Algonquin Power & Utilities Corp. – Management’s Discussion & Analysis 2011 results if approved as filed. The application seeks recognition of increased capital investment and  increased operating expenses over current rates. In addition to a revenue increase, the application seeks a  mechanism that helps mitigate the effects of regulatory lag on capital investment. The new rates are expected  to be implemented in the second half of 2013.  On February 17, 2012, Liberty Utilities (West) filed a general rate case and on November 29, 2012, approval of  the All Parties General Rate Case Settlement (“Settlement”) was received from the CPUC. As an element of the  decision, a revenue decoupling mechanism and a vegetation management memorandum account was agreed  upon. The revenue decoupling mechanism will decouple base revenues from fluctuations caused by weather  and economic factors. The vegetation management memorandum account allows for the tracking and pass  through of vegetation management expenses, one of the largest expenses of the utility. Primarily as a result of  the rate case at the Calpeco Electric Utility, additional EBITDA of $7.1 million is expected in 2013. On February 28, 2013, Liberty Utilities (West) filed a general rate case with the Arizona Corporation Commission  related to the Litchfield Park Service Company facilities seeking, among other things, an increase in EBITDA by  U.S. $3.0 million over the 2012 results if approved as filed. The application seeks recognition of increased  capital investment and increased operating expenses over current rates. In addition to a revenue increase, the  application seeks an accelerated infrastructure recovery surcharge, a Purchased Power Pass through  Mechanism to recover power price increases between test years, a Property Tax Accounting Deferral to defer  increases in property taxes between test years and a policy statement on rate design to begin the gradual shift  of moving more revenue recovery to fixed charges versus commodity charges. New rates are expected to be  implemented in the first half of 2014.  In the first half of 2013, Liberty Utilities (East)’s electric utility will file a rate case with the NHPUC seeking an  increase in distribution base rates for Granite State Electric Utility. The filing is based on a 2012 test year, with  revenues and expenses adjusted to reflect known and measurable changes. In addition, Granite State Electric  Utility will request approval to implement a “rate year” step adjustment to reflect certain capital additions to rate  base after the test year. Among other things, Granite State Electric Utility will also seek to continue current cost- recovery tracking mechanisms, including long-term continuation of the REP/VMP Program and a modification to  allow for recovery of pre-staging personnel and equipment for qualifying storms. The case is expected to be  concluded in mid-2014; in accordance with general New Hampshire regulatory practice, interim rates are  expected to be implemented on or about July 1, 2013.  During the year ended December 31, 2012, administrative expenses totalled $19.6 million, as compared to  $17.5 million in the same period in 2011. The expense increase in the year 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 year ended December 31, 2012, interest expense totalled $35.9 million as compared to $30.4 million in  the same period in 2011. The increased interest expense is due to new indebtedness as a result of the U.S.  $225 million private placement used to fund a portion of the New Hampshire and Midwest Gas Utilities  acquisitions, the $135 million senior unsecured debentures placed in the third quarter of 2011 and an $1.7  million in 2012 related to the Quebec water lease litigation as compared to the same period in 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 and lower interest expense related to the Air Source debt which was retired in 2011.  2012 Annual Corporate and Other Expenses  APUC: Corporate and Other Expenses  2012 Annual Report 44 Three months ended   December 31  Year ended  December 30  2012  2011  2012  2011  Corporate and other expenses:  (millions) (millions)  (millions) (millions)  Administrative expenses $ 5.4 $ 4.8 $ 19.6 $ 17.5 (Gain)/Loss on foreign exchange  (1.6)  0.4 (0.6)  (0.7) Interest expense  11.3 7.6 35.9 30.4 Interest, dividend and other Income  (0.4)  (0.8)  (2.1)  (3.0) Write down of long lived assets  - 15.2 - 15.2 Acquisition-related costs  1.3 1.2 7.7 3.0 (Gain)/Loss on derivative financial instruments  (0.4)  1.6 (0.2)  5.8 Income tax recovery  (6.6)  (6.0)  (13.6)  (22.5)