Algonquin Power & Utilities Corp. – Consolidated Financial Statements ALGONQUIN POWER & UTILITIES CORP.  24. Financial instruments 2012 Annual Report 131 Notes to the Consolidated Financial Statements  December 31, 2012 and 2011   (in thousands of Canadian dollars except as noted and amounts per share)  2012  Carrying  amount Fair Value Level  1 Level   2  Level   3  Notes receivable  $22,937 $25,476 $ -  $ - $25,476 Derivative financial instruments:  Energy contracts designated  as a cashflow hedge  12,695 12,695 - 12,695 - Cross-currency swap  designated as a foreign  exchange hedge  408 408 - 408 - Commodity contracts for  regulatory operations 147 147 - 147 - Total derivative financial  instruments 13,250 13,250 13,250 Total financial assets  $36,187 $38,726 $ -  $13,250 $25,476 Long-term liabilities  $770,826 $785,473 $ - $ 785,473 $ - Convertible debentures  960 1,319 1,319  - - Derivative financial instruments:  Energy contracts designated  as a cashflow hedge  9,012 9,012 - 9,012 - Cross-currency swap  designated as a foreign  exchange hedge  2,078 2,078 - 2,078 - Interest rate swaps not  designated as a hedge  4,778 4,778 - 4,778 - Energy derivative contracts  287 287 -  287 - Commodity contracts for  regulated operations  1,661 1,661 -  1,661 - Total derivative financial  instruments 17,816 17,816 - 17,816 Total financial liabilities  $789,602 $804,608 $1,319  $803,289 $ - (a)  Fair value of financial instruments 