## Management’s Discussion and Analysis 

The following management’s discussion and analysis (“MD&A”) should be read in conjunction with the Caribbean Utilities Company, Ltd. (“CUC” or the “Company”) financial statements for the twelve months ended December 31, 2011 (“Fiscal 2011”). The material has been prepared in accordance with National Instrument 51-102 - Continuous Disclosure Obligations (“NI 51-102”) relating to Management’s Discussion and Analysis. 

Additional information in this MD&A has been prepared in accordance with Canadian generally accepted accounting principles (“Canadian GAAP”), including certain accounting practices unique to rate-regulated entities. These accounting practices, and their impact, which are disclosed in the notes to the 2011 financial statements, result in regulatory assets and liabilities which would not occur in the absence of rate regulation. In the absence of rate regulation the amount and timing of the recovery or refund would not be subject to regulatory approval. 

Certain statements in this MD&A, other than statements of historical fact, are forward-looking statements concerning anticipated future events, results, circumstances, performance or expectations with respect to the Company and its operations, including its strategy and financial performance and condition. Forward-looking statements include statements that are predictive in nature, depend upon future events or conditions, or include words such as “expects”, “anticipates”, “plan”, “believes”, “estimates”, “intends”, “targets”, “projects”, “forecasts”, “schedule”, or negative versions thereof and other similar expressions, or future or conditional verbs such as “may”, “will”, “should”, “would” and “could”. 

Forward-looking statements are based on underlying assumptions and management’s beliefs, estimates and opinions, and are subject to inherent risks and uncertainties surrounding future expectations generally that may cause actual results to vary from plans, targets and estimates. Some of the important risks and uncertainties that could affect forward-looking statements are described in the MD&A in 

Letitia Lawrence Vice President Finance & Chief Financial Officer 

the section labelled “Business Risks” and include but are not limited to operational, general economic, market and business conditions, regulatory developments and weather. CUC cautions readers that actual results may vary significantly from those expected should certain risks or uncertainties materialize, or should underlying assumptions prove incorrect. Forward- looking statements are provided for the purpose of providing information about management’s current expectations and plans relating to the future. Readers are cautioned that such information may not be appropriate for other purposes. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise except as required by law. 

Financial information is presented in United States dollars unless otherwise specified. The financial statements and MD&A in this report were approved by the Audit Committee. 

