Algonquin Power & Utilities Corp. – Management’s Discussion & Analysis connections. Liberty Utilities (East) reports active connections, exclusive of vacant connections rather than total  connections. From the acquisition date of July 3, 2012 to December 31, 2012, Liberty Utilities (East)’s electricity usage  totalled 474.5 GW-hrs and natural gas usage totalled 4,728,400 MMBTU.  $^{1}$ Granite State Electric Utility and EnergyNorth Gas Utility were acquired on July 3, 2012. $^{2}$ Natural Gas costs are shown net of U.S. $4.5 million regulatory authorized deferral related to an under recovery of actual gas costs.  Liberty Utilities (East) has investments in electricity assets for regulatory purposes of U.S. $88.4 million, and  natural gas assets for regulatory purposes of U.S. $263.4 million as at December 31, 2012, as compared to U.S.  $nil and U.S. $nil, respectively as at December 31, 2011.  From the date of acquisition to December 31, 2012, Liberty Utilities (East)’s revenue totalled U.S. $87.2 million  as a result of the acquisitions of Granite State Electric Utility and EnergyNorth Gas Utility on July 3, 2012.  From the date of acquisition to December 31, 2012, Liberty Utilities (East)’s revenue from utility electricity sales  totalled U.S. $36.8 million. The cost of electricity is passed through to Liberty Utilities (East)’s customers. As a  result, the division compares ‘net utility electricity sales’ (revenue from electricity sales less fuel and purchased  power costs) as a more appropriate measure of the division’s results. From the date of acquisition to December  31, 2012, net electricity utility sales for Liberty Utilities (East) totalled U.S. $12.4 million.  From the date of acquisition to December 31, 2012, Liberty Utilities (East)’s revenue from natural gas sales and  distribution totalled U.S. $50.3 million. The cost of natural gas by Liberty Utilities (East) is passed through to  Liberty Utilities (East)’s customers. As a result, the division compares ‘net utility natural gas sales and  distribution revenue’ (utility natural gas sales and distribution revenue less natural gas purchases) as a more  appropriate measure of the division’s results. From the date of acquisition to December 31, 2012, net utility  natural gas sales and distribution revenue for Liberty Utilities (East) totalled U.S. $26.3 million.  From the date of acquisition to December 31, 2012, electricity purchases for Liberty Utilities (East) totalled U.S.  $24.4 million, and natural gas purchases totalled U.S. $24.0 million.  From the date of acquisition to December 31, 2012, operating expenses, excluding electricity and natural gas  purchases, totalled U.S. $30.4 million. From the date of acquisition to December 31, 2012, Liberty Utilities (East)’s operating profit totalled U.S. $8.8  million. Measured in Canadian dollars, from the date of acquisition to December 31, 2012, Liberty Utilities (East)’s  revenue from utility electricity sales totalled $36.7 million and utility natural gas sales totalled $49.9 million. Measured in Canadian dollars, from the date of acquisition to December 31, 2012, Liberty Utilities (East)’s net  utility electricity sales and distribution revenue totalled $12.4 million and net utility natural gas sales and  distribution revenue totalled $26.1 million.  2012 Annual Report 41 2012 Annual Operating Results  From the acquisition date  to December 31 1 From the acquisition date  to  December 31 1 2012  2011  2012  2011  U.S. $ U.S. $ Can $ Can $ (millions) (millions) (millions) (millions) Electricity Assets for regulatory purposes  88.4 - Natural Gas for regulatory purposes  263.4 - Revenue Utility electricity sales and distribution  $ 36.8 $ - $ 36.7 $ - Utility natural gas sales and distribution  50.3 - 49.9 - Other Revenue  0.1 - 0.1 - 87.2 - 86.7 - Less: Cost of Sales – Electricity (24.4) - (24.3) - Cost of Sales – Natural Gas 2 (24.0) - (23.8) - $ 38.8 $ - $ 38.6 $ - Expenses Operating expenses  (30.4) - (30.2) - Other Income  0.4 0.4 Division operating profit 1 $ 8.8 $ - $ 8.8 $ -