Algonquin Power & Utilities Corp. – Management’s Discussion & Analysis 2012 Fourth Quarter Operating Results  For the three months ended December 31, 2012, Liberty Utilities (Central)’s revenue totalled U.S. $22.7 million  as compared to U.S. $2.3 million during the same period in 2011, an increase of U.S. $20.4 million. The  revenue increase can be primarily attributed to the addition of the natural gas distribution assets on August 1,  2012. For the three months ended December 31, 2012, Liberty Utilities (Central)’s revenue from natural gas sales and  distribution totalled U.S. $20.5 million. The purchase of natural gas by Liberty Utilities (Central) is a significant  revenue driver and component of operating expenses but these costs are effectively passed through to its  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. For the three months ended December 31, 2012, net utility natural gas sales and distribution  revenue for Liberty Utilities (Central) totalled U.S. $8.5 million.  For the three months ended December 31, 2012, natural gas purchases for Liberty Utilities (Central) totalled U.S  $12.0 million. For the three months ended December 31, 2012, revenue from wastewater treatment and water distribution  totalled U.S. $2.2 million, as compared to U.S. $2.3 million during the same period in 2011, a decrease of U.S.  $0.1 million or 4%.  For the three months ended December 31, 2012, operating expenses, excluding natural gas purchases, totalled  U.S. $6.3 million, as compared to U.S. $1.2 million during the same period in 2011. The increase in operating  expenses can be mostly attributed to the addition of the natural gas distribution assets on August 1, 2012. For the three months ended December 31, 2012, Liberty Utilities (Central)’s operating profit was U.S. $4.4  million as compared to U.S. $1.1 million in the same period in 2011, an increase of U.S. $3.3 million, primarily  related to the acquisition of the natural gas utility.  Measured in Canadian dollars, for the three months ended December 31, 2012, Liberty Utilities (Central)’s  revenue from utility natural gas sales and distribution totalled $20.4 million. Measured in Canadian dollars, for  the three months ended December 31, 2012, net utility natural gas sales and distribution revenue for Liberty  Utilities (Central) totalled $8.5 million.  Measured in Canadian dollars, for the three months ended December 31, 2012, natural gas purchases for  Liberty Utilities (Central) totalled $11.9 million. Measured in Canadian dollars, for the three months ended December 31, 2012, Liberty Utilities (Central)’s  revenue from water treatment and wastewater distribution totalled $2.1 million, as compared to $2.4 million  during the same period in 2011. Measured in Canadian dollars, for the three months ended December 31, 2012, operating expenses, excluding  natural gas purchases, totalled $6.3 million, as compared to $1.2 million during the same period in 2011. Measured in Canadian dollars, for the three months ended December 31, 2012, Liberty Utilities (Central)’s  operating profit totalled $4.3 million as compared to $1.2 million in the same period in 2011.  In the June 30, 2012 Interim MD&A, guidance was provided on the Liberty Utilities (Central)’s expected  operating results over the 12 month period ending June 30, 2013. For the three months ended December 31,  2012 Annual Report 39 Three months ended December 31 Three months ended December 31  2012  2011  2012  2011  U.S. $ U.S. $ Can $ Can $ (millions) (millions) (millions) (millions) Revenue Utility natural gas sales and distribution $  20.5 $  - $  20.4  $   - Wastewater treatment   1.5  1.5  1.4  1.5 Water distribution   0.7  0.8  0.7  0.9  22.7  2.3  22.5   2.4 Less: Cost of Sales – Natural Gas (12.0)  - (11.9)  - $  10.7 $  2.3 $  10.6  $  2.4 Expenses Operating expenses  (6.3) (1.2) (6.3) (1.2) Division operating profit  $   4.4  $   1.1  $   4.3 $   1.2 