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2012 at a total capital cost of U.S. $18.3 million (net of one-time non-recurring items: State of Connecticut grant for U.S. $6.5 million; and a U.S. Federal Government heat and power investment tax credit (“ITC”) for U.S. $2.4 million) and is now fully operational. As part of the repowering project APCo also entered into an extension of the energy services agreement with Ahlstrom for delivery of 100% of its steam capacity and a portion of its electrical generating capacity. The agreement now continues until 2027. With the new turbine operational the existing Frame 6 is now available as a peaking turbine to generate additional revenues. 

## Sale of Small U.S. Hydro Facilities 

On March 14, 2013, APCo entered into an agreement to sell 10 small U.S. hydroelectric generating facilities that were no longer considered strategic to the ongoing operations of the Company for gross proceeds of U.S. $27 million. The operating results from these facilities are therefore disclosed as discontinued operations on the consolidated statements of operations and prior periods have been reclassified to conform to this presentation. 

## 2012 Annual Results from Operations 

During the year, APUC positioned both its regulated and non-regulated utility businesses for significant growth in 2013 and beyond. Growth expected in the first quarter of 2013 will reflect the acquisition of 3 U.S. wind generation facilities near the end of the year. The acquisition of natural gas and electric utilities in the third quarter of 2012 will also contribute to significant growth expected in 2013 as cash flow and earnings from these utilities are heavily weighted to the first and second quarters of each year. 

## Key Selected Annual Financial Information 

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1 APUC uses adjusted EBITDA, adjusted net earnings and adjusted funds from operations to enhance assessment and understanding of the operating performance of APUC without the effects of certain accounting adjustments which are derived from a number of non-operating factors, accounting methods and assumptions. 2 

APUC uses per share adjusted net earnings, cash provided by operating activities and adjusted funds from operations to enhance assessment and understanding of the performance of APUC. $^{3}$ Non-GAAP measure - see applicable section later in this MD&A and the caution regarding non-GAAP measures on page 1. $^{4}$Long term debt includes current and long term portion of debt and convertible debentures. 

For the year ended December 31, 2012, APUC experienced an average U.S. exchange rate of approximately $0.999 as compared to $0.989 in the same period in 2011. As such, any year over year variance in revenue or expenses, in local currency, at any of APUC’s U.S. entities are affected by a change in the average exchange rate, upon conversion to APUC’s Canadian dollar reporting currency. 

For the year ended December 31, 2012, APUC reported total revenue of $369.9 million as compared to $270.7 million during the same period in 2011, an increase of $99.2 million or 37%. The major factors resulting in the increase in APUC revenue for the year ended December 31, 2012 as compared to the corresponding period in 2011 are set out as follows: 

