23 Caribbean Utilities Company, Ltd.  2011  Annual Report Management’s Discussion and Analysis March 31, 2012. Beginning with the  first quarter of 2012, the Company’s  unaudited interim financial  statements will be prepared and filed  in accordance with US GAAP. Phase III will conclude when the  Company files its annual audited  financial statements for the year  ending December 31, 2012 prepared  in accordance with US GAAP.  The area identified to date where  differences between US GAAP and  Canadian GAAP is expected to  have the most significant financial  statement impacts is outlined below. The identified impacts are unaudited  and are subject to change based on  further analysis. Under Canadian GAAP, the accrued  benefit asset or liability associated  with defined benefit plans is  recognised on the balance sheet with  a reconciliation of the recognised asset  or liability to the funded or unfunded  status being disclosed in the notes to  the financial statements. The accrued  benefit asset or liability excludes  unamortized balances related to past  service costs, actuarial gains or losses  and transitional obligations which  have not yet been expensed. US GAAP requires recognition of  the funded or unfunded status of  defined benefit plans on the balance  sheet, with the opening unamortized  balances related to past service  costs, actuarial gains or losses and  transitional obligations recognised on  the balance sheet as a component of  accumulated other comprehensive  income. Changes to past service  costs, actuarial gains or losses and  transitional obligations which are  not immediately recognised as  components of net pension expense  The above items do not represent a  complete list of expected differences  between US GAAP and Canadian  GAAP, and are subject to change. Other less significant differences  have also been identified. Analysis  also remains ongoing and additional  areas where the Company’s financial  statements may be materially  impacted may be identified prior  to the Company’s voluntary  preparation and filing of its audited  US GAAP financial statements for the  year ended December 31, 2011. A  detailed reconciliation between the  Company’s audited Canadian GAAP  The above differences are expected  to impact the calculation and  recognition of the Company’s benefit  obligation which will be mostly  offset by a corresponding change to  Accumulated Other Comprehensive  Income. Additional differences between  Canadian GAAP and US GAAP in  the accounting for defined benefit  plans include the determination  of the measurement date and the  period over which pension expense  is recognised. Canadian GAAP allows  the use of a measurement date up  to three months prior to the date of  an entity’s fiscal year end. US GAAP  requires the entity’s fiscal year end  to be used as the measurement date. Canadian GAAP allows the use of  an attribution period that extends  beyond the date when the credited  service period ends, under specific  circumstances, for defined benefit  pension plans. US GAAP allows the  use of an attribution period up to  the date when credit service ends for  defined benefit pension plans. are required to be recognised in  other comprehensive income. Upon  adoption of US GAAP, the Company  will recognise the unfunded status of  its defined benefit plan on the balance  sheet. and US GAAP financial statements for  2011, including 2010 comparatives,  and any additional areas where  significant adjustments may be  required in accordance with US  GAAP, will be disclosed as part of that  voluntary filing.  The unaudited, estimated  quantification and reconciliation of  the Company’s balance sheest as at  December 31, 2011 and December  31, 2010 prepared in accordance with  US GAAP versus Canadian GAAP, and  based on the differences identified to  date, may be summarized as follows: Liabilities impact to long-term debt  stated seperately as of December  31, 2011 are estimated to increase  by approximately $2.8 million  (December 31, 2010: $1.6 million). The estimated increase is due to the  expected increase in the pension  liability in accordance with US GAAP. Shareholders’ equity as of  December 31, 2011 is estimated to  decrease by approximately $2.8  million (December 31, 2010: $1.6  million). The estimated decrease is  due to the expected recognition of  the past service costs and net actuarial  losses related to the defined benefit  plan in accordance with US GAAP.  Other assets as of December  31, 2011 are estimated to increase  by approximately $1.6 million  (December 31, 2010: $1.2 million). The estimated increase is due to the  reclassification of deferred debt costs  in accordance with US GAAP. Long-term debt as of December  31, 2011 is estimated to increase  by approximately $1.6 million  (December 31, 2010: $1.2 million). The estimated increase is due to the  reclassification of deferred debt costs  in accordance with US GAAP. The preparation of the Company’s  financial statements in accordance  Critical Accounting Estimates Employee Future Benefits: Financial Statement Impacts - US GAAP: