%"><FONT face=Arial size=1>December 31,
      2012 Closing rate</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=Arial size=1>$</FONT></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>1.005</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=Arial size=1>$</FONT></TD>
    <TD noWrap align=right width="2%"><FONT face=Arial size=1>0.995</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="90%" bgColor=#c0c0c0><FONT face=Arial size=1>Fiscal 2012 Average rate</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>1.001</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face=Arial size=1>0.999</FONT></TD></TR></TABLE><BR>
<P style="PADDING-LEFT: 18pt" align=justify><FONT face=Arial size=2>Based on
cash, cash equivalents and short-term investments held at December 31, 2012, a
10% increase in the Canadian dollar against the U.S. dollar, with all other
variables held constant, would result in an increase in foreign exchange gains
of approximately $1,742,000 recorded against net income.</FONT></P>
<P style="PADDING-LEFT: 18pt" align=justify><FONT face=Arial size=2>If the
Canadian dollar weakened 10% against the U.S. dollar, there would be an equal,
and opposite impact, on net income. This sensitivity analysis includes foreign
currency denominated monetary items, and adjusts their translation at year-end,
for a 10% change in foreign currency rates. </FONT></P>
<P align=right><FONT face=Arial size=1>61 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=justify><B><FONT face=Arial size=2>BALLARD POWER SYSTEMS
INC.<BR></FONT></B><FONT face=Arial size=2>Notes to Consolidated Financial
Statements<BR></FONT><FONT face=Arial size=1>Years ended December 31, 2012, and
2011</FONT><FONT face=Arial size=2> <BR></FONT><FONT face=Arial size=1>(Tabular
amounts expressed in thousands of U.S. dollars, except per share amounts and
number of shares)</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD style="BORDER-TOP: #000000 1.5pt solid" width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" width="99%">&nbsp;</TD></TR>
  <TR>
    <TD width="1%"><STRONG><FONT face=Arial size=2>27.</FONT></STRONG></TD>
    <TD width="99%"><FONT face=Arial size=2><STRONG>Financial instruments
      (cont&#146;d): </STRONG></FONT></TD></TR>
  <TR>
    <TD width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="99%">&nbsp;</TD></TR>
  <TR>
    <TD width="1%">
      <P align=justify><FONT face=Arial size=2>(b)</FONT></P></TD>
    <TD width="99%">
      <P align=justify><FONT face=Arial size=2>Financial risk management
      (cont&#146;d):</FONT></P></TD></TR>
  <TR>
    <TD width="1%">&nbsp;</TD>
    <TD width="99%"></TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="99%">
      <P align=justify><I><FONT face=Arial size=2>Interest rate risk
      </FONT></I></P>
      <P align=justify><FONT face=Arial size=2>Interest rate risk is the risk
      that the fair value of deferred cash flows of a financial instrument will
      fluctuate because of changes in market interest rates. The Corporation is
      exposed to interest rate risk arising primarily from fluctuations in
      interest rates on its cash, cash equivalents and short-term investments.
      The Corporation limits its exposure to interest rate risk by continually
      monitoring and adjusting portfolio duration to align to forecasted cash
      requirements and anticipated changes in interest rates. </FONT></P>
      <P align=justify><FONT face=Arial size=2>Based on cash, cash equivalents
      and short-term investments at December 31, 2012, a 0.25% decline in
      interest rates, with all other variables held constant, would result in a
      decrease in investment income $55,000, arising mainly as a result of an
      increase in the fair value of fixed rate financial assets classified as
      held-for-trading. If interest rates had been 0.25% higher, there would be
      an equal and opposite impact on net income. </FONT></P>
      <P align=justify><I><FONT face=Arial size=2>Credit risk </FONT></I></P>
      <P align=justify><FONT face=Arial size=2>Credit risk is the risk of
      financial loss to the Corporation if a counterparty to a financial
      instrument fails to meet its contractual obligations and arises
      principally from the Corporation&#146;s cash, cash equivalents, short-term
      investments and accounts receivable. The Corporation limits its exposure
      to credit risk on cash, cash equivalents and short-term investments by
      only investing in liquid, investment grade securities. The Corporation
      manages its exposure to credit risk on accounts receivable by assessing
      the ability of counterparties to fulfill their obligations under the
      related contracts prior to entering into such contracts, and continuously
      monitors these exposures. </FONT></P></TD></TR></TABLE><BR>
<P align=right><FONT face=Arial size=1>62 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=justify><B><FONT face=Arial size=2>BALLARD POWER SYSTEMS
INC.<BR></FONT></B><FONT face=Arial size=2>Notes to Consolidated Financial
Statements<BR></FONT><FONT face=Arial size=1>Years ended December 31, 2012, and
2011</FONT><FONT face=Arial size=2> <BR></FONT><FONT face=Arial size=1>(Tabular
amounts expressed in thousands of U.S. dollars, except per share amounts and
number of shares)</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD style="BORDER-TOP: #000000 1.5pt solid" width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" width="99%">&nbsp; </TD></TR>
  <TR>
    <TD width="1%"><STRONG><FONT face=Arial size=2>28.</FONT></STRONG></TD>
    <TD width="99%"><FONT face=Arial size=2><STRONG>Assets held for sale and
      discontinued operations:</STRONG></FONT></TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="99%">&nbsp;&nbsp; </TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="99%">
      <P align=justify><FONT face=Arial size=2>In 2012, the Corporation decided
      to dispose of its Material Products segment, which was subsequently sold
      on January 31, 2013 (note 29). Due to the Corporation&#146;s commitment to the
      disposition of the segment as of December 31, 2012, the Material Products
      segment has been classified and accounted for as discontinued operations
      and the assets and liabilities of the Material Products segment have been
      classified as held for sale. Impairment losses of $1,815,000 and $500,000
      relating to goodwill and property, plant and equipment, respectively, were
      recognized based on a fair value less costs to sell assessment, which
      compared the segment&#146;s carrying value as of December 31, 2012 to the
      actual net proceeds received on disposition on January 31, 2013 (note 11).
      </FONT></P></TD></TR></TABLE><BR>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="92%" colSpan=4><FONT face=Arial size=2>Assets
      and liabilities classified as held for sale are comprised of the
      following:</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="92%" colSpan=4>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="3%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="87%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>December 31,</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="87%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="3%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>2012</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=Arial size=1>Trade and other receivables</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>2,367</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="87%"><FONT face=Arial size=1>Inventories</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>2,555</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=Arial size=1>Prepaid expenses and other current assets</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>61</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="87%"><FONT face=Arial size=1>Property, plant and
equipment</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="3%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>5,815</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=Arial size=1>Assets classified as held for
      sale</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>10,798</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="99%" colSpan=9>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=Arial size=1>Trade and other payables</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>1,398</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="87%"><FONT face=Arial size=1>Deferred revenue</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="3%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>25</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=Arial size=1>Liabilities classified as held for
      sale</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>1,423</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="99%" colSpan=9>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD vAlign=top align=left width="98%" colSpan=8><FONT face=Arial size=2>Net earnings (loss) from discontinued operations is comprised of
      the following:</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" width="99%" colSpan=9>&nbsp;&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="87%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>2012</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=Arial size=1>Product and service revenues</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>15,540</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>20,236</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="87%"><FONT face=Arial size=1>Cost of product and service
      revenues</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>11,159</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>13,630</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=Arial size=1>Gross margin</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>4,381</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>6,606</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="99%" colSpan=9>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=Arial size=1>Total operating expenses</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>(2,053</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>(2,602</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="87%"><FONT face=Arial size=1>Impairment on
      property, plant and equipment</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>(500</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=Arial size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=Arial size=1>Impairment loss on
    goodwill</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>(1,815</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="87%"><FONT face=Arial size=1>Earnings before
      income taxes</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>13</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>4,004</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=Arial size=1>Income tax expense</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>(78</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>(249</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="87%"><FONT face=Arial size=1>Net earnings (loss) from discontinued
      operations</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>(65</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face=Arial size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>3,755</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD></TR></TABLE><BR>
<P align=right><FONT face=Arial size=1>63 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=justify><B><FONT face=Arial size=2>BALLARD POWER SYSTEMS
INC.<BR></FONT></B><FONT face=Arial size=2>Notes to Consolidated Financial
Statements<BR></FONT><FONT face=Arial size=1>Years ended December 31, 2012, and
2011</FONT><FONT face=Arial size=2> <BR></FONT><FONT face=Arial size=1>(Tabular
amounts expressed in thousands of U.S. dollars, except per share amounts and
number of shares)</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD style="BORDER-TOP: #000000 1.5pt solid" width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" width="99%">&nbsp; </TD></TR>
  <TR>
    <TD width="1%"><STRONG><FONT face=Arial size=2>28.</FONT></STRONG></TD>
    <TD width="99%"><FONT face=Arial size=2><STRONG>Assets held for sale and
      discontinued operations (cont&#146;d):</STRONG></FONT></TD></TR></TABLE><BR>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD style="TEXT-ALIGN: center" noWrap width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="99%" colSpan=8><FONT face=Arial size=2>Net
      cash flows from discontinued operations is as follows:</FONT></TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" width="99%" colSpan=8>&nbsp;&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="88%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>2012</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=Arial size=1>Cash provided by (used in) operating activities</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>2,303</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>3,587</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="88%"><FONT face=Arial size=1>Cash used in
      investing activities</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>(476</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=Arial size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>(282</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=Arial size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=Arial size=1>Cash used in financing
      activities</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="88%"><FONT face=Arial size=1>Cash and cash
      equivalents provided by (used in) discontinued</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="88%"><FONT face=Arial size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      operations</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>1,827</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face=Arial size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>3,305</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD></TR></TABLE><BR>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD width="1%"><STRONG><FONT face=Arial size=2>29.</FONT></STRONG></TD>
    <TD width="99%"><FONT face=Arial size=2><STRONG>Subsequent
      events:</STRONG></FONT></TD></TR>
  <TR>
    <TD width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="99%">&nbsp;</TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="99%">
      <P align=justify><FONT face=Arial size=2>On January 15, 2013, a Canadian
      government agency agreed to terminate previous funding obligations that
      were repayable through potential royalties in respect of future sales of
      fuel cell based stationary power products under the Utilities Development
      Program (Phase 2) (note 21) in exchange for a final repayment by the
      Corporation of CDN $1,930,000. </FONT></P>
      <P align=justify><FONT face=Arial size=2>On January 31, 2013, the
      Corporation completed an agreement to sell substantially all of the assets
      of its Material Products division for up to $12,000,000. Of this amount,
      $10,500,000 was paid to the Corporation in cash on closing, with the
      remainder payable dependent on the Material Products division achieving
      certain financial results in 2013. The Material Products division has been
      classified and accounted for as assets held for sale and discontinued
      operations (note 28) at December 31, 2012.</FONT></P>
      <P align=justify><FONT face=Arial size=2>On February 18, 2013, the
      maturity date of the convertible debenture related to financing to
      Dantherm Power A/S by the non-controlling partner (note 17) was extended
      from December 31, 2013 to December 31, 2014.
</FONT></P></TD></TR></TABLE>
<P align=right><FONT face=Arial size=1>64 </FONT></P>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>3
<FILENAME>exhibit99-2.htm
<DESCRIPTION>MANAGEMENT'S DISCUSSION AND ANALYSIS
<TEXT>

<HTML>
<HEAD>
   <TITLE></TITLE>
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<BODY bgcolor=#ffffff>
<BR>
<P align=right><IMG src="ballard_logo.jpg" border=0></P>
<P align=justify><B><FONT face="Arial" size=2>MANAGEMENT&#146;S DISCUSSION AND
ANALYSIS </FONT></B></P>
<P align=justify><FONT face="Arial" size=2>This discussion and analysis of
financial condition and results of operations of Ballard Power Systems Inc.
(&#147;Ballard&#148;, &#147;the Company&#148;, &#147;we&#148;, &#147;us&#148; or &#147;our&#148;) is prepared as at February 20,
2013 and should be read in conjunction with the audited consolidated financial
statements and accompanying notes for the year ended December 31, 2012. The
results reported herein are presented in U.S. dollars unless otherwise stated
and have been prepared in accordance with International Financial Reporting
Standards (&#147;IFRS&#148;). Additional information relating to the Company, including
our Annual Information Form, are filed with Canadian (</FONT><FONT face="Arial" size=2>www.sedar.com</FONT><FONT face="Arial" size=2>) and
U.S. securities regulatory authorities (</FONT><FONT face="Arial" size=2>www.sec.gov</FONT><FONT face="Arial" size=2>) and are also available
on our website at </FONT><FONT face="Arial" size=2>www.ballard.com</FONT><FONT face="Arial" size=2>. </FONT></P>
<P align=justify><B><FONT face="Arial" size=2>BUSINESS OVERVIEW
</FONT></B></P>
<P align=justify><FONT face="Arial" size=2>At Ballard, we are building a
clean energy growth company. We are recognized as a world leader in proton
exchange membrane (&#147;PEM&#148;) fuel cell development and commercialization. Our
principal business is the design, development, manufacture, sale and service of
fuel cell products for a variety of applications, focusing on motive power
(material handling and buses) and stationary power (backup power and distributed
generation) markets. We also provide engineering services for a variety of fuel
cell applications. </FONT></P>
<P align=justify><FONT face="Arial" size=2>A fuel cell is an environmentally
clean electrochemical device that combines hydrogen fuel with oxygen (from the
air) to produce electricity. The hydrogen fuel can be obtained from natural gas,
kerosene, methanol or other hydrocarbon fuels, or from water through
electrolysis. Ballard fuel cell products feature high fuel efficiency, low
operating temperature, low noise and vibration, compact size, quick response to
changes in electrical demand, modular design and environmental cleanliness.
Embedded in each Ballard PEM fuel cell product lies a stack of unit cells
designed with our proprietary esencia<SUP>TM</SUP> technology which draws on
intellectual property from our patent portfolio together with our extensive
experience in key areas of fuel cell stack operation, system integration, and
fuel processing. </FONT></P>
<P align=justify><FONT face="Arial" size=2>We provide our customers with the
positive economic and environmental benefits unique to fuel cell power. We plan
to build value for our shareholders by developing, manufacturing, selling and
servicing industry-leading fuel cell products to meet the needs of our customers
in select target markets. Our focus is on leveraging the inherent reliability
and durability derived from our legacy automotive technology into non-automotive
markets where demand is near term and on our core competencies of PEM fuel cell
design, development, manufacture, sales and service. </FONT></P>
<P align=justify><FONT face="Arial" size=2>Our business strategy is to
establish a sharp focus on key growth opportunities with near-term commercial
prospects in our core fuel cell markets, enhanced by our engineering services
operating unit to leverage our expertise in fuel cell design, prototyping,
manufacturing and servicing. To support our business strategy and our capability
to execute on our clean energy growth priorities, we have also focused our
efforts on both product cost reduction and managing our operating expense base
including overall expense reductions, the pursuit of government funding for our
research and product development efforts, and the redirection of engineering
resources to revenue bearing engineering service projects.</FONT></P>
<P align=justify><FONT face="Arial" size=2>We are based in Canada, with head
office, research and development, testing and manufacturing facilities in
Burnaby, British Columbia. We also utilize a manufacturing facility in Tijuana,
Mexico (as of January 1, 2013), research and development facilities in Oregon and Maryland, and sales, manufacturing, and
research and development facilities in Hobro, Denmark and Lowell, Massachusetts
(disposed of on January 31, 2013).</FONT></P>
<P align=right><FONT face="Arial" size=1>Page 1 of 35 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=right><IMG src="ballard_logo.jpg" border=0>&nbsp;</P>
<P align=justify><B><FONT face="Arial" size=2>RECENT DEVELOPMENTS
</FONT></B></P>
<P align=justify><FONT face="Arial" size=2>On January 31, 2013, we completed
an agreement to sell substantially all of the assets in our Lowell,
Massachusetts based Material Products division for gross cash proceeds of $10.5
million and additional potential proceeds of up to $1.5 million. The additional
proceeds of up to $1.5 million are payable in 2014 and 2015 (through a GDL
product credit) if the former Material Products division attains certain
financial results in 2013. As we were committed to the disposition of the
Material Products segment as of December 31, 2012, the Material Products segment
has been classified as a discontinued operation in our 2012 consolidated
financial statements. As such, the assets of the Material Products segment have
been classified as &#147;assets held for sale&#148; and have been measured at the lower of
(i) carrying amount and (ii) fair value less costs to sell. Furthermore, the
annual operating results of the Material Products segment for both 2012 and 2011
have been removed from continuing operating results and are instead presented
separately in the statement of comprehensive income as income from discontinued
operations.</FONT></P>
<P align=justify><FONT face="Arial" size=2>On August 1, 2012 (announced on
July 24, 2012), we completed an agreement to acquire key assets and product
lines from IdaTech LLC (&#147;Idatech&#148;), a customer of Ballard for the past several
years. In exchange for $7.5 million of Ballard shares issued from treasury (7.1
million Ballard shares valued at $1.05 per share based on our share price as of
the acquisition date), we acquired Idatech&#146;s key assets including fuel cell
systems inventory, prepaid rights to inventory, product lines for backup power
applications, distributor and customer relationships, a license to intellectual
property, the right to assume control of a manufacturing facility in Tijuana,
Mexico, and certain property, plant and equipment. Acquired fuel cell systems
inventory, prepaid rights to inventory, product lines and intellectual property
consist of both direct hydrogen units as well as methanol fuelled units and are
designed for deployment as emergency backup power in the networks of wireless
telecom service providers. The methanol systems incorporate a fuel reformer to
extract hydrogen from a mixture of methanol and water which is then used as
feedstock for the fuel cells.</FONT></P>
<P align=justify><FONT face="Arial" size=2>In July 2012, we completed a 7%
workforce reduction and an overall curtailment of discretionary spending
designed to have a minimal impact on key product development initiatives and our
manufacturing capabilities. Total restructuring and related costs of $1.6
million has been recorded in general and administration expense in our third
quarter of 2012 financial results.</FONT></P>
<P align=justify><FONT face="Arial" size=2>In June 2011, we obtained an $7.0
million Canadian (revised to $7.3 million Canadian in December 2012) award
agreement from Sustainable Development Technology Canada (&#147;SDTC&#148;) for the period
from 2011 to 2013 (extended to 2014) to be used to extend the operating life and
lower the product cost of FCgen&#153;-1300, the fuel cell product that powers
Ballard&#146;s CLEARgen&#153; distributed generation system. This award is in addition to
a $4.8 million Canadian (revised to $6.9 million Canadian in June 2012) award
agreement from SDTC announced in 2010 for the period from 2010 to 2012 (extended
to November 2013) to be used to further develop fuel cell power module
technology for the transit bus market.</FONT><FONT face="Arial" size=2>
</FONT><FONT face="Arial" size=2>These awards are recorded primarily as a
cost offset against our research and product development expenses as the
expenses are incurred on these programs.</FONT></P>
<P align=justify><FONT face="Arial" size=2>In March 2011, we completed a
sub-lease agreement with Mercedes-Benz Canada Inc. (&#147;MBC&#148;) for the rental of
21,000 square feet of previously used consolidated production space in our specialized fuel cell
manufacturing facility located in Burnaby, British Columbia. This sub-lease is
effective from August 1, 2011 until July 31, 2019 and is expected to result in
annual savings of approximately $1 million in real estate and related overhead
costs.</FONT></P>
<P align=right><FONT face="Arial" size=1>Page 2 of 35 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=right><IMG src="ballard_logo.jpg" border=0></P>
<P align=justify><B><FONT face="Arial" size=2>OPERATING SEGMENTS
</FONT></B></P>
<P align=justify><FONT face="Arial" size=2>We report our results in the
following operating segments: </FONT></P>
<P align=justify><FONT face="Arial" size=2>1. </FONT><I><U><FONT face="Arial" size=2>Fuel Cell Products</FONT></U></I><FONT face="Arial" size=2>: fuel cell products and services for motive power (material handling and
bus markets) and stationary power (backup power and distributed generation
markets) applications, and engineering services for a variety of fuel cell
applications; and </FONT></P>
<P align=justify><FONT face="Arial" size=2>2. </FONT><I><U><FONT face="Arial" size=2>Contract Automotive</FONT></U></I><FONT face="Arial" size=2>: contract manufacturing services (consisting of light-duty automotive
FCvelocity 1100 fuel cell products) provided primarily for Daimler AG&#146;s
(&#147;Daimler&#148;) Hyway 2/3 programs. With the completion of our manufacturing supply
agreement with Daimler in October 2011, this segment ceased to be an ongoing
operating segment as of the fourth quarter of 2011 and is now presented for
comparative purposes only. </FONT></P>
<P align=justify><FONT face="Arial" size=2>3. </FONT><U><FONT face="Arial" size=2>Material Products (Discontinued Operation):</FONT></U><FONT face="Arial" size=2> carbon fiber products primarily for automotive
transmissions and gas diffusion layers (&#147;GDLs&#148;) for fuel cells. As a result of
the disposition of this segment on January 31, 2013, the Material Products
segment has been classified as a discontinued operation as of December 31, 2012.
</FONT></P>
<P align=right><FONT face="Arial" size=1>Page 3 of 35 </FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=right><IMG src="ballard_logo.jpg" border=0></P>
<div align=justify><B><FONT face="Arial" size=2>SELECTED ANNUAL FINANCIAL
INFORMATION</FONT></B></div>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="83%"><B><FONT face="Arial" size=1>Results of Operations</FONT></B></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; text-align: center" noWrap width="17%" colSpan=11><B><FONT face="Arial" size=1>Year
  ended,</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="83%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face="Arial" size=1>2012</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face="Arial" size=1>2011</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face="Arial" size=1>2010</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial" size=1>(Expressed in thousands of U.S.
      dollars, except per share</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="83%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp; amounts and gross margin
%)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="3%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="3%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="3%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><B><U><FONT face="Arial" size=1>From continuing
      operations</FONT></U></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial" size=1>Revenues</FONT></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>43,690</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>55,773</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>44,055</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial" size=1>Gross
      margin</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>7,369</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>7,279</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>1,670</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial" size=1>Gross margin %</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>17%</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1></FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>13%</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1></FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>4%</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1></FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial" size=1>Cash Operating
      Costs <SUP>(1)</SUP></FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>30,301</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>36,969</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>40,258</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial" size=1>Adjusted EBITDA
      <SUP>(1)</SUP></FONT></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>(22,076</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>(27,913</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>(34,011</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial" size=1>Normalized Net
      Loss <SUP>(1)</SUP></FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>(31,500</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>(35,448</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>(45,723</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>)</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial" size=1>Normalized Net Loss per
      share</FONT></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>(0.36</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>(0.42</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>(0.54</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial" size=1>Net loss from
      continuing operations attributable to Ballard</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp; (42,070</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp; (37,175</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp; (37,691</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>)</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="83%"><FONT face="Arial" size=1>Net loss per share attributable to Ballard, basic and
      diluted</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><B><FONT face="Arial" size=1>(0.48</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><B><FONT face="Arial" size=1>(0.44</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><B><FONT face="Arial" size=1>(0.45</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><B><U><FONT face="Arial" size=1>From discontinued
      operations</FONT></U></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial" size=1>Revenues</FONT></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>15,540</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>20,236</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>20,964</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial" size=1>Gross
      margin</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>4,381</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>6,606</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>8,462</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial" size=1>Gross margin %</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>28%</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1></FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>33%</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1></FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>40%</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1></FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial" size=1>Cash Operating
      Costs <SUP>(1)</SUP></FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>1,889</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>2,333</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>1,820</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial" size=1>Adjusted EBITDA
      <SUP>(1)</SUP></FONT></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>3,580</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>5,618</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>7,848</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial" size=1>Net earnings (loss) from discontinued
      operations</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>(65</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>3,755</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>6,159</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><B><U><FONT face="Arial" size=1>Total</FONT></U></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial" size=1>Revenues</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>59,230</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>76,009</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>65,019</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial" size=1>Gross margin</FONT></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>11,750</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>13,885</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>10,132</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial" size=1>Gross margin
      %</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>20%</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1></FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>18%</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1></FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>16%</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1></FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial" size=1>Cash Operating Costs
      <SUP>(1)</SUP></FONT></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>32,190</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>39,302</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>42,078</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial" size=1>Adjusted EBITDA
      <SUP>(1)</SUP></FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>(18,496</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>(22,295</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>(26,163</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>)</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial" size=1>Net loss attributable to
      Ballard</FONT></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>(42,135</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>(33,420</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>(31,532</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial" size=1>Net loss per share attributable to
      Ballard, basic and diluted</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>(0.48</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>(0.40</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>(0.37</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>)</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><B><FONT face="Arial" size=1>Financial Position</FONT></B></TD>
    <TD style="text-align: center" width="17%" colSpan=11><B><FONT face="Arial" size=1>At
      December 31,</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="83%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face="Arial" size=1>2012</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face="Arial" size=1>2011</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face="Arial" size=1>2010</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="83%"><FONT face="Arial" size=1>(expressed in thousands of U.S. dollars)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="3%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="3%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="3%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial" size=1>Assets from
      continuing operations</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>116,749</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>165,290</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>190,027</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="83%"><FONT face="Arial" size=1>Assets from discontinued operations</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face="Arial" size=1>10,798</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial" size=1>Total assets</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>127,547</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>165,290</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>190,027</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face="Arial" size=1>Cash and cash
    equivalents</FONT></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>9,770</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>20,316</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>51,937</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial" size=1>Short-term
      investments</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>12,068</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>25,878</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>22,508</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="83%"><FONT face="Arial" size=1>Bank operating line</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face="Arial" size=1>(9,358</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face="Arial" size=1>(4,587</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="83%" bgColor=#c0c0c0><FONT face="Arial" size=1>Net cash reserves</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>12,480</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>41,607</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>74,445</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR></TABLE>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD vAlign=top noWrap><FONT face="Arial" size=1><sup>1</sup></FONT></TD>
    <TD vAlign=top noWrap><FONT face=Arial size=1>&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD STYLE="width: 100%; border-top: White 3pt solid"><FONT face="Arial" size=1>Cash Operating Costs,
      Adjusted EBITDA, Normalized Net Loss and Normalized Net Loss per share are
      non-GAAP measures. We use certain Non-GAAP measures to assist in assessing
      our financial performance. Non-GAAP measures do not have any standardized
      meaning prescribed by GAAP and are therefore unlikely to be comparable to
      similar measures presented by other companies. See reconciliation to GAAP
      in the Supplemental Non-GAAP Measures section.</FONT></TD></TR></TABLE>
<P align=right><FONT face="Arial" size=1>Page 4 of 35 </FONT></P>

<HR align=center width="100%" noShade SIZE=2>
<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=right><IMG src="ballard_logo.jpg" border=0> </P>
<P align=justify><B><I><FONT face="Arial" size=2>2012 Performance compared to
2012 Revised Business Outlook </FONT></I></B></P>
<UL style="TEXT-ALIGN: justify"><LI><FONT face="Arial" size=2>Revenues from continuing and discontinued
  operations in 2012 of $59.2 million, was consistent with our revised outlook
  from October 9, 2012 of revenues in 2012 of approximately $60 million.
  <BR>&nbsp;</FONT>
  </LI><LI><FONT face="Arial" size=2>Adjusted EBITDA from continuing and
  discontinued operations in 2012 of ($18.5) million, was consistent with our
  revised outlook from October 9, 2012 of Adjusted EBITDA in 2012 of
  approximately ($18) million. </FONT></LI></UL>
<P align=justify><B><FONT face="Arial" size=2>RESULTS OF CONTINUING
OPERATIONS &#150; Fourth Quarter of 2012 </FONT></B></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" colSpan=11><B><I><FONT face="Arial" size=2>Revenue and gross margin (from continuing
      operations)</FONT></I></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR>
    <TD width="100%" colSpan=15>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="79%" colSpan=2><I><FONT face="Arial" size=1>(Expressed in thousands of U.S.
    dollars)</FONT></I></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid; text-align: center" noWrap width="21%" colSpan=13><FONT face="Arial" size=1>Three months
      ended December 31,</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="78%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face="Arial" size=1>2012</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid; text-align: center" noWrap width="3%"><FONT face="Arial" size=1>$ Change</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid; text-align: center" noWrap width="3%"><FONT face="Arial" size=1>% Change</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%" bgColor=#c0c0c0><FONT face="Arial" size=1>Fuel Cell
      Products</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>16,476</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>16,872</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>(396</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>(2%</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="78%"><FONT face="Arial" size=1>Contract Automotive</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>101</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>(101</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp; (100%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG>Revenues</STRONG></FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>16,476</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>16,973</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>(497</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>(3%</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="78%"><FONT face="Arial" size=1>Cost of goods sold</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;
      <STRONG>12,789</STRONG></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp; 14,030</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp; (1,241</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>(9%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="78%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>Gross Margin</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>3,687</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>2,943</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>744</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>25%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="78%"><FONT face="Arial" size=1>Gross Margin %</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><B><FONT face="Arial" size=1>22%</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=1></FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>17%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>n/a</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>5 pts</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1></FONT></TD></TR></TABLE><BR>
<P align=justify><FONT face="Arial" size=2>Revenues from continuing
operations of $16.5 million for the fourth quarter of 2012 declined (3%), or
($0.5) million, compared to the fourth quarter of 2011 primarily as a result of
slight declines in our Fuel Cell Products segment. </FONT></P>
<P align=justify><FONT face="Arial" size=2>In our core Fuel Cell Products
segment, fourth quarter of 2012 revenues were down slightly as declines in
Motive power and distributed generation revenues were only partially offset by
higher backup power and engineering services revenues. The decline in Motive
power revenues was driven by lower fuel cell bus revenues as new fourth quarter
of 2012 heavy-duty bus shipments to Van Hool NV and others were significantly
lower than 2011 shipments to Van Hool NV and UNDP-EMTU Brazil and were also
negatively impacted by the completion of our fuel cell bus manufacturing supply
agreement with a Daimler subsidiary in October 2011 ($0.4 million impact),
combined with lower material handling market revenues as a result of a decline
in shipments in support of Plug Power Inc.&#146;s GenDrive&#153; systems. These declines
were partially offset by significantly higher backup power market revenues and
higher engineering services revenues. The increase in backup power revenues is
as a result of new shipments of hydrogen-based and methanol-based backup power
systems due to our recent acquisition of Idatech&#146;s key assets (impact of
approximately $3.0 million) combined with an increase in shipments of
hydrogen-based backup power stacks. The increase in engineering services
revenues is a result of our increased focus on building our engineering services
business including ongoing projects with Anglo American Platinum Limited and
others.</FONT></P>
<P align=justify><FONT face="Arial" size=2>Gross margins from continuing
operations increased to $3.7 million, or 22% of revenues, for the fourth quarter
of 2012, compared to $2.9 million, or 17% of revenues, for the fourth quarter of
2011. The overall increase and improvement in gross margin was driven primarily
by increased work performed on higher margin engineering services projects at
both Ballard and Dantherm Power, by significant sales of hydrogen-based and
methanol-based backup power systems acquired from Idatech, and by our ongoing
product cost reduction efforts across all of our platforms.</FONT></P>
<P align=right><FONT face="Arial" size=1>Page 5 of 35 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=right><IMG src="ballard_logo.jpg" border=0></P>
<P align=justify><FONT face="Arial" size=2>The following table provides a
summary of our fourth quarter fuel cell stack and system shipments: </FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="88%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; text-align: center" noWrap width="12%" colSpan=6><FONT face="Arial" size=1>Three months ended December 31,</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="88%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face="Arial" size=1>2012</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp; &nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>% Change</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Material
      handling</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp; <STRONG>468</STRONG></FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp; 799</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp; (41%</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Backup
      power</FONT></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>313</FONT></B></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>124</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;
      152%</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="88%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>3</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>19</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>(84%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="88%"><B><FONT face="Arial" size=1>Fuel Cell Stack Shipments</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><B><FONT face="Arial" size=1>784</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>942</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>(17%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="88%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>Fuel Cell System
      Shipments</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>204</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>75</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>172%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1></FONT></TD></TR></TABLE><BR>
<div align=justify><B><I><FONT face="Arial" size=2>Cash Operating Costs (from
continuing operations) </FONT></I></B></div>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="79%"><I><FONT face="Arial" size=1>(Expressed in
      thousands of U.S. dollars)</FONT></I></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid; text-align: center" noWrap width="21%" colSpan=13><FONT face="Arial" size=1>Three months
      ended December 31,</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="79%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face="Arial" size=1>2012</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>$ Change</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>% Change</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="79%" bgColor=#c0c0c0><FONT face="Arial" size=1>Research and
      Product</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>4,228</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>4,084</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>144</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>4</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>%</FONT></TD></TR>
  <TR>
    <TD noWrap align=left width="79%" bgColor=#c0c0c0><FONT face=Arial size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Development (operating
      cost)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="79%"><FONT face="Arial" size=1>General and
    Administrative</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>2,709</FONT></B></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>2,100</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>609</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>29</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>%</FONT></TD></TR>
  <TR>
    <TD noWrap align=left width="79%"><FONT face=Arial size=1>(operating cost)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="79%" bgColor=#c0c0c0><FONT face="Arial" size=1>Sales and Marketing expense</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>1,951</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>1,695</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>256</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>15</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="79%"><B><FONT face="Arial" size=1>Operating costs</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>8,888</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>7,879</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>1,009</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>13</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="79%" bgColor=#c0c0c0><FONT face="Arial" size=1>Less:
      Stock-based compensation</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>(1,555</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>322</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp; (1,877</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp; (583</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>%)</FONT></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="79%" bgColor=#c0c0c0><FONT face=Arial size=1>(expense) recovery</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="79%"><B><FONT face="Arial" size=1>Cash Operating Costs</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;
      <STRONG>7,333</STRONG></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp; 8,201</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>(868</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>(11</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>%)</FONT></TD></TR></TABLE>
<DIV align=justify><FONT face="Arial" size=1>Cash Operating Costs is a
non-GAAP measure. We use certain Non-GAAP measures to assist in assessing our
financial performance. Non-GAAP measures do not have any standardized meaning
prescribed by GAAP and are therefore unlikely to be comparable to similar
measures presented by other companies. See reconciliation to GAAP in the
Supplemental Non-GAAP Measures section. Cash Operating Costs adjusts operating
expenses for stock-based compensation expense, depreciation and amortization,
restructuring charges, acquisition costs and financing charges.</FONT></DIV>
<P align=justify><FONT face="Arial" size=2>Cash Operating Costs (see
Supplemental Non-GAAP Measures) from continuing operations for the fourth
quarter of 2012 were $7.3 million, a decline of ($0.9) million, or (11%),
compared to the fourth quarter of 2011. The 11% reduction in the fourth quarter
of 2012 was driven by lower operating costs across the business as a result of
our continued cost reduction efforts including a 7% workforce reduction
initiated in July 2012, and by lower research and product development expense
due to the redirection of engineering resources to revenue bearing engineering
service projects. Labour and material costs incurred on revenue producing
engineering services projects are reallocated from research and product
development expenses to cost of goods sold.</FONT></P>
<P align=justify><FONT face="Arial" size=2>As the Canadian dollar relative to
the U.S. dollar was relatively consistent for the fourth quarter of 2012
compared to the fourth quarter of 2011, foreign exchange impacts on our Canadian
operating cost base were relatively insignificant. A 1% increase in the Canadian
dollar, relative to the U.S. dollar, negatively impacts annual Cash Operating
Costs and Adjusted EBITDA by approximately $0.3 million to $0.4 million.</FONT></P>
<P align=justify><FONT face="Arial" size=2>While
excluded from Cash Operating Costs, stock-based compensation expense declined
significantly in the fourth quarter of 2011 to a recovery position, as a result
of a downward adjustment to accrued share-based compensation expense as certain
outstanding restricted share units failed to meet the vesting criteria and were
cancelled.</FONT></P>
<div align=justify><B><I><FONT face="Arial" size=2>Adjusted EBITDA (from
continuing operations)</FONT></I></B><FONT face="Arial" size=2> </FONT></div>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="80%"><I><FONT face="Arial" size=1>(Expressed in thousands of U.S.
      dollars)</FONT></I></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; text-align: center" noWrap width="20%" colSpan=12><FONT face="Arial" size=1>Three </FONT><FONT face="Arial" size=1>months ended December 31,</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="80%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face="Arial" size=1>2012</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="4%" COLSPAN="2" STYLE="border-bottom: #000000 1pt solid; text-align: right"><FONT face="Arial" size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid; text-align: center" noWrap width="4%" colSpan=2><FONT face="Arial" size=1></FONT><FONT face="Arial" size=1>$ Change</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp; &nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>% Change</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="80%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>Adjusted
    EBITDA</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;
      <STRONG>(3,222</STRONG></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid; text-align: center" noWrap width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;
    (4,875</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid; text-align: center" noWrap width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;
1,653</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;
  34%</FONT></TD></TR></TABLE>
<DIV align=justify><FONT face="Arial" size=1>EBITDA and</FONT><FONT face="Arial" size=1> </FONT><FONT face="Arial" size=1>Adjusted EBITDA are
non-GAAP measures. We use certain Non-GAAP measures to assist in assessing our
financial performance. Non-GAAP measures do not have any standardized meaning
prescribed by GAAP and are therefore unlikely to be comparable to similar
measures presented by other companies. See reconciliation to GAAP in the
Supplemental Non-GAAP Measures section. Adjusted EBITDA adjusts EBITDA for
stock-based compensation expense, transactional gains and losses, finance and
other income, and acquisition costs. </FONT></DIV>
<P align=right><FONT face="Arial" size=1>Page 6 of 35 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<!--PART B-->
<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=right><IMG src="ballard_logo.jpg" border=0></P>
<P align=justify><FONT face="Arial" size=2>Adjusted EBITDA (see Supplemental
Non-GAAP Measures) from continuing operations for the fourth quarter of 2012 was
($3.2) million, an improvement of $1.7 million, or 34%, compared to the fourth
quarter of 2011.</FONT></P>
<P align=justify><FONT face="Arial" size=2>The $1.7 million reduction in
Adjusted EBITDA loss in the fourth quarter of 2012 was driven by gross margin
improvements of $0.7 million as margins improved on a percentage of revenue
basis from 17% to 22% primarily as a result of increased work performed on
higher margin engineering services projects, combined with lower Cash Operating
Costs of $0.9 million primarily as a result of the redirection of engineering
resources to revenue bearing engineering service projects and our continued cost
optimization efforts across the business.</FONT></P>
<P align=justify><B><I><FONT face="Arial" size=2>Net loss attributable to
Ballard (from continuing operations) </FONT></I></B></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="81%"><I><FONT face=Arial size=1>(Expressed in thousands of U.S.
      dollars)</FONT></I></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; TEXT-ALIGN: center" noWrap width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; TEXT-ALIGN: center" noWrap width="17%" colSpan=10><FONT face=Arial size=1>Three months ended December
      31,</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="81%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid; TEXT-ALIGN: center" noWrap width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><B><FONT face=Arial size=1>2012</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" colSpan=2><FONT face=Arial size=1>$ Change</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>% Change</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="81%" bgColor=#c0c0c0><B><FONT face=Arial size=1>Net loss
      attributable to Ballard from<BR>continuing operations</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=Arial size=1>(16,809</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=Arial size=1>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>(7,969</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="2%" bgColor=#c0c0c0><FONT face=Arial size=1>(8,840</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(111%)</FONT></TD></TR></TABLE><BR>
<P align=justify><FONT face="Arial" size=2>Net loss attributable to Ballard
from continuing operations for the fourth quarter of 2012 was ($16.8) million,
or ($0.18) per share, compared to a net loss of ($8.0) million, or ($0.09) per
share, in the fourth quarter of 2011. The ($8.8) million increase in net loss
for the fourth quarter of 2012 was driven by a Fuel Cell Products goodwill
impairment charge of ($10.0) million. Net loss from continuing operations in the
fourth quarters of 2012 and 2011 also include impairment charges related to a
write-down of manufacturing equipment of ($0.6) million and ($1.7) million,
respectively.</FONT></P>
<P align=justify><FONT face="Arial" size=2>Excluding the impact of these
impairment charges in continuing operations of ($10.6) million in the fourth
quarter of 2012 and ($1.7) million in the fourth quarter of 2011, Normalized Net
Loss (see Supplemental Non-GAAP Measures) in the fourth quarter of 2012 would
have been comparable to the fourth quarter of 2011. </FONT></P>
<P align=justify><FONT face="Arial" size=2>Net loss attributable to Ballard
from continuing operations excludes the net loss attributed to the
non-controlling interest of Dantherm A/S and Danfoss A/S in the losses of
Dantherm Power as a result of their 48% total equity interest in 2012 and 2011,
and the results of discontinued operations. Net loss attributed to
non-controlling</FONT><B><I><FONT face="Arial" size=2> </FONT></I></B><FONT face="Arial" size=2>interests for the fourth quarter of 2012 was ($0.5)
million, as compared to ($0.3) million for the fourth quarter of 2011. Net loss
from discontinued operations for the fourth quarter of 2012 was ($1.3) million,
as compared to net income for the fourth quarter of 2011 of $0.7 million. Net
loss from discontinued operations in the fourth quarter of 2012 includes a
goodwill impairment charge of ($1.8) million and a write-down of property, plant
and equipment of ($0.5) million. </FONT></P>
<P align=justify><B><I><FONT face="Arial" size=2>Cash used in operating
activities</FONT></I></B><FONT face="Arial" size=2> </FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="81%"><I><FONT face=Arial size=1>(Expressed in thousands of U.S.
      dollars)</FONT></I></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; TEXT-ALIGN: center" noWrap width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; TEXT-ALIGN: center" noWrap width="17%" colSpan=10><FONT face=Arial size=1>Three months ended December
      31,</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="81%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid; TEXT-ALIGN: center" noWrap width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><B><FONT face=Arial size=1>2012</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" colSpan=2><FONT face=Arial size=1>$ Change</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>% Change</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="81%" bgColor=#c0c0c0><B><FONT face=Arial size=1>Cash (used in)
      provided by operating<BR>activities</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1><B>$</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=Arial size=1>(535</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=Arial size=1>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>4,066</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="2%" bgColor=#c0c0c0><FONT face=Arial size=1>(4,601</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(113%)</FONT></TD></TR></TABLE>
<P align=justify><FONT face="Arial" size=2>Cash used in operating activities
in the fourth quarter of 2012 was ($0.5) million, consisting of cash operating
losses of ($2.4) million partially offset by net working capital inflows of $1.9
million. Cash provided by operating activities in the fourth quarter of 2011 was
$4.1 million, consisting of cash operating losses of ($4.7) million and net
working capital inflows of $8.8 million.</FONT></P>
<P align=right><FONT face="Arial" size=1>Page 7 of 35</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=right><IMG src="ballard_logo.jpg" border=0></P>
<P align=justify><FONT face="Arial" size=2>The ($4.6) million increase in
cash used by operating activities in the fourth quarter of 2012, as compared to
the fourth quarter of 2011, was driven by reduced working capital inflows of
($6.9) million partially offset by an decrease in cash operating losses of $2.3
million. The reduction in cash operating losses of $2.3 million is primarily a
result of a $1.8 million improvement in Adjusted EBITDA loss from both
continuing and discontinued operations. In the fourth quarter of 2012, net
working capital cash inflows of $1.9 million were driven by lower inventory of
$5.4 million as we consumed previously built-up or acquired inventory in order
to fulfill the higher product shipments in the fourth quarter, and by higher
deferred revenue and cost recovery of $0.9 million as we received the next
tranches of SDTC government funding for our distributed generation and bus
projects in advance of incurring the related research and product development
expenditures. These fourth quarter of 2012 working capital inflows were
partially offset by higher accounts receivable of ($2.5) million due primarily
to the timing of shipment versus collection of our fuel cell product and service
revenues, and by lower accounts payable and accrued liabilities of ($2.6)
million due to increased supplier payments made for higher first three quarter
of 2012 inventory purchases.</FONT></P>
<P align=justify><B><FONT face="Arial" size=2>RESULTS OF CONTINUING
OPERATIONS &#150; Year ended December 31, 2012 </FONT></B></P>
<P align=justify><B><I><FONT face="Arial" size=2>Revenue and gross margin
(from continuing operations) </FONT></I></B></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="84%"><EM><FONT face=Arial size=1>(Expressed in thousands of U.S. dollars)</FONT></EM></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid; text-align: center" noWrap width="15%" colSpan=11><FONT face=Arial size=1>Years ended December
  31,</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="84%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><B><FONT face="Arial" size=1>2012</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>$ Change</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" colSpan=2><FONT face="Arial" size=1>% Change</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%" bgColor=#c0c0c0><FONT face="Arial" size=1>Fuel Cell
      Products</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>43,690</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>46,468</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>(2,778</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>(6%</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="84%"><FONT face="Arial" size=1>Contract Automotive</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>9,305</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>(9,305</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(100%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenues</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>43,690</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>55,773</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>(12,083</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>(22%</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="84%"><FONT face="Arial" size=1>Cost of goods sold</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><B><FONT face="Arial" size=1>36,321</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>48,494</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>(12,173</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>(25%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="84%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>Gross Margin</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>7,369</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>7,279</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>90</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>1%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="84%"><FONT face="Arial" size=1>Gross Margin %</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%"><B><FONT face="Arial" size=1>17%</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=1></FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>13%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>n/a</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>4pts</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1></FONT></TD></TR></TABLE><BR>
<P align=justify><FONT face="Arial" size=2>Revenues from continuing
operations of $43.7 million for 2012 declined (22%), or ($12.1) million,
compared to 2011. The ($12.1) million decline was driven by the absence of
Contract Automotive segment revenues ($9.3 million impact) as a result of the
completion of our light-duty automotive manufacturing supply agreement with
Daimler in October 2011 and by lower revenues of $(2.8) million in our core Fuel
Cell Products segment. </FONT></P>
<P align=justify><FONT face="Arial" size=2>In our core Fuel Cell Products
segment, 2012 revenues declined (6%), or ($2.8) million, to $43.7 million
compared to 2011, primarily as a result of significantly lower fuel cell bus
revenues combined with slightly lower material handling and distributed
generation revenues. The significant decline in fuel cell bus revenues was
driven by the completion of our fuel cell bus manufacturing supply agreement
with a Daimler subsidiary in October 2011 ($8.7 million impact), combined with
lower shipments of heavy-duty fuel cell bus modules primarily as a result of a
lack of shipments in 2012 to Brazil. This decline was partially offset by
significant increases in both our backup power and engineering services
revenues. The significant increase in backup power revenues is as a result of
new shipments of hydrogen-based and methanol-based backup power systems due to
our recent acquisition of Idatech&#146;s key assets (impact of approximately $5.1
million), combined with an increase in shipments of hydrogen-based backup power
systems at Dantherm Power, and by relatively stable shipments of hydrogen-based
backup power stacks. The increase in engineering services revenues is a result
of our increased focus on building our engineering services business including
ongoing projects with Anglo American Platinum Limited and others.</FONT></P>
<P align=right><FONT face="Arial" size=1>Page 8 of 35</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=right><IMG src="ballard_logo.jpg" border=0></P>
<P align=justify><FONT face="Arial" size=2>Gross margins from continuing
operations increased to $7.4 million, or 17% of revenues, for 2012, compared to
$7.3 million, or 13% of revenues, for 2011. The overall increase and improvement
in gross margin was driven primarily by increased work performed on higher
margin engineering services projects at both Ballard and Dantherm Power, by
significant sales of hydrogen-based and methanol-based backup power systems
acquired from Idatech, and by our ongoing product cost reduction efforts across
all of our platforms.</FONT></P>
<P align=justify><FONT face="Arial" size=2>The following table provides a
summary of our fuel cell stack and system shipments for the year: </FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="90%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; text-align: center" noWrap width="9%" colSpan=6><FONT face="Arial" size=1>Years ended December 31,</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="90%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><B><FONT face="Arial" size=1>2012</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" colSpan=2><FONT face="Arial" size=1>% Change</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Material
      handling</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,022</FONT></B></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,422</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>42%</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Backup
    power</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="2%"><B><FONT face="Arial" size=1>667</FONT></B></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>1,238</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>(46%</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="90%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>12</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>396</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>(97%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="90%"><B><FONT face="Arial" size=1>Fuel Cell Stack Shipments</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%"><B><FONT face="Arial" size=1>2,701</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>3,056</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>(12%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="90%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>Fuel Cell System
      Shipments</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>399</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>145</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;175%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1></FONT></TD></TR></TABLE><BR>
<P align=justify><B><I><FONT face="Arial" size=2>Cash Operating Costs (from
continuing operations) </FONT></I></B></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="88%"><I><FONT face="Arial" size=1>(Expressed in
      thousands of U.S. dollars)</FONT></I></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid; text-align: center" noWrap width="11%" colSpan=11><FONT face="Arial" size=1>Years ended
      December 31,</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="88%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=1>2012</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>$ Change</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>% Change</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="88%" bgColor=#c0c0c0><FONT face="Arial" size=1>Research and
      Product<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Development
      (operating cost)</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>16,680</FONT></B></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>21,038</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(4,358</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(21%</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="88%"><FONT face="Arial" size=1>General and
      Administrative<BR>(operating cost)</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=right width="1%"><B><FONT face="Arial" size=1>9,302</FONT></B></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=right width="1%"><FONT face="Arial" size=1>9,793</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=right width="1%"><FONT face="Arial" size=1>(491</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD vAlign=top noWrap align=right width="1%"><FONT face="Arial" size=1>(5%</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="88%" bgColor=#c0c0c0><FONT face="Arial" size=1>Sales and Marketing expense</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>6,901</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>8,515</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(1,614</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(19%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="88%"><B><FONT face="Arial" size=1>Operating costs</FONT></B></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=right width="1%"><B><FONT face="Arial" size=1>32,883</FONT></B></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=right width="1%"><FONT face="Arial" size=1>39,346</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=right width="1%"><FONT face="Arial" size=1>(6,463</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD vAlign=top noWrap align=right width="1%"><FONT face="Arial" size=1>(16%</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="88%" bgColor=#c0c0c0><FONT face="Arial" size=1>Less: Stock-based
      compensation<BR>expense</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>(2,582</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(2,377</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(205</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(9%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="88%"><B><FONT face="Arial" size=1>Cash Operating
      Costs</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="1%"><B><FONT face="Arial" size=1>30,301</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="1%"><FONT face="Arial" size=1>36,969</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="1%"><FONT face="Arial" size=1>(6,668</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="1%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(18%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR></TABLE>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD width="100%">
      <P align=justify><FONT face="Arial" size=1>Cash Operating Costs is a
      non-GAAP measure. We use certain Non-GAAP measures to assist in assessing
      our financial performance. Non-GAAP measures do not have any standardized
      meaning prescribed by GAAP and are therefore unlikely to be comparable to
      similar measures presented by other companies. See reconciliation to GAAP
      in the Supplemental Non-GAAP Measures section. Cash Operating Costs
      adjusts operating expenses for stock-based compensation expense,
      depreciation and amortization, restructuring charges, acquisition costs
      and financing charges. </FONT></P></TD></TR></TABLE><BR>
<P align=justify><FONT face="Arial" size=2>Cash Operating Costs (see
Supplemental Non-GAAP Measures) from continuing operations for 2012 were $30.3
million, a decline of $6.7 million, or 18%, compared to 2011. The 18% reduction
in 2012 was driven by lower operating costs across the business as a result of
our continued cost reduction efforts including a 7% workforce reduction
initiated in July 2012, lower research and product development expense due to
the redirection of engineering resources to revenue bearing engineering service
projects, the receipt of government funding for certain of our research and
product development efforts, and by lower sales and marketing expense due to a
corporate leadership restructuring initiated in September 2011. Government
research funding is reflected as a cost offset to research and product
development expenses, whereas labour and material costs incurred on revenue
producing engineering services projects are reallocated from research and
product development expenses to cost of goods sold.</FONT></P>
<P align=justify><FONT face="Arial" size=2>As the Canadian dollar relative to
the U.S. dollar was relatively consistent for 2012 compared to 2011, foreign
exchange impacts on our Canadian operating cost base were relatively
insignificant. A 1% increase in the Canadian dollar, relative to the U.S.
dollar, negatively impacts annual Cash Operating Costs and Adjusted EBITDA by
approximately $0.3 million to $0.4 million. </FONT></P>
<P align=right><FONT face="Arial" size=1>Page 9 of 35</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=right><IMG src="ballard_logo.jpg" border=0></P>
<P align=justify><B><I><FONT face="Arial" size=2>Adjusted EBITDA (from
continuing operations)</FONT></I></B><FONT face="Arial" size=2> </FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="81%"><I><FONT face=Arial size=1>(Expressed in thousands of U.S.
      dollars)</FONT></I></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; TEXT-ALIGN: center" noWrap width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; TEXT-ALIGN: center" noWrap width="17%" colSpan=10><FONT face=Arial size=1>Years ended December
      31,</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="81%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid; TEXT-ALIGN: center" noWrap width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><B><FONT face=Arial size=1>2012</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" colSpan=2><FONT face=Arial size=1>$ Change</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>% Change</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="81%" bgColor=#c0c0c0><B><FONT face=Arial size=1>Adjusted EBITDA</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=Arial size=1>(22,076</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=Arial size=1>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>(27,913</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face=Arial size=1>5,837</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21%</FONT></TD></TR></TABLE>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD width="100%">
      <P align=justify><FONT face="Arial" size=1>EBITDA and</FONT><FONT face="Arial" size=1> </FONT><FONT face="Arial" size=1>Adjusted
      EBITDA are non-GAAP measures. We use certain Non-GAAP measures to assist
      in assessing our financial performance. Non-GAAP measures do not have any
      standardized meaning prescribed by GAAP and are therefore unlikely to be
      comparable to similar measures presented by other companies. See
      reconciliation to GAAP in the Supplemental Non-GAAP Measures section.
      Adjusted EBITDA adjusts EBITDA for stock-based compensation expense,
      transactional gains and losses, finance and other income, and acquisition
      costs. </FONT></P></TD></TR></TABLE>
<P align=justify><FONT face="Arial" size=2>Adjusted EBITDA (see Supplemental
Non-GAAP Measures) from continuing operations for 2012 was ($22.1) million, an
improvement of $5.8 million, or 21%, compared to 2011. The $5.8 million
reduction in Adjusted EBITDA loss in 2012 was driven by lower Cash Operating
Costs of $6.7 million due primarily to lower operating costs across the business
as a result of our continued cost reduction efforts including a 7% workforce
reduction initiated in July 2012, and by lower research and product development
expense primarily due to the redirection of engineering resources to revenue
bearing engineering service projects. Total gross margin was consistent year
over year despite the 22% decline in revenues from continuing operations as
margins improved on a percentage of revenue basis from 13% to 17% primarily as a
result of increased work performed on higher margin engineering services
projects, and by our ongoing product cost reduction efforts across all of our
platforms. These improvements in Adjusted EBITDA were partially offset by an
increase in restructuring charges of ($0.5) million from ($1.4) million in 2011
to ($1.9) million in 2012.</FONT></P>
<P align=justify><FONT face="Arial" size=2>As part of our focus on cost
optimization, we have taken steps to reduce our cost base in both 2012 and 2011.
In addition to the measures taken in April 2012 to reduce our manufacturing
overhead cost pool, we completed a 7% workforce reduction in July 2012 along
with other cost reduction activities. During 2011, we completed a corporate
leadership restructuring in September 2011 and a Dantherm Power leadership
restructuring in March 2011. These actions have resulted in the above noted
restructuring charges of ($1.9) million in 2012 and ($1.4) million in 2011.
</FONT></P>
<P align=justify><B><I><FONT face="Arial" size=2>Net loss attributable to
Ballard (from continuing operations) </FONT></I></B></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="81%"><I><FONT face=Arial size=1>(Expressed in thousands of U.S.
      dollars)</FONT></I></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; TEXT-ALIGN: center" noWrap width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; TEXT-ALIGN: center" noWrap width="17%" colSpan=10><FONT face=Arial size=1>Twelve months ended
      December 31,</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="81%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid; TEXT-ALIGN: center" noWrap width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><B><FONT face=Arial size=1>2012</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" colSpan=2><FONT face=Arial size=1>$ Change</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>% Change</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="81%" bgColor=#c0c0c0><B><FONT face=Arial size=1>Net loss attributable to
      Ballard</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=Arial size=1>(42,070</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=Arial size=1>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>(37,175</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face=Arial size=1>(4,985</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(13%)</FONT></TD></TR></TABLE><BR>
<P align=justify><FONT face="Arial" size=2>Net loss from continuing
operations attributable to Ballard for 2012 was ($42.1) million, or ($0.48) per
share, compared to net loss of ($37.2) million, or ($0.44) per share, in 2011.
The ($5.0) million increase in net loss for 2012 was driven by a Fuel Cell
Products goodwill impairment charge of ($10.0) million which more than offset
improvements in Adjusted EBITDA loss of $5.8 million. Net loss from continuing
operations in 2012 and 2011 also includes impairment charges related to a
write-down of manufacturing equipment of ($0.6) million and ($1.7) million,
respectively.</FONT></P>
<P align=justify><FONT face="Arial" size=2>Excluding the impact of these
impairment charges in continuing operations of ($10.6) million in 2012 and
($1.7) million in 2011, Normalized Net Loss (see Supplemental Non-GAAP Measures)
in 2012 would have improved by $4.0 million, or 11%, as compared to
2011.</FONT></P>
<P align=right><FONT face="Arial" size=1>Page 10 of 35</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=right><IMG src="ballard_logo.jpg" border=0></P>
<P align=justify><FONT face="Arial" size=2>Net loss from continuing
operations attributable to Ballard excludes the net loss attributed to the
non-controlling interest of Dantherm A/S and Danfoss A/S in the losses of
Dantherm Power as a result of their 48% total equity interest in 2012 and 2011,
and the results of discontinued operations. Net loss attributed to
non-controlling interests for 2012 was ($1.3) million, as compared to ($2.7)
million for 2011. The reduced loss in 2012 at Dantherm Power is primarily a
result of improved gross margins combined with lower operating costs as a result
of our continued cost reduction efforts. Net loss from discontinued operations
in 2012 was ($0.1) million, as compared to net income in 2011 of $3.8 million.
Net loss from discontinued operations in 2012 includes a goodwill impairment
charge of ($1.8) million and a write-down of property, plant and equipment of
($0.5) million. </FONT></P>
<P align=justify><B><I><FONT face="Arial" size=2>Cash used in operating
activities</FONT></I></B><FONT face="Arial" size=2> </FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="81%"><I><FONT face=Arial size=1>(Expressed in thousands of U.S.
      dollars)</FONT></I></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; TEXT-ALIGN: center" noWrap width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; TEXT-ALIGN: center" noWrap width="17%" colSpan=10><FONT face=Arial size=1>Twelve months ended
      December 31,</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="81%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid; TEXT-ALIGN: center" noWrap width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><B><FONT face=Arial size=1>2012</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" colSpan=2><FONT face=Arial size=1>$ Change</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>% Change</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="81%" bgColor=#c0c0c0><B><FONT face=Arial size=1>Cash used in operating
      activities</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=Arial size=1>(28,146</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=Arial size=1>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>(33,221</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face=Arial size=1>5,075</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15%</FONT></TD></TR></TABLE>
<P align=justify><FONT face="Arial" size=2>Cash used in operating activities
in 2012 was ($28.1) million, consisting of cash operating losses of ($22.2)
million and working capital requirements of ($5.9) million. Cash used in
operating activities in 2011 was ($33.2) million, consisting of cash operating
losses of ($26.5) million and working capital requirements of ($6.7) million.
The $5.1 million, or 15%, decline in cash used by operating activities in 2012
as compared to 2011 was driven by reductions in cash operating losses of $4.3
million combined with lower working capital requirements of $0.8 million.
</FONT></P>
<P align=justify><FONT face="Arial" size=2>The reduction in cash operating
losses of $4.3 million is primarily a result of the 17%, or $3.8 million,
improvement in Adjusted EBITDA from both continuing and discontinued operations.
Total working capital requirements of ($5.9) million in 2012 were driven by
lower accounts payable and accrued liabilities of ($10.5) million due to
increased supplier payments made for higher fourth quarter of 2011 and first
three quarter of 2012 inventory purchases combined with the payment of accrued
2011 annual employee bonuses, partially offset by lower inventory of $4.4
million as we consumed previously built-up or acquired inventory in order to
fulfill the higher product shipments in the fourth quarter of 2012.</FONT></P>
<P align=justify><B><FONT face="Arial" size=2>RESULTS OF DISCONTINUED
OPERATIONS &#150; Fourth Quarter of 2012 </FONT></B></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="87%"><EM><FONT face=Arial size=1>(Expressed in thousands of U.S. dollars)</FONT></EM></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid; text-align: center" noWrap width="12%" colSpan=11><FONT face=Arial size=1>Three months ended December
      31,</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="87%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=1>2012</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid; text-align: center" noWrap width="1%"><FONT face="Arial" size=1>$ Change</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid; text-align: center" noWrap width="3%" colSpan=2><FONT face="Arial" size=1>% Change</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="87%" bgColor=#c0c0c0><FONT face="Arial" size=1>Revenues</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>4,783</FONT></B></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>4,023</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>760</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>19%</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="87%"><FONT face="Arial" size=1>Cost of goods sold</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=right width="1%"><B><FONT face="Arial" size=1>3,265</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=right width="1%"><FONT face="Arial" size=1>2,824</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=right width="1%"><FONT face="Arial" size=1>441</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=right width="2%"><FONT face="Arial" size=1>16%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=1></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="87%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross
      margin</FONT></B></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>1,518</FONT></B></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>1,199</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>319</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>27%</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="87%"><FONT face="Arial" size=1>Operating
      expenses</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=right width="1%"><B><FONT face="Arial" size=1>(495</FONT></B></TD>
    <TD vAlign=top noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=right width="1%"><FONT face="Arial" size=1>(488</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=right width="1%"><FONT face="Arial" size=1>(7</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD vAlign=top noWrap align=right width="2%"><FONT face="Arial" size=1>(1%</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="87%" bgColor=#c0c0c0><FONT face="Arial" size=1>Impairment charge on<BR>property, plant
      and<BR>equipment</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>(500</FONT></B></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(500</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD vAlign=top noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(100%</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="87%"><FONT face="Arial" size=1>Impairment
      charge on<BR>goodwill</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=right width="1%"><B><FONT face="Arial" size=1>(1,815</FONT></B></TD>
    <TD vAlign=top noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=right width="1%"><FONT face="Arial" size=1>(1,815</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD vAlign=top noWrap align=right width="2%"><FONT face="Arial" size=1>(100%</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="87%" bgColor=#c0c0c0><FONT face="Arial" size=1>Income taxes</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>(7</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(30</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>23</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>77%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="87%"><B><FONT face="Arial" size=1>Net earnings (loss)<BR>from
      discontinued<BR>operations</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%"><B><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="1%"><B><FONT face="Arial" size=1>(1,299</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="1%"><FONT face="Arial" size=1>681</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="1%"><FONT face="Arial" size=1>(1,980</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="2%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(291%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR></TABLE><BR>
<P align=justify><FONT face="Arial" size=2>Revenues from the discontinued
Material Products segment in the fourth quarter of 2012 of $4.8 million
increased 19%, or $0.8 million, as a result of higher shipments of fuel cell GDL
products and relatively stable shipments of carbon friction material
products.</FONT></P>
<P align=justify><FONT face="Arial" size=2>Impairment charges in 2012 were
determined based on a fair value less costs to sell assessment which compared
the segment&#146;s carrying value at December 31, 2012 to the actual net proceeds
received on disposition on January 31, 2013. As a result of this assessment, we
recorded a ($1.8) million write-off of Material Products goodwill and a ($0.5)
million write-down of property, plant and equipment in the fourth quarter of
2012.</FONT></P>
<P align=right><FONT face="Arial" size=1>Page 11 of 35</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=right><IMG src="ballard_logo.jpg" border=0></P>
<P align=justify><B><FONT face="Arial" size=2>RESULTS OF DISCONTINUED
OPERATIONS &#150; Year ended December 31, 2012 </FONT></B></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="88%"><EM><FONT face=Arial size=1>(Expressed in thousands of U.S. dollars)</FONT></EM></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid; text-align: center" noWrap width="11%" colSpan=11><FONT face=Arial size=1>Years ended December
  31,</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="88%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=1>2012</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>$ Change</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>% Change</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="88%" bgColor=#c0c0c0><FONT face="Arial" size=1>Revenues</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>15,540</FONT></B></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>20,236</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(4,696</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(23%</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="88%"><FONT face="Arial" size=1>Cost of goods sold</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=right width="1%"><B><FONT face="Arial" size=1>11,159</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=right width="1%"><FONT face="Arial" size=1>13,630</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=right width="1%"><FONT face="Arial" size=1>(2,471</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=right width="1%"><FONT face="Arial" size=1>(18%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="88%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross
      margin</FONT></B></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>4,381</FONT></B></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>6,606</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(2,225</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(34%</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="88%"><FONT face="Arial" size=1>Operating
      expenses</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=right width="1%"><B><FONT face="Arial" size=1>(2,053</FONT></B></TD>
    <TD vAlign=top noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=right width="1%"><FONT face="Arial" size=1>(2,602</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=right width="1%"><FONT face="Arial" size=1>549</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=right width="1%"><FONT face="Arial" size=1>21%</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=1></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="88%" bgColor=#c0c0c0><FONT face="Arial" size=1>Impairment charge on</FONT><BR><FONT face="Arial" size=1>property, plant and</FONT><BR><FONT face="Arial" size=1>equipment</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>(500</FONT></B></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(500</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(100%</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="88%"><FONT face="Arial" size=1>Impairment
      charge on</FONT><BR><FONT face="Arial" size=1>goodwill</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=right width="1%"><B><FONT face="Arial" size=1>(1,815</FONT></B></TD>
    <TD vAlign=top noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=right width="1%"><FONT face="Arial" size=1>(1,815</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD vAlign=top noWrap align=right width="1%"><FONT face="Arial" size=1>(100%</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="88%" bgColor=#c0c0c0><FONT face="Arial" size=1>Income taxes</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>(78</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(249</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>171</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>69%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="88%"><B><FONT face="Arial" size=1>Net earnings
      (loss)</FONT></B><BR><B><FONT face="Arial" size=1>from
      discontinued</FONT></B><BR><B><FONT face="Arial" size=1>operations</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="1%"><B><FONT face="Arial" size=1>(65</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="1%"><FONT face="Arial" size=1>3,755</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="1%"><FONT face="Arial" size=1>(3,820</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="1%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(102%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR></TABLE><BR>
<P align=justify><FONT face="Arial" size=2>Revenues from the discontinued
Material Products segment in 2012 of $15.5 million were down (23%), or ($4.7)
million as a result of lower shipments of both fuel cell GDL products and carbon
friction material products. Fuel cell GDL product shipments were negatively
impacted by ongoing technical issues experienced by a third party fuel cell
customer unrelated to our GDL products, whereas carbon friction material product
shipments were negatively impacted by the timing of customer programs and
inventory levels. </FONT></P>
<P align=justify><FONT face="Arial" size=2>Impairment charges in 2012 were
determined based on a fair value less costs to sell assessment which compared
the segment&#146;s carrying value at December 31, 2012 to the actual net proceeds
received on disposition on January 31, 2013. As a result of this assessment, we
recorded a ($1.8) million write-off of Material Products goodwill and a ($0.5)
million write-down of property, plant and equipment in the fourth quarter of
2012. </FONT></P>
<P align=justify><B><FONT face="Arial" size=2>OPERATING EXPENSES AND OTHER
ITEMS FROM CONTINUING OPERATIONS </FONT></B></P>
<P align=justify><B><I><FONT face="Arial" size=2>Research and product
development expenses </FONT></I></B></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="87%"><I><FONT face="Arial" size=1>(Expressed in thousands of U.S.
      dollars)</FONT></I></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; text-align: center" noWrap width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; text-align: center" noWrap width="11%" colSpan=11><FONT face="Arial" size=1>Three months ended December
    31,</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="87%"><B><FONT face="Arial" size=1>Research and product
      development</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=1>2012</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>$ Change</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>% Change</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="87%" bgColor=#c0c0c0><FONT face="Arial" size=1>Research and product development expense</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>4,677</FONT></B></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>5,041</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(364</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(7%</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="87%"><FONT face="Arial" size=1>Less: depreciation and amortization
      expense</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=right width="1%"><B><FONT face="Arial" size=1>(449</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=right width="1%"><FONT face="Arial" size=1>(957</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=right width="1%"><FONT face="Arial" size=1>508</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=right width="1%"><FONT face="Arial" size=1>53%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=1></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="87%" bgColor=#c0c0c0><FONT face="Arial" size=1>Research and product development
      (operating</FONT><BR><FONT face="Arial" size=1>cost)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>4,228</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>4,084</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>144</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>4%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1></FONT></TD></TR>
  <TR>
    <TD width="99%" colSpan=13>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="87%"><I><FONT face="Arial" size=1>(Expressed in thousands of U.S.
      dollars)</FONT></I></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; text-align: center" noWrap width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; text-align: center" noWrap width="11%" colSpan=11><FONT face="Arial" size=1>Years ended December 31,</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="87%"><B><FONT face="Arial" size=1>Research and product
      development</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=1>2012</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>$ Change</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>% Change</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="87%" bgColor=#c0c0c0><FONT face="Arial" size=1>Research and product development expense</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>19,273</FONT></B></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>24,896</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(5,623</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(23%</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="87%"><FONT face="Arial" size=1>Less: depreciation and amortization
      expense</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=right width="1%"><B><FONT face="Arial" size=1>(2,593</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=right width="1%"><FONT face="Arial" size=1>(3,858</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=right width="1%"><FONT face="Arial" size=1>1,265</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=right width="1%"><FONT face="Arial" size=1>33%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="1%"><FONT face="Arial" size=1></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="87%" bgColor=#c0c0c0><FONT face="Arial" size=1>Research and product development
      (operating</FONT><BR><FONT face="Arial" size=1>cost)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>16,680</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>21,038</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(4,358</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(21%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR></TABLE><BR>
<P align=right><FONT face="Arial" size=1>Page 12 of 35</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=right><IMG src="ballard_logo.jpg" border=0></P>
<P align=justify><B><I><FONT face="Arial" size=2>Research and product
development</FONT></I></B><FONT face="Arial" size=2> expenses for the three
months ended December 31, 2012 were $4.7 million, a decrease of ($0.4) million,
or 7%, compared to the corresponding period of 2011. Excluding depreciation and
amortization expense of ($0.4) million and ($1.0) million, respectively,
research and product development expense was effectively flat compared to the
fourth quarter of 2011. Reductions in 2012 as a result of the redirection of
engineering resources to revenue bearing engineering service projects were
offset by higher share-based compensation expense due to a downward adjustment
to accrued share-based compensation expense for 2011 that was recorded in the
fourth quarter of 2011.</FONT></P>
<P align=justify><FONT face="Arial" size=2>Research and product development
expenses for the year ended December 31, 2012 were $19.3 million, a decrease of
($5.6) million, or 23%, compared to 2011. Excluding depreciation and
amortization expense of ($2.6) million and ($3.9) million, respectively,
research and product development expense declined ($4.4) million, or 21%,
compared to 2011. The 21% reduction in 2012 was primarily as a result of the
redirection of engineering resources to revenue bearing engineering service
projects, by the receipt of government funding for certain of our research and
product development efforts, and by lower operating costs across the business
due to our continued cost reduction efforts including a 7% workforce reduction
initiated in July 2012, partially offset by higher share-based compensation
expense in 2012.</FONT></P>
<P align=justify><FONT face="Arial" size=2>Government research funding is
reflected as a cost offset to research and product development expenses, whereas
labour and material costs incurred on revenue producing engineering services
projects are reallocated from research and product development expenses to cost
of goods sold. </FONT></P>
<P align=justify><B><I><FONT face="Arial" size=2>General and administrative
expenses</FONT></I></B></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="88%"><I><FONT face="Arial" size=1>(Expressed in thousands of U.S.
      dollars)</FONT></I></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; text-align: center" noWrap width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; text-align: center" noWrap width="11%" colSpan=11><FONT face="Arial" size=1>Three months ended December
    31,</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="88%"><B><FONT face="Arial" size=1>General and administrative</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=1>2012</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>$ Change</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>% Change</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face="Arial" size=1>General and
      administrative expense</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>3,419</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>2,256</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>1,163</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>52%</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%"><FONT face="Arial" size=1>Less: Depreciation and
      amortization expense</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>(55</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>(77</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>22</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>29%</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face="Arial" size=1>Less:
      Restructuring charges</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(79</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>79</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;100%</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%"><FONT face="Arial" size=1>Less: Acquisition and
      integration costs</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>(91</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>(91</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>n/a</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="88%" bgColor=#c0c0c0><FONT face="Arial" size=1>Less: Financing charges</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>(564</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(564</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>n/a</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="88%"><FONT face="Arial" size=1>General and administrative (operating cost)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=1>2,709</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>2,100</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>609</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>29%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1></FONT></TD></TR>
  <TR>
    <TD width="100%" colSpan=13>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="88%"><I><FONT face="Arial" size=1>(Expressed in thousands of U.S.
      dollars)</FONT></I></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; text-align: center" noWrap width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; text-align: center" noWrap width="11%" colSpan=11><FONT face="Arial" size=1>Years ended December 31,</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="88%"><B><FONT face="Arial" size=1>General and administrative</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=1>2012</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>$ Change</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" colSpan=2><FONT face="Arial" size=1>% Change</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face="Arial" size=1>General and
      administrative expense</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>12,306</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>11,455</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>851</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>7%</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%"><FONT face="Arial" size=1>Less: Depreciation and
      amortization expense</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>(235</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>(306</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>71</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>23%</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face="Arial" size=1>Less:
      Restructuring charges</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>(1,931</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(1,356</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(575</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(42%</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%"><FONT face="Arial" size=1>Less: Acquisition and
      integration costs</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>(274</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>(274</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>n/a</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="88%" bgColor=#c0c0c0><FONT face="Arial" size=1>Less: Financing charges</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>(564</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(564</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>n/a</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="88%"><FONT face="Arial" size=1>General and administrative (operating cost)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=1>9,302</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>9,793</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>(491</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>(5%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR></TABLE><BR>
<P align=justify><B><I><FONT face="Arial" size=2>General and
administrative</FONT></I></B><B><FONT face="Arial" size=2> </FONT></B><FONT face="Arial" size=2>expenses for the three months ended December 31, 2012
were $3.4 million, an increase of $1.2 million, or 52%, compared to the
corresponding period of 2011. Excluding acquisition and integration costs
related to the Idatech acquisition of ($0.1) million and financing charges of
($0.6) million related to withdrawn financing efforts, general and
administrative expense was $2.7 million, an increase of $0.6 million, or 29%,
compared to the fourth quarter of 2011. The 29% increase in the fourth quarter
of 2012 was due primarily to higher share-based compensation expense as a result
of a downward adjustment to accrued share-based compensation expense for 2011
that was recorded in the fourth quarter of 2011. General and administrative
expenses also include impairment losses on trade receivables of ($0.2) million
and ($0.3) million, respectively, in the fourth quarters of 2012 and
2011.</FONT></P>
<P align=right><FONT face="Arial" size=1>Page 13 of 35</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=right><IMG src="ballard_logo.jpg" border=0></P>
<P align=justify><FONT face="Arial" size=2>General and
administrative</FONT><B><FONT face="Arial" size=2> </FONT></B><FONT face="Arial" size=2>expenses for the year ended December 31, 2012 were $12.3
million, an increase of $0.9 million, or 7%, compared to 2011. Excluding
restructuring charges of ($1.9) million and ($1.4) million, respectively,
depreciation and amortization expense of ($0.2) million and ($0.3) million,
respectively, and 2012 acquisition and integration costs related to the Idatech
acquisition of ($0.3) million and financing charges of ($0.6) million related to
withdrawn financing efforts, general and administrative expense, general and
administrative expense was $9.3 million, a decrease of ($0.5) million, or 5%,
compared to 2011. The 5% reduction in 2012 was primarily as result of our
continued cost reduction efforts including a 7% workforce reduction initiated in
July 2012, partially offset by higher share-based compensation expense in 2012.
General and administrative expenses also include impairment losses on trade
receivables of ($0.2) million and ($0.3) million, respectively, in 2012 and
2011.</FONT></P>
<P align=justify><FONT face="Arial" size=2>Restructuring</FONT><B><I><FONT face="Arial" size=2> </FONT></I></B><FONT face="Arial" size=2>charges of
($1.9) million in 2012 relate primarily to the 7% workforce reduction initiated
in July 2012 and a minor restructuring focused on manufacturing overhead cost
reduction initiated in April 2012. Restructuring</FONT><B><I><FONT face="Arial" size=2> </FONT></I></B><FONT face="Arial" size=2>charges of
($1.4) million in 2011 relate primarily to a corporate leadership restructuring
initiated in September 2011 and a Dantherm Power leadership restructuring
initiated in March 2011.</FONT></P>
<P align=justify><B><I><FONT face="Arial" size=2>Sales and marketing expenses
</FONT></I></B></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="81%"><I><FONT face=Arial size=1>(Expressed in thousands of U.S.
      dollars)</FONT></I></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; TEXT-ALIGN: center" noWrap width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; TEXT-ALIGN: center" noWrap width="17%" colSpan=10><FONT face=Arial size=1>Three months ended December
      31,</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="81%"><STRONG><FONT face=Arial size=1>Sales and
      marketing</FONT></STRONG></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid; TEXT-ALIGN: center" noWrap width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><B><FONT face=Arial size=1>2012</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" colSpan=2><FONT face=Arial size=1>$ Change</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>% Change</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="81%" bgColor=#c0c0c0><FONT face=Arial size=1>Sales and marketing
      expense</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1><B>$</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=Arial size=1>1,951</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=Arial size=1></FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>1,695</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="2%" bgColor=#c0c0c0><FONT face=Arial size=1>256</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15%</FONT></TD></TR></TABLE><BR>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="81%"><I><FONT face=Arial size=1>(Expressed in thousands of U.S.
      dollars)</FONT></I></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; TEXT-ALIGN: center" noWrap width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; TEXT-ALIGN: center" noWrap width="17%" colSpan=10><FONT face=Arial size=1>Years ended December
      31,</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="81%"><STRONG><FONT face=Arial size=1>Sales and
      marketing</FONT></STRONG></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid; TEXT-ALIGN: center" noWrap width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><B><FONT face=Arial size=1>2012</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face=Arial size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" colSpan=2><FONT face=Arial size=1>$ Change</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>% Change</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="81%" bgColor=#c0c0c0><FONT face=Arial size=1>Sales and marketing
      expense</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1><B>$</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=Arial size=1>6,901</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=Arial size=1></FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>8,515</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="2%" bgColor=#c0c0c0><FONT face=Arial size=1>(1,614</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" vAlign=top noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(19%)</FONT></TD></TR></TABLE><BR>
<P align=justify><B><FONT face="Arial" size=2>Sales and
marketing</FONT></B><B><I><FONT face="Arial" size=2> </FONT></I></B><FONT face="Arial" size=2>expenses for the three months ended December 31, 2012
were $2.0 million, an increase of $0.3 million, or 15% compared to the
corresponding period of 2011. The 15% increase in the fourth quarter of 2012 is
as a result of increased investment in sales and marketing capacity in the
backup power market due to our acquisition of the Idatech assets in August 2012,
combined with higher share-based compensation expense due to a downward
adjustment to accrued share-based compensation expense for 2011 that was
recorded in the fourth quarter of 2011.</FONT></P>
<P align=justify><FONT face="Arial" size=2>Sales and
marketing</FONT><B><I><FONT face="Arial" size=2> </FONT></I></B><FONT face="Arial" size=2>expenses for the year ended December 31, 2012 were $6.9
million, a decrease of $1.6 million, or 19% compared to 2011. The 19% reduction
in 2012 was primarily as a result of our continued cost reduction efforts across
the business which included a 7% workforce reduction initiated in July 2012 and
a corporate leadership restructuring initiated in September 2011, partially
offset by increased investment in sales and marketing capacity in the backup
power market due to our acquisition of the Idatech assets in August 2012.
</FONT></P>
<P align=right><FONT face="Arial" size=1>Page 14 of 35</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=right><IMG src="ballard_logo.jpg" border=0></P>
<P align=justify><B><I><FONT face="Arial" size=2>Finance income (loss) and
other</FONT></I></B><B><FONT face="Arial" size=2> </FONT></B><FONT face="Arial" size=2>for the three months and year ended December 31, 2012 was
$0.2 million and $0.1 million, respectively, compared to $0.1 million and $0.2
million, respectively, for the corresponding periods of 2011. The following
tables provide a breakdown of our finance and other income (loss) for the
reported periods: </FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="88%"><I><FONT face="Arial" size=1>(Expressed in thousands of U.S.
      dollars)</FONT></I></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; text-align: center" noWrap width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; text-align: center" noWrap width="11%" colSpan=11><FONT face="Arial" size=1>Three months ended December
    31,</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="88%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=1>2012</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>$ Change</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>% Change</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face="Arial" size=1>Employee future
      benefit plan expense</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>(29</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(37</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>8</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>22%</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%"><FONT face="Arial" size=1>Investment and other
      income</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>48</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>77</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>(29</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>(38%</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="88%" bgColor=#c0c0c0><FONT face="Arial" size=1>Foreign exchange gain (loss)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>148</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>38</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>110</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>289%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="88%"><B><FONT face="Arial" size=1>Finance income (loss) and other</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=1>167</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>78</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>89</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>114%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1></FONT></TD></TR>
  <TR>
    <TD width="100%" colSpan=13>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="88%"><I><FONT face="Arial" size=1>(Expressed in thousands of U.S.
      dollars)</FONT></I></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; text-align: center" noWrap width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; text-align: center" noWrap width="11%" colSpan=11><FONT face="Arial" size=1>Years ended December 31,</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="88%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=1>2012</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>$ Change</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>% Change</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face="Arial" size=1>Employee future
      benefit plan expense</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>(29</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(37</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>8</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>22%</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%"><FONT face="Arial" size=1>Investment and other
      income</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><B><FONT face="Arial" size=1>238</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>303</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>(65</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=right width="1%"><FONT face="Arial" size=1>(21%</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="88%" bgColor=#c0c0c0><FONT face="Arial" size=1>Foreign exchange gain (loss)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>(178</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(71</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(107</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>(151%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="88%"><B><FONT face="Arial" size=1>Finance income (loss) and other</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><B><FONT face="Arial" size=1>31</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>195</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>(164</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face="Arial" size=1>(84%</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR></TABLE><BR>
<P align=justify><FONT face="Arial" size=2>Employee future benefit plan
expense for the three months and years ended December 31, 2012 and 2011 were
nominal. Employee future benefit plan expense primarily represents the excess of
interest cost over the expected return on plan assets on a curtailed defined
benefit pension plan for our current and former United States employees
</FONT></P>
<P align=justify><FONT face="Arial" size=2>Foreign exchange gains and losses
are attributable primarily to the effect of the changes in the value of the
Canadian dollar, relative to the U.S. dollar, on our Canadian dollar-denominated
net monetary position. Foreign exchange gains and losses are also impacted by
the conversion of Dantherm Power&#146;s assets and liabilities from the Danish Kroner
to the U.S. dollar at exchange rates in effect at each reporting date.
</FONT></P>
<P align=justify><FONT face="Arial" size=2>Investment and other income of
$0.2 million and $0.3 million, respectively, for the years ended December 31,
2012 and 2011 was earned primarily on our cash, cash equivalents and short-term
investments.</FONT></P>
<P align=justify><B><I><FONT face="Arial" size=2>Finance
expense</FONT></I></B><FONT face="Arial" size=2> for the three months and
year ended December 31, 2012 was ($0.5) million and ($1.7) million,
respectively, compared to ($0.5) million and ($1.4) million, respectively, for
the corresponding periods of 2011. Finance expense relates primarily to the sale
and leaseback of our head office building in Burnaby, British Columbia which was
completed on March 9, 2010. Due to the long term nature of the lease, the
leaseback of the building qualifies as a finance (or capital) lease. </FONT></P>
<P align=justify><B><I><FONT face="Arial" size=2>Gain (loss) on sale of
property, plant and equipment </FONT></I></B><FONT face="Arial" size=2>for
the three months and year ended December 31, 2012 was ($0.1) million, compared
to $0.7 million for the three months and year ended December 31, 2011. The gain
in 2011 relates primarily to a gain on sale of certain property, plant and
equipment to Mercedes-Benz Canada Inc. in conjunction with the sub-lease of
21,000 square feet of production space in Burnaby, B.C, effective in August
2011. </FONT></P>
<P align=justify><B><I><FONT face="Arial" size=2>Impairment loss on property,
plant and equipment </FONT></I></B><FONT face="Arial" size=2>for the three
months and year ended December 31, 2012 was ($0.6) million, compared to ($1.7)
million for the three months and year ended December 31, 2011, and relate to a
write-down of manufacturing equipment never put into use. </FONT></P>
<P align=justify><B><I><FONT face="Arial" size=2>Impairment loss on goodwill
</FONT></I></B><FONT face="Arial" size=2>for the three months and year ended
December 31, 2012 was ($10.0) million and consists of an impairment charge
related to our Fuel Cell Products segment. </FONT></P>

<P align=right><FONT face="Arial" size=1>Page 15 of 35</FONT></P>
<HR align=center width="100%" noShade SIZE=2>


<!--PART C-->
<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=right><IMG src="ballard_logo.jpg" border=0></P>
<P align=justify><B><I><FONT face="Arial" size=2>Net loss attributed to
non-controlling interests</FONT></I></B><FONT face="Arial" size=2> for the
three months and year ended December 31, 2012 was ($0.5)
million and ($1.3) million, respectively, compared to ($0.3) million and ($2.7)
million, respectively, for the corresponding periods of 2011. Amounts represent
the non-controlling interest of Dantherm A/S and Danfoss A/S in the losses of
Dantherm Power as a result of their 48% total equity interest during 2012 and
2011. The improved performance in 2012 at Dantherm Power is primarily a result
of improved gross margins as a result of increased higher margin engineering
services revenues and increased shipments of backup power systems, combined with
lower operating costs due to our continued cost reduction efforts which included
a leadership restructuring in the first quarter of 2011. These benefits were
partially offset by a restructuring charge recorded in the first quarter of 2011
related to the above noted Dantherm Power leadership restructuring.</FONT></P>
<P align=justify><B><FONT face="Arial" size=2>SUMMARY OF QUARTERLY RESULTS
FROM CONTINUING OPERATIONS </FONT></B></P>
<P align=justify><FONT face="Arial" size=2>The following table provides
summary financial data for our last eight quarters from continuing operations:
</FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="75%"><I><FONT face="Arial" size=1>(Expressed in thousands of U.S.
      dollars, except per share amounts</FONT></I></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; text-align: center" noWrap width="23%" colSpan=15><FONT face="Arial" size=1>Quarter ended,</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%"><I><FONT face="Arial" size=1>and weighted average shares outstanding which are
      expressed in</FONT></I></TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%"><I><FONT face="Arial" size=1>thousands)</FONT></I></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR>
    <TD noWrap align=left width="75%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>Dec 31,</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>Sep 30,</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>Jun 30,</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>Mar 31,</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="75%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>2012</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>2012</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>2012</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=Arial size=1>2012</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#c0c0c0><FONT face="Arial" size=1>Revenues from
      continuing operations</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>16,476</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>10,312</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>6,824</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>10,078</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%"><FONT face="Arial" size=1>Net income (loss) attributable
      to Ballard from</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>(16,809</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>(9,185</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>(7,416</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>(8,660</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%"><FONT face="Arial" size=1>continuing operations</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#c0c0c0><FONT face="Arial" size=1>Net income
      (loss) per share attributable to</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>(0.18</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>(0.10</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>(0.09</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>(0.10</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#c0c0c0><FONT face="Arial" size=1>Ballard from
      continuing operations, basic and</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#c0c0c0><FONT face="Arial" size=1>diluted</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="75%" bgColor=#ffffff><FONT face="Arial" size=1>Weighted average common shares outstanding</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="2%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#ffffff><FONT face="Arial" size=1>91,801</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#ffffff><FONT face="Arial" size=1>89,269</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#ffffff><FONT face="Arial" size=1>84,621</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#ffffff><FONT face="Arial" size=1>84,566</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#ffffff></TD></TR>
  <TR>
    <TD noWrap align=left width="75%">&nbsp;</TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%"></TD>
    <TD noWrap align=left width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>Dec 31,</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>Sep 30,</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>Jun 30,</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>Mar 31,</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="75%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#c0c0c0><FONT face="Arial" size=1>Revenues from
      continuing operations</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>16,973</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>15,071</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>13,595</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>10,134</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%"><FONT face="Arial" size=1>Net income (loss) attributable
      to Ballard from</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>(7,969</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>(8,337</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>(10,109</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>(10,760</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%"><FONT face="Arial" size=1>continuing operations</FONT></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#c0c0c0><FONT face="Arial" size=1>Net income
      (loss) per share attributable to</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>(0.09</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>(0.10</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>(0.12</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>(0.13</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#c0c0c0><FONT face="Arial" size=1>Ballard from
      continuing operations, basic and</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#c0c0c0><FONT face="Arial" size=1>diluted</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD NOWRAP STYLE="text-align: left; width: 75%; background-color: #ffffff; border-bottom: Black 1.5pt solid"><FONT face="Arial" size=1>Weighted average
      common shares outstanding</FONT></TD>
    <TD NOWRAP STYLE="text-align: left; width: 2%; background-color: #ffffff; border-bottom: Black 1.5pt solid"></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; background-color: #ffffff; border-bottom: Black 1.5pt solid"></TD>
    <TD NOWRAP STYLE="text-align: right; width: 3%; background-color: #ffffff; border-bottom: Black 1.5pt solid"><FONT face="Arial" size=1>84,549</FONT></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; background-color: #ffffff; border-bottom: Black 1.5pt solid"></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; background-color: #ffffff; border-bottom: Black 1.5pt solid"></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; background-color: #ffffff; border-bottom: Black 1.5pt solid"></TD>
    <TD NOWRAP STYLE="text-align: right; width: 3%; background-color: #ffffff; border-bottom: Black 1.5pt solid"><FONT face="Arial" size=1>84,548</FONT></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; background-color: #ffffff; border-bottom: Black 1.5pt solid"></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; background-color: #ffffff; border-bottom: Black 1.5pt solid"></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; background-color: #ffffff; border-bottom: Black 1.5pt solid"></TD>
    <TD NOWRAP STYLE="text-align: right; width: 3%; background-color: #ffffff; border-bottom: Black 1.5pt solid"><FONT face="Arial" size=1>84,456</FONT></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; background-color: #ffffff; border-bottom: Black 1.5pt solid"></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; background-color: #ffffff; border-bottom: Black 1.5pt solid"></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; background-color: #ffffff; border-bottom: Black 1.5pt solid"></TD>
    <TD NOWRAP STYLE="text-align: right; width: 3%; background-color: #ffffff; border-bottom: Black 1.5pt solid"><FONT face="Arial" size=1>84,205</FONT></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; background-color: #ffffff; border-bottom: Black 1.5pt solid"></TD></TR></TABLE><BR>
<P align=justify><B><FONT face="Arial" size=2>Summary of Quarterly
Results</FONT></B><FONT face="Arial" size=2>: There were no significant
seasonal variations in our quarterly results from continuing operations.
Variations in our net loss for the above periods were affected primarily by the
following factors: </FONT></P>
<ul style="text-align: justify; margin-left: 16px"><li><FONT face="Arial" size=2></FONT><B><FONT face="Arial" size=2>Revenues</FONT></B><FONT face="Arial" size=2>: Variations in fuel
cell revenues reflect the demand and timing of our customers&#146; fuel cell vehicle,
bus and fuel cell product deployments as well as the demand and timing of their
engineering services projects. Variations in fuel cell revenues also reflect the
timing of work performed and the achievements of milestones under long-term
fixed price contracts. Revenues were positively impacted in the third and fourth
quarters of 2012 by $2.1 million and $3.0 million, respectively, as a result of
our acquisition of Idatech&#146;s key assets and product lines as of August 1, 2012.
Revenues were positively impacted in 2011 by a manufacturing supply agreement
with Daimler and a Daimler subsidiary which was completed in October 2011.
Contract Automotive revenues of $9.3 million (Q1-11: $2.9 million, Q2-11: $4.6
million, Q3-11: $1.8 million, and Q4-11: $0.1 million) and Fuel Cell Products
revenues of $8.7 million (Q1-11: $2.4 million, Q2-11: $3.3 million, Q3-11: $2.6
million, Q4-11: $0.4 million) in 2011 were derived from this contract
manufacturing agreement. </FONT></li></ul>
<P align=right><FONT face="Arial" size=1>Page 16 of 35 </FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=right><IMG src="ballard_logo.jpg" border=0></P>
<UL style="MARGIN-LEFT: 16px; TEXT-ALIGN: justify"><LI><FONT face="Arial" size=2></FONT><B><FONT face="Arial" size=2>Operating expenditures</FONT></B><FONT face="Arial" size=2>:
  Operating expenses were negatively impacted by restructuring charges of ($1.6)
  million in the third quarter of 2012 as a result of a 7% workforce reduction,
  restructuring charges of ($0.4) million in the third quarter of 2011 due to a
  corporate leadership restructuring, and by restructuring charges of ($0.9)
  million in the first quarter of 2011 due to a leadership restructuring in
  Dantherm Power.</FONT><FONT face="Arial" size=2>Restructuring charges are
  recognized in general and administrative expense. </FONT><B><FONT face="Arial" size=2></FONT></B>
  <P align=justify><FONT face="Arial" size=2>Operating expenses also include
  the impact of changes in the value of the Canadian dollar, versus the U.S.
  dollar, on our Canadian dollar denominated expenditures.</FONT><B><FONT face="Arial" size=2> </FONT></B></P>
  </LI><LI>
  <P align=justify><B><FONT face="Arial" size=2>Impairment loss on property,
  plant and equipment</FONT></B><FONT face="Arial" size=2>: The net loss for
  the fourth quarter of 2012 and the fourth quarter of 2011 was negatively
  impacted by an impairment charge of ($0.6) million and ($1.7) million,
  respectively, related to the write-down of manufacturing equipment never put
  into use. </FONT></P>
  </LI><LI>
  <P align=justify><B><FONT face="Arial" size=2>Impairment loss on
  goodwill</FONT></B><FONT face="Arial" size=2>: The net loss for the fourth
  quarter of 2012 was negatively impacted by an impairment charge of ($10.0)
  million related to a write-down of goodwill in our Fuel Cell Products segment.
  </FONT></P></LI></UL>
<P align=justify><B><FONT face="Arial" size=2>CASH FLOWS </FONT></B></P>
<P align=justify><FONT face="Arial" size=2>Cash, cash equivalents and
short-term investments were $21.8 million (or $12.5 million net of Operating
Facility draws of $9.3 million) at December 31, 2012, compared to $46.2 million
(or $41.6 million net of Operating Facility draws of $4.6 million) at December
31, 2011. The decrease in cash, cash equivalents and short-term investments of
($24.4) million in 2012 was driven by a net loss (excluding non-cash items) of
($22.2) million, and by net working capital requirements of ($5.9) million.
These outflows were partially offset by net cash advances on our Operating
Facility of $4.8 million and by convertible debt financing of $0.9 million to
Dantherm Power by a non-controlling partner.</FONT></P>
<P align=justify><FONT face="Arial" size=2>For the three months ended December
31, 2012, cash used by operating activities was ($0.5) million, consisting of
cash operating losses of ($2.4) million partially offset by net working capital
inflows of $1.9 million. For the three months ended December 31, 2011, cash from
operating activities was $4.1 million, consisting of cash operating losses of
($4.7) million and net working capital inflows of $8.8 million. The ($4.6)
million increase in cash used by operating activities in the fourth quarter of
2012, as compared to the fourth quarter of 2011, was driven by reduced working
capital inflows of ($6.9) million partially offset by a reduction in cash
operating losses of $2.3 million. The reduction in cash operating losses of $2.3
million is primarily a result of a $1.8 million improvement in total Adjusted
EBITDA loss. In the fourth quarter of 2012, net working capital cash inflows of
$1.9 million were driven by lower inventory of $5.4 million as we consumed
previously built-up or acquired inventory in order to fulfill the higher product
shipments in the fourth quarter, and by higher deferred revenue and cost
recovery of $0.9 million as we received the next tranches of SDTC government
funding for our distributed generation and bus projects in advance of incurring
the related research and product development expenditures. These fourth quarter
of 2012 working capital inflows were partially offset by higher accounts
receivable of ($2.5) million due primarily to the timing of shipment versus
collection of our fuel cell product and service revenues, and by lower accounts
payable and accrued liabilities of ($2.6) million due to increased supplier
payments made for higher first three quarter of 2012 inventory purchases.
Working capital inflows of $8.8 million in the fourth quarter of 2011 were
driven by lower accounts receivable of $3.3 million due primarily to the timing
of collections of our fuel cell product and service revenues, lower inventory of
$1.9 million as we consumed previously built-up inventory in order to fulfill
the higher product shipments in the fourth quarter, and higher deferred revenue
and cost recovery of $2.0 million as we received the next tranches of SDTC
government funding for our distributed generation and bus projects in advance of
incurring the related research and product development expenditures.</FONT></P>
<P align=right><FONT face="Arial" size=1>Page 17 of 35 </FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=right><IMG src="ballard_logo.jpg" border=0></P>
<P align=justify><FONT face="Arial" size=2>For the year ended December 31,
2012, cash used by operating activities was ($28.1) million, consisting of cash
operating losses of ($22.2) million and working capital requirements of ($5.9)
million. For the year ended December 31, 2011, cash used by operating activities
was ($33.2) million, consisting of cash operating losses of ($26.5) million and
working capital requirements of ($6.7) million. The $5.1 million, or 15%,
decline in cash used by operating activities in 2012, as compared to 2011, was
driven by reductions in cash operating losses of $4.3 million combined with
lower working capital requirements of $0.8 million. The reduction in cash
operating losses of $4.3 million is primarily a result of the 17%, or $3.8
million, improvement in Adjusted EBITDA from both continuing and discontinued
operations. In 2012, net working capital outflows of ($5.9) million were driven
by lower accounts payable and accrued liabilities of ($10.5) million due to
increased supplier payments made for higher fourth quarter of 2011 and first
three quarter of 2012 inventory purchases combined with the payment of accrued
2011 annual employee bonuses, partially offset by lower inventory of $4.4
million as we consumed previously built-up or acquired inventory in order to
fulfill the higher product shipments in the fourth quarter. Working capital
outflows of ($6.7) million in 2011 were driven by higher accounts receivable of
($4.3) million due primarily to the timing of collections of our fuel cell
product and service revenues, higher inventory of ($1.3) million due primarily
to the buildup of inventory to support expected higher product shipments 2012,
and by lower accounts payable and accrued liabilities of ($1.7) million due
primarily to the timing of supplier payments.</FONT></P>
<P align=justify><FONT face="Arial" size=2>Investing activities resulted in
cash inflows of $0.4 million and $13.0 million, respectively, for the three
months and year ended December 31, 2012, compared to cash outflows of ($15.5)
million ($3.8) million, respectively, for the corresponding periods of 2011.
Changes in short-term investments resulted in cash inflows of $0.6 million and
$13.8 million, respectively, for the three month and year ended December 31,
2012, compared to cash outflows of ($15.6) million and ($3.4) million,
respectively, for the corresponding periods of 2011. Balances changed between
cash equivalents and short-term investments as we make investment decisions with
regards to the term of investments and our future cash requirements.</FONT></P>
<P align=justify><FONT face="Arial" size=2>Other investing activities in 2012
consist primarily of proceeds on sale of $0.4 million for previously impaired
manufacturing equipment, less capital expenditures of ($1.2) million. Other
investing activities in 2011 consist primarily of proceeds on sale of $1.7
million received primarily from Daimler on the closing of the facilities
sub-lease agreement, proceeds on sale and leaseback of capital equipment of $1.9
million, and capital expenditures of ($4.1) million primarily for manufacturing
equipment in order to build production capacity. </FONT></P>
<P align=justify><FONT face="Arial" size=2>Financing activities resulted in
cash outflows of ($0.4) million and inflows of $4.6 million, respectively, for
the three months and year ended December 31, 2012, compared to cash outflows of
($3.2) million and inflows of $5.1 million, respectively, for the corresponding
periods of 2011. Financing activities in 2012 primarily represent advances, net
of repayments, of $4.8 million on our Operating Facility which is used to assist
with the financing of our working capital requirements. Financing activities in
2012 also include proceeds on convertible debenture financing from the Dantherm
Power non-controlling interests to Dantherm Power of $0.9 million and finance
lease payments of ($1.0) million. Financing activities in 2011 consist primarily
of net cash advances on our Operating Facility of $4.6 million, proceeds on
convertible debenture financing from the Dantherm Power non-controlling
interests to Dantherm Power of $1.7 million, less finance lease payments of
($0.8) million.</FONT></P>
<P align=right><FONT face="Arial" size=1>Page 18 of 35 </FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=right><IMG src="ballard_logo.jpg" border=0></P>
<P align=justify><B><FONT face="Arial" size=2>LIQUIDITY AND CAPITAL RESOURCES
</FONT></B></P>
<P align=justify><FONT face="Arial" size=2>At December 31, 2012, we had total
Liquidity of $12.5 million. We measure Liquidity as our net cash position,
consisting of the sum of our cash, cash equivalents and short-term investments
of $21.8 million, net of amounts drawn on our $10 million Canadian demand
revolving facility (&#147;Operating Facility&#148;) of $9.3 million. The Operating
Facility is used to assist in financing our short term working capital
requirements and is secured by a hypothecation of our cash, cash equivalents and
short-term investments. </FONT></P>
<P align=justify><FONT face="Arial" size=2>We also have a $3.3 million
Canadian capital leasing facility (&#147;Leasing Facility&#148;) which is used to finance
the acquisition and / or lease of operating equipment and is secured by a
hypothecation of our cash, cash equivalents and short-term investments. At
December 31, 2012, $2.5 million was outstanding on the Leasing
Facility.</FONT></P>
<P align=justify><FONT face="Arial" size=2>Our Liquidity objective is to
maintain cash balances sufficient to fund at least six quarters of forecasted
cash used by operating activities at all times. Our strategy to attain this
objective is to continue our drive to attain profitable operations that are
sustainable by executing a business plan aimed at continued focus on Fuel Cell
Products revenue growth, improving overall gross margins, minimizing Cash
Operating Costs, managing working capital requirements, and securing additional
financing to fund our operations as needed until we do achieve profitable
operations that are sustainable. While we believe that we have adequate
liquidity in cash, working capital and non-core asset monetization opportunities
(consisting primarily of the subsequent disposition of our Materials Product
segment for gross cash proceeds of $10.5 million on January 31, 2013) to finance
our operations, we may also choose to pursue additional liquidity through the
issuance of debt or equity in private or public market financings. To facilitate
such an action, we filed a short form base shelf prospectus (&#147;Prospectus&#148;) in
April 2012 in each of the provinces and territories of Canada, except Quebec,
and a corresponding shelf registration statement on Form F-10 (&#147;Registration
Statement&#148;) with the United States Securities and Exchange Commission, which has
been declared effective. These filings will enable offerings of equity
securities during the effective period of the Prospectus and Registration
Statements. However, no assurance can be given that any such additional
liquidity will be available or that, if available, it can be obtained on terms
favorable to the Company. </FONT></P>
<P align=justify><FONT face="Arial" size=2>Failure to achieve this Liquidity
objective will have a material adverse effect on our financial condition and
results of operations including our ability to continue as a going concern.
There are also various risks and uncertainties affecting our ability to achieve
this Liquidity objective including, but not limited to, the market acceptance
and rate of commercialization of our products, the ability to successfully
execute our business plan, and general global economic conditions, certain of
which are beyond our control. While we continue to make significant investments
in product development and market development activities necessary to
commercialize our products, and make increased investments in working capital as
we grow our business, our actual liquidity requirements will also vary and will
be impacted by our relationships with our lead customers and strategic partners,
our success in developing new channels to market and relationships with
customers, our success in generating revenue growth from near-term product
opportunities, our success in managing our operating expense and working capital
requirements, foreign exchange fluctuations, and the progress and results of our
research, development and demonstration programs.</FONT></P>
<P align=right><FONT face="Arial" size=1>Page 19 of 35 </FONT></P>
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<P align=right><IMG src="ballard_logo.jpg" border=0></P>
<P align=justify><B><FONT face="Arial" size=2>2013 BUSINESS
OUTLOOK</FONT></B></P>
<P align=justify><FONT face="Arial" size=2>On a continuing operations basis,
we expect: </FONT></P>
<UL style="TEXT-ALIGN: justify"><LI><FONT face="Arial" size=2></FONT><FONT face="Arial" size=2>Revenue
  growth in 2013 in excess of 30% over 2012 (or at least $56.8 million from
  $43.7 million in 2012); </FONT><I><FONT face="Arial" size=2>and<BR>&nbsp;</FONT></I>
  </LI><LI><FONT face="Arial" size=2>Adjusted EBITDA improvement in 2013 in excess
  of 50% from 2012 (or lower than ($11.1) million from ($22.1) million in
  2012).</FONT></LI></UL>
<P align=justify><FONT face="Arial" size=2>Consistent with the past couple of
years, we expect a majority of our 2013 revenue to be realized in the second
half of the year. Our business revenue outlook for 2013 is based on our internal
revenue forecast which reflects an assessment of overall business conditions and
takes into account actual sales in the first month of 2013, sales orders
received for units and services to be delivered in 2013, and an estimate with
respect to the generation of new sales in each of our markets. Our 2013 business
revenue outlook is also supported by our 12-month order book of $36.8 million at
December 31, 2012 ($32.0 million at December 31, 2011). The primary risk factors
that could cause us to miss our revenue guidance for 2013 are potential
disruptions in the material handling market as a result of our reliance on a
single customer in this market, and delays from forecast in terms of closing and
shipping expected sales orders primarily in our backup power and engineering
services markets.</FONT></P>
<P align=justify><FONT face="Arial" size=2>The key drivers for the expected
improvement in Adjusted EBITDA for 2013 are expected increases in gross margins
driven primarily by the above noted overall increase in expected revenues,
supported by continued operating expense optimization and a resulting reduction
in Cash Operating Costs to the mid-$20 million range from $30.3 million in 2012.
Consistent with the expectation that a majority of our 2013 revenue will fall in
the last half of the year, Adjusted EBITDA is expected to be materially improved
in the last half of 2013, as compared to the first half of 2013.</FONT></P>
<P align=justify><FONT face="Arial" size=2>Our Adjusted EBITDA outlook for
2013 is based on our internal Adjusted EBITDA forecast and takes into account
our forecasted gross margin related to the above revenue forecast, the costs of
our current and forecasted Cash Operating Costs, and assumes an average U.S.
dollar exchange rate of 1.00 in relation to the Canadian dollar. The primary
risk factor that could cause us to miss our target Adjusted EBITDA outlook for
2013 are lower than expected gross margins due to (i) lower revenues from
forecast due to potential disruptions in the material handling market as a
result of our reliance on a single customer in this market, or unexpected delays
in terms of closing and shipping expected sales orders primarily in our backup
power and engineering services markets; (ii) shifts in product sales mix
negatively impacting projected gross margin as a percentage of revenues; or
(iii) delays in the timing of our projected product cost reductions. In
addition, Adjusted EBITDA could also be negatively impacted by increases in Cash
Operating Costs as a result of (i) increased product development costs due to
unexpected cost overruns or by lower than anticipated engineering services
contracts or government cost recoveries; or (ii) negative foreign exchange
impacts due to a higher than expected Canadian dollar. A 1% increase in the
Canadian dollar, relative to the U.S. dollar, negatively impacts Adjusted EBITDA
and Cash Operating Costs by approximately $0.3 million to $0.4
million.</FONT></P>
<P align=justify><FONT face="Arial" size=2>Similar to prior years and
consistent with our revenue and Adjusted EBITDA performance expectations for the
year and the resulting impacts on gross margin and working capital, we expect
cash used in operating activities in 2013 to be materially higher in the first
and second quarters of 2013, as compared to the third and fourth quarters of
2013. Cash used in operating activities in the first two quarters of 2013 is
expected to be negatively impacted by the buildup of inventory to support higher
product shipments in the third and fourth quarters, and by the timing of
revenues and the related customer collections which are also skewed towards the
last half of the year.</FONT></P>
<P align=right><FONT face="Arial" size=1>Page 20 of 35 </FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=right><IMG src="ballard_logo.jpg" border=0></P>
<P align=justify><FONT face="Arial" size=2>Our cash flow from operations
outlook for 2013 is based on our internal net cash forecast and takes into
account our actual results for the first month of 2013 and our forecasted net
cash requirements for the balance of the year as a result of the above noted
Adjusted EBITDA forecast and our expectations for working capital requirements,
capital expenditures, and other investing, and financing activities for the
year. The primary risk factors that could cause us to miss our cash flow from
operations expectations for 2013 are lower than expected Adjusted EBITDA
performance as a result of the occurrence of any or all of the above noted risk
factors, and increased working capital requirements primarily as a result of (i)
higher than anticipated accounts receivable due to delays in the timing of
revenues and the related customer collections, (ii) unexpected changes in the
timing and amount of expected government grants and the related contract
payments; (iii) unexpected changes in the timing and mix of supplier purchases
and payments; and (iv) increased inventory levels due to unexpected changes in
the timing and mix of expected product shipments. </FONT></P>
<P align=justify><B><FONT face="Arial" size=2>OFF-BALANCE SHEET ARRANGEMENTS
&amp; CONTRACTUAL OBLIGATIONS </FONT></B></P>
<P align=justify><FONT face="Arial" size=2>Periodically, we use forward
foreign exchange and forward platinum purchase contracts to manage our exposure
to currency rate fluctuations and platinum price fluctuations. We record these
contracts at their fair value as either assets or liabilities on our balance
sheet. Any changes in fair value are either (i) recorded in our statement of
comprehensive income if formally designated and qualified under hedge accounting
criteria; or (ii) recorded in our statement of operations if either not
designated, or not qualified, under hedge accounting criteria. At December 31,
2012, we did not have any outstanding foreign exchange currency contracts or
outstanding platinum forward purchase contracts.</FONT></P>
<P align=justify><FONT face="Arial" size=2>At December 31, 2012, we did not
have any other material obligations under guarantee contracts, retained or
contingent interests in transferred assets, outstanding derivative instruments
or non-consolidated variable interests.</FONT></P>
<P align=justify><FONT face="Arial" size=2>At December 31, 2012 we had the
following contractual obligations and commercial commitments: </FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="75%"><I><FONT face="Arial" size=1>(Expressed in thousands of U.S.
      dollars)</FONT></I></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; text-align: center" noWrap width="24%" colSpan=14><FONT face="Arial" size=1>Payments due by period,</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%"><B><FONT face="Arial" size=2>Contractual Obligations</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>Total</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>Less than</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>1-3 years</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>3-5 years</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap style="text-align: center" width="3%"><FONT face="Arial" size=1>After
  5</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="75%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="3%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>one year</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="3%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="3%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid; text-align: center" noWrap width="3%"><FONT face="Arial" size=1>years</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#c0c0c0><FONT face="Arial" size=1>Operating
      leases</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>21,574</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>2,520</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>5,327</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>5,499</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>8,228</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%"><FONT face="Arial" size=1>Capital leases</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>20,437</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>1,924</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>4,063</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>3,315</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>11,135</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%" bgColor=#c0c0c0><FONT face="Arial" size=1>Asset retirement
      obligations</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>6,366</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>6,366</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="75%"><FONT face="Arial" size=1>Total contractual obligations</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><B><FONT face="Arial" size=1>48,377</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>4,444</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>9,390</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>8,814</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>25,729</FONT></TD></TR></TABLE><BR>
<P align=justify><FONT face="Arial" size=2>In addition to the contractual
purchase obligations above, we have outstanding commitments of $0.3 million
related primarily to purchases of capital assets at December 31, 2012. Capital
expenditures pertain to our regular operations and are expected to be funded
through cash on hand. </FONT></P>
<P align=right><FONT face="Arial" size=1>Page 21 of 35 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=right><IMG src="ballard_logo.jpg" border=0></P>
<P align=justify><FONT face="Arial" size=2>As of December 31, 2012, we have
also agreed to pay previous funding obligations that were repayable through potential
royalties in respect of sales of certain fuel cell-based stationary power
products under two development programs with Canadian government agencies. The
total combined royalty is limited in any year to 4% of revenue from such
products. Under the terms of the Utilities Development Program (Phase 1) with
the Government British Columbia, total royalties are payable to a maximum equal
to the original amount of the government contributions of CDN $5.4 million. As
at December 31, 2012, no royalties have been incurred for Phase 1. Under the
terms of the Utilities Development Program (Phase 2) with Technology
Partnerships Canada (&#147;TPC&#148;) total royalties are payable to a maximum of CDN
$38.3 million. As at December 31, 2012, a total of CDN $5.3 million in royalty
repayments have been made for Phase 2. The Corporation has made no Phase 2
royalty repayments in 2012 and 2011. On January 15, 2013, we reached an
agreement with TPC to terminate all existing and future potential royalties
payable in respect of future sales of fuel cell based stationary power products
under the Utilities Development Program (Phase 2) in exchange for a final
repayment to TPC of CDN $1.9 million.</FONT></P>
<P align=justify><FONT face="Arial" size=2>In the ordinary course of business
or as required by certain acquisition or disposition agreements, we are
periodically required to provide certain indemnities to other parties. Our
Arrangement with Superior Plus includes an indemnification agreement dated
December 31, 2008 (the "Indemnity Agreement"), which sets out the parties&#146;
continuing obligations to the other. The Indemnity Agreement has two basic
elements: it provides for the indemnification by each of the parties to the
other for breaches of representations and warranties or covenants as well as, in
our case, any liability relating to our business which is suffered by Superior
Plus. Our indemnity to Superior Plus with respect to our representation relating
to the existence of our tax pools immediately prior to the completion of the
Arrangement is limited to an aggregate of $7.4 million (Canadian $7.4 million)
with a threshold amount of $0.5 million (Canadian $0.5 million) before there is
an obligation to make a payment. Second, the Indemnity Agreement provides for
adjustments to be paid by us, or to us, depending on the final determination of
the amount of our Canadian non-capital losses, scientific research and
development expenditures and investment tax credits generated to December 31,
2008, to the extent that such amounts are more or less than the amounts
estimated at the time the Arrangement was executed. At December 31, 2012, we
have not accrued any amount owing, or receivable, as a result of the Indemnity
Agreement. </FONT></P>
<P align=justify><B><FONT face="Arial" size=2>RELATED PARTY TRANSACTIONS
</FONT></B></P>
<P align=justify><FONT face="Arial" size=2>Related parties include
shareholders with a significant ownership interest in us, together with their
subsidiaries and affiliates, our key management personnel, and our minority
interest partners in Dantherm Power. Revenues and costs recognized from such
transactions reflect the prices and terms of sale and purchase transactions with
related parties, which are in accordance with normal trade practices at fair
value. Related party transactions and balances are as follows: </FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="80%"><I><FONT face="Arial" size=1>(Expressed in thousands of U.S.
      dollars)</FONT></I></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="9%" colSpan=5><FONT face="Arial" size=1>Three months ended</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="9%" colSpan=5><FONT face="Arial" size=1>Year ended</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="80%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="9%" colSpan=5><FONT face="Arial" size=1>December
      31,</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="9%" colSpan=5><FONT face="Arial" size=1>December
      31,</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="80%"><B><FONT face="Arial" size=1>Transactions with related
      parties</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face="Arial" size=1>2012</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face="Arial" size=1>2012</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="80%" bgColor=#c0c0c0><FONT face="Arial" size=1>Revenues</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="80%"><FONT face="Arial" size=1>Purchases</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>288</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>309</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>744</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="80%" bgColor=#c0c0c0><FONT face="Arial" size=1>Finance expense
      on convertible</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>86</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>53</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>289</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>151</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="80%" bgColor=#c0c0c0><FONT face="Arial" size=1>debenture payable</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="3%" bgColor=#c0c0c0></TD></TR></TABLE><BR>
<P align=right><FONT face="Arial" size=1>Page 22 of 35 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=right><IMG src="ballard_logo.jpg" border=0></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="90%"><I><FONT face="Arial" size=1>(Expressed in thousands of U.S.
      dollars)</FONT></I></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=right width="9%" colSpan=5><FONT face="Arial" size=1>As at December 31,</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="90%"><B><FONT face="Arial" size=1>Balances with related parties</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face="Arial" size=1>2012</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><FONT face="Arial" size=1>Trade accounts
      payable</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>100</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>260</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%"><FONT face="Arial" size=1>Interest payable</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>417</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>141</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="90%" bgColor=#c0c0c0><FONT face="Arial" size=1>Convertible debenture payable</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>2,507</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>1,592</FONT></TD></TR>
  <TR>
    <TD width="100%" colSpan=7>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%"><B><FONT face="Arial" size=2>OUTSTANDING SHARE DATA</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" width="100%" colSpan=7>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="90%"><B><FONT face="Arial" size=1>As at February 20, 2013</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="3%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="3%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><FONT face="Arial" size=1>Common share
      outstanding</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0 colSpan=2><FONT face="Arial" size=1>91,801,477</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="90%"><FONT face="Arial" size=1>Options outstanding</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="3%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="4%" colSpan=2><FONT face="Arial" size=1>6,595,937</FONT></TD></TR></TABLE><BR>
<P align=justify><B><FONT face="Arial" size=2>CRITICAL ACCOUNTING POLICIES
AND KEY SOURCES OF ESTIMATION UNCERTAINTY </FONT></B></P>
<P align=justify><FONT face="Arial" size=2>Our consolidated financial
statements are prepared in accordance with International Financial Reporting
Standards, which require us to make estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual result may differ from those estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis Revisions
to accounting estimates are recognized in the period in which the estimates are
revised and in any future periods affected.</FONT></P>
<P align=justify><FONT face="Arial" size=2>At this time, we have concluded
that there are no critical judgments that we have made in the process of
applying our accounting policies. Our significant accounting policies are
detailed in note 3 to the annual consolidated financial statements. </FONT></P>
<P align=justify><FONT face="Arial" size=2>The following are key assumptions
concerning the future and other key sources of estimation uncertainty that have
a significant risk of resulting in a material adjustment to the reported amount
of assets, liabilities, income and expenses within the next financial
year.</FONT></P>
<P align=justify><FONT face="Arial" size=2>REVENUE RECOGNITION </FONT></P>
<P align=justify><FONT face="Arial" size=2>Revenues are generated primarily
from product sales and services in our Fuel Cell Products, Contract Automotive
and Material Products segments. Product revenues are derived primarily from
standard equipment and material sales contracts and from long-term fixed price
contracts. Service revenues are derived primarily from cost-plus reimbursable
contracts and from long-term fixed price contracts.</FONT></P>
<P align=justify><FONT face="Arial" size=2>On standard equipment and material
sales contracts, revenues are recognized when (i) significant risks and rewards
of ownership of the goods has been transferred to the buyer; (ii) we retain
neither continuing managerial involvement to the degree usually associated with
ownership nor effective control over the goods sold; (iii) the amount of revenue
can be measured reliably; (iv) it is probable that the economic benefits
associated with the sale will accrue to us; and (v) the costs incurred, or to be
incurred, in respect of the transaction can be measured reliably. Provisions are
made at the time of sale for warranties. Revenue recognition for standard
equipment and material sales contracts does not usually involve significant
estimates.</FONT></P>
<P align=justify><FONT face="Arial" size=2>On cost-plus reimbursable
contracts, revenues are recognized as costs are incurred, and include applicable
fees earned as services are provided. Revenue recognition for cost-plus
reimbursable contracts does not usually involve significant estimates.
</FONT></P>
<P align=right><FONT face="Arial" size=1>Page 23 of 35 </FONT></P>
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<P align=justify><FONT face="Arial" size=2>On long-term fixed price
contracts, revenues are recorded on the percentage-of-completion basis over the
duration of the contract, which consists of recognizing revenue on a given
contract proportionately with its percentage of completion at any given time.
The percentage of completion is determined by dividing the cumulative costs
incurred as at the balance sheet date by the sum of incurred and anticipated
costs for completing a contract.</FONT></P>
<UL style="TEXT-ALIGN: justify"><LI><FONT face="Arial" size=2></FONT><FONT face="Arial" size=2>The
  determination of anticipated costs for completing a contract is based on
  estimates that can be affected by a variety of factors such as variances in
  the timeline to completion, the cost of materials, the availability and cost
  of labour, as well as productivity.<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Arial" size=2>The determination of potential revenues
  includes the contractually agreed amount and may be adjusted based on the
  estimate of our attainment on achieving certain defined contractual
  milestones. Management&#146;s estimation is required in determining the probability
  that the revenue will be received and in determining the measurement of that
  amount.</FONT></LI></UL>
<P align=justify><FONT face="Arial" size=2>Estimates used to determine
revenues and costs of long-term fixed price contracts involve uncertainties that
ultimately depend on the outcome of future events and are periodically revised
as projects progress. There is a risk that a customer may ultimately disagree
with our assessment of the progress achieved against milestones or that our
estimates of the work required to complete a contract may change. The cumulative
effect of changes to anticipated revenues and anticipated costs for completing a
contract are recognized in the period in which the revisions are identified. In
the event that the anticipated costs exceed the anticipated revenues on a
contract, such loss is recognized in its entirety in the period it becomes
known. </FONT></P>
<P align=justify><FONT face="Arial" size=2>During the three months and year
ended December 31, 2012 and 2011, there was no material adjustments to revenues
relating to revenue recognized in a prior period.</FONT></P>
<P align=justify><FONT face="Arial" size=2>ASSET IMPAIRMENT </FONT></P>
<P align=justify><FONT face="Arial" size=2>The carrying amounts of our
non-financial assets other than inventories are reviewed at each reporting date
to determine whether there is any indication of impairment. If any such
indication exists, then the asset&#146;s recoverable amount is estimated. For
goodwill and intangible assets that have indefinite useful lives, the
recoverable amount is estimated at least annually.</FONT></P>
<P align=justify><FONT face="Arial" size=2>The recoverable amount of an asset
or cash-generating unit is the greater of its value in use and its fair value
less costs to sell. In assessing value in use, the estimated future cash flows
are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks
specific to the asset. In assessing fair value less costs to sell, the price
that would be received on the sale of an asset in an orderly transaction between
market participants at the measurement date is estimated. For the purposes of
impairment testing, assets that cannot be tested individually are grouped
together into the smallest group of assets that generates cash inflows from
continuing use that are largely independent of the cash inflows of other groups
of assets. Cash-generating units to which goodwill has been allocated reflects
the lowest level at which goodwill is monitored for internal reporting purposes.
Many of the factors used in assessing fair value are outside the control of
management and it is reasonably likely that assumptions and estimates will
change from period to period. These changes may result in future impairments.
For example, our revenue growth rate could be lower than projected due to
economic, industry or competitive factors, or the discount rate used in our
value in use model could increase due to a change in market interest rates. In
addition, future goodwill impairment charges may be necessary if our market
capitalization decreased due to a decline in the trading price of our common
stock, which could negatively impact the fair value of our operating
segments.</FONT></P>
<P align=right><FONT face="Arial" size=1>Page 24 of 35 </FONT></P>
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<P align=right><IMG src="ballard_logo.jpg" border=0></P>
<P align=justify><FONT face="Arial" size=2>An impairment loss is recognized
if the carrying amount of an asset or its cash-generating unit exceeds its
estimated recoverable amount. Impairment losses are recognized in net loss.
Impairment losses recognized in respect of the cash-generating units are
allocated first to reduce the carrying amount of any goodwill allocated to the
units, and then to reduce the carrying amounts of the other assets in the unit
on a pro-rata basis. </FONT></P>
<P align=justify><FONT face="Arial" size=2>An impairment loss in respect of
goodwill is not reversed. In respect of other assets, impairment losses
recognized in prior periods are assessed at each reporting date for any
indications that the loss has decreased or no longer exists. An impairment loss
is reversed only to the extent that the asset&#146;s carrying amount does not exceed
the carrying amount that would have been determined, net of depreciation or
amortization, if no impairment loss had been recognized. </FONT></P>
<P align=justify><FONT face="Arial" size=2>We perform the annual review of
goodwill as at December 31 of each year, more often if events or changes in
circumstances indicate that it might be impaired. Under IFRS, the annual review
of goodwill requires a comparison of the carrying value of the asset to the
higher of (i) value in use; and (ii) fair value less costs to
sell</FONT><B><FONT face="Arial" size=2>.</FONT></B><FONT face="Arial" size=2> Value in use is defined as the present value of future cash flows
expected to be derived from the asset in its current state. Prior to our 2012
annual impairment test, our consolidated goodwill balance of $48.1 million
consisted of $46.3 million in our core Fuel Cell Products segment, and $1.8
million in our now discontinued Material Products segment. Based on the
impairment test performed as at December 31, 2012, we have recorded a goodwill
impairment charge of ($11.8) million in our 2012 financial results, consisting
of goodwill impairment of ($10.0) million in our Fuel Cell Products segment and
a goodwill write-off of ($1.8) million in our Material Products segment. Details
of our goodwill impairment tests are as follows: </FONT></P>
<ul style="text-align: justify; margin-left: 16px"><li><FONT face="Arial" size=2></FONT><FONT face="Arial" size=2>One of the methods used to assess the recoverable amount of the goodwill
in our core Fuel Cells Products segment is a fair value, less costs to sale,
test. Our fair value test is in effect a modified market capitalization
assessment, whereby we calculate the fair value of the Fuel Cell Products
segment by first calculating the value of the Company at December 31, 2012 based
on the average closing share price in the month of December, add a reasonable
estimated control premium of 25% to determine the Company&#146;s enterprise value on
a controlling basis after adjusting for excess cash balances, and then deduct
the fair value of our Materials Product segments from this enterprise value to
arrive at the fair value of the Fuel Cell Products segment. As a result of this
assessment, we have determined that the fair value of the Fuel Cell Products
segment was deficient to its carrying value resulting in a ($10.0) million
write-down of Fuel Cell Products goodwill from $46.3 million to $36.3 million as
of December 31, 2012.<BR>&nbsp;
</FONT></li>
<li><FONT face="Arial" size=2></FONT><FONT face="Arial" size=2>In addition to this fair value test, we also performed a value in use
test on our Fuel Cell Products segment that compared the carrying value of the
segment to the present value of future cash flows expected to be derived from
the segment. The principal factors used in this discounted cash flow analysis
requiring significant estimation are the projected results of operations, the
discount rate based on the weighted average cost of capital (&#147;WACC&#148;), and
terminal value assumptions for each reporting unit. Our value in use
test was based on a WACC of 20%; an average estimated compound annual growth
rate of approximately 35% from 2012 to 2017; and a terminal year EBITDA
multiplied by a terminal value multiplier of 4.0. Our value in use assessment
resulted in an estimated fair value for the Fuel Cell Products segment that is
consistent with that as determined under the above fair value, less costs to
sell, assessment.</FONT></li></ul>
<P align=right><FONT face="Arial" size=1>Page 25 of 35 </FONT></P>
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<UL style="FONT-SIZE: 10pt; MARGIN-LEFT: 16px; TEXT-ALIGN: justify"><LI><FONT face="Arial" size=2>The fair value of our Material Products
  segment was determined based on a fair value less costs to sell assessment
  which compared the segment&#146;s carrying value at December 31, 2012 to the actual
  net proceeds received on disposition on January 31, 2013. As a result of this
  assessment, we have determined that the fair value of the Material Products
  segment was deficient to its carrying value resulting in a ($1.8) million
  write-off of Material Products goodwill and a ($0.5) million write-down of
  property, plant and equipment as of December 31, 2012. Total 2012 impairment
  charges of ($2.3) million for the Material Products segment are included in
  net loss from discontinued operations. </FONT></LI></UL>
<P align=justify><FONT face="Arial" size=2>As a result of our quarterly
review of the carrying amounts of our non-financial assets (other than
inventories) to determine whether there is any indication of impairment, we
recorded an impairment charge of ($0.6) million in our Fuel Cell Products
segment for the three months and year ended December 31, 2012 related to a
write-down of manufacturing equipment never put into use.</FONT></P>
<P align=justify><FONT face="Arial" size=2>WARRANTY PROVISION </FONT></P>
<P align=justify><FONT face="Arial" size=2>A provision for warranty costs is
recorded on product sales at the time of shipment. In establishing the accrued
warranty liabilities, we estimate the likelihood that products sold will
experience warranty claims and the cost to resolve claims received. In making
such determinations, we use estimates based on the nature of the contract and
past and projected experience with the products. Should these estimates prove to
be incorrect, we may incur costs different from those provided for in our
warranty provisions. During the three months and year ended December 31, 2012,
we recorded provisions to accrued warranty liabilities of $0.4 million and $1.5
million, respectively, for new product sales, compared to $1.0 million and $1.9
million, respectively, for the three months and year ended December 31, 2011.
</FONT></P>
<P align=justify><FONT face="Arial" size=2>We review our warranty assumptions
and make adjustments to accrued warranty liabilities quarterly based on the
latest information available and to reflect the expiry of contractual
obligations. Adjustments to accrued warranty liabilities are recorded in cost of
product and service revenues. As a result of these reviews and the resulting
adjustments, our warranty provision and cost of revenues for the three months
and year ended December 31, 2012 were adjusted upwards by a net amount of ($0.2)
million and downwards by $0.4 million, respectively, compared to a net
adjustment downwards of $0.5 million and $1.7 million, respectively, for the
three months and year ended December 31, 2011. The adjustments to reduce accrued
warranty liabilities were primarily due to contractual expirations, changes in
estimated costs to repair, and improved lifetimes and reliability of our fuel
cell products.</FONT></P>

<P align=justify><FONT face="Arial" size=2>INVENTORY PROVISION </FONT></P>
<P align=justify><FONT face="Arial" size=2>In determining the lower of cost
and net realizable value of our inventory and establishing the appropriate
provision for inventory obsolescence, we estimate the likelihood that inventory
carrying values will be affected by changes in market pricing or demand for our
products and by changes in technology or design which could make inventory on
hand obsolete or recoverable at less than cost. We perform regular reviews to
assess the impact <FONT face="Arial" size=2>of changes in technology and
design, sales trends and other changes on the carrying value of inventory. Where
we determine that such changes have occurred and will have a negative impact on
the value of inventory on hand, appropriate provisions are made. If there is a
subsequent increase in the value of inventory on hand, reversals of previous
write-downs to net realizable value are made. Unforeseen changes in these
factors could result in additional inventory provisions, or reversals of
previous provisions, being required. During the three months and year ended
December 31, 2012, inventory provisions of ($0.2)</FONT><B><FONT face="Arial" size=2> </FONT></B><FONT face="Arial" size=2>million and
($0.7)</FONT><B><FONT face="Arial" size=2> </FONT></B><FONT face="Arial" size=2>million, respectively, were recorded as a charge to cost of product and
service revenues, compared to ($0.3) million and ($0.6) million, respectively,
for the three months and year ended December 31, 2011. </FONT></FONT></P>
<P align=right><FONT face="Arial" size=1>Page 26 of 35 </FONT></P>
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<P align=justify><FONT face="Arial" size=2>EMPLOYEE FUTURE BENEFITS
</FONT></P>
<P align=justify><FONT face="Arial" size=2>The present value of our defined
benefit obligation is determined by discounting the estimated future cash
outflows using interest rates of high-quality corporate bonds that have terms to
maturity approximating the terms of the related pension liability. Determination
of benefit expense requires assumptions such as the discount rate to measure
obligations, expected plan investment performance, expected healthcare cost
trend rate, and retirement ages of employees. Actual results will differ from
the recorded amounts based on these estimates and assumptions.</FONT></P>
<P align=justify><FONT face="Arial" size=2>INCOME TAXES </FONT></P>
<P align=justify><FONT face="Arial" size=2>We use the asset and liability
method of accounting for income taxes. Under this method, deferred income taxes
are recognized for the deferred income tax consequences attributable to
differences between the financial statement carrying values of assets and
liabilities and their respective income tax bases (temporary differences) and
for loss carry-forwards. The resulting changes in the net deferred tax asset or
liability are included in income. </FONT></P>
<P align=justify><FONT face="Arial" size=2>Deferred tax assets and
liabilities are measured using enacted, or substantially enacted, tax rates
expected to apply to taxable income in the years in which temporary differences
are expected to be recovered or settled. The effect on deferred income tax
assets and liabilities, of a change in tax rates, is included in income in the
period that includes the substantive enactment date. Deferred income tax assets
are reviewed at each reporting period and are reduced to the extent that it is
no longer probable that the related tax benefit will be realized. As of December
31, 2012 and 2011, we have not recorded any deferred income tax assets on our
consolidated statement of financial position.</FONT></P>
<P align=justify><B><FONT face="Arial" size=2>NEW IFRS ACCOUNTING POLICIES
</FONT></B></P>
<P align=justify><FONT face="Arial" size=2>The following is an overview of
accounting standard changes that we will be required to adopt in future years.
Except as otherwise noted below for IFRS 9, IAS 32 and amendments to IFRS 7, the
standards are effective for our annual periods beginning on or after January 1,
2013, with earlier application permitted. We do not expect to adopt any of these
standards before their effective dates.</FONT></P>
<P align=justify><B><FONT face="Arial" size=2>IFRS 9 &#150; Financial Instruments
</FONT></B></P>
<P align=justify><FONT face="Arial" size=2>In November 2009, the
International Accounting Standards Board (&#147;IASB&#148;) published IFRS 9 &#147;Financial
Instruments&#148;. This new standard simplifies the classification and measurement of
financial assets set out in IAS 39 &#147;Financial Instruments: Recognition and
Measurement&#148;. Financial assets are to be measured at amortized cost or fair
value. They are to be measured at amortized cost if the two following conditions
are met:</FONT></P>
<P align=justify><FONT face="Arial" size=2>a) The assets are held within a
business model whose objective is to collect contractual cash flows;
and</FONT></P>
<P align=justify><FONT face="Arial" size=2>b) The contractual cash flows are
solely payments of principal and interest on the outstanding principal.
</FONT></P>
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<P align=justify><FONT face="Arial" size=2>All other financial assets are to
be measured at fair value through net earnings. The entity may, if certain
conditions are met, elect to use the fair value option instead of measurement at
amortized cost. As well, the entity may choose upon initial recognition to
measure non-trading equity investments at fair value through comprehensive
income. Such a choice is irrevocable. </FONT></P>
<P align=justify><FONT face="Arial" size=2>In October 2010, the IASB issued
revisions to IFRS 9, adding the requirements for classification and measurement
of financial liabilities contained in IAS 39 and further points. For financial
liabilities measured at fair value through net earnings using the fair value
option, the amount of change in a liability&#146;s fair value attributable to changes
in its credit risk is recognized directly in other comprehensive income.
</FONT></P>
<P align=justify><FONT face="Arial" size=2>In December 2011, the IASB
deferred the mandatory effective date of IFRS 9 to fiscal years beginning on or
after January 1, 2015. Early adoption is permitted under certain conditions. An
entity is not required to restate comparative financial periods for its
first-time application of IFRS 9, but must comply with the new disclosure
requirements. </FONT></P>
<P align=justify><FONT face="Arial" size=2>We intend to adopt IFRS 9 in our
financial statements for the annual period beginning on January 1, 2015. The
extent of the impact of adoption of IFRS 9 has not yet been determined.
</FONT></P>
<P align=justify><B><FONT face="Arial" size=2>IFRS 10 - Consolidated
Financial Statements </FONT></B></P>
<P align=justify><FONT face="Arial" size=2>In May 2011, the IASB published
IFRS 10 &#147;Consolidated Financial Statements&#148; which is a replacement of SIC-12
&#147;Consolidation &#150; Special Purpose Entities&#148;, and certain parts of IAS 27
&#147;Consolidated and Separate Financial Statements&#148;. IFRS 10 uses control as the
single basis for consolidation, irrespective of the nature of the investee,
employing the following factors to identify control:</FONT></P>
<P align=justify><FONT face="Arial" size=2>a) Power over the
investee;</FONT></P>
<P align=justify><FONT face="Arial" size=2>b) Exposure or rights to variable
returns from involvement with the investee;</FONT></P>
<P align=justify><FONT face="Arial" size=2>c) The ability to use power over
the investee to affect the amount of the investor&#146;s returns.</FONT></P>
<P align=justify><FONT face="Arial" size=2>IFRS 10 shall be applied to fiscal
years beginning on or after January 1, 2013. We intend to adopt IFRS 10 in our
financial statements for the annual period beginning on January 1, 2013. We do
not expect IFRS 10 to have a material impact on our financial statements.
</FONT></P>
<P align=justify><B><FONT face="Arial" size=2>IFRS 11 - Joint Arrangements
</FONT></B></P>
<P align=justify><FONT face="Arial" size=2>In May 2011, the IASB published
IFRS 11 &#147;Joint Arrangements&#148; which supersedes IAS 31 &#147;Interests in Joint
Ventures&#148; and SIC-13 &#147;Jointly Controlled Entities &#150; Non-Monetary Contributions
by Venturers&#148;. IFRS 11 requires that joint ventures be accounted for using the
equity method of accounting and eliminates the need for proportionate
consolidation.</FONT></P>
<P align=justify><FONT face="Arial" size=2>IFRS 11 shall be applied to fiscal
years beginning on or after January 1, 2013. We intend to adopt IFRS 11 in our
financial statements for the annual period beginning on January 1, 2013. We do
not expect IFRS 11 to have a material impact on our financial
statements.</FONT></P>
<P align=justify><B><FONT face="Arial" size=2>IFRS 12 - Disclosure of
Interests in Other Entities </FONT></B></P>
<P align=justify><FONT face="Arial" size=2>In May 2011, the IASB published
IFRS 12 &#147;Disclosure of Interests in Other Entities&#148; which requires that an entity disclose information on the nature of and risks
associated with its interests in other entities (i.e. subsidiaries, joint
arrangements, associates or unconsolidated structured entities) and the effects
of those interests on its financial statements.</FONT></P>
<P align=right><FONT face="Arial" size=1>Page 28 of 35 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=right><IMG src="ballard_logo.jpg" border=0></P>
<P align=justify><FONT face="Arial" size=2>IFRS 12 shall be applied to fiscal
years beginning on or after January 1, 2013. We intend to adopt IFRS 12 in our
financial statements for the annual period beginning on January 1, 2013. We do
not expect IFRS 12 to have a material impact on our financial
statements.</FONT></P>
<P align=justify><B><FONT face="Arial" size=2>IFRS 13 - Fair Value
Measurement </FONT></B></P>
<P align=justify><FONT face="Arial" size=2>In May 2011, the IASB published
IFRS 13 &#147;Fair Value Measurement&#148; to establish a single framework for fair value
measurement of financial and non-financial items. IFRS 13 defines fair value as
the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the
measurement date. It also requires disclosure of certain information on fair
value measurements.</FONT></P>
<P align=justify><FONT face="Arial" size=2>IFRS 13 shall be applied to fiscal
years beginning on or after January 1, 2013. We intend to adopt IFRS 13 in our
financial statements for the annual period beginning on January 1, 2013. We do
not expect IFRS 13 to have a material impact on our financial
statements.</FONT></P>
<P align=justify><B><FONT face="Arial" size=2>Amendments to IAS 19 - Employee
Benefits </FONT></B></P>
<P align=justify><FONT face="Arial" size=2>In June 2011, the IASB issued
amendments to IAS 19 &#147;Employee Benefits&#148;. Changes in defined benefit obligations
and plan assets are to be recognized in other comprehensive income when they
occur, thus eliminating the corridor approach and accelerating recognition of
past service cost. Net interest is to be recognized in net earnings and
calculated using the discount rate by reference to market yields at the end of
the reporting period on high quality corporate bonds. The actual return on plan
assets minus net interest is to be recognized in other comprehensive
income.</FONT></P>
<P align=justify><FONT face="Arial" size=2>The amendments to IAS 19 shall be
applied to fiscal years beginning on or after January 1, 2013. We intend to
adopt the amendments to IAS 19 in our financial statements for the annual period
beginning on January 1, 2013. Our current accounting policy for employee
benefits for the presentation of pension expense and the immediate recognition
of actuarial gains and losses in other comprehensive income is consistent with
the requirements of the amended IAS 19 standard. However, additional disclosures
and the computation of annual expense based on the application of the discount
rate to the net defined benefit asset or liability will be required in relation
to the revised standard. </FONT></P>
<P align=justify><B><FONT face="Arial" size=2>Amendments to IAS 1 &#150; Financial
Statement Presentation</FONT></B></P>
<P align=justify><FONT face="Arial" size=2>In June 2011, the IASB issued
amendments to IAS 1 &#147;Presentation of Financial Statements&#148;. Items of other
comprehensive income and the corresponding tax expense are required to be
grouped into those that will and will not subsequently be reclassified through
net earnings.</FONT></P>
<P align=justify><FONT face="Arial" size=2>These amendments shall be applied
to fiscal years beginning on or after July 1, 2012. We intend to adopt the
amendments to IAS 1 in our financial statements for the annual period beginning
on January 1, 2013. We do not expect the amendments to IAS 1 to have a material
impact on our financial statements. </FONT></P>

<P align=right><FONT face="Arial" size=1>Page 29 of 35 </FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=right><IMG src="ballard_logo.jpg" border=0></P>
<P align=justify><B><FONT face="Arial" size=2>Amendments to other IFRS
Standards</FONT></B></P>
<P align=justify><FONT face="Arial" size=2>In addition, there have been
amendments to existing standards, including IFRS 7 </FONT><I><FONT face="Arial" size=2>Financial Instruments: Disclosure</FONT></I><FONT face="Arial" size=2>, IAS 27 </FONT><I><FONT face="Arial" size=2>Separate
Financial Statements</FONT></I><FONT face="Arial" size=2>, IAS 28
</FONT><I><FONT face="Arial" size=2>Investments in </FONT></I><I><FONT face="Arial" size=2>Associates and Joint
Ventures</FONT></I><FONT face="Arial" size=2>, and IAS 32 </FONT><I><FONT face="Arial" size=2>Financial Instruments: Presentation</FONT></I><FONT face="Arial" size=2>. IFRS 7 amendments require disclosure about the effects
of offsetting financial assets and financial liabilities and related
arrangements on an entity&#146;s financial position. IAS 27 addresses accounting for
subsidiaries, jointly controlled entities and associates in non-consolidated
financial statements. IAS 28 has been amended to include joint ventures in its
scope and to address the changes in IFRS 10 to 13. IAS 32 addresses
inconsistencies when applying the offsetting requirements, and is effective for
annual periods beginning on or after January 1, 2014. We do not expect these
amendments to have a material impact on our financial statements. </FONT></P>
<P align=justify><B><FONT face="Arial" size=2>SUPPLEMENTAL NON-GAAP MEASURES
</FONT></B></P>
<P align=justify><FONT face="Arial" size=2>In addition to providing measures
prepared in accordance with GAAP, we present certain supplemental non-GAAP
measures. These measures are Cash Operating Costs, EBITDA and Adjusted EBITDA,
and Normalized Net Loss. These non-GAAP measures do not have any standardized
meaning prescribed by GAAP and therefore are unlikely to be comparable to
similar measures presented by other companies. We believe these measures are
useful in evaluating the operating performance and liquidity of the Company&#146;s
ongoing business. These measures should be considered in addition to, and not as
a substitute for, net income, cash flows and other measures of financial
performance and liquidity reported in accordance with GAAP. </FONT></P>
<P align=justify><B><FONT face="Arial" size=2>Cash Operating
Costs</FONT></B></P>
<P align=justify><FONT face="Arial" size=2>This supplemental non-GAAP measure
is provided to assist readers in determining our operating costs on a cash
basis. We believe this measure is useful in assessing performance and
highlighting trends on an overall basis. We also believe Cash Operating Costs is
frequently used by securities analysts and investors when comparing our results
with those of other companies. Cash Operating Costs differs from the most
comparable GAAP measure, operating expenses, primarily because it does not
include stock-based compensation expense, depreciation and amortization,
restructuring charges, acquisition costs and financing charges. The following
table shows a reconciliation of operating expenses to Cash Operating Costs from
continuing operations for the three months and years ended December 31, 2012 and
2011: </FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="80%"><I><FONT face="Arial" size=1>(Expressed in thousands of U.S.
      dollars)</FONT></I></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; text-align: center" width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; text-align: center" width="16%" colSpan=10><FONT face="Arial" size=1>Three months ended December
    31,</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; text-align: center" width="3%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: black 1pt solid" noWrap align=left width="80%"><B><FONT face="Arial" size=1>Cash Operating Costs</FONT></B></TD>
    <TD style="BORDER-BOTTOM: black 1pt solid" noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black 1pt solid" noWrap align=right width="4%" colSpan=2><B><FONT face="Arial" size=1>2012</FONT></B></TD>
    <TD style="BORDER-BOTTOM: black 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: black 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face="Arial" size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: black 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: black 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face="Arial" size=1></FONT><FONT face="Arial" size=1>$ Change</FONT></TD>
    <TD style="BORDER-BOTTOM: black 1pt solid" noWrap align=right width="3%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="80%" bgColor=#c0c0c0><FONT face="Arial" size=1>Operating
      Expense</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>10,047</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>8,992</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>1,055</FONT></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="80%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based
      compensation (expense)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><STRONG><FONT face=Arial size=1>(1,555</FONT></STRONG></TD>
    <TD noWrap align=left width="1%"><STRONG><FONT face=Arial size=1>)</FONT></STRONG></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>322</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>(1,877</FONT></TD>
    <TD noWrap align=left width="3%"><FONT face=Arial size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="80%"><FONT face="Arial" size=1>recovery</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="3%"></TD>
    <TD noWrap align=left width="3%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="80%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Acquisition and
      integration costs</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>(91</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>(91</FONT></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="80%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restructuring
      charges</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>(79</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>79</FONT></TD>
    <TD noWrap align=left width="3%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="80%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financing
      charges</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>(564</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>(564</FONT></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: black 1pt solid" noWrap align=left width="80%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and
      amortization</FONT></TD>
    <TD style="BORDER-BOTTOM: black 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: black 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: black 1pt solid" noWrap align=right width="3%"><B><FONT face="Arial" size=1>(504</FONT></B></TD>
    <TD style="BORDER-BOTTOM: black 1pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: black 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: black 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: black 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>(1,034</FONT></TD>
    <TD style="BORDER-BOTTOM: black 1pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: black 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: black 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>530</FONT></TD>
    <TD style="BORDER-BOTTOM: black 1pt solid" noWrap align=left width="3%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="80%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>Cash Operating Costs</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>7,333</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>8,201</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>(868</FONT></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR>
    <TD style="BORDER-TOP: #000000 1.5pt solid" width="100%" colSpan=13>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="80%"><I><FONT face="Arial" size=1>(Expressed in thousands of U.S.
      dollars)</FONT></I></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" align=left width="1%"></TD>
    <TD ALIGN="LEFT" WIDTH="19%" COLSPAN="11" STYLE="border-top: #000000 1.5pt solid; text-align: center"><FONT face="Arial" size=1>Years ended December 31,</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: black 1pt solid" noWrap align=left width="80%"><B><FONT face="Arial" size=1>Cash Operating Costs</FONT></B></TD>
    <TD style="BORDER-BOTTOM: black 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: black 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: black 1pt solid" noWrap align=right width="3%"><B><FONT face="Arial" size=1>2012</FONT></B></TD>
    <TD style="BORDER-BOTTOM: black 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: black 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: black 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: black 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: black 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: black 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: black 1pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: black 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>Change</FONT></TD>
    <TD style="BORDER-BOTTOM: black 1pt solid" noWrap align=left width="3%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="80%" bgColor=#c0c0c0><FONT face="Arial" size=1>Operating
      Expense</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>38,480</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>44,866</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>(6,386</FONT></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="80%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based
      compensation expense</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>(2,582</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>(2,377</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>(205</FONT></TD>
    <TD noWrap align=left width="3%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="80%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Acquisition and
      integration costs</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>(274</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>(274</FONT></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="80%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restructuring
      charges</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>(1,931</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>(1,356</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>(575</FONT></TD>
    <TD noWrap align=left width="3%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD NOWRAP STYLE="text-align: left; width: 80%; background-color: #c0c0c0"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financing
      charges</FONT></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; background-color: #c0c0c0"></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; background-color: #c0c0c0"></TD>
    <TD NOWRAP STYLE="text-align: right; width: 3%; background-color: #c0c0c0"><B><FONT face="Arial" size=1>(564</FONT></B></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; background-color: #c0c0c0"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; background-color: #c0c0c0"></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; background-color: #c0c0c0"></TD>
    <TD NOWRAP STYLE="text-align: right; width: 3%; background-color: #c0c0c0"><FONT face="Arial" size=1>-</FONT></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; background-color: #c0c0c0"></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; background-color: #c0c0c0"></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; background-color: #c0c0c0"></TD>
    <TD NOWRAP STYLE="text-align: right; width: 3%; background-color: #c0c0c0"><FONT face="Arial" size=1>(564</FONT></TD>
    <TD NOWRAP STYLE="text-align: left; width: 3%; background-color: #c0c0c0"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD NOWRAP STYLE="text-align: left; width: 80%; border-bottom: Black 1pt solid"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and
      amortization</FONT></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; border-bottom: Black 1pt solid"></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right; width: 3%; border-bottom: Black 1pt solid"><B><FONT face="Arial" size=1>(2,828</FONT></B></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; border-bottom: Black 1pt solid"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; border-bottom: Black 1pt solid"></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right; width: 3%; border-bottom: Black 1pt solid"><FONT face="Arial" size=1>(4,164</FONT></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; border-bottom: Black 1pt solid"><FONT face="Arial" size=1>)</FONT></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; border-bottom: Black 1pt solid"></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; border-bottom: Black 1pt solid"></TD>
    <TD NOWRAP STYLE="text-align: right; width: 3%; border-bottom: Black 1pt solid"><FONT face="Arial" size=1>1,336</FONT></TD>
    <TD NOWRAP STYLE="text-align: left; width: 3%; border-bottom: Black 1pt solid"></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="80%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>Cash Operating
      Costs</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>30,301</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>36,969</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>(6,668</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR></TABLE><BR>
<P STYLE="text-align: right"><FONT face="Arial" size=1>Page 30 of 35 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=right><IMG src="ballard_logo.jpg" border=0></P>
<P align=justify><B><FONT face="Arial" size=2>EBITDA and Adjusted
EBITDA</FONT></B></P>

<P align=justify><B><FONT face="Arial" size=2></FONT></B><FONT face="Arial" size=2>These supplemental non-GAAP
measures are provided to assist readers in determining our operating performance
and ability to generate operating cash flow. We believe this measure is useful
in assessing performance and highlighting trends on an overall basis. We also
believe EBITDA and Adjusted EBITDA are frequently used by securities analysts
and investors when comparing our results with those of other companies. EBITDA
differs from the most comparable GAAP measure, net income attributable to
Ballard, primarily because it does not include finance expense, income taxes,
depreciation of property, plant and equipment, amortization of intangible
assets, and goodwill impairment charges. Adjusted EBITDA adjusts EBITDA for
stock-based compensation expense, transactional gains and losses, asset
impairment charges, finance and other income, and acquisition costs. </FONT></P>
<P align=justify><FONT face="Arial" size=2>The following table shows a
reconciliation of net income attributable to Ballard to EBITDA and Adjusted
EBITDA from continuing operations for the three months and year ended December
31, 2012 and 2011: </FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="82%"><I><FONT face="Arial" size=1>(Expressed in thousands of U.S.
      dollars)</FONT></I></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; text-align: center" width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; text-align: center" width="15%" colSpan=10><FONT face="Arial" size=1>Three months ended December 31,</FONT></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="82%"><B><FONT face="Arial" size=1>EBITDA and Adjusted
EBITDA</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><B><FONT face="Arial" size=1>2012</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face="Arial" size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" colSpan=2><FONT face="Arial" size=1>$ Change</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face="Arial" size=1>Net loss from
      continuing operations</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><STRONG><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></STRONG></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0><STRONG><FONT face=Arial size=1>(16,809</FONT></STRONG></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><STRONG><FONT face=Arial size=1>)</FONT></STRONG></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="3%" BGCOLOR="#c0c0c0" STYLE="text-align: right"><FONT face=Arial size=1>(7,969</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD NOWRAP ALIGN="LEFT" WIDTH="2%" BGCOLOR="#c0c0c0" STYLE="text-align: right"><FONT face=Arial size=1>(8,840</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face="Arial" size=1>attributable to
      Ballard</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%"><FONT face="Arial" size=1>Depreciation and
      amortization</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>1,016</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>1,157</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>(141</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face="Arial" size=1>Finance
      expense</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>458</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>455</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>3</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="82%"><FONT face="Arial" size=1>Income taxes</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>134</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>(134</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face="Arial" size=1>EBITDA
      attributable to Ballard</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>(15,335</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>(6,223</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>(9,112</FONT></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; background-color: Silver"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based
      compensation expense</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><STRONG><FONT face=Arial size=1>1,555</FONT></STRONG></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>(322</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=Arial size=1>)</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face=Arial size=1>1,877</FONT></TD>
    <TD noWrap align=right width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%"><FONT face="Arial" size=1>(recovery)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Acquisition
      and integration costs</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>91</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>91</FONT></TD>
    <TD NOWRAP STYLE="text-align: left; width: 1%; background-color: Silver"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Finance
      and other (income) loss</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>(167</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>(78</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>(89</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impairment
      of goodwill</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>10,000</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>10,000</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss
      (gain) on sale and impairment of</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><STRONG><FONT face=Arial size=1>634</FONT></STRONG></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>1,750</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face=Arial size=1>(1,116</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=Arial size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="82%"><FONT face="Arial" size=1>property, plant and equipment</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="82%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>Adjusted
    EBITDA</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>(3,222</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>(4,873</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>1,651</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD width="99%" colSpan=13>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%"><I><FONT face="Arial" size=1>(Expressed in thousands of U.S.
    dollars)</FONT></I></TD>
    <TD style="text-align: center" width="1%"></TD>
    <TD style="text-align: center" width="15%" colSpan=10><FONT face="Arial" size=1>Year ended
      December 31,</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="82%"><B><FONT face="Arial" size=1>EBITDA and Adjusted
EBITDA</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><B><FONT face="Arial" size=1>2012</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face="Arial" size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" colSpan=2><FONT face="Arial" size=1>$ Change</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face="Arial" size=1>Net loss from
      continuing operations</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>(42,070</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>(37,175</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>(4,895</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face="Arial" size=1>attributable to
      Ballard</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%"><FONT face="Arial" size=1>Depreciation and
      amortization</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>4,840</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>4,561</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>279</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face="Arial" size=1>Finance
      expense</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>1,690</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>1,392</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>298</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="82%"><FONT face="Arial" size=1>Income taxes</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face="Arial" size=1>-</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>134</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>(134</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face="Arial" size=1>EBITDA
      attributable to Ballard</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>(35,540</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>(31,088</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>(4,452</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based
      compensation</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>2,582</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>2,377</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>205</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Acquisition
      costs</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>274</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>274</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Finance
      and other (income) loss</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>(31</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>(195</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>164</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impairment
      of goodwill</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>10,000</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>10,000</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss
      (gain) on sale and impairment of</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><STRONG><FONT face=Arial size=1>639</FONT></STRONG></TD>
    <TD noWrap align=right width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=Arial size=1>993</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face=Arial size=1>(354</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=Arial size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="82%"><FONT face="Arial" size=1>property, plant and equipment</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="82%"><B><FONT face="Arial" size=1>Adjusted EBITDA</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><B><FONT face="Arial" size=1>(22,076</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>(27,913</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>(5,837</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD></TR></TABLE><BR>
<P align=justify><B><FONT face="Arial" size=2>Normalized Net Loss
</FONT></B></P>
<P align=justify><FONT face="Arial" size=2>This supplemental non-GAAP measure
is provided to assist readers in determining our financial performance. We
believe this measure is useful in assessing our actual performance by adjusting
our results from continuing operations for one-time transactional gains and
losses and impairment losses. Normalized Net Loss differs from the most
comparable GAAP measure, net loss attributable to Ballard from continuing
operations, primarily because it does not include
transactional gains and losses and asset impairment charges. </FONT></P>
<P align=right><FONT face="Arial" size=1>Page 31 of 35 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=right><IMG src="ballard_logo.jpg" border=0></P>
<P align=justify><FONT face="Arial" size=2>The following table shows a
reconciliation of net loss attributable to Ballard from continuing operations to
Normalized Net Loss for the three months and years ended December 31, 2012 and
2011. </FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-TOP: #000000 1.5pt solid" noWrap align=left width="82%"><I><FONT face="Arial" size=1>(Expressed in thousands of U.S.
      dollars)</FONT></I></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; text-align: center" width="1%"></TD>
    <TD style="BORDER-TOP: #000000 1.5pt solid; text-align: center" width="15%" colSpan=10><FONT face="Arial" size=1>Three months ended December
    31,</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="82%"><B><FONT face="Arial" size=1>Normalized Net Loss</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face="Arial" size=1><FONT face="Times New Roman" size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>2012</STRONG></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" colSpan=2><FONT face="Arial" size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face="Arial" size=1>$ Change</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face="Arial" size=1>Net loss
      attributable to Ballard from</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><STRONG><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></STRONG></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><STRONG><FONT face=Arial size=1>(16,809</FONT></STRONG></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><STRONG><FONT face=Arial size=1>)</FONT></STRONG></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face=Arial size=1>(7,969</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>(8,840</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face="Arial" size=1>continuing
      operations</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impairment of
      goodwill</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>10,000</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>10,000</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impairment on
      property, plant and</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>570</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>1,727</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>(1,157</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="82%" bgColor=#c0c0c0><FONT face="Arial" size=1>equipment</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="82%"><B><FONT face="Arial" size=1>Normalized Net Loss</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face="Arial" size=1>(6,239</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>(6,242</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>3</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="82%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>Normalized Net Loss per
      share</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>(0.07</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>(0.07</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" width="99%" colSpan=13>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%"><I><FONT face="Arial" size=1>(Expressed in thousands of U.S. dollars)</FONT></I></TD>
    <TD style="text-align: center" width="16%" colSpan=11><FONT face="Arial" size=1>Years ended December 31,</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="82%"><B><FONT face="Arial" size=1>Normalized Net Loss</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><B><FONT face="Arial" size=1>2012</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" colSpan=2><FONT face="Arial" size=1>2011</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" colSpan=2><FONT face="Arial" size=1>$ Change</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face="Arial" size=1>Net loss
      attributable to Ballard from</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><STRONG><FONT face=Arial size=1>$</FONT></STRONG></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><STRONG><FONT face=Arial size=1>(42,070</FONT></STRONG></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><STRONG><FONT face=Arial size=1>)</FONT></STRONG></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>$</FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face=Arial size=1>(37,175</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>(4,895</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face="Arial" size=1>continuing
      operations</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%"><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impairment of
      goodwill</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><B><FONT face="Arial" size=1>10,000</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="2%"><FONT face="Arial" size=1>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face="Arial" size=1>10,000</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face="Arial" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impairment on
      property, plant and</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><STRONG><FONT face=Arial size=1>570</FONT></STRONG></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face=Arial size=1>1,727</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=Arial size=1>(1,157</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=Arial size=1>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="82%" bgColor=#c0c0c0><FONT face="Arial" size=1>equipment</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="82%"><B><FONT face="Arial" size=1>Normalized Net Loss</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face="Arial" size=1>(31,500</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="2%"><FONT face="Arial" size=1>(35,448</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face="Arial" size=1>3,948</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="82%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>Normalized Net Loss per
      share</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>(0.36</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Arial" size=1>)</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="2%" bgColor=#c0c0c0><FONT face="Arial" size=1>(0.42</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>)</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Arial" size=1>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face="Arial" size=1>0.06</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR></TABLE><BR>
<P align=justify><B><FONT face="Arial" size=2>MANAGEMENT&#146;S REPORT ON
DISCLOSURE CONTROLS AND PROCEDURES AND INTERNAL CONTROLS OVER FINANCIAL
REPORTING </FONT></B></P>
<P align=justify><I><FONT face="Arial" size=2>Disclosure controls and
procedures </FONT></I></P>
<P align=justify><FONT face="Arial" size=2>Our disclosure controls and
procedures are designed to provide reasonable assurance that relevant
information is gathered and reported to senior management, including the Chief
Executive Officer (&#147;CEO&#148;) and the Chief Financial Officer (&#147;CFO&#148;), on a timely
basis so that appropriate decisions can be made regarding public disclosures.
</FONT></P>
<P align=justify><FONT face="Arial" size=2>As of the end of the period
covered by this report, we evaluated, under the supervision and with the
participation of management, including the CEO and the CFO, the effectiveness of
the design and operation of our disclosure controls and procedures, as defined
in Rules 13a&#150;15(e) and 15d-15(e) of the Securities Exchange Act of 1934
(&#147;Exchange Act&#148;). The CEO and CFO have concluded that as of December 31, 2012,
our disclosure controls and procedures were effective to ensure that information
required to be disclosed in reports we file or submit under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
therein, and accumulated and reported to management to allow timely discussions
regarding required disclosure. </FONT></P>
<P align=justify><I><FONT face="Arial" size=2>Internal control over financial
reporting </FONT></I></P>
<P align=justify><FONT face="Arial" size=2>The CEO and CFO, together with
other members of management, are responsible for establishing and maintaining
adequate internal control over the Company&#146;s financial reporting. Internal
control over financial reporting is designed under our supervision, and effected
by the Company&#146;s board of directors, management, and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
IFRS.</FONT></P>
<P align=right><FONT face="Arial" size=1>Page 32 of 35 </FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=right><IMG src="ballard_logo.jpg" border=0></P>
<P align=justify><FONT face="Arial" size=2>There are inherent limitations in
the effectiveness of internal control over financial reporting, including the
possibility that misstatements may not be prevented or detected. Accordingly,
even effective internal controls over financial reporting can provide only
reasonable assurance with respect to financial statement preparation.
Furthermore, the effectiveness of internal controls can change with
circumstances.</FONT></P>
<P align=justify><FONT face="Arial" size=2>Management, including the CEO and
CFO, have evaluated the effectiveness of internal control over financial
reporting, as defined in Rules 13a&#150;15(f) of the Exchange Act, in relation to
criteria described in </FONT><I><FONT face="Arial" size=2>Internal
Control&#150;Integrated Framework</FONT></I><FONT face="Arial" size=2> issued by
the Committee of Sponsoring Organizations of the Treadway Commission (&#147;COSO&#148;).
Based on this evaluation, Management has determined that internal control over
financial reporting was effective as of December 31, 2012.</FONT></P>
<P align=justify><FONT face="Arial" size=2>KPMG LLP, our independent
registered public accounting firm, has audited our consolidated financial
statements and expressed an unqualified opinion thereon. KPMG has also expressed
an unqualified opinion on the effective operation of our internal control over
financial reporting as of December 31, 2012. </FONT></P>
<P align=justify><I><FONT face="Arial" size=2>Changes in internal control
over financial reporting </FONT></I></P>
<P align=justify><FONT face="Arial" size=2>During the year ended December 31,
2012, there were no material changes in internal control over financial
reporting that have materially affected, or are reasonably likely to materially
affect, the Company&#146;s internal control over financial reporting. Our design of
disclosure controls and procedures and internal controls over financial
reporting includes controls, policies and procedures covering Dantherm Power.
</FONT></P>
<P align=justify><B><FONT face="Arial" size=2>RISKS &amp; UNCERTAINTIES</FONT></B></P>

<P align=justify><FONT face="Arial" size=2>An investment in our common shares
involves risk. Investors should carefully consider the risks and uncertainties
described below and in our Annual Information Form. The risks and uncertainties
described below and in our Annual Information Form are not the only ones we
face. Additional risks and uncertainties, including those that we do not know
about now or that we currently deem immaterial, may also adversely affect our
business. For a more complete discussion of the risks and uncertainties which
apply to our business and our operating results (which are summarized below),
please see our Annual Information Form and other filings with Canadian
(www.sedar.com) and U.S. securities regulatory authorities (www.sec.gov).</FONT></P>
<P align=justify><FONT face="Arial" size=2>Our business entails risks and
uncertainties that affect our outlook and eventual results of our business and
commercialization plans. The primary risks relate to meeting our product
development and commercialization milestones, which require that our products
exhibit the functionality, cost, durability and performance required in a
commercial product and that we have sufficient access to capital to fund these
activities. To be commercially useful, most of our products must be integrated
into products manufactured by system integrators or OEMs. There is no guarantee
that system integrators or OEMs will provide products that use our products as
components. There is also a risk that mass markets for certain of our products
may never develop, or that market acceptance might take longer to develop than
anticipated.</FONT></P>
<P align=justify><FONT face="Arial" size=2>A summary of our identified risks
and uncertainties are as follows: </FONT></P>
<UL style="FONT-SIZE: 10pt; TEXT-ALIGN: justify"><LI><FONT face="Arial" size=2>We may not be able to achieve
  commercialization of our products on the timetable we anticipate, or at
  all;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Arial" size=2>We expect our cash reserves will be reduced
  due to future operating losses and <FONT face="Arial" size=2>working
  capital requirements, and we cannot provide certainty as to how long our cash
  reserves will last or that we will be able to access additional capital when
  necessary; </FONT></FONT></LI></UL>
<P align=right><FONT face="Arial" size=1>Page 33 of 35 </FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=right><IMG src="ballard_logo.jpg" border=0></P>
<UL style="FONT-SIZE: 10pt; TEXT-ALIGN: justify"><LI><FONT face="Arial" size=2>A mass market for our products may never
  develop or may take longer to develop than we anticipate;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Arial" size=2>We may not be able to successfully execute
  our business plan;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Arial" size=2>In our material handling market, we depend on
  a single customer for the majority of our revenues;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Arial" size=2>We have limited experience manufacturing fuel
  cell products on a commercial basis;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Arial" size=2>Global economic conditions are beyond our
  control and may have an adverse impact on our business or on our key suppliers
  and / or customers;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Arial" size=2>Potential fluctuations in our financial and
  business results make forecasting difficult and may restrict our access to
  funding for our commercialization plan;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Arial" size=2>We could be adversely affected by risks
  associated with acquisitions;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Arial" size=2>We are subject to risks inherent in
  international operations;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Arial" size=2>Exchange rate fluctuations are beyond our
  control and may have a material adverse effect on our business, operating
  results, financial condition and profitability;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Arial" size=2>Commodity price fluctuations are beyond our
  control and may have a material adverse effect on our business, operating
  results, financial condition and profitability;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Arial" size=2>We are dependent upon Original Equipment
  Manufacturers and Systems Integrators to purchase certain of our
  products;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Arial" size=2>We are dependent on third party suppliers for
  the supply of key materials and components for our products;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Arial" size=2>We currently face and will continue to face
  significant competition;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Arial" size=2>We could lose or fail to attract the
  personnel necessary to run our business;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Arial" size=2>Public Policy and regulatory changes could
  hurt the market for our products;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Arial" size=2>We depend on our intellectual property, and
  our failure to protect that intellectual property could adversely affect our
  future growth and success;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Arial" size=2>We could be liable for environmental damages
  resulting from our research, development or manufacturing operations;
  and<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Arial" size=2>Our products use flammable fuels, which could
  subject our business to product liability claims. </FONT></LI></UL>
<P align=justify><B><FONT face="Arial" size=2>FORWARD-LOOKING STATEMENTS
DISCLAIMER</FONT></B><FONT face="Arial" size=2> </FONT></P>
<P align=justify><FONT face="Arial" size=2>This document contains
forward-looking statements that are based on the beliefs of management and
reflect our current expectations as contemplated under the safe harbor
provisions of Section 21E of the United States Securities Exchange Act of 1934,
as amended. Such statements include, but are not limited to, statements with
respect to our objectives, goals, liquidity, sources of capital and our outlook
including our estimated revenue and gross margins, cash flow from operations,
Cash Operating Costs, EBITDA and Adjusted EBITDA
(see Non-GAAP Measures) contained in our &#147;Business Outlook&#148;, as well as
statements with respect to our beliefs, plans, objectives, expectations,
anticipations, estimates and intentions. Words such as "estimate", "project",
"believe", "anticipate", "intend", "expect", "plan", "predict", "may", "should",
"will", the negatives of these words or other variations thereof and comparable
terminology are intended to identify forward-looking statements. These
statements are not guarantees of future performance and involve assumptions,
risks and uncertainties that are difficult to predict.</FONT></P>
<P align=right><FONT face="Arial" size=1>Page 34 of 35 </FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=right><IMG src="ballard_logo.jpg" border=0></P>
<P align=justify><FONT face="Arial" size=2>In particular, these
forward-looking statements are based on certain factors and assumptions
disclosed in our &#147;Outlook&#148; as well as specific assumptions relating to our
expectations with respect to the generation of new sales, producing, delivering
and selling the expected product volumes at the expected prices, and controlling
our costs. They are also based on a variety of general factors and assumptions
including, but not limited to, our expectations regarding product development
efforts, manufacturing capacity, product pricing, market demand, and the
availability and prices of raw materials, labour and supplies. These assumptions
have been derived from information available to the Company including
information obtained by the Company from third parties. These assumptions may
prove to be incorrect in whole or in part. In addition, actual results may
differ materially from those expressed, implied, or forecasted in such
forward-looking statements. Factors that could cause our actual results or
outcomes to differ materially from the results expressed, implied or forecasted
in such forward-looking statements include, but are not limited to: the
condition of the global economy; the rate of mass adoption of our products;
changes in product pricing; changes in our customers' requirements, the
competitive environment and related market conditions; product development
delays; changes in the availability or price of raw materials, labour and
supplies; our ability to attract and retain business partners, suppliers,
employees and customers; changing environmental regulations; our access to
funding and our ability to provide the capital required for product development,
operations and marketing efforts, and working capital requirements; our ability
to protect our intellectual property; the magnitude of the rate of change of the
Canadian dollar versus the U.S. dollar; and the general assumption that none of
the risks identified in the Risks and Uncertainties section of this report or in
our most recent Annual Information Form will materialize. Readers should not
place undue reliance on Ballard's forward-looking statements.</FONT></P>
<P align=justify><FONT face="Arial" size=2>The forward-looking statements
contained in this document speak only as of the date of this Management
Discussion and Analysis. Except as required by applicable legislation, Ballard
does not undertake any obligation to release publicly any revisions to these
forward-looking statements to reflect events or circumstances after the date of
this Management Discussion and Analysis, including the occurrence of
unanticipated events.</FONT></P>
<P align=right><FONT face="Arial" size=1>Page 35 of 35 </FONT></P>
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end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
