UIL Reports Third Quarter 2012 Results and Reaffirms 2012 Consolidated Earnings Guidance

  UIL Reports Third Quarter 2012 Results and Reaffirms 2012 Consolidated
  Earnings Guidance

Business Wire

NEW HAVEN, Conn. -- November 05, 2012

UIL Holdings Corporation (NYSE: UIL) today reported consolidated net income of
$15.7 million, or $0.31 per diluted share for the third quarter of 2012,
compared to $12.2 million or $0.24 per diluted share for the same period in
2011. For the first nine months of 2012, UIL’s consolidated net income was
$74.8 million, or $1.46 per diluted share, compared to $78.4 million, or $1.54
per diluted share for the same period in 2011.

“We continue our focus on short-term operations and maintenance cost controls
at all our companies to mitigate the earnings impact of the record warm
weather experienced earlier in 2012,” said James P. Torgerson, UIL’s president
and chief executive officer. “We are executing on our growth strategy of
converting businesses and households to natural gas heat, and we are presently
55% ahead of our 2011 levels. As of the end of October, we have converted
8,919 customers, compared to 5,740 customers for the same period in 2011, and
we are on track to meet our 2012 goal of 10,200 conversions.”

“In addition, we are pleased with the draft comprehensive energy strategy that
was recently issued by Governor Dannel Malloy and the Department of Energy and
Environmental Protection,” added Torgerson. “UIL has been a constant advocate
for policies that reflect a strategic vision for the energy industry in
Connecticut. The draft of the strategy includes the goal of making natural
gas, a lower-cost option, available to more than 250,000 additional
residential customers and potentially up to 75% of businesses in Connecticut
in the next seven years. In addition to expanding the use of natural gas, the
draft also includes recommendations promoting increased energy efficiency,
both of which will provide significant opportunities for our company and help
the State of Connecticut in terms of job creation and economic growth.”

“Lastly, over the past week, we have been dealing with the impact of Hurricane
Sandy,” added Torgerson. “The storm caused extensive damage to the electric
system in UI’s service territory with approximately 250,000 customer outages.
As of this morning, approximately 97% of our customers have power. Our
employees and contractors have done a stellar job, working around the clock,
on restoration efforts.”

Electric distribution, CTA & other

Earnings from the electric distribution business for the third quarter in 2012
were $18.2 million, or $0.36 per diluted share, compared to $13.1 million, or
$0.26 per diluted share, for the same period in 2011. The increase in earnings
for the quarter was primarily attributable to reduced operation and
maintenance (O&M) expenses and to a settlement agreement relating to power
procurement incentives, which was approved by the Public Utility Regulatory
Authority on October 31, 2012 and resulted in increased pre-tax earnings for
the quarter of $2.7 million.

For the first nine months of 2012, the electric distribution business had
total earnings of $43.3 million, or $0.85 per diluted share, compared to $34.9
million, or $0.69 per diluted share, for the same period in 2011. The increase
in earnings for the first nine months of 2012 was primarily attributable to
increased income from UI’s equity investment in GenConn, reduced O&M expenses
and to the settlement noted above.

For the third quarter of 2012, pre-tax earnings from the equity investment in
GenConn were $3.4 million, compared to pre-tax earnings of $3.5 million for
the same period in 2011. For the first nine months of 2012, pre-tax earnings
from the equity investment in GenConn were $11.8 million, compared to $8.2
million for the same period in 2011.

Electric transmission

Earnings from the electric transmission business for the third quarter in 2012
were $8.2 million, or $0.16 per diluted share, compared to $7.6 million, or
$0.15 per diluted share, for the same period in 2011. For the first nine
months of 2012, total transmission earnings were $23.4 million, or $0.46 per
diluted share, compared to $23.2 million, or $0.46 per diluted share for the
same period in 2011. The increase in earnings for the third quarter and first
nine months of 2012 was primarily attributable to income earned on an increase
in rate base and an increased investment in New England East-West Solution
transmission projects, partially offset by a decrease in allowance for funds
used during construction.

Gas distribution

The gas distribution business incurred a loss of $7.3 million, or $0.14 per
diluted share for the third quarter in 2012, compared to a loss of $6.2
million, or $0.12 per diluted share for the same period in 2011, consistent
with the seasonal nature of the gas business. The increased loss was primarily
attributable to higher uncollectible expense, as well as the absence in 2012
of a non-recurring adjustment recorded in 2011 of $2.2 million, pre-tax,
related to carrying charges resulting from the settlement of the rate case
appeals, partially offset by higher margins associated with an increase in
natural gas heating customers.

For the first nine months of 2012, earnings from the gas distribution business
were $17.9 million, or $0.35 per diluted share, compared to $29.7 million, or
$0.58 per diluted share for the same period in 2011. Earnings for the first
nine months of 2012 were negatively impacted by lower sales volume primarily
due to warmer weather in the first half of 2012 and the absence in 2012 of the
non-recurring adjustment mentioned above, which was recorded in 2011. Heating
degree days for the first nine months of 2012 were 20.3% below normal and
19.7% lower compared to the same period in 2011. The warmer temperatures in
the first half of 2012 resulted in a $17.8 million decrease in gross margin in
the first nine months of 2012, compared to the same period in 2011. The
decrease in gross margin for the nine months was partially offset by weather
insurance of $3.5 million, which was recorded in the first quarter of 2012.

Corporate

UIL Holdings retains certain costs, primarily interest expense, at the holding
company, or “corporate” level, which are not allocated to the various
subsidiaries. UIL Corporate incurred net after-tax costs of $3.4 million, or
$0.07 per diluted share, in the third quarter of 2012, compared to net
after-tax costs of $2.3 million, or $0.05 per diluted share, in the same
period of 2011. For the first nine months of 2012, UIL Corporate incurred net
after-tax costs of $9.8 million, or $0.20 per diluted share, compared to $9.4
million, or $0.19 per diluted share for the first nine months of 2011. The
increase in after-tax costs for both the quarter and first nine months was
primarily due to increased interest expense on short-term borrowings.

Looking Forward

UIL reaffirms its earnings guidance estimate for 2012 of $2.00-$2.15 per
diluted share on a consolidated basis. UI distribution, CTA & other, Total
Electric and Gas distribution have been revised to reflect actual year-to-date
results. The revisions include:

  *Distribution, CTA & other is $0.95-$1.05 per diluted share, compared to
    the previously reported estimate of $0.90-$1.00 per diluted share.
  *Total electric is revised to $1.55-$1.70 per diluted share, compared to
    the previously reported estimate of $1.50-$1.65 per diluted share.
  *Gas distribution is $0.65-$0.75 per diluted share, compared to the
    previously reported estimate of $0.70-$0.80 per diluted share.

The earnings guidance continues to assume normal weather for the remainder of
2012. Details of the components are summarized as follows:

                                   Approximate Net
Category                                             EPS - diluted^(3)
                                   Income^(2)
                                                       
Electric distribution, CTA & other $48 - $53           $0.95 - $1.05
Electric transmission              $28 - $33           $0.55 - $0.65
                                                       
Total Electric^(1)                 $79 - $86           $1.55 - $1.70
                                                       
Gas distribution                   $33 - $38           $0.65 - $0.75
UIL Corporate                      ($14) - ($13)       ($0.27) - ($0.25)
                                                       
Total UIL^(1)                      $102 - $109         $2.00 - $2.15
                                                       
^(1) Expectations are not expected to be additive
^(2) Rounded to the nearest million
^(3) Assumes approximately 51.1 million average shares outstanding

Third Quarter 2012 Earnings Conference Call

In conjunction with this earnings release, UIL Holdings will conduct a webcast
conference call with financial analysts on Tuesday, November 6, 2012,
beginning at 10:00 a.m. eastern time. UIL Holdings’ executive management will
present an overview of the financial results followed by a question and answer
session. Interested parties, including analysts, investors and the media, may
listen live via the internet by logging onto the Investors section of UIL’s
website at http://www.uil.com. Institutional investors can access the call via
Thomson Street Events (www.streetevents.com), a password-protected event
management site.

Headquartered in New Haven, Connecticut, UIL Holdings Corporation (NYSE:UIL)
is a diversified energy delivery company serving a total of approximately
700,000 electric and natural gas utility customers in 66 communities across
two states, with combined total assets of over $4 billion.

UIL Holdings is the parent company for The United Illuminating Company (UI),
Connecticut Natural Gas Corporation (CNG), The Southern Connecticut Gas
Company (SCG), and The Berkshire Gas Company (Berkshire), each more than 100
years old. UI provides for the transmission and delivery of electricity and
other energy related services for Connecticut’s Greater New Haven and
Bridgeport areas. SCG and CNG are natural gas distribution companies that
serve customers in Connecticut, while Berkshire serves natural gas customers
in western Massachusetts. UIL Holdings employs more than 1,800 people in the
New England region. For more information on UIL Holdings, visit
http://www.uil.com.

Use of Non-GAAP Measures

UIL Holdings believes that a breakdown, presented on a net income and per
share basis is useful in understanding the change in the consolidated results
of operations for UIL Holdings from one reporting period to another. UIL
Holdings presents such per share amounts by taking the pretax amounts
determined in accordance with generally accepted accounting principles (GAAP),
and applying UIL Holdings' combined effective statutory federal and state tax
rate and then dividing the results by the average number of shares of UIL
Holdings common stock outstanding for the periods presented. Any such amounts
provided are provided for informational purposes only and are not intended to
be used to calculate "Pro-forma" amounts.

UIL Holdings also believes earnings per share (EPS) information as presented
in its earnings guidance is useful in understanding the earnings expectations
for the business as a whole. The amounts presented in the earnings guidance
show the EPS for each of UIL Holdings’ lines of business. EPS is calculated by
dividing the 2012 net income for each line of business by the average number
of shares of UIL Holdings common stock outstanding for 2012. Total
consolidated EPS is a GAAP-basis presentation.

Forward-Looking Statements

Certain statements contained herein, regarding matters that are not historical
facts, are forward-looking statements (as defined in the Private Securities
Litigation Reform Act of 1995). These include statements regarding
management’s intentions, plans, beliefs, expectations or forecasts for the
future. Such forward-looking statements are based on UIL Holdings’
expectations and involve risks and uncertainties; consequently, actual results
may differ materially from those expressed or implied in the statements. Such
risks and uncertainties include, but are not limited to, general economic
conditions, legislative and regulatory changes, changes in demand for
electricity, gas and other products and services, unanticipated weather
conditions, changes in accounting principles, policies or guidelines, and
other economic, competitive, governmental, and technological factors affecting
the operations, markets, products and services of UIL Holdings’ subsidiaries,
The United Illuminating Company, The Southern Connecticut Gas Company,
Connecticut Natural Gas Corporation and The Berkshire Gas Company. The
foregoing and other factors are discussed and should be reviewed in UIL
Holdings’ most recent Annual Report on Form 10-K and other subsequent periodic
filings with the Securities and Exchange Commission. Forward-looking
statements included herein speak only as of the date hereof and UIL Holdings
undertakes no obligation to revise or update such statements to reflect events
or circumstances after the date hereof or to reflect the occurrence of
unanticipated events or circumstances.

The following are summaries of UIL Holdings’ unaudited consolidated financial
information for the third quarter and first nine months of 2012 and 2011:

UIL HOLDINGS CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(In Thousands except per share amounts)
(Unaudited)
                                                            
                         Three Months Ended        Nine Months Ended
                         September 30,             September 30,
                          2012       2011        2012         2011      
                                                                 
Operating Revenues       $ 323,809   $ 321,427    $ 1,065,655   $ 1,196,529 
                                                                 
Operating Expenses
Operation
Purchased power            43,565      52,974        118,581       139,548
Natural gas purchased      51,570      48,714        242,328       341,594
Operation and              88,202      92,279        262,995       267,804
maintenance
Transmission wholesale     26,565      25,180        59,847        59,809
Depreciation and           46,279      41,628        135,886       125,676
amortization
Taxes - other than        28,502     26,399      82,924       87,806    
income taxes
Total Operating           284,683    287,174     902,561      1,022,237 
Expenses
Operating Income          39,126     34,253      163,094      174,292   
                                                                 
Other Income and          7,416      8,392       21,205       18,661    
(Deductions), net
                                                                 
Interest Charges, net
Interest on long-term      21,578      21,052        64,505        65,059
debt
Other interest, net       1,165      2,647       4,012        4,376     
                           22,743      23,699        68,517        69,435
Amortization of debt
expense and redemption    610        644         1,818        1,979     
premiums
Total Interest            23,353     24,343      70,335       71,414    
Charges, net
                                                                 
                                                                 
Income Before Income       23,189      18,302        113,964       121,539
Taxes, Equity Earnings
                                                                 
Income Taxes              10,835     9,629       50,924       51,347    
                                                                 
Income Before Equity       12,354      8,673         63,040        70,192
Earnings
Income from Equity        3,421      3,521       11,823       8,230     
Investments
                                                                 
Net Income                 15,775      12,194        74,863        78,422
Less:
Preferred Stock
Dividends of
Subsidiary,
Noncontrolling            26         14          65           42        
Interests
                                                                 
Net Income
attributable to UIL      $ 15,749    $ 12,180     $ 74,798      $ 78,380    
Holdings
                                                                 
Average Number of
Common Shares              50,799      50,643        50,760        50,597
Outstanding - Basic
Average Number of
Common Shares              51,032      50,927        51,004        50,886
Outstanding - Diluted
                                                              
Earnings Per Share of    $ 0.31      $ 0.24       $ 1.47        $ 1.55      
Common Stock - Basic:
                                                                 
Earnings Per Share of
Common Stock -           $ 0.31      $ 0.24       $ 1.46        $ 1.54      
Diluted:
                                                                 
Cash Dividends
Declared per share of    $ 0.432     $ 0.432      $ 1.296       $ 1.296     
Common Stock
                                                         
                                                                 
UIL HOLDINGS CORPORATION
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the Three and Nine Months Ended September 30, 2012 and 2011
(Thousands of Dollars)
(Unaudited)
                          2012       2011        2012         2011      
                                                                 
Net Income               $ 15,775    $ 12,194      $ 74,863      $ 78,422
Other Comprehensive       350        (1,012  )    551          (866      )
Income, net
Comprehensive Income       16,125      11,182        75,414        77,556
Less:
Preferred Stock
Dividends of
Subsidiary,
Noncontrolling            26         14          65           42        
Interests
Comprehensive Income
attributable to UIL      $ 16,099    $ 11,168     $ 75,349      $ 77,514    
Holdings

UIL HOLDINGS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
                                                               
                                                  September 30,   December 31,
  (thousands of dollars)                            2012          2011
  ASSETS
  Current assets                                  $  604,698      $  667,228
  Other investments                                  148,972         153,653
  Net property, plant and equipment                  2,714,441       2,570,355
  Regulatory assets                                  898,325         983,222
  Goodwill                                           266,205         266,797
  Deferred charges and other assets                 97,803         103,354
  Total Assets                                    $  4,730,444    $  4,744,609
                                                                  
                                                                  
                                                                  
  LIABILITIES AND CAPITALIZATION
  Current liabilities                             $  515,681      $  641,868
  Noncurrent liabilities                             601,648         650,555
  Deferred income taxes                              447,683         388,553
  Regulatory liabilities                            431,973        420,175
  Total Liabilities                                  1,996,985       2,101,151
                                                                  
  Long-term debt, net of unamortized discount and    1,623,477       1,548,347
  premium
  Preferred stock of subsidiary                      750             750
  Net common stock equity                           1,109,232      1,094,361
  Total Capitalization                               2,733,459       2,643,458
                                                                 
  Total Liabilities and Capitalization            $  4,730,444    $  4,744,609

Contact:

UIL Holdings Corporation
Analyst:
Susan Allen, 203-499-2409
or
Media:
Michael West Jr., 203-499-3858