8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

Amendment No. 1

CURRENT REPORT

PURSUANT TO SECTION 13 or 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):  November 16, 2010

(Exact name of registrant as specified in its charter)

Connecticut	1-15052	06-1541045
(State or other jurisdiction	(Commission	(IRS Employer
of Incorporation)	File Number)	Identification No.)
157 Church Street, New Haven, Connecticut		06506
(Address of principal executive offices)		(Zip Code)
Registrant's Telephone Number,
Including Area Code		(203) 499-2000

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

£      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

£      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

£      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17CFR 240.14d-2(b))

£       Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 INTRODUCTION

As previously reported, on November 16, 2010, UIL Holdings Corporation (the “Registrant” or “UIL Holdings”) completed its acquisition (the “Acquisition”) from Iberdrola USA, Inc. (“Iberdrola USA”) of (i) Connecticut Energy Corporation (“CEC”), the parent of The Southern Connecticut Gas Company, (ii) CTG Resources, Inc. (“CTG”), the parent of Connecticut Natural Gas Corporation, and (iii) Berkshire Energy Resources (“Berkshire”), the parent of The Berkshire Gas Company.  The approximately $1.296 billion purchase price less net debt of approximately $331.1 million and a preliminary working capital adjustment of approximately $47.0 million resulted in cash consideration at closing of approximately $917.9 million to Iberdrola USA.&# 160; The Registrant paid this cash consideration from a combination of approximately $501.5 million in net proceeds from the Registrant’s September 2010 issuance of 20,355,000 shares of its common stock and the approximately $442.9 million in net proceeds from the Registrant’s October 2010 issuance of $450 million aggregate principal amount of 4.625% Notes due 2020.  While the aggregate purchase price was unchanged, the cash consideration paid at closing was greater than the prior estimate of $885 million due to lower actual levels of net debt assumed, partially offset by the preliminary working capital adjustment.  The lower level of debt reflected prior principal payments of $43.8 million on long-term debt and $38.9 million of cash generated by the acquired entities.  The preliminary working capital adjustment resulted primarily from a seasonal decrease of $45.7 million in accounts receivable.

This Current Report on Form 8-K/A contains:

·   historical financial statements of CEC and CTG, in accordance with Rule 3-05 of Regulation S-X and the significant subsidiary rules outlined in Regulation S-X; and

·   pro forma financial information of UIL Holdings, CEC, CTG and Berkshire in accordance with Article 11 of Regulation S-X giving effect to certain pro forma events relating to the Acquisition.

The historical financial statements of CEC and CTG include the results of CNE Energy Services Group, Inc. (CNE Energy) and TEN Companies, Inc. (TEN).  These subsidiaries of CEC and CTG are involved in operations outside the regulatory gas distribution business and are not included in the Acquisition.  The attached pro forma financial information reflects the removal of CNE Energy and TEN.

Item 9.01 Financial Statements and Exhibits.

(a)    Financial Statements of Businesses Acquired.

Filed herewith or incorporated by reference herein are the following financial statements of CEC and CTG:

Audited Combined Financial Statements of CEC and CTG for the years ended December 31, 2009, 2008 and 2007

Unaudited Condensed Combined Financial Statements of CEC and CTG for the three and nine months ended September 30, 2010 and 2009

(b)    Pro Forma Financial Information.

Filed herewith is the following pro forma financial information:

Unaudited Pro Forma Condensed Combined Statements of Income for the nine months ended September 30, 2010 and for the year ended December 31, 2009 and Unaudited Pro Forma Condensed Combined Balance Sheet as of September 30, 2010 of UIL Holdings, CEC, CTG, and Berkshire.

(d)    Exhibits.

The following exhibits are filed as part of this report:

23.1	Consent of PricewaterhouseCoopers LLP
99.1	Audited Combined Financial Statements of CEC and CTG for the years ended December 31, 2009, 2008 and 2007 (Incorporated by reference to Exhibit 99.1 to the Form 8-K filed by the Registrant on August 18, 2010)
99.2	Unaudited Condensed Combined Financial Statements of CEC and CTG for the three and nine months ended September 30, 2010 and 2009
99.3	Unaudited Pro Forma Condensed Combined Statements of Income for the nine months ended September 30, 2010 and for the year ended December 31, 2009 and Unaudited Pro Forma Condensed Combined Balance Sheet as of September 30, 2010, of UIL Holdings, CEC, CTG, and Berkshire

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

UIL HOLDINGS CORPORATION

Registrant

Date:  11/18/10	By /s/ Richard J. Nicholas
	Richard J. Nicholas
	Executive Vice President
	and Chief Financial Officer

Exhibit Index

Exhibit	Description
23.1	Consent of PricewaterhouseCoopers LLP
99.1	Audited Combined Financial Statements of CEC and CTG for the years ended December 31, 2009, 2008 and 2007 (Incorporated by reference to Exhibit 99.1 to the Form 8-K filed by the Registrant on August 18, 2010)
99.2	Unaudited Condensed Combined Financial Statements of CEC and CTG for the three and nine months ended September 30, 2010 and 2009
99.3	Unaudited Pro Forma Condensed Combined Statements of Income for the nine months ended September 30, 2010 and for the year ended December 31, 2009 and Unaudited Pro Forma Condensed Combined Balance Sheet as of September 30, 2010, of UIL Holdings, CEC, CTG, and Berkshire

EX-23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Registration Statement on Form S-3 (No. 333-157854) of UIL Holdings Corporation of our reports dated July 24, 2010 for the year ended December 31, 2009 and the period from September 17, 2008 to December 31, 2008 (the "successor periods") and for the period from January 1, 2008 to September 16, 2008 and the year ended December 31, 2007 (the "predecessor periods")relating to the combined financial statements of Connecticut Energy Corporation and CTG Resources, Inc., which appear in the Current Report on Form 8-K/A of UIL Holdings Corporation dated November 18, 2010.

/s/ PricewaterhouseCoopers LLP

Philadelphia, Pennsylvania

November 18, 2010

EX-99.2

EXHIBIT 99.2

Connecticut Energy Corporation and CTG Resources, Inc.

Condensed Combined Financial Statements (Unaudited)

For the Three Months and Nine Months Ended

September 30, 2010 and 2009

Connecticut Energy Corporation and CTG Resources, Inc.

Index

Condensed Combined Financial Statements (Unaudited)
for the Three Months andNine Months Ended September 30, 2010 and 2009	Page(s)
Condensed Combined Statements of Operations	1
Condensed Combined Statements of Comprehensive Income (Loss)	1
Condensed Combined Balance Sheets	2 - 3
Condensed Combined Statements of Cash Flows	4
Condensed Combined Statements of (Accumulated Deficit) Retained Earnings	5
Notes to Condensed Combined Financial Statements	6 – 14

Connecticut Energy Corporation and CTG Resources, Inc.

Condensed Combined Statements of Operations – (Unaudited)

	Three Months						Nine Months
Periods ended September 30,	2010			2009			2010			2009
(Thousands)
Operating Revenues
Sales and services	$	111,060		$	84,511		$	537,494		$	537,513
Operating Expenses
Natural gas purchased		55,612			25,091			293,353			293,717
Other operating expenses		33,867			31,955			94,254			104,191
Maintenance		6,249			4,697			17,704			13,965
Depreciation and amortization		11,086			10,825			34,349			40,241
Goodwill impairment charge		-			-			249,844			-
Other taxes		7,620			7,525			33,506			34,911
Total Operating Expenses		114,434			80,093			723,010			487,025
Operating (Loss) Income		(3,374	)		4,418			(185,516	)		50,488
Other (Income)		(1,566	)		(2,200	)		(8,477	)		(5,973	)
Other Deductions		1,777			203			7,118			1,754
Interest Charges		7,314			7,763			22,149			23,695
(Loss) Income Before Income Taxes		(10,899	)		(1,348	)		(206,306	)		31,012
Income Taxes (Benefit) Expense		(13,405	)		(7,034	)		(3,880	)		1,328
Net Income (Loss)		2,506			5,686			(202,426	)		29,684
Less: Preferred Stock Dividends of   Subsidiary, Noncontrolling Interests		13			13			39			26
Net Income Attributable to Other   Noncontrolling Interests		60			246			353			498
Net Income(Loss) Attributable   to CEC and CTG	$	2,433		$	5,427		$	(202,818	)	$	29,160

The accompanying notes are an integral part of our condensed combined financial statements.

Connecticut Energy Corporation and CTG Resources, Inc.

Condensed Combined Statements of Comprehensive Income (Loss) – (Unaudited)

	Three Months				Nine Months
Periods ended September 30,	2010		2009		2010			2009
(Thousands)
Net Income (Loss)	$	2,506	$	5,686	$	(202,426	)	$	29,684
Other Comprehensive Income,   Net of Tax		389		445		140			664
Comprehensive Income (Loss)		2,895		6,131		(202,286	)		30,348
Less: Preferred Stock Dividends of   Subsidiary, Noncontrolling Interests		13		13		39			26
Comprehensive Income Attributable to   Other Noncontrolling Interests		60		246		353			498
Comprehensive Income (Loss)   Attributable to CEC and CTG	$	2,822	$	5,872	$	(202,678	)	$	29,824

The accompanying notes are an integral part of our condensed combined financial statements.

1

Connecticut Energy Corporation and CTG Resources, Inc.

Condensed Combined Balance Sheets – (Unaudited)

	September 30, 2010		December 31, 2009
(Thousands)
Assets
Current Assets
Cash and cash equivalents	$	55,566	$	25,367
Accounts receivable and unbilled revenues, net		86,621		128,705
Accounts receivable affiliate		1,265		1,441
Notes receivable affiliate		3,050		5,700
Natural gas in storage, at average cost		132,345		145,362
Materials and supplies, at average cost		1,682		1,407
Deferred income taxes		1,129		141
Derivative assets		-		306
Prepaid taxes		11,370		33,371
Prepayments and other current assets		10,437		10,910
Total Current Assets		303,465		352,710
Utility Plant, at Original Cost
Natural gas		1,333,907		1,315,749
Less accumulated depreciation		427,625		430,702
Net Utility Plant in Service		906,282		885,047
Construction work in progress		4,316		1,370
Total Utility Plant		910,598		886,417
Other Property and Investments
Other property and investments		56,168		58,470
Investment in wind farms		298,283		304,821
Total Other Property and Investments		354,451		363,291
Regulatory and Other Assets
Regulatory assets
Unfunded future income taxes		93,179		86,606
Deferred income taxes		8,780		7,947
Environmental remediation costs		2,926		3,342
Deferred purchased gas		6,968		34,674
Low income program		39,324		47,121
Pension and other postretirement benefits		154,984		162,270
Other		45,025		36,890
Total regulatory assets		351,186		378,850
Other assets
Goodwill		210,029		459,873
Other		13,646		17,649
Total other assets		223,675		477,522
Total Regulatory and Other Assets		574,861		856,372
Total Assets	$	2,143,375	$	2,458,790

The accompanying notes are an integral part of our condensed combined financial statements.

2

Connecticut Energy Corporation and CTG Resources, Inc.

Condensed Combined Balance Sheets – (Unaudited)

	September  30, 2010			December  31, 2009
(Thousands)
Liabilities
Current Liabilities
Current portion of long-term debt	$	30,000		$	40,000
Note payable to affiliate		12,284			16,100
Accounts payable and accrued liabilities		7,933			11,649
Accounts payable, natural gas purchased		27,162			54,494
Accounts payable to affiliates		4,851			7,909
Interest accrued		6,262			6,211
Taxes accrued		24,476			25,487
Customer deposits		9,834			10,145
Derivative liability		53			-
Other		19,495			18,929
Total Current Liabilities		142,350			190,924
Regulatory and Other Liabilities
Regulatory liabilities
Accrued removal obligations		195,595			189,555
Deferred income taxes		39,323			39,854
Pension benefits		21,288			23,730
Other		51,258			64,657
Total regulatory liabilities		307,464			317,796
Other liabilities
Deferred income taxes		292,675			235,212
Pension and other postretirement benefits		136,538			136,124
Asset retirement obligations		18,017			17,530
Other		23,005			4,003
Total other liabilities		470,235			392,869
Total Regulatory and Other Liabilities		777,699			710,665
Long-term debt		314,000			344,000
Total Liabilities		1,234,049			1,245,589
Commitments and Contingencies
Preferred Stock of Subsidiary
Redeemable preferred stock, noncontrolling interests		750			750
CEC and CTG Common Stock Equity  Common stock		2			2
Capital in excess of par value		1,117,678			1,183,228
(Accumulated deficit) Retained earnings		(215,595	)		23,223
Accumulated other comprehensive (loss)		(44	)		(184	)
Total CEC and CTG Common Stock Equity		902,041			1,206,269
Other Noncontrolling Interests		6,535			6,182
Total Equity		908,576			1,212,451
Total Liabilities and Equity	$	2,143,375		$	2,458,790

The accompanying notes are an integral part of our condensed combined financial statements.

3

Connecticut Energy Corporation and CTG Resources, Inc.

Condensed Combined Statements of Cash Flows – (Unaudited)

Nine months ended September 30,	2010			2009
(Thousands)
Operating Activities
Net (loss) income	$	(202,426	)	$	29,684
Adjustments to reconcile net income to net   cash provided by operating activities
Depreciation and amortization		34,349			32,929
Amortization of regulatory and other      assets and liabilities		7,224			8,353
Deferred income taxes and investment      tax credits, net		49,371			21,906
Goodwill impairment charge		249,844			-
Bridgeport pipeline contract impairment		-			7,312
Pension expense		7,997			5,673
Changes in current operating assets and liabilities
Accounts receivable and unbilled revenues, net		42,260			113,598
Inventories		12,742			59,323
Prepayments and other current assets		779			(6,222	)
Accounts payable and accrued liabilities		(34,106	)		(74,653	)
Interest accrued		51			2,585
Taxes accrued		20,157			(1,895	)
Other current liabilities		308			1,307
Pension and other postretirement benefits contributions		(3,700	)		(4,700	)
Changes in other assets		3,874			2,096
Changes in other liabilities		2,247			15,096
Net Cash Provided by Operating Activities		190,971			212,392
Investing Activities
Utility plant additions		(26,857	)		(24,707	)
Proceeds from sale of Capitol Area System		-			10,624
Notes receivable, affiliate		2,650			(2,300	)
Other property additions		-			(3,965	)
Investments available for sale		8,840			2,559
Investment in wind farms		-			(304,821	)
Net Cash (Used in) Investing Activities		(15,367	)		(322,610	)
Financing Activities
Equity contribution from parent		-			305,400
Long-term note issuances		-			20,000
Long-term note retirements		(40,000	)		(14,900	)
Notes payable three months or less, net		-			(122,650	)
Notes payable to affiliate three months or less, net		(3,816	)		-
Liquidating dividends		(65,550	)		(37,325	)
Dividends paid on preferred stock of subsidiary,    noncontrolling interests		(39	)		(26	)
Dividends paid on common stock		(36,000	)		(12,000	)
Net Cash (Used in) Provided by Financing Activities		(145,405	)		138,499
Net Increase in Cash and Cash Equivalents		30,199			28,281
Cash and Cash Equivalents, Beginning of Period		25,367			29,616
Cash and Cash Equivalents, End of Period	$	55,566		$	57,897

The accompanying notes are an integral part of our condensed combined financial statements.

4

Connecticut Energy Corporation and CTG Resources, Inc. CondensedCombined Statements of (Accumulated Deficit) Retained Earnings – (Unaudited)
Nine months ended September 30,	2010			2009
(Thousands)
Balance, Beginning of Period	$	23,223		$	9,303
Add net (loss) income		(202,426	)		29,684
		(179,203	)		38,987
Deduct net income attributable to other noncontrolling interests		353			498
Deduct preferred stock dividends of subsidiary,   noncontrolling interests		39			26
Deduct dividends on common stock		36,000			12,000
Balance, End of Period	$	(215,595	)	$	26,463
The accompanying notes are an integral part of our condensed combined financial statements.

5

Notes to Condensed Combined Financial Statements

Connecticut Energy Corporation and CTG Resources, Inc.

Note 1. Unaudited Condensed Combined Financial Statements

In management’s opinion, the accompanying unaudited condensed combined financial statements reflect all adjustments necessary for a fair statement of the interim periods presented. All such adjustments are of a normal, recurring nature. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America.

These financial statements represent the combined financial statements of Connecticut Energy Corporation (CEC) and CTG Resources, Inc. (CTG) after eliminating intercompany transactions under the basis of common control because both companies are owned by Iberdrola USA, Inc. (Iberdrola USA). The financial statements of CEC and CTG consolidate their majority-owned subsidiaries after eliminating intercompany transactions.

We have evaluated events or transactions that occurred after September 30, 2010, for inclusion in these financial statements through November 8, 2010, which is the date these financial statements were available to be issued.

On May 25, 2010, UIL Holdings Corporation (UIL) entered into an agreement to purchase CEC and CTG as well as Berkshire Energy Resources. Pursuant to the agreement, UIL will obtain the natural gas distribution utilities owned by CEC and CTG, which are The Southern Connecticut Gas Company (SCG) and Connecticut Natural Gas Corporation (CNG). Iberdrola USA, Inc. will retain its nonutility subsidiaries, CNE Energy Services Group, Inc. (CNE Energy) and TEN Companies, Inc. (TEN), at the time of the transaction. The purchase is subject to various state and federal approvals. On October 27, 2010, the Connecticut Department of Public Utility Control issued a draft decision approving the sale. A final decision is expected on November 10, 2010. We expect the sale to be completed in November 2010.

The accompanying unaudited condensed combined financial statements should be read in conjunction with the combined annual financial statements and notes thereto for the fiscal year ended December 31, 2009. Due to the seasonal nature of our operations, financial results for interim periods are not necessarily indicative of trends for a 12-month period.

Bridgeport pipeline contract impairment:In 1998 CNE Energy, a subsidiary of CEC, provided the funds for the construction of an 11.5 mile long pipeline in Bridgeport, Connecticut, which is subject to a 20 year gas transmission agreement (Agreement) with an unrelated entity. CNE Energy recorded the $12.8 million total cost of construction of the pipeline as an intangible asset (contract interest) on its balance sheet, which it then began to amortize over the 20-year life of the project. SCG constructed the pipeline and has owned and operated it since its completion. In addition to funding the pipeline construction costs, CNE Energy has paid all operating and maintenance c osts related to the pipeline project. As a result of Energy East Corporation’s acquisition of SCG and CNE Energy in February 2000, the value of the investment in the pipeline was assessed and CNE Energy recorded an intangible asset of $2.4 million. CNE Energy has been amortizing the valuation adjustment over the remaining term of the Agreement, since February 2000.

In February 1998 the Connecticut Department of Public Utility Control (DPUC) issued a decision concerning the allocation of revenues during the first 10 years of the Agreement, allocating a portion to SCG for the benefit of its ratepayers with the remaining portion retained by CNE Energy. The original DPUC decision required SCG to petition the DPUC by July 1, 2008, for an

6

Notes to Condensed Combined Financial Statements

Connecticut Energy Corporation and CTG Resources, Inc.

adjustment to the allocation of revenues for the second 10 years of the Agreement. The DPUC issued a decision on April 1, 2009, reducing the annual revenue allocation to CNE Energy for the remaining term of the Agreement. Based on its estimate of undiscounted cash flows for the remaining years, CNE Energy determined that the combined $7.1 million carrying amount of the contract interest and valuation adjustment was not recoverable, and impaired the entire net carrying amount.  In addition, because substantially all of its economic activity is derived from the Bridgeport contract, CNE Energy also impaired $0.2 million of net goodwill in 2009. The combined pretax impairments totaling approximately $7.3 million are included in depreciation and amortization on the statement of operations. The total after-tax effect of the impairment s is approximately $4.7 million.

Liquidating dividends: During 2010 CEC has declared and paid liquidating dividends to Iberdrola USA as follows: $18 million declared in March and paid in April, $18 million declared and paid in June, and $29.55 million declared and paid in September. CEC also declared and paid liquidating dividends of $37.3 million in 2009. The liquidating dividends are being paid to flow the tax benefits of CNE Energy’s investment in wind farms to Iberdrola USA.

Note 2. Other (Income) and Other Deductions

	Three Months						Nine Months
Periods ended September 30,	2010			2009			2010			2009
(Thousands)
Interest and dividend income	$	(125	)	$	(85	)	$	(309	)	$	(319	)
Carrying costs on regulatory assets		(319	)		(288	)		(917	)		(840	)
Gain on weather derivative		-			-			(3,000	)		-
Equity in partnership interest		(878	)		(1,040	)		(3,155	)		(3,350	)
Gain on sale of Capitol Area System		-			-			-			(493	)
Life insurance credit		-			-			(254	)		-
Miscellaneous		(244	)		(787	)		(842	)		(971	)
Total other (income)	$	(1,566	)	$	(2,200	)	$	(8,477	)	$	(5,973	)
Civic donations	$	38		$	36		$	91		$	90
Losses on energy risk contracts		-			-			263			316
Loss on wind farms		1,649			-			6,538			871
Miscellaneous		90			167			226			477
Total other deductions	$	1,777		$	203		$	7,118		$	1,754

Note 3. Goodwill

Iberdrola USA’s decision to sell its northeastern natural gas companies, including SCG and CNG, allows it to increase its focus on its electricity business and provides it with a funding source for its announced electric transmission investments. The sale agreement represented a triggering event and we performed an impairment assessment of the goodwill for SCG and CNG in accordance with the accounting standards concerninggoodwill and other intangibles. We determined that the carrying value of the combined companies exceeded the purchase price agreed to by UIL for CNG and SCG, resulting in a goodwill impairment of $250 million.

7

Notes to Condensed Combined Financial Statements

Connecticut Energy Corporation and CTG Resources, Inc.

The carrying amount of goodwill at December 31, 2009, and September 30, 2010, is shown in the following table.

	Nine Months  Ended  September  30, 2010
(Thousands)
Balance, beginning of period
Goodwill	$	460,115
Accumulated impairment losses		(242	)
		459,873
Impairment for UIL agreement to   purchase CEC and CTG		(249,844	)
Balance, end of period
Goodwill		460,115
Accumulated impairment losses		(250,086	)
	$	210,029

The above amounts include goodwill of $3.8 million at December 31, 2009, and September 30, 2010, for TEN. There was no impairment of TEN’s goodwill.

Note 4. Income Taxes

Our tax expense differed from the expense at the statutory rate of 35% due to the following:

	Three Months						Nine Months
Periods ended September 30,	2010			2009			2010			2009
(Thousands)
Tax expense at statutory rate	$	(3,815	)	$	(471	)	$	(72,208	)	$	10,854
Flow-through items
Depreciation and amortization not normalized		(827	)		(254	)		(1,039	)		(672	)
Removal costs		321			(87	)		(754	)		(1,022	)
Tax return and audit adjustments		2,275			(1,482	)		2,275			(1,482	)
Three-way payment plan		(621	)		442			1,213			2,015
Production tax credits		(5,752	)		(7,061	)		(18,245	)		(12,858	)
State taxes, net of federal benefit		(285	)		(1,602	)		3,017			(307	)
Goodwill impairment		-			-			87,536			-
Other, net		(4,701	)		3,481			(5,675	)		4,800
Difference from statutory		(9,590	)		(6,563	)		68,328			(9,526	)
Total income taxes	$	(13,405	)	$	(7,034	)	$	(3,880	)	$	1,328

Income taxes were $9.6 million lower for the three months ended September 30, 2010, than they would have been at the federal statutory rate of 35%, and $6.6 million lower for the three months ended September 30, 2009. Income taxes were $68.3 million higher for the nine months ended September 30, 2010, and $9.5 million lower for the nine months ended September 30, 2009, than they would have been at the federal statutory rate of 35%. The effective tax rate for the nine months ended September 30, 2010, was higher than the statutory rate primarily due to the recording of a goodwill impairment due to the expected sale of CNG and SCG. The goodwill impairment does not result in a corresponding tax benefit because there is no tax basis in the goodwill. CEC and CTG were acquired in 2000 in a nontaxable transaction resulting in the tax basis b eing carried over versus there being a step-up in tax basis. The effect of production tax credits generated as a result of our investment in wind farms reduced income

8

Notes to Condensed Combined Financial Statements

Connecticut Energy Corporation and CTG Resources, Inc.

taxes for all of the above presented periods. In addition, we recorded adjustments for our 2009 tax return in September 2010 and for our 2008 tax return in September 2009.

Elimination of tax deduction related to Medicare Part D Subsidy: The Patient Protection and Affordable Care Act (PPACA) and the Health Care and Education Reconciliation Act of 2010 (H.R. 4872) were signed into U.S. law in late March 2010. SCG and CNG receive a federal subsidy because we sponsor retiree health benefit plans that provide a benefit that is at least actuarially equivalent to the benefits under Medicare Part D. The subsidy is known as the Retiree Drug Subsidy (RDS or the subsidy). The RDS payments we receive are not currently taxed. A provision in the PPACA changes the tax treatment of the RDS, requiring the amount of the subsidy received to be offset against the amount of retiree health care payments that would be eligible for a tax deduction. As a result, the subsidy received would reduce an employer’s tax deduction for the costs of retiree health care. Our subsidy receipts will effectively become taxable in tax years that begin after December 31, 2012.

In accordance with U.S. GAAP concerning accounting for income taxes, a reporting entity is required to immediately recognize the effect of a change in tax law in continuing operations in the income statement in the period that includes the enactment date. We were required to record the effect of the change related to the RDS in the quarter ended March 31, 2010, due to the fact that we accounted for the future tax benefit on an accrual basis. In accounting for the effect of the change for U.S. GAAP reporting, an employer that captured the tax benefit of future subsidies on an accrual basis would now be required to reduce the accumulated deferred tax asset on its balance sheet related to the accrued estimated deductible retiree health care payments to reflect the fact that the future deduction will now be reduced by the collection of t he accrued subsidy. Companies such as CNG and SCG that meet the requirements concerning accounting for regulated operations offset that decrease with the establishment of a regulatory asset. As a result, we recorded a regulatory asset for unfunded future income taxes of approximately $1.6 million and reduced our deferred income tax asset related to the costs of retiree health care by approximately $1.0 million. In addition, since the recognition of the unfunded future income tax regulatory asset is considered a temporary difference, we recognized an associated deferred income tax liability of approximately $0.6 million. There is no immediate effect on the income statement under this accounting, only our balance sheet is affected.

Note 5. New Accounting Standards

New accounting standard adopted: We have adopted a new accounting standard issued by the Financial Accounting Standards Board (FASB) as explained below.

Disclosures about fair value measurements: In January 2010 the FASB issued amendments to improve disclosures about fair value measurements. New disclosures that are or will be required include: 1) details of transfers in and out of Level 1 and Level 2 of the fair value measurement hierarchy, and 2) gross presentation of roll forward activity within Level 3 – separate presentation of information about purchases, sales, issuances and settlements. Entities will also have to provide fair value measurement disclosures for each class of assets and liabilities, as well as disclosures about inputs and valuation techniques for both recurring and nonrecurring Level 2 and Level 3 fair value measurements. The amendments are effective for interim and annual repo rting periods beginning after December 15, 2009, except that the disclosures about Level 3 roll forward activity are effective for fiscal years beginning after December 15, 2010, and interim periods within those fiscal years. Our adoption of the amendments effective for interim and annual periods beginning on or after January 1, 2010, did

9

Notes to Condensed Combined Financial Statements

Connecticut Energy Corporation and CTG Resources, Inc.

not affect our results of operation, financial position or cash flows. Our adoption of the amendments concerning Level 3 roll forward activity effective for fiscal years beginning on or after January 1, 2011, and interim periods within those fiscal years, will not affect our results of operation, financial position or cash flows.

Note 6. Accounts receivable

Accounts receivable include unbilled revenues of $16.8 million at September 30, 2010, and $41 million at December 31, 2009, net of an allowance for doubtful accounts at September 30, 2010 of $9.1 million and $7.4 million at December 31, 2009. Accounts receivable do not bear interest, although late fees may be assessed.

In July 2010 we recorded an adjustment of $2.3 million to our bad debt allowance, resulting in an increase in Other operating expenses for the third quarter. The adjustment is a change in estimate as a result of no longer factoring in customer security deposits when we determine the amount of the allowance. We recorded the change in estimate prior to the issuance of our combined financial statements for the quarter and six months ended June 30, 2010, but made no adjustments to those financial statements. The adjustment is not material to our combined statements of operations for the three months and nine months ended September 30, 2010.

Note 7. Fair Value Measurements

Assets and liabilities measured at fair value on a recurring basis

Fair Value Measurements Using

Description	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
(Thousands)
September 30, 2010
Assets
Noncurrent investments   available for sale	$	9,673		$	9,673		-		-
Total	$	9,673		$	9,673		-		-
Liabilities
Derivatives	$	(53	)		-		-	$	(53	)
Total	$	(53	)		-		-	$	(53	)
December 31, 2009
Assets
Noncurrent investments   available for sale	$	13,445		$	13,445		-		-
Derivatives		306			-		-	$	306
Total	$	13,751		$	13,445		-	$	306

The derivatives asset for the weather derivative totaled $0.3 million at December 31, 2009. The contract settled in April 2010 and CNG received a payment of $3 million, the maximum allowed under the contract for temperatures that were warmer than normal.

Valuation techniques: We measure the fair value of our noncurrent investments available for sale using quoted market prices in active markets for identical assets. The investments

10

Notes to Condensed Combined Financial Statements

Connecticut Energy Corporation and CTG Resources, Inc.

primarily consist of money market funds, but also include some fixed income and equity investments.

Fleet fuel derivatives are included in Level 3 of the fair value hierarchy due to the fact that a proprietary calculation (unobservable to the market) is used to arrive at the valuation.

The fair value of fleet fuel derivative contracts is determined by comparing the initial cost of the derivative contracts to the exchange-based settlement price as described in New York

Mercantile Exchange Rulebook Chapter 6 Section 6.51(a) adjusted by a calculated rolling three-year locational basis derived from actual company purchases of fleet fuel within a particular fleet fueling location.

Instruments measured at fair value on a recurring basis using significant

unobservable inputs

Fair Value Measurements Using Significant

Unobservable Inputs (Level 3)

Three months ended September 30,	2010			Derivatives, Net 2009
(Thousands)
Beginning balance	$	(90	)	$	(107	)
Total gains (losses) (realized/unrealized)
Included in earnings		19			150
Included in other comprehensive income		18			(39	)
Ending balance	$	(53	)	$	4

Fair Value Measurements Using Significant

Unobservable Inputs (Level 3)

Nine months ended September 30,	2010			Derivatives, Net 2009
(Thousands)
Beginning balance	$	306		$	(336	)
Total (losses) gains (realized/unrealized)
Included in earnings		(20	)		465
Included in other comprehensive income		2,524			(125	)
Purchases, issuances and settlements		(2,863	)		-
Ending balance	$	(53	)	$	4

The amounts of realized and unrealized gains and losses included in earnings for the periods (above), which are reported in the various categories indicated are:

	Other  operating  expense
(Thousands)
Total gains included in earnings for the three months ended September 30,
2010	$	19
2009	$	150
Total (losses) gains included in earnings for the nine months ended September 30,
2010	$	(20	)
2009	$	465

11

Notes to Condensed Combined Financial Statements

Connecticut Energy Corporation and CTG Resources, Inc.

Note 8. Regulatory Proceedings

CNG overearnings and rate filing: In June 2008 CNG filed its monthly financial report with the DPUC showing that it exceeded its allowed return on equity (ROE) by more than 100 basis points for the sixth consecutive monthly period. As a result, the DPUC initiated an overearnings investigation. In August 2008 the DPUC issued a decision ordering CNG to implement a rate decrease of $15 million effective August 6, 2008, and the filing of a rate case by January 1, 2009.

In January 2009 CNG filed an application for a delivery rate increase of $16.2 million or approximately 4.4% over the revenues produced from its existing rate schedules. The DPUC issued CNG’s rate order on July 23, 2009, requiring a rate reduction of 4.2% effective July 31, 2009. CNG appealed the order and the application of new tariffs prescribed by the rate order was temporarily suspended by the court. On January 6, 2010, the Connecticut Superior Court entered a ruling against CNG’s appeal. On January 21, 2010, CNG filed for a continuation of the temporary stay while it pursues an appeal of that decision. On May 28, 2010, CNG appealed the decision to the Connecticut Supreme Court. Oral argument is expected to be presented in the fourth quarter of 2010 with a decision on the appeal not expected until the f irst quarter of 2011.

SCG overearnings and rate filing:In July 2008 SCG filed its monthly financial report with the DPUC showing that it exceeded its allowed ROE by more than 100 basis points for the sixth consecutive monthly period. As a result, the DPUC initiated an overearnings investigation. In October 2008 the DPUC issued a decision ordering SCG to implement a rate decrease of $15 million effective October 24, 2008, and to file pro forma adjustments for the purpose of a surcharge for the period beginning October 24, 2008, through June 30, 2009.

In January 2009 SCG filed an application for a delivery rate increase of $50.1 million or approximately 15.2% over the revenues produced from its existing rate schedules. The DPUC issued SCG’s rate order on July 2, 2009, requiring a rate reduction of 3.2% effective August 19, 2009. SCG appealed the order and the application of new tariffs prescribed by the rate order was temporarily suspended by the Court until it makes a final decision on the appeal. On December 17, 2009, the Court issued an order requiring the DPUC to provide its reasoning for several findings in its decision within 90 days. On April 1, 2010, the Connecticut Superior Court entered a ruling against SCG’s appeal. On April 16, 2010, SCG filed for a continuation of the temporary stay while it pursues an appeal of that decision. On May 28, 201 0, SCG appealed the decision to the Connecticut Supreme Court. Oral argument is expected to be presented in the fourth quarter of 2010 with a decision on the appeal not expected until the first quarter of 2011.

12

Notes to Condensed Combined Financial Statements

Connecticut Energy Corporation and CTG Resources, Inc.

Note 9. Retirement Benefits

We have funded noncontributory defined benefit pension plans that cover substantially all of our employees. The plans provide defined benefits based on years of service and final average salary. We also have postretirement health care benefit plans covering substantially all of our employees. The health care plans are contributory with participants' contributions adjusted annually.

Components of net periodic benefit cost:

	Pension Benefits						Postretirement Benefits
Three months ended September 30,	2010			2009			2010			2009
(Thousands)
Service cost	$	1,251		$	1,167		$	173		$	143
Interest cost		4,450			4,428			777			818
Expected return on plan assets		(5,264	)		(5,459	)		(320	)		(224	)
Amortization of prior service cost (benefit)		85			129			(24	)		34
Amortization of net loss		2,144			1,626			164			182
Net periodic benefit cost	$	2,666		$	1,891		$	770		$	953

	Pension Benefits						Postretirement Benefits
Nine months ended September 30,	2010			2009			2010			2009
(Thousands)
Service cost	$	3,754		$	3,502		$	518		$	428
Interest cost		13,349			13,283			2,329			2,456
Expected return on plan assets		(15,792	)		(16,379	)		(959	)		(673	)
Amortization of prior service cost (benefit)		254			389			(72	)		102
Amortization of net loss		6,432			4,878			493			546
Net periodic benefit cost	$	7,997		$	5,673		$	2,309		$	2,859

13

Notes to Condensed Combined Financial Statements

Connecticut Energy Corporation and CTG Resources, Inc.

Note 10. Segment Information

Our natural gas delivery segment consists of our regulated transportation, storage and distribution operations in Connecticut. We measure segment profitability based on net income. Eliminations and other includes primarily our intersegment and intercompany eliminations. Selected information for our operating segments includes:

	Natural Gas  Delivery			CNE Energy		TEN		Eliminations and other			Total
(Thousands)
Three months ended:
September 30, 2010
Operating Revenues	$	102,138		$	2,246	$	8,432	$	(1,756	)	$	111,060
Net (Loss) Income     Attributable to    CEC and CTG	$	(4,653	)	$	4,717	$	1,891	$	478		$	2,433
September 30, 2009
Operating Revenues	$	76,571		$	2,875	$	7,619	$	(2,554	)	$	84,511
Net (Loss) Income        Attributable to    CEC and CTG	$	(615	)	$	5,838	$	1,396	$	(1,192	)	$	5,427
Nine months ended:
September 30, 2010
Operating Revenues	$	510,737		$	7,728	$	25,286	$	(6,257	)	$	537,494
Net (Loss) Income        Attributable to    CEC and CTG	$	(222,548	)	$	15,194	$	4,794	$	(258	)	$	(202,818	)
September 30, 2009
Operating Revenues	$	509,191		$	9,648	$	26,107	$	(7,433	)	$	537,513
Net (Loss) Income        Attributable to    CEC and CTG	$	19,713		$	6,610	$	4,911	$	(2,074	)	$	29,160
Total Assets
September 30, 2010	$	1,735,864		$	342,501	$	68,050	$	(3,040	)	$	2,143,375
December 31, 2009	$	2,036,072		$	353,736	$	71,958	$	(2,976	)	$	2,458,790

14 

EX-99.3

EXHIBIT 99.3

UIL HOLDINGS CORPORATION

PRO FORMA FINANCIAL INFORMATION

(UNAUDITED)

On November 16, 2010, UIL Holdings Corporation (the “Registrant” or “UIL Holdings”) completed its acquisition (the “Acquisition”) from Iberdrola USA, Inc. (“Iberdrola USA”) of (i) Connecticut Energy Corporation (“CEC”), the parent of The Southern Connecticut Gas Company, (ii) CTG Resources, Inc. (“CTG”), the parent of Connecticut Natural Gas Corporation, and (iii) Berkshire Energy Resources (“Berkshire”), the parent of The Berkshire Gas Company.  The approximately $1.296 billion purchase price less net debt of approximately $331.1 million and a preliminary working capital adjustment of approximately $47.0 million resulted in cash consideration at closing of approximately $917.9 million to Iberdrola USA.  The Registrant paid this cash consideration from a combination of approximately $501.5 million in net proceeds from the Registrant’s September 2010 issuance of 20,355,000 shares of its common stock and the approximately $442.9 million in net proceeds from the Registrant’s October 2010 issuance of $450 million aggregate principal amount of 4.625% Notes due 2020..  While the aggregate purchase price was unchanged, the cash consideration paid at closing was greater than the prior estimate of $885 million due to lower actual levels of net debt assumed, partially offset by the preliminary working capital adjustment.  The lower level of debt reflected prior principal payments of $43.8 million on long-term debt and $38.9 million of cash generated by the acquired entities.  The preliminary working capital adjustment resulted primarily from a seasonal decrease of $45.7 million in accounts receivable.  The financial indebtedness and preliminary working capital adjustments hav e been included in these pro forma financial statements based on the condensed combined financial statements of CEC and CTG as of and for the nine months ended September 30, 2010 (unaudited), however they remain subject to further adjustment.

The Acquisition will be accounted for in accordance with the acquisition method of accounting and the regulations of the SEC.

The Unaudited Pro Forma Condensed Combined Financial Statements (pro forma financial statements) have been derived from:

·   the consolidated financial statements of UIL Holdings as of and for the year ended December 31, 2009 included in UIL Holdings’ Form 10-K for the fiscal year then ended;

·   the consolidated financial statements of UIL Holdings as of and for the nine months ended September 30, 2010 (unaudited) included in UIL Holdings’ Form 10-Q for the quarterly period ended September 30, 2010;

·   the combined financial statements of CEC and CTG as of and for the year ended December 31, 2009;

·   the condensed combined financial statements of CEC and CTG as of and for the nine months ended September 30, 2010 (unaudited);

·   the financial statements of Berkshire as of and for the year ended December 31, 2009; and

·   the financial statements of Berkshire as of and for the nine months ended September 30, 2010 (unaudited).

The Unaudited Pro Forma Condensed Combined Statements of Income (pro forma statements of income) for the nine months ended September 30, 2010 and year ended December 31, 2009 give effect to the Acquisition as if it were completed on January 1, 2009. The Unaudited Pro Forma Condensed Combined Balance Sheet (pro forma balance sheet) as of September 30, 2010 gives effect to the Acquisition as if it were completed on September 30, 2010.  These unaudited pro forma financial statements should be read in conjunction with the accompanying notes.

The historical consolidated financial information has been adjusted in the pro forma financial statements to give effect to pro forma events that are: (1) directly attributable to the Acquisition; (2) factually supportable; and (3) with respect to the statements of income, expected to have a continuing impact on the combined results of UIL Holdings and CEC, CTG and Berkshire.

The pro forma financial statements do not reflect any cost savings (or associated costs to achieve such savings) from operating efficiencies or restructuring that could result from the Acquisition.

The pro forma statements of income for the nine months ended September 30, 2010 and year ended December 31, 2009 include certain nonrecurring charges.  The pro forma statement of income for the nine months ended September 30, 2010 includes an after-tax goodwill impairment charge of $271.2 million, and certain nonrecurring offsets to expenses totaling $2 million after-tax.  The pro forma statement of income for the year ended December 31, 2009 includes nonrecurring expenses totaling $12 million after-tax.

Assumptions and estimates underlying the pro forma adjustments are described in the accompanying notes, which should be read in connection with the pro forma financial statements. The final amounts recorded may differ materially from the information presented.  These estimates are subject to change pending further review of the assets acquired and liabilities assumed.

The pro forma financial statements have been presented for illustrative purposes only and are not necessarily indicative of results of operations and financial position that would have been achieved had the pro forma events taken place on the dates indicated, or the future consolidated results of operations or financial position of the combined company.  The pro forma results of operations for the nine-month period ended September 30, 2010 do not necessarily represent 75% of the ultimate result for the full year 2010.  For example, electric and gas revenues vary by season, with the highest revenues typically in the third quarter for electric revenues and in the first quarter for gas revenues.

UIL HOLDINGS CORPORATION, CONNECTICUT ENERGY CORPORATION AND CTG RESOURCES, INC.,
AND THE BERKSHIRE GAS COMPANY
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
(In Thousands except per share amounts)
For the Nine Months Ended September 30, 2010
	UIL			CEC and						Pro Forma Adjustments							Pro Forma
	Holdings (a)			CTG (a)			Berkshire (a)			(b)			Other				Combined
Operating Revenues	$	663,673		$	537,494		$	48,823		$	(33,014	)	$	-			$	1,216,976
Operating Expenses
Fuel and purchased power		194,531			293,353			25,314			(1,745	)		-				511,453
Other operating expenses		238,780			111,958			9,400			(18,411	)		(13,171	)	(d)		328,556
Depreciation and amortization		82,672			34,349			4,939			(4,017	)		-				117,943
Goodwill impairment charge		-			249,844			21,331			-			-				271,175
Taxes - other than income taxes		54,534			33,506			1,735			(2,309	)		-				87,466
Total Operating Expenses		570,517			723,010			62,719			(26,482	)		(13,171	)			1,316,593
Operating Income (Loss)		93,156			(185,516	)		(13,896	)		(6,532	)		13,171				(99,617	)
Other Income and (Deductions), net		14,551			1,359			1,333			3,127			-				20,370
Interest Charges, net		32,627			22,149			2,507			(51	)		16,056		(c)		73,288
Income (Loss) Before Income Taxes and Equity Earnings		75,080			(206,306	)		(15,070	)		(3,354	)		(2,885	)			(152,535	)
Income Taxes		32,089			(3,880	)		2,438			16,987			(1,558	)	(c)(d)		46,076
Income (Loss) Before Equity Earnings		42,991			(202,426	)		(17,508	)		(20,341	)		(1,327	)			(198,611	)
Income (Loss) from Equity Investments		(544	)		(392	)		(4	)		353			-				(587	)
Net Income (Loss)	$	42,447		$	(202,818	)	$	(17,512	)	$	(19,988	)	$	(1,327	)		$	(199,198	)
Average Number of Common Shares Outstanding - Basic		30,743			N/A			N/A			N/A			19,684		(e)		50,427
Average Number of Common Shares Outstanding - Diluted		31,067			N/A			N/A			N/A			19,684		(e)		50,751
Earnings Per Share of Common Stock - Basic	$	1.38			N/A			N/A			N/A			N/A			$	(3.94	)
Earnings Per Share of Common Stock - Diluted	$	1.36			N/A			N/A			N/A			N/A			$	(3.94	)
Cash Dividends Declared per share of Common Stock	$	1.296			N/A			N/A			N/A			N/A			$	1.296
The accompanying Notes to the Unaudited Pro Forma Condensed Combined Financial
Statements are an integral part of the pro forma financial statements.

UIL HOLDINGS CORPORATION, CONNECTICUT ENERGY CORPORATION AND CTG RESOURCES, INC.,
AND THE BERKSHIRE GAS COMPANY
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
ASSETS
(In Thousands)
As of September 30, 2010
	UIL		CEC and				Pro Forma Adjustments										Pro Forma
	Holdings (a)		CTG (a)		Berkshire (a)		(b)			(f)			Other				Combined
Current Assets
Unrestricted cash, restricted cash, and temporary    cash investments	$	545,023	$	55,566	$	6,274	$	706		$	-		$	(488,735	)	(h)(i)(j)	$	118,834
Accounts receivable and unbilled revenues		156,291		86,621		3,573		(6,663	)		1,265			-				241,087
Related party accounts receivable		-		1,265		-		-			(1,265	)		-				-
Related party notes receivable		-		3,050		-		(3,050	)		-			-				-
Natural gas in storage, at average cost		-		132,345		5,698		(12,236	)		-			-				125,807
Materials and supplies, at average cost		5,019		1,682		505		-			-			-				7,206
Other current assets		72,088		22,936		2,330		(11,989	)		-			-				85,365
Total Current Assets		778,421		303,465		18,380		(33,232	)		-			(488,735	)			578,299
Other investments		66,096		354,451		3,013		(340,452	)		-			-				83,108
Property, Plant and Equipment		1,662,076		1,338,223		155,619		(63,053	)		-			-				3,092,865
Less, accumulated depreciation		411,252		427,625		49,991		(34,851	)		-			-				854,017
Net Property, Plant and Equipment		1,250,824		910,598		105,628		(28,202	)		-			-				2,238,848
Other Assets
Regulatory assets		597,796		351,186		31,580		-			-			-				980,562
Related party note receivable		61,432		-		-		-			-			-				61,432
Goodwill		-		210,029		54,666		(3,784	)		-			(1,367	)	(g)(h)		259,544
Other		38,378		13,646		1,936		(4,881	)		-			3,560		(i)		52,639
Total Deferred Charges and Other Assets		697,606		574,861		88,182		(8,665	)		-			2,193				1,354,177
Total Assets	$	2,792,947	$	2,143,375	$	215,203	$	(410,551	)	$	-		$	(486,542	)		$	4,254,432
The accompanying Notes to the Unaudited Pro Forma Condensed Combined Financial
Statements are an integral part of the pro forma financial statements.

UIL HOLDINGS CORPORATION, CONNECTICUT ENERGY CORPORATION AND CTG RESOURCES, INC.,
AND THE BERKSHIRE GAS COMPANY
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
LIABILITIES
(In Thousands)
As of September 30, 2010
	UIL		CEC and						Pro Forma Adjustments										Pro Forma
	Holdings (a)		CTG (a)			Berkshire (a)			(b)			(f)			Other				Combined
Current Liabilities
Current portion of long-term debt	$	65,518	$	30,000		$	3,000		$	-		$	-		$	-			$	98,518
Related party note payable		-		12,284			-			(12,284	)		-			-				-
Accounts payable		91,997		35,095			1,598			(3,514	)		4,851			-				130,027
Related party accounts payable		-		4,851			-			-			(4,851	)		-				-
Dividends payable		13,007		-			-			-			-			-				13,007
Accrued liabilities		36,700		-			-			(1,147	)		32,259			-				67,812
Taxes accrued		13,694		24,476			2,174			(5,262	)		-			(4,070	)	(j)		31,012
Other		43,600		35,644			5,398			-			(32,259	)		-				52,383
Total Current Liabilities		264,516		142,350			12,170			(22,207	)		-			(4,070	)			392,759
Noncurrent Liabilities
Pension accrued		142,372		-			-			-			98,590			-				240,962
Other post-retirement benefits accrued		49,435		136,538			-			-			(98,324	)		-				87,649
Derivative liabilities		123,228		-			-			-			-			-				123,228
Deferred income taxes		296,206		292,675			18,719			(106,337	)		-			(186,338	)	(h)		314,925
Regulatory liabilities		82,527		307,464			28,107			-			-			-				418,098
Other		35,070		41,022			14,037			(657	)		(266	)		-				89,206
Total Noncurrent Liabilities		728,838		777,699			60,863			(106,994	)		-			(186,338	)			1,274,068
Capitalization
Long-term debt		715,460		314,000			34,000			-			-			446,418		(i)		1,509,878
Preferred stock equity		-		750			78			-			-			-				828
Common Stock Equity
Common stock		926,958		2			-			(2	)		-			-				926,958
Paid-in capital		16,340		1,117,678			128,108			(220,043	)		-			(1,025,743	)	(g)		16,340
Retained earnings		140,835		(215,595	)		(20,016	)		(54,770	)		-			283,147		(g)(j)		133,601
Accumulated other comprehensive loss		-		(44	)		-			-			-			44		(g)		-
Net Common Stock Equity		1,084,133		902,041			108,092			(274,815	)		-			(742,552	)			1,076,899
Other Noncontrolling Interests		-		6,535			-			(6,535	)		-			-				-
Total Capitalization		1,799,593		1,223,326			142,170			(281,350	)		-			(296,134	)			2,587,605
Total Liabilities and Capitalization	$	2,792,947	$	2,143,375		$	215,203		$	(410,551	)	$	-		$	(486,542	)		$	4,254,432
The accompanying Notes to the Unaudited Pro Forma Condensed Combined Financial
Statements are an integral part of the pro forma financial statements.

UIL HOLDINGS CORPORATION, CONNECTICUT ENERGY CORPORATION AND CTG RESOURCES, INC.,
AND THE BERKSHIRE GAS COMPANY
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
(In Thousands except per share amounts)
For the Year Ended December 31, 2009
	UIL		CEC and						Pro Forma Adjustments							Pro Forma
	Holdings (a)		CTG (a)			Berkshire (a)			(b)			Other				Combined
Operating Revenues	$	896,550	$	713,701		$	64,043		$	(45,515	)	$	-			$	1,628,779
Operating Expenses
Fuel and purchased power		333,339		381,375			30,251			(2,877	)		-				742,088
Other operating expenses		282,865		181,442			13,917			(26,170	)		-				452,054
Depreciation and amortization		98,116		51,061			5,947			(11,379	)		-				143,745
Taxes - other than income taxes		60,062		48,736			2,246			(3,050	)		-				107,994
Total Operating Expenses		774,382		662,614			52,361			(43,476	)		-				1,445,881
Operating Income		122,168		51,087			11,682			(2,039	)		-				182,898
Other Income and (Deductions), net		5,586		6,204			1,054			(4,543	)		-				8,301
Interest Charges, net		40,400		31,865			3,543			(394	)		21,385		(c)		96,799
Income Before Income Taxes and Equity Earnings		87,354		25,426			9,193			(6,188	)		(21,385	)			94,400
Income Taxes		33,096		(12,160	)		3,562			12,167			(8,400	)	(c)		28,265
Income Before Equity Earnings		54,258		37,586			5,631			(18,355	)		(12,985	)			66,135
Income (Loss) from Equity Investments		59		(666	)		(6	)		627			-				14
Net Income	$	54,317	$	36,920		$	5,625		$	(17,728	)	$	(12,985	)		$	66,149
Average Number of Common Shares Outstanding - Basic		28,027		N/A			N/A			N/A			20,355		(e)		48,382
Average Number of Common Shares Outstanding - Diluted		28,273		N/A			N/A			N/A			20,355		(e)		48,628
Earnings Per Share of Common Stock - Basic	$	1.94		N/A			N/A			N/A			N/A			$	1.36
Earnings Per Share of Common Stock - Diluted	$	1.93		N/A			N/A			N/A			N/A			$	1.36
Cash Dividends Declared per share of Common Stock	$	1.728		N/A			N/A			N/A			N/A			$	1.728
The accompanying Notes to the Unaudited Pro Forma Condensed Combined Financial
Statements are an integral part of the pro forma financial statements.

NOTES TO THE UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

The pro forma adjustments included in the pro forma financial statements are as follows:

Adjustments to Pro Forma Financial Statements

(a) UIL Holdings, CEC, CTG, and Berkshire historical presentation – Based on UIL Holdings’ review of CEC, CTG and Berkshire’s summary of significant accounting policies disclosed in their financial statements and preliminary discussions with their management, the nature and amount of any adjustments to the historical financial statements of CEC, CTG and Berkshire to conform their accounting policies to those of UIL Holdings are not expected to be material.  Further review of CEC, CTG and Berkshire’s accounting policies and financial statements may result in revisions to their policies and classifications to conform to UIL Holdings.  Additionally, certain immaterial amounts reported in the consolidated financial statements of UIL Holding s as of and for the year ended December 31, 2009 have been reclassified to conform to the presentation in the consolidated financial statements of UIL Holdings as of and for the nine months ended September 30, 2010.

(b) CNE Energy Services Group, Inc. (CNE Energy) and TEN Companies, Inc. (TEN) – Represents the removal of CNE Energy and TEN from CEC and CTG.  These subsidiaries of CEC and CTG are involved in operations outside the regulatory gas distribution business and are not included in the Acquisition.

(c) Interest expense – Reflects an increase in interest expense related to the October 2010 issuance of $450 million of senior unsecured debt with a fixed interest rate of 4.625% and a 10 year maturity, amortization of the associated debt issuance costs, and accretion of the $3.6 million discount, calculated as follows (dollars in thousands):

	Nine months ended			Year ended
	September 30, 2010			December 31, 2009
October 2010 issuance of senior unsecured debt	$	450,000		$	450,000
Interest rate (includes amortization of debt issuance costs)		4.625	%		4.625	%
	$	15,609		$	20,813
Amortization of senior unsecured debt issuance costs	$	223		$	285
Accretion of senior unsecured debt discount	$	224		$	287
Total interest expense	$	16,056		$	21,385
Tax effect	$	(6,300	)	$	(8,400	)

(d) Transaction Costs – Reflects the removal of transaction costs (primarily advisory, consulting, and legal expenses) as they reflect non-recurring charges directly related to the Acquisition (dollars in thousands).

	Nine months ended
	September 30, 2010
Pro forma transaction cost adjustment	$	(13,171	)
Tax effect	$	4,742

(e) Average Number of Common Shares Outstanding – Reflects the impact of the September 2010 issuance of 20,355,000 shares of common stock, which amounted to net proceeds of approximately $501.5 million after expenses and underwriting discounts, to provide funds to complete the Acquisition.  Basic and diluted earnings per share of common stock under the two-class method are as follows (dollars in thousands):

	Nine months ended			Year ended
	September 30, 2010			December 31, 2009
Numerator:
Pro forma net income (loss)	$	(199,198	)	$	66,149
Less:  Pro forma net income (loss) allocated to unvested units		(425	)		162
Pro forma net income (loss) attributable to common shareholders	$	(198,773	)	$	65,987
Denominator:
Basic average number of shares outstanding		30,743			28,027
Pro forma adjustment		19,684			20,355
Pro forma basic average number of shares outstanding		50,427			48,382
Effect of dilutive securities		324			246
Pro forma diluted average number of shares outstanding		50,751			48,628
Earnings per share:
Basic pro porma earnings per share of common stock	$	(3.94	)	$	1.36
Diluted pro porma earnings per share of common stock	$	(3.94	)	$	1.36

(f) Reclassification of Certain Historical Amounts – Represents certain asset and liability accounts included in CEC, CTG, and Berkshire’s historical presentations being reclassified to conform to UIL Holdings’ historical presentation.

(g) Equity and Goodwill – Reflects the removal of the historical common stock equity accounts and remaining historical goodwill of CEC and CTG, and Berkshire after adjustment (b).

(h) Purchase Price Allocation – Reflects the preliminary estimate of the excess of the purchase price paid over the fair value of CEC, CTG and Berkshire’s assets acquired and liabilities assumed based upon a closing date of September 30, 2010.  Under the purchase method of accounting, the total estimated purchase price is allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values with the excess of the purchase price over the fair value recorded to goodwill.  UIL Holdings has assumed the historical book value of the assets and liabilities of CEC, CTG and Berkshire approximates their fair value

given the regulation they operate under in Connecticut and Massachusetts.  The following represents the excess of the purchase price over the fair value of the net assets acquired (dollars in thousands):

Purchase price, net	$            885,000
Working capital adjustment to purchase price	(56,429)
Financial indebtedness adjustment to purchase price	91,718
Less: book value of net assets of CEC, CTG and Berkshire	(1,010,133)
Adjustments related to:
Elimination of CNE Energy and TEN - adjustment (b)	274,815
Elimination of historical goodwill - adjustment (g)	260,911
Pro forma adjustment to deferred income tax liabilities*	(186,338)
	$            259,544

*To remove the remaining deferred income tax liabilities of CEC and CTG after adjustment (b)

Pursuant to the authoritative guidance on goodwill and other intangible assets, goodwill is not amortized; rather, impairment tests are performed at least annually or more frequently if circumstances indicate an impairment may have occurred.  If an impairment exists, the goodwill is immediately written down to its fair value through a current charge to income.  Accordingly, the goodwill arising from the Acquisition will be subject to an impairment test at least annually.

(i) Debt – Reflects the October 2010 issuance of $450 million of senior unsecured debt with an interest rate of 4.625% and a 10-year maturity, offset by issuance costs of $3.6 million included in other assets and a discount of $3.6 million, to provide funds to complete the Acquisition.

(j) Transaction Costs – Reflects an estimated payment of the anticipated remaining transaction costs (primarily advisory, consulting, and legal expenses) (dollars in thousands).

	As of
	September 30, 2010
Pro forma transaction cost adjustment to cash	$	(11,304	)
Tax effect	$	4,070

Detail of adjustments to cash– The following details the adjustments to cash (dollars in thousands):

October 2010 debt issuance	$	446,418
Purchase price, net		(885,000	)
Working capital purchase price adjustment - adjustment (h)		56,429
Financial indebtedness purchase price adjustment - adjustment (h)		(91,718	)
Debt issuance costs - adjustment (i)		(3,560	)
Remaining anticipated transaction costs - adjustment (j)		(11,304	)
	$	(488,735	)