3 To Our Shareholders Caribbean Utilities Company, Ltd.  2011  Annual Report Electricity sales revenue for Fiscal  2011 was relatively flat at $69.6  million compared to $69.5 million for  Fiscal 2010. There was an increase in  kWh sales in the commercial sector,  which was offset by a decrease in sales  to residential customers. Rising world fuel prices continue to  impact CUC’s fuel costs and electricity  rates to consumers. The average Fuel  Cost Charge rate per kWh charged to  consumers for Fiscal 2011 was $0.27,  a 35% increase from $0.20 per kWh  for Fiscal 2010. CUC passes through  100% of fuel and lubricating oil costs  to consumers on a two-month lag  basis without mark-up. Management  believes that the increasing fuel factor  is negatively impacting electricity sales  as consumers reduce electricity use. In March 2011 the Electricity  Regulatory Authority (“ERA”)  approved the Fuel Price Volatility  Management Programme. This  fuel hedging programme utilises  call options to create a ceiling price  for fuel costs at pre-determined  contract premiums and is currently  structured to cover 40% of expected  fuel consumption. The call options  were purchased in an effort to provide  consumers protection from a rapid  increase in fuel pricing, and the  monthly premiums are included in  fuel costs. The current options expire in March  2012. Options will be renewed if  approved by the ERA. Operating Income declined in Fiscal  2011 due to increased Depreciation  and General and Administration  (“G&A”) costs. The higher G&A was  driven by transitional costs which  we expect will result in improved  efficiencies and a stronger, safer  performance. As the economy and electricity  demand remain flat going into the  third consecutive year, CUC continues  to focus on containing discretionary  expenditures while operating in a  prudent and efficient manner.  CUC is committed to providing its  customers with a safe and reliable  service. At December 31, 2011, there were  26,636 customers, an increase of 2%  compared to 26,151 customers as at  December 31, 2010. An average of  40 customers were connected per  month for Fiscal 2011 as compared  to an average of 58 customers per  month for Fiscal 2010. The Company  continues to see an increase in  customer numbers but also continues  to see a decline in the average  customer kWh consumption that  began in 2009. With the decline in the construction  sector, and general weakness  in the economy, the number of  work permit holders on the Island  decreased significantly since 2009  according to information released  by the Government of the Cayman  Islands (the “Government”). This has  led to high vacancy levels for rental  properties, many of which continue  to maintain active electricity accounts  with little electricity consumption. The  Sales per Employee (millions of kiloWatt-hours) System Availability (data for years ended December 31) Customers per Employee (number of customers) Customer Service and Operations 08 TP 08 09 10 11 2.0 2.2 2.4 2.6 2.8 3.0 Millions kilowatt-hours 1.8 2.74 2.88 1.91 2.82 2.87 TP  - Transitional Period 08 TP 08 09 10 11 99.8 99.9 100.0 Percentage 99.95 99.95 99.96 99.95 99.94 TP  - Transitional Period 08 TP 08 09 10 11 90 100 110 120 130 140 Customers 122 89 124 129 136 138 TP  - Transitional Period