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## Managem ment’s Di iscussion n and Ana alysis 

(All monetary amounts or w y amounts are where otherwi e in thousand ise noted.) s of Canadia n dollars, exc cept per share e and convert tible debentur re 

Management discussion an for the three (“MD&A”) sh ended Decem APUC websit recent Annua t of Algonqu nd analysis to e and twelve ould be read mber 31, 201 te at www.Alg al Information in Power & o provide info months end d in conjuncti 12 and 2011 gonquinPowe  Form (“AIF”) Utilities Corp ormation to a ded Decembe on with APU . This mate erandUtilities.c ) can be found p. (“APUC” o assist its shar er 31, 2012. C’s audited c erial is availa com. Additio d on SEDAR or the “Comp reholders’ und  The Manag consolidated ble on SEDA onal informatio at www.seda pany”) has p derstanding o gement’s Disc financial stat AR at www.s on about APU ar.com. repared the of the financia cussion and tements for t edar.com an UC, including following al results Analysis the years d on the the most 

This MD&A is s based on in nformation ava ailable to man nagement as of March 14,  2013. 

## Caution co oncerning forward-lo ooking stat tements an nd non-GA AAP Measu ures 

Certain state laws. These relating to, a commodity m statements in plans and its “continues”, similar expre ements includ e statements among others market prices, nclude, amon s dividends to “could”, “exp ssions genera ed herein co reflect the v , the perform , and the fina ng others, sta o shareholder pect”, “estima ally constitute ntain forward views of APU mance of APU ancial and reg atements with rs. Statemen ates”, “intend e forward-look d-looking infor UC with respe UC's assets a gulatory clima h respect to nts containing s”, “may”, “o king statemen rmation within ect to future and the busin ate in which it the expected g expressions outlook”, “plan nts. n the meanin events, base ness, interest t operates. T d performance s such as “an ns”, “project” g of certain s ed upon assu t and exchan These forward e of APUC, nticipates”, “b , “strives”, “w securities umptions ge rates, d looking its future believes”, will”, and 

Since forward to make assu assumptions actual results factors includ environmenta taken by regu and accompa adversely aff statements. I date of this M information it intend to up development d-looking stat umptions and are reasona s may differ m de the impac al and other ulators on mo anying busine fect results. In addition, s MD&A and su t has presente pdate or revis ts or otherwis tements relat d involve inhe ble in the circ materially from ct of movem laws and re onetary policy ess climate. Given these uch statemen uch expectati ed, not less f se any forwa e, except as e to future ev erent risks an cumstances, m the expecta ments in exch gulatory polic y; and the stat APUC cauti e risks, undu nts are made ons may cha frequently tha ard-looking st required by la vents and con d uncertaintie these risks a ations set out hange rates cy applicable te of the Can ions that this e reliance sh e based on in ange after this an on a quarte tatements, w aw. nditions, by th es. APUC ca and uncertain in the forward and interest e to the ener adian and the s list is not ex hould not be nformation av s date. APUC erly basis. A whether as a heir very natu autions that a ties give rise d-looking stat rates; the e rgy and utiliti e United State xhaustive, an e placed on t vailable and e C reviews ma PUC is not o result of ne ure they requi although it be e to the possi tements. Ma effects of cha es sectors; d es (“U.S.”) ec nd other facto these forward expectations a aterial forward bligated to no ew informatio re APUC elieves its bility that terial risk anges in decisions conomies ors could d-looking as of the d-looking or does it on, future 

The terms “a (“Adjusted E operations” a “adjusted net share cash p under GAAP from operatio operating act by other com A calculation share cash p can be found of performan do not repres charges and adjusted net EBITDA”), “ad and “per shar t earnings”, “p provided by a . There is no ons”, “per sha tivities” conse mpanies and t  and analysis provided by a d throughout t ce for earning sent amounts claims agains earnings”, “a djusted funds re cash provi per share cas adjusted fund o standardize are cash prov equently APU therefore may s of “adjusted adjusted fund this MD&A. P gs per share. s available for st APUC. adjusted earn s from opera ded by opera sh provided b ds from opera ed measure o vided by adjus UC’s method o y not be com d net earnings s from opera Per share cas . Amounts rep r distribution nings before ations”, “per ating activities y operating a ations” and A f “adjusted ne sted funds fro of calculating mparable to si s”, Adjusted E ations” and “p h provided by presented by to shareholde interest, taxe share cash s” are used t activities”, “ad Adjusted EBIT et earnings”, om operations these measu milar measur EBITDA, “adj per share cas y operating ac per share ca ers and shou es, depreciat provided by throughout th justed funds TDA are not Adjusted EB s” and “per sh ures may diffe res presented justed funds f sh provided b ctivities is not ash provided ld be conside ion and amo adjusted fun his MD&A. T from operatio recognized m ITDA, “adjust hare cash pro er from metho d by other com from operatio by operating a t a substitute by operating ered in light o ortization” nds from he terms ons”, “per measures ted funds ovided by ods used mpanies. ons”, “per activities” measure activities of various 

