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%. 

## 2012 Fourth Quarter Operating Results 

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 

