Algonquin Power & Utilities Corp. – Management’s Discussion & Analysis 2012 Fourth Quarter Operating Results  For the year ended December 31, 2012, interest and other income totalled $2.0 million, consistent with the  same period in 2011. Interest and other income primarily consists of interest related to the senior and  subordinated debt interest in the Red Lily I wind project. This amount is included as part of APCo’s earnings  from its investment in Red Lily I, as discussed above.  For the year ended December 31, 2012, the Renewable Energy Division’s operating profit totalled $57.8 million,  as compared to $60.6 million during the same period of 2011, representing a decrease of $2.8 million or 5%. For the quarter ended December 31, 2012, the Renewable Energy Division produced 355.4 GW-hrs of  electricity, as compared to 307.5 GW-hrs produced in the same period in 2011, an increase of 16%. The  increased generation is primarily due to the acquisition of Sandy Ridge, Minonk and Senate Wind Facilities. This level of production represents sufficient renewable energy to supply the equivalent of 79,000 homes on an  annualized basis with renewable power. Using new standards of thermal generation, as a result of renewable  energy production, the equivalent of 195,500 tons of CO2 gas was prevented from entering the atmosphere in  the fourth quarter of 2012.  During the quarter ended December 31, 2012, the division generated electricity equal to 84% of long-term  projected average resources (wind and hydrology) as compared to 109% during the same period in 2011. In the  fourth quarter of 2012, the new Texas region experienced resources slightly higher than long-term averages  resources, whereas the new Illinois region as well as the Western, and Quebec regions experienced resources  slightly lower than long-term averages resources, producing 1-9% below long-term average resources. The  Manitoba, Saskatchewan and Pennsylvania regions produced 12-20% below long-term averages resources.  The Ontario and Maritimes regions produced well below long-term averages resources, primarily due to the  unplanned outage at the Long Sault Facility.  For the quarter ended December 31, 2012, revenue from energy sales in the Renewable Energy Division  totalled $21.5 million, as compared to $22.3 million during the same period in 2011. As the purchase of energy  by the Energy Services Business is a significant revenue driver and component of variable operating expenses,  the division compares ‘net energy sales’ (energy sales revenue less energy purchases) as a more appropriate  measure of the division’s sales results. For the quarter ended December 31, 2012, net revenue from energy  sales in the Renewable Energy Division totalled $19.8 million, as compared $21.6 million during the same  period in 2011.  Revenue generated from APCo’s hydro facilities located in the Ontario, Quebec and Western regions decreased  by $1.1 million due to a $1.3 million overall decrease in hydrology, primarily in the Ontario and Quebec regions,  offset partially by a $0.2 million increase in weighted average energy rates as compared to the same period in  2011. Lost production from the unplanned shutdown in Ontario was covered by business interruption insurance  claim proceeds in the amount of $1.8 million. Revenue from APCo’s hydro facility located in the Maritime region  decreased primarily due to a $0.5 million decrease in customer demand, partially offset by a $0.2 million  increase in weighted average energy rates as compared to the same period in 2011. Revenue from APCo’s wind facilities located in the Manitoba region decreased $0.7 million primarily due to  lower than normal wind resource, decreased weighted average energy rates realized on production in excess of  contracted dependable volumes partially offset by an increase in production from the expansion of the facility. Revenue from APCo’s wind facilities located in the new Pennsylvania, Texas, and Illinois regions which  accounts for Sandy Ridge, Minonk and Senate Wind Facilities, the three U.S. Wind Project interests acquired in  2012, produced revenue of $3.2 million. Revenue at AES increased 5% primarily due to $0.5 million of increased customer demand, partially offset by a  $0.4 million decrease in weighted average energy rates. Revenue at AES primarily consists of wholesale  deliveries to local electric utilities, retail sales to commercial and industrial customers in Northern Maine,  merchant sales of production in excess of customer demand at the Tinker Facility and other revenue. For the quarter ended December 31, 2012, energy purchase costs by AES totalled $1.7 million as compared to  $0.7 million during the same period in 2011, an increase of $1.0 million. During this period, AES purchased  approximately 22.1 GW-hrs of energy at market and fixed rates averaging U.S. $76 per MW-hr. During the  quarter, the Maritime region generated approximately 52% of the load required to service its customers as well  as AES’ customers, as compared to 70% in the same period in 2011. The lower production from the Maritime  region was a result of a planned shutdown to implement various equipment upgrades. This planned shutdown  and resultant lower production was the primary driver for AES’ increased energy purchase costs for the quarter  2012 Annual Report 26