Caribbean Utilities Company, Ltd.  2011  Annual Report Notes to Financial Statements 45 (Expressed in thousands of United States dollars) The Company’s principal activity of generation, transmission and distribution of electricity in Grand Cayman, requires CUC to have ongoing access to capital to build and maintain the electrical system for the community it serves.  To help ensure access to capital, the Company targets a long-term capital structure containing approximately 45% equity, including preference shares, and 55% debt, as well as investment-grade credit ratings. The Company sets the amount of capital in proportion to risk. The debt to equity ratio is managed through various methods such as the rights offering that occurred in the 2008 Transitional Period and utilisation of the Share Purchase Plans. The capital managed by the Company is composed of debt (short-term debt, long-term debt and bank overdraft) and shareholders’ equity (including: capital stock, share premium, contributed surplus and retained earnings). The Company’s capital structure is shown below: Authorised: Class A Ordinary Shares were issued during the period for cash as follows (shares as follows fully stated, not in thousands): Total shares issued and purchased in 2011 were 159,824. Share proceeds totalled $1.5 million, of which $1.49 million was recorded as an increase to share premium and $0.01 million as an increase to share capital. 12. Capital Management 13. Capital Stock a)  60,000,000 (December 31, 2010: 60,000,000) Class A Ordinary Shares of CI$0.05 each b)  250,000 (December 31, 2010: 250,000) 9% Cumulative, Participating Class B Preference Shares of CI$0.84 each (non-voting) c)  419,666 (December 31, 2010: 419,666) Class C Preference Shares of CI$0.84 each (non-voting) d)  1 Cumulative, Participating, Class D Preference Share of CI$0.56 (non-voting) Capital Structure December 31, 2011  % December 31, 2010  %  ($ thousands) ($ thousands) Total debt  208,448  54 195,290  53 Shareholders’ equity  176,035  46 173,841  47 Total  384,483  100 369,131  100  Class A Ordinary Shares Issued Year ended  Year ended  Year ended  Year ended  Dec. 31, 2011  Dec. 31, 2011  Dec. 31, 2010  Dec. 31, 2010 Number of  Amount  Number of  Amount shares  ($ thousands) shares  ($ thousands) Balance, beginning of period  28,464,853  1,694  28,277,139  1,683 Customer Share Purchase and Dividend Reinvestment Plan  149,604  9  170,964  10 Employee Share Purchase Plan, Employee Long Service Bonus Plans and Employee Stock Options  10,220  1  16,750  1 Class A Ordinary Shares issued and outstanding  28,624,677  1,704  28,464,853  1,694 9% Cumulative, Participating Class B  250,000  250  250,000  250 Total  1,954  1,944 