Algonquin Power & Utilities Corp. – Management’s Discussion & Analysis 2012 Annual Report 45 For the year ended December 31, 2012, interest, dividend and other income totalled $2.1 million as compared to  $3.0 million in the same period in 2011. Interest, dividend and other income primarily consists of dividends from  APUC’s share investment in the Kirkland and Cochrane facilities. For the year ended December 31, 2012, acquisition related costs totalled $7.7 million as compared to $3.0  million in the same period in 2011. The increase was primarily driven by the closing of Sandy Ridge Wind  Facility on July 1, 2012, Granite State Electric Utility and EnergyNorth Gas Utility acquisitions on July 3, 2012,  the Midwest Gas Utilities on August 1, 2012, and Minonk and Senate Facilities on December 10, 2012. An income tax recovery of $13.6 million was recorded in the year ended December 31, 2012, as compared to a  recovery of $22.5 million during the same period in 2011. The income tax recovery for the year ended  December 31, 2012 primarily resulted from the recognition of deferred credits from the utilization of deferred  income tax assets recognized at the time of the Unit Exchange Offer, non-taxable inter-corporate dividends,  changes in tax rates, losses in subsidiaries and production tax credits.  2012 Fourth Quarter Corporate and Other Expenses  NON-GAAP PERFORMANCE MEASURES  Reconciliation of Adjusted EBITDA to net earnings During the quarter ended December 31, 2012, administrative expenses totalled $5.4 million, as compared to  $4.8 million in the same period in 2011. The expense increase in the quarter ended December 31, 2012  primarily results from additional personnel, increased wages, additional costs required to administer APUC’s  operations, share based compensation expense and other costs as compared to the same period in 2011.  For the quarter ended December 31, 2012, interest expense totalled $11.3 million as compared to $7.6 million in  the same period in 2011. The increased interest expense is due new indebtedness as a result of the U.S. $225  million private placement used to fund a portion of the EnergyNorth Gas Utility, Granite State Electric Utility, and  Midwest Gas Utilities acquisitions, and the $135 million senior unsecured debentures placed in the third quarter  of 2011. These amounts were partially offset by reduced interest expense related to convertible debentures due  to the conversion of the Series 1A Debentures in the prior year and the Series 2A Debentures in the first quarter  of 2012.  For the quarter ended December 31, 2012, interest, dividend and other income totalled $0.4 million, as  compared to $0.8 million in the same period in 2011. Interest, dividend and other income primarily consists of  dividends from APUC’s share investment in the Kirkland and Cochrane facilities. An income tax recovery of $6.6 million was recorded in the three months ended December 31, 2012, as  compared to a recovery of $6.0 million during the same period in 2011. The income tax recovery for the three  months ended December 31, 2012 primarily resulted from the recognition of deferred credits from the utilization  of deferred income tax assets recognized at the time of the Unit Exchange Offer, non-taxable inter-corporate  dividends, changes in tax rates, losses in subsidiaries and production tax credits.  EBITDA is a non-GAAP metric used by many investors to compare companies on the basis of ability to generate  cash from operations. APUC uses these calculations to monitor the amount of cash generated by APUC as  compared to the amount of dividends paid by APUC. APUC uses Adjusted EBITDA to assess the operating  performance of APUC without the effects of depreciation and amortization expense, income tax expense or  recoveries, acquisition costs, interest expense, gain or loss on derivative financial instruments, write down of  intangibles and property, plant and equipment, earnings attributable to non-controlling interests and gain or loss  on foreign exchange. APUC adjusts for these factors as they may be non-cash, unusual in nature and are not  factors used by management for evaluating the operating performance of the company. APUC believes that  presentation of this measure will enhance an investor’s understanding of APUC’s operating performance. Adjusted EBITDA is not intended to be representative of cash provided by operating activities or results of  operations determined in accordance with GAAP. The following table is derived from and should be read in conjunction with the audited Consolidated Statement  of Operations. This supplementary disclosure is intended to more fully explain disclosures related to Adjusted  EBITDA and provides additional information related to the operating performance of APUC. Investors are  cautioned that this measure should not be construed as an alternative to GAAP consolidated net earnings. 