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## ALGONQUIN POWER & UTILITIES CORP. 

Notes to the Consolidated Financial Statements 

December 31, 2012 and 2011 

 (in thousands of Canadian dollars except as noted and amounts per share) 

## 3. Business acquisitions and development projects 

(a) Acquisition of New Hampshire electric and gas utilities 

On July 3, 2012, Liberty Utilities acquired 100% of the common shares of Granite State Electric Company, a regulated electric utility, and EnergyNorth Natural Gas Inc. (“EnergyNorth”) a regulated natural gas utility for total cash consideration of $299,501 (U.S. $295,805) subject to final closing adjustments. 

The following table summarizes the preliminary determination of the fair value of the assets acquired and liabilities assumed at the acquisition date: 

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The determination of the fair value of assets and liabilities acquired has been based upon management’s preliminary estimates and certain assumptions with respect to the fair values of the assets acquired and liabilities assumed. The Company has not completed the fair value measurements. In addition, the purchase agreements provides for a final purchase price adjustment based on final agreed working capital and rate base balances at the acquisition date. The Company will continue to review information and perform further analysis prior to finalizing the fair value of the consideration paid and the fair value of the assets acquired and liabilities assumed. The actual fair values of the assets acquired and liabilities assumed may differ from the amounts above. 

Goodwill represents the excess of the fair value of the consideration paid over the fair value of net identifiable assets acquired. The contributing factors to the amount recorded as goodwill include expected future cash flows, potential operational synergies, the utilization of technology, and cost savings opportunities in the delivery of certain shared administrative and other services. The goodwill related to EnergyNorth and Granite State has been allocated to the Liberty Utilities (East) segment. 

