Algonquin Power & Utilities Corp. – Management’s Discussion & Analysis Quarterly revenues have fluctuated between $63.3 million and $143.1 million over the prior two year period. A  number of factors impact quarterly results including acquisitions, seasonal fluctuations, hydrology and winter  and summer rates built into the PPAs. In addition, a factor impacting revenues year over year is the fluctuation  in the strength of the Canadian dollar which can result in significant changes in reported revenue from U.S.  operations. Quarterly net earnings attributable to shareholders have fluctuated between net earnings attributable to  shareholders of $19.6 million and a net loss of $8.5 million over the prior two year period. Earnings have been  significantly impacted by non-cash factors such as deferred tax recovery and expense, impairment of  intangibles, property, plant and equipment and mark-to-market gains and losses on financial instruments.  At the end of the fiscal year ended December 31, 2012, APUC carried out an evaluation, under the supervision  of and with the participation of APUC’s management, including the Chief Executive Officer (“CEO”) and the  Chief Financial Officer (“CFO”), of the effectiveness of the design and operations of APUC’s disclosure controls  and procedures (as defined in Rule 13a – 15(e) and Rule 15d – 15(e) under the Securities Exchange Act of  1934, as amended (the “Exchange Act”)). Based on that evaluation, the CEO and the CFO have concluded that  as of December 31, 2012, APUC’s disclosure controls and procedures are effective. APUC’s internal control over financial reporting is a process designed to provide reasonable assurance  regarding the reliability of financial reporting and the preparation of financial statements for external purposes in  accordance with generally accepted accounting principles.  A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to  the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and  dispositions of the assets of APUC; (ii) provide reasonable assurance that transactions are recorded as  necessary to permit preparation of financial statements in accordance with generally accepted accounting  principles, and that receipts and expenditures of APUC are being made only in accordance with authorizations  of management and directors of APUC; and (iii) provide reasonable assurance regarding prevention or timely  detection of unauthorized acquisition, use, or disposition of APUC’s assets that could have a material effect on  the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect all  misstatements. Additionally, projections of any evaluation of effectiveness to future periods are subject to the  risk that controls may become inadequate because of changes in conditions, or that the degree of compliance  with the policies or procedures may deteriorate. During the year ended December 31, 2012, APUC acquired EnergyNorth Gas Utility, Granite State Electric  Utility, the Midwest Gas Utilities, and the Sandy Ridge, Minonk and Senate Wind Facilities. The financial  information for these business acquisitions is included in this MD&A and in Note 3 to the consolidated financial  statements. As permitted by National Instrument 52-109 and the U.S. Securities and Exchange Commission, the  Company excluded these acquisitions from its evaluation of the effectiveness of APUC’s internal controls over  financial reporting as of December 31, 2012 due to the complexity associated with assessing internal controls  during integration efforts and the proximity of some of the acquisitions to year-end.  Management conducted an evaluation of the design and operation of APUC’s internal control over financial  reporting as of December 31, 2012 based on the criteria set forth in Internal Control – Integrated Framework  issued by the Committee of Sponsoring Organizations of the Treadway Commission. This evaluation included  review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the  operating effectiveness of controls and a conclusion on this evaluation. Based on this evaluation, management  has concluded that APUC’s internal control over financial reporting was effective as of December 31, 2012.  During the year ended December 31, 2012, there has been no change in APUC’s internal control over financial  reporting that has materially affected, or is reasonably likely to materially affect, APUC’s internal control over  financial reporting. APUC continues to implement its internal control structure over the operations of the  acquired businesses discussed above.  2012 Annual Report 66 Internal controls over financial reporting  Disclosure Controls