DEAR FELLOW SHAREHOLDERS, 2012  LETTER  TO SHAREHOLDERS On behalf of everyone at Algonquin Power & Utilities  Corp. (the “Company” or “Algonquin”), thank you  for investing in us.The team here has been working  very hard to earn and maintain the confi dence  of investors like you and we can assure you that  creating long-term value for your investment is  foremost in the decisions we make every day. Fiscal 2012 has been a year of signifi cant change,  transition and accomplishment for us.While there  were the usual highs and lows in 2012, we hope  you would agree that our overall report card shows  very solid marks. As a result of acquisitions and  successful organic growth programs in 2012, we have  more than doubled our asset base, increased our  annual revenues by over 30% and grown our market  capitalization by almost 50% from the end of 2011  compared to the end of 2012.  Moreover, the Company saw attractive total  shareholder returns of over 11% through our  stable and growing dividend, coupled with capital  appreciation which is underpinned by increases in  genuine earnings and cash flow arising from the  successful execution on our growth strategies. During the year, our non-regulated utilities  division, Algonquin Power Co. (“APCo”), announced  several exciting growth milestones. Our business  development team closed the acquisition of a 60%  interest in a portfolio of 400 MW of U.S. based wind  generation, consisting of three facilities – Sandy  Ridge (50MW), Minonk (200MW) and Senate  (150MW). In addition, our team announced a 25  year power purchase agreement with SaskPower  for a 177MW wind power project in Chaplin,  Saskatchewan.We kicked off 2013 on a high note  with the announcement of additional geographic  diversification through the acquisition of a 109.5MW  wind power facility in Illinois. 2013 will see further  diversification and continued growth through our  pipeline of contracted solar projects.  The quality and stability of our  portfolio of regulated and  non-regulated utility assets is  a fundamental strength of our  company and is central to our  value proposition for investors. Ken Moore Chairman of the Board of Directors Ian Robertson CEO 2012 Annual Report 8