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## 2012  LETTER TO SHAREHOLDERS 

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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. 

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## DEAR FELLOW 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. 

