Algonquin Power & Utilities Corp. – Consolidated Financial Statements ALGONQUIN POWER & UTILITIES CORP.  Notes to the Consolidated Financial Statements  December 31, 2012 and 2011   (in thousands of Canadian dollars except as noted and amounts per share)  19.  Related party transactions (continued)  Transactions with APMI and Senior Executives (continued) As at December 31, 2012, included in amounts due from related parties is $816 (2011 - $663)  owed to APUC from APMI and included in amounts due to related parties is $1,811 (2011 -  $1,795) owed to APMI. These amounts arise from the transactions described above. Long Sault is a hydroelectric generating facility in which APUC acquired its interest by way of  subscribing to two notes from the original developers. An affiliate of APMI is one of the original  partners in the facility and is entitled to receive 5% of the after tax equity cash flows commencing in  2014.  In March, 2012, APUC and APMI’s Senior Executives (the “Parties”) reached a term sheet  agreement to resolve a number of the historic joint business associations between the Parties. The transaction is subject to finalization of definitive agreements which are expected to be  completed in the first quarter of 2013.  Under the term sheet, it is proposed that APUC will exchange its 45% interest in the 4MW  Rattlebrook hydroelectric facility (including a $0.5 million positive working capital adjustment) in  return for the Parties’ residual partnership interest in the Long Sault Rapids hydroelectric facility  and the equity interest in the Brampton cogeneration plant. The agreement also settles  outstanding fees owing to APMI. In 2011, a subsidiary of Emera provided lead market participant services for fuel capacity and  forward reserve markets in ISO NE for the Windsor Locks facility. During the year ended December  31, 2012 APUC paid U.S. $nil (2011 – U.S. $260) in relation to this contract. In 2011, APUC  provided a corporate guarantee to a subsidiary of Emera in an amount of U.S. $1,000 in conjunction  with this contract.  Transactions with Emera  For the year ended December 31, 2012, the Energy Services Business sold electricity to Maine  Public Service Company (“MPS”), a subsidiary of Emera, amounting to U.S. $6,096 (2011 – U.S.  $6,564). In 2011, APUC provided a corporate guarantee to MPS in an amount of U.S. $3,000 and a  letter of credit in an amount of U.S $100, primarily in conjunction with a three year contract to provide  standard offer service to commercial and industrial customers in Northern Maine.  As of December 31, 2012, included in amounts due from related parties is $nil (2011 - $1,612) owed  from Emera related to the unpaid contribution of their share of Liberty Energy (California) costs.  The above related party transactions have been recorded at the exchange amounts agreed to by the  parties to the transactions. Basic and diluted earnings per share have been calculated on the basis of net earnings attributable  to the common shareholders of the Company and the weighted average number of common shares  outstanding during the year. Diluted net income per share is computed using the weighted-average  number of common shares and, if dilutive, potential common shares outstanding during the period.  Potential common shares consist of the incremental common shares issuable upon the exercise of  stock options, PSUs, DSUs, shareholders’ rights and convertible debentures. The dilutive effect of  outstanding stock options, PSUs, DSUs and shareholders’ rights is reflected in diluted earnings per  share by application of the treasury stock method while the dilutive effect of convertible debentures is  reflected in diluted earnings per share by application of the as if converted method. 20.  Basic and diluted net earnings per share  2012 Annual Report 123