8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 or 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):  February 22, 2011

(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 (17 CFR 240.14d-2(b))

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

Item 2.02 Results of Operations and Financial Condition

On February 22, 2011, UIL Holdings Corporation (the Registrant or UIL Holdings) issued a press release that announces its financial results for the three and twelve months ended December 31, 2010 and provides 2011 earnings guidance.  A copy of the Registrant's press release is attached hereto as Exhibit 99.

Item 7.01 Regulation FD Disclosure

Additionally, UIL will conduct a webcast conference call with financial analysts on Wednesday, February 23, 2011, 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 Holdings' website at http://www.uil.com.  Institutional investors can access the call via Thomson Street Events (www.stree tevents.com), a password-protected event management site.

As part of the conference call, James P. Torgerson, President and Chief Executive Officer, and Richard J. Nicholas, Executive Vice President and Chief Financial Officer, will present items previously not disclosed in reports filed by the Registrant with the Securities and Exchange Commission.  Among these items are (a) a revised capital expenditure forecast for 2011 (b) a regulatory update (c) a bonus depreciation impact analysis (d) a revised near-term rate base profile (e) 2012 earnings guidance (f) a long-term debt maturity update and (g) earned rate of return information.  A copy of the Registrant's presentation is attached hereto as Exhibit 99.1.

The information in this Form 8-K shall not be deemed to be “filed” for the purposes of Section 18 of the Securities and Exchange Act of 1934 (the Exchange Act), or otherwise subject to the liabilities of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Use of Non-GAAP Measures

UIL Holdings believes that a breakdown, presented on a net income and per share basis, of how the acquisition-related financial activities discussed in the press release and presentation described above contributed to the change in net income is useful in understanding the overall 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 dollar amount of the applicable change for the acquisition activity, booked in accordance with generally accepted accounting principles (GAAP), and applying UIL Holdings' combined effective statutory federal and state tax rate and then dividing 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 projected 2011 net income for each line of business by the projected average number of shares of UIL Holdings common stock outstanding for 2011.   Total consolidated EPS is a GAAP-basis presentation.

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 and other products and services, unanticipated weather conditions, changes in accoun ting principles, policies or guidelines, and other economic, competitive, governmental, and technological factors affecting the operations, markets, products and services of UIL Holdings’ subsidiary, The United Illuminating Company.  Such risks and uncertainties with respect to UIL Holdings’ pending transaction with Iberdrola USA, Inc. include, but are not limited to: the possibility that the proposed transaction is delayed or does not close, including due to the failure to receive required regulatory approvals, the taking of governmental action (including the passage of legislation) to block the transaction, or the failure of other closing conditions; and the possibility that the expected benefits will not be realized, or will not be realized within the expected time period.  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 C ommission.  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.

Item 9.01 Financial Statements and Exhibits

(d)	Exhibits – The following exhibits are filed as part of this report:
99	Press release, dated February 22, 2011.
99.1	Presentation on Fourth Quarter and Full Year 2010 financial results

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:  2/22/11	By                /s/ Richard J. Nicholas
	Richard J. Nicholas
	Executive Vice President
	and Chief Financial Officer

Exhibit Index

Exhibit	Description
99	Press Release dated February 22, 2011.
99.1	Presentation on Fourth Quarter and Full Year 2010 financial results

EX-99

EXHIBIT 99

UIL Holdings Corporation

157 Church Street

P.O. Box 1564

New Haven, CT  06506-0901

203.499.2812 Fax:  203.499.3626

NEWS RELEASE

February 22, 2011	Analyst Contact:	Susan Allen	203-499-2409
	Media Contact:	Michael West Jr.	203-499-3858

UIL Holdings Corporation Reports 2010 Financial Results and Provides 2011 Earnings Guidance

UIL Holdings Corporation (NYSE: UIL) today reported consolidated net income of $54.9 million, or $1.53 per basic share, an increase in net income of $0.6 million, and a decrease of $0.41 per basic share, compared to 2009.  Excluding the impact of the gas distribution acquisition and transition related activities, earnings for 2010 were $61.3 million, or $2.04 per share, an increase of 5% on an earnings per share basis when compared to the same period in 2009.

For the fourth quarter of 2010, earnings were $12.4 million, or $0.25 per basic share, compared to net income of $6.7 million, or $0.22 per basic share, for the same period in 2009.  Excluding the impact of the gas distribution acquisition and transition related activities, earnings for the fourth quarter of 2010 were $10.4 million, or $0.35 per share, an increase of 58% on an earnings per share basis when compared to the same period in 2009.

“UIL had a remarkable year in 2010 – we closed on the acquisition of three gas companies within six months of announcement, launched a new and innovative transmission venture and GenConn Energy’s Devon plant was completed and became operational,” commented James P. Torgerson, UIL’s President and CEO.  “In addition, GenConn Energy’s second plant, located in Middletown, Connecticut, is currently on schedule to be operational by June 2011.”

“Importantly 2011 will be a transition year.  Therefore, we will continue to focus on controlling operational costs and executing on our capital expenditure plan at each of our regulated subsidiaries,” added Torgerson.  “The integration of all of our operating companies is underway with an emphasis on process integration initiatives and best practices. The implementation of these initiatives is expected to continue through this year with most being completed before 2012.”

 - more -

The following table provides earnings per share on both a pre-acquisition and post-acquisition basis for the fourth quarter and full year of 2010, compared to the same periods in 2009.

	Quarter Ended December 31,								Full Year Ended December 31,
	2010			2009		Difference			2010			2009		Difference
EPS
UIL excl. acquisition & transition related activities	$	0.35		$	0.22	$	0.13		$	2.04		$	1.94	$	0.10
Gas distribution	$	0.26		$	-	$	0.26		$	0.36		$	-	$	0.36
Acquisition & transition related expenses	$	(0.16	)	$	-	$	(0.16	)	$	(0.46	)	$	-	$	(0.46	)
Interest expense related to $450M debt issuance	$	(0.06	)	$	-	$	(0.06	)	$	(0.08	)	$	-	$	(0.08	)
September 2010 equity issuance	$	(0.14	)	$	-	$	(0.14	)	$	(0.33	)	$	-	$	(0.33	)
UIL Consolidated	$	0.25		$	0.22	$	0.03		$	1.53		$	1.94	$	(0.41	)

Electric distribution, CTA & other

Earnings from the electric distribution business in 2010 were $35.5 million, or $0.99 per basic share, compared to $31.7 million, or $1.13 per basic share, for the same period in 2009.  For the fourth quarter of 2010, earnings from the electric distribution business were $3.7 million, or $0.07 per basic share, compared to $1.4 million, or $0.04 per basic share in the fourth quarter of 2009.  The increase in earnings for both the quarter and full year 2010 was primarily due to increased operating income from revenues from the approved rate increase effective January 1, 2010, partially offset by lower CTA rate base.  Earnings from UI’s equity investment in GenConn were $1.2 million in 2010.

Electric transmission

Earnings from the electric transmission business in 2010 were $28.3 million, or $0.79 per basic share, compared to $25.3 million, or $0.90 per basic share, for the same period in 2009.  For the fourth quarter of 2010, earnings from the electric transmission business were $7.3 million, or $0.15 per basic share, compared to $6.1 million, or $0.21 per basic share in the fourth quarter of 2009. The favorable earnings for both the quarter and full year of 2010 were primarily due to an increase in the allowance for funds used during construction, as well as a higher rate base.

Gas distribution

Earnings from the newly acquired gas distribution businesses for the period November 17, 2010 through December 31, 2010 were $12.9 million, or $0.36 per basic share.

Corporate

UIL Holdings retains certain costs, primarily interest expense, at the holding company, or “corporate” levels, which are not allocated to the various subsidiaries.  UIL Corporate incurred net after-tax costs of $2.5 million, or $0.07 per basic share in 2010, compared to net after-tax costs of $2.7 million, or $0.09 per basic share, in the same period of 2009.  For the fourth quarter of 2010, Corporate incurred after-tax costs of $0.6 million, or $0.01 per basic share, compared to net after-tax costs of $0.8 million or $0.03 per basic share in the fourth quarter of 2009.

 - more -

2

Looking Forward

UIL's consolidated earnings estimate for 2011 is $1.75 - $1.95 per share. Details of the 2011 earnings estimates are summarized as follows:

2011 Earnings Expectations
	Approximate Net Income(2)			EPS - basic(3)
Electric distribution, CTA & other	$	39 - $46		$	0.78 - $0.90
Electric transmission	$	28 - $30		$	0.55 - $0.60
Total UI (1)	$	68 - $73		$	1.35 - $1.45
Gas distribution	$	35 - $40		$	0.70 - $0.80
UIL Corporate	$	(15) - ($14	)	$	(0.30) - ($0.28	)
Total UIL (1)	$	88 - $98		$	1.75 - $1.95
(1)    Expectations are not intended to be additive
(2)    Rounded to the nearest million
(3)    Assumes approximately 50.6 million average shares outstanding

 

UIL’s objective is for its regulated businesses to earn the allowed return on an aggregate basis. Major factors impacting the earnings per share estimates for 2011 are as follows:

·   Earnings take into account a full year of the gas distribution earnings, which are expected to contribute $0.70 - $0.80 per share.

·   In 2011, UIL will incur costs from the transition services agreement with Iberdrola USA, while also incurring costs involved in the permanent transition of these services to UIL.

·   The full realization of saving half of the $23 million Iberdrola USA 2009 charges to the gas companies is not expected until 2012.  The savings opportunities have been identified and we project to fully achieve those savings in 2012.

·   The earnings expectations for 2011 also include the impact of 100% bonus depreciation for tax purposes on qualified property.  The deferred taxes generated by bonus depreciation reduced the electric and gas rate bases, along with GenConn’s rate base.

·   UI’s investment in GenConn’s peaking generation project in Middletown, Connecticut is scheduled to be in commercial operation by June 2011.  With the GenConn Devon plant in operation for the full year 2011, the two GenConn units are expected to contribute $0.12 - $0.14per share in 2011.

·   CTA earnings are expected to decline by $0.07 - $0.09 per share in 2011 compared to 2010, as rate base continues to be amortized.

 - more -

3

Fourth Quarter and Year-end 2010 Earnings Conference Call

In conjunction with this earnings release, UIL will conduct a webcast conference call with financial analysts on Wednesday, February 23, 2011, beginning at 10:00 a.m. eastern time.  UIL’s 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 690,000 electric and natural gas utility customers in 66 communities across two states, with combined total assets of over $4 billion.

UIL 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 (BGC), 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 Gas serves natural gas customers in western Massachusetts. UIL employs more than 1,850 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, of how the acquisition-related financial activities described above contributed to the change in net income is useful in understanding the overall 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 dollar amount of the applicable change for the acquisition activity, booked in accordance with generally accepted accounting principles (GAAP), and applying UIL Holdings' combined effective statutory federal and state tax rate and then dividing by the average number of shares of UIL Holdings common stock outstanding for the periods presented. Any such amounts provided are provided for informational purpo ses 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 projected 2011 net income for each line of business by the projected average number of shares of UIL Holdings common stock outstanding for 2011.   Total consolidated EPS is a GAAP-basis presentation.

 - more -

4

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. Such risks and uncertainties with respect to UIL Holdings’ recent acquisition of The Southern Connecticut Gas Company, Connecticut Natural Gas Corporation and The Berkshire Gas Company include, but are not limited to, the possibility that the expected benefits will not be realized, or will not be realized within the expected ti me period. 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 fourth quarter and full years of 2010 and 2009:

###

5

UIL HOLDINGS CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(In Thousands except per share amounts)
(Unaudited)
	Years Ended
	December 31,
	2010		2009
Operating Revenues
Electric distribution and transmission	$	859,547	$	895,681
Gas distribution		138,105		-
Non-utility		14		869
Total Operating Revenues		997,666		896,550
Operating Expenses
Operation
Purchased power		242,268		333,339
Natural gas purchased		81,428		-
Operation and maintenance		258,282		225,853
Transmission wholesale		72,169		57,012
Depreciation and amortization		113,946		98,116
Taxes - other than income taxes		78,702		60,062
Acquisition and closing related expenses		25,572		-
Total Operating Expenses		872,367		774,382
Operating Income		125,299		122,168
Other Income and (Deductions), net		17,262		5,586
Interest Charges, net
Interest on long-term debt		50,357		37,297
Other interest, net		1,553		1,286
		51,910		38,583
Amortization of debt expense and redemption premiums		1,788		1,817
Total Interest Charges, net		53,698		40,400
Income Before Income Taxes, Equity Earnings		88,863		87,354
Income Taxes		35,284		33,096
Income Before Equity Earnings		53,579		54,258
Income (Loss) from Equity Investments		1,278		59
Net Income		54,857		54,317
Less:
Preferred Stock Dividends of
Subsidiary, Noncontrolling Interests		3		-
Net Income attributable to UIL Holdings	$	54,854	$	54,317
Average Number of Common Shares Outstanding - Basic		35,722		28,027
Average Number of Common Shares Outstanding - Diluted		36,083		28,273
Earnings Per Share of Common Stock - Basic:	$	1.53	$	1.94
Earnings Per Share of Common Stock - Diluted:	$	1.52	$	1.93
Cash Dividends Declared per share of Common Stock	$	1.728	$	1.728

6

UIL HOLDINGS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
	December 31,		December 31,
(thousands of dollars)	2010		2009
ASSETS
Current assets	$	697,421	$	236,694
Other investments		85,717		10,659
Net property, plant and equipment		2,327,450		1,153,001
Regulatory assets		925,889		676,428
Goodwill		298,890		144,978
Deferred charges and other assets		120,066		-
Total Assets	$	4,455,433	$	2,221,760
LIABILITIES AND CAPITALIZATION
Current liabilities	$	552,934	$	243,334
Noncurrent liabilities		577,231		374,686
Deferred income taxes		354,164		273,558
Regulatory liabilities		382,366		82,457
Total Liabilities		1,866,695		974,035
Long-term debt, net of unamortized discount and premium		1,511,768		673,549
Preferred stock of subsidiary		828		-
Net common stock equity		1,076,142		574,176
Total Capitalization		2,588,738		1,247,725
Total Liabilities and Capitalization	$	4,455,433	$	2,221,760

7

SEGMENTED CONSOLIDATED NET INCOME SUMMARY
	Quarter Ended December 31,									Full Year Ended December 31,
	2010			2009			Difference			2010			2009			Difference
Net Income (Loss) ($M)
Electric distribution, CTA and Other	$	3.7		$	1.4		$	2.3		$	35.5		$	31.7		$	3.8
Electric transmission		7.3			6.1			1.2			28.3			25.3			3.0
Total UI Net Income	$	11.0		$	7.5		$	3.5		$	63.8		$	57.0		$	6.8
Corporate excl. acquisition & transition related expenses		(0.6	)		(0.8	)		0.3			(2.5	)		(2.7	)		0.2
Net Income excl. acquisition & transition related expenses	$	10.4		$	6.7		$	3.8		$	61.3		$	54.3		$	7.0
Gas distribution		12.9			-			12.9			12.9			-			12.9
Acquisition & transition related expenses		(10.9	)		-			(10.9	)		(19.3	)		-			(19.3	)
Total Net Income	$	12.4		$	6.7		$	5.8		$	54.9		$	54.3		$	0.6
Average Shares Outstanding - Basic		50.5			30.0						35.7			28.0
Earnings per Share
Electric distribution, CTA and Other	$	0.07		$	0.04		$	0.03		$	0.99		$	1.13		$	(0.14	)
Electric transmission		0.15			0.21			(0.06	)		0.79			0.90			(0.11	)
Total UI	$	0.22		$	0.25		$	(0.03	)	$	1.78		$	2.03		$	(0.25	)
Corporate excl. acquisition & transition related expenses		(0.01	)		(0.03	)		0.02			(0.07	)		(0.09	)		0.02
EPS excl. acquisition & transition related expenses	$	0.21		$	0.22		$	(0.01	)	$	1.71		$	1.94		$	(0.23	)
Gas distribution		0.26			-			0.26			0.36			-			0.36
Acquisition & transition related expenses		(0.22	)		-			(0.22	)		(0.54	)		-			(0.54	)
Total EPS - Basic	$	0.25		$	0.22		$	0.03		$	1.53		$	1.94		$	(0.41	)
EPS excl. acquisition & transition  related activities
Net Income excl. acquisition & transition related activities	$	0.21		$	0.22		$	(0.01	)	$	1.71		$	1.94		$	(0.23	)
September 2010 equity issuance		0.14			-			0.14			0.33			-			0.33
EPS excl. acquisition & transition related activities and September 2010 equity issuance	$	0.35		$	0.22		$	0.13		$	2.04		$	1.94		$	0.10

8

EX-99.1

1

4Q ’10 Earnings

4Q & FY 2010 Earnings Conference Call

February 23, 2011

EXHIBIT 99.1

2

4Q ’10 Earnings

Important Note to Investors

James P. Torgerson

President and Chief Executive Officer

Richard J. Nicholas

Executive Vice President and Chief Financial Officer

Safe Harbor Provision

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. Such risks and uncertainties with respect to UIL Holdings’ recent acquisition of The
Southern Connecticut Gas Company, Connecticut Natural Gas Corporation and The Berkshire Gas Company include, but are not limited
to, the possibility that the expected benefits will not be realized, or will not be realized within the expected time period. 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.

3

4Q ’10 Earnings

2010 Accomplishments/Milestones

ü13% increase in 2010 net income, excluding acquisition & transition related
expenses, compared to 2009

üTransformative gas companies acquisition completed within six months of
announcement

üGenConn Devon became operational

üGenConn Middletown - 92.4% complete as of year-end

üInvesting in Connecticut portion of New England East West Solution
projects

üExecuting on 10-year capital expenditure plan - driving long-term earnings
growth

4

4Q ’10 Earnings

Gas Company Integration

Working diligently internalizing the Transition Services Agreement (TSA)

›Support services such as IT, Finance and Human Resources provided by
Iberdrola, USA (IUSA) with the ability to terminate any service given 90 days
notice

Integration activities are well underway

›Implementation of these initiatives is expected to continue through this year with
most completed before 2012

2012 savings opportunities - identified & quantified

›IUSA 2009 allocated corporate overheads, support costs and shared services
totaled $23M

»$11.6M of expected savings to be in place in 2012

5

4Q ’10 Earnings

Expected $11.6M of Identified Savings

net

2012 Shared Services Identified Savings

6

4Q ’10 Earnings

›Scheduled: draft - 3/21/11, final - 4/13/11

›Continued until final decision on pilot to be
made as part of UI’s ’10 rate year decoupling
filing due by 4/4/11

›As of 12/31/10 - approximately $1.9M owed to
customers

SCG Potential Overearnings

Generic ROE Proceeding

UI Electric Decoupling

SCG/CNG Rate Case Appeals

›Potential for UI to file distribution rate case for rates in effect in 2012 to reflect
significant investments in distribution infrastructure

›DPUC docket opened 12/28/10

›Scheduled: draft - 3/25/11, final - 4/13/11

›Pending at the CT Supreme Court

›Previous allowed returns in effect pending
appeals - SCG 10%, CNG 10.1%

7

4Q ’10 Earnings

Cash*

EPS*

2010A

2011P

$97 million

(0.05)

$

Bonus Depreciation 2010 & 2011

* Based on current expectations

Efficient use of cash benefits from bonus depreciation

›Expected pension contributions of $65-$75M to the electric and gas pension
plans in 2011

›Reduces pension costs and increases rate base

Expect no need for external equity for at least the next 3 years

8

4Q ’10 Earnings

9

4Q ’10 Earnings

2010 Financial Results - Details

Electric distribution, CTA & other

›12% increase in net income compared to ’09

»Increased operating income due to rate increase effective 1/1/10, partially offset by lower CTA rate
base

»Earnings of $1.2M from UI’s equity investment in GenConn

»Average earned ROE of 9.18% after sharing

Electric transmission

›12% increase in net income compared to ’09

»Increase in AFUDC coupled with higher rate base

»Weighted average ROE of 12.5%

Gas distribution

›Net income of $12.9M from acquisition close (11/17/10 - 12/31/10)

›Expected final average ROEs; SCG 10.60% - 10.80%, CNG 8.95% - 9.05%

›1.3% increase in customers in ‘10

Acquisition & transition related expenses - $19.3M after-tax

Bonus depreciation effect on ’10 results based on current expectations - ($0.6M)

EPS dilution from Sept. ’10 equity issuance - $0.33 per share

10

4Q ’10 Earnings

UI Equity Bridge Loan

UIL Debt retired 2/15/11

Liquidity Overview (12/31/10)

Near-Term Debt Maturities

($M)

*

* To be remarketed

Amounts may not add due to rounding.

No

Expect no need for external equity for at least the next 3 years

($M)

Debt Maturity and Liquidity Profile

11

4Q ’10 Earnings

($ millions)

The annual long-term capital spending update will be presented at the Fall EEI
Financial conference

Central Facility

New business main & services,
system improvements, fleet, IT

Capital costs relating to the
integration of the gas companies,
mainly IT-related

Major Variance Explanations

Note: *2010 Gas distribution capex reflects the full year amount; UIL ownership was for 6 weeks effective with the closing on the acquisition.

2011 Capex Update

12

4Q ’10 Earnings

12

Updated Near-Term Average Rate Base Profile

28%

23%

7%

30%

22%

5%

35%

3%

40%

1%

23%

38%

37%

39%

43%

22%

38%

24%

36%

40%

24%

Electric distribution

CTA

Gas distribution*

Electric transmission

UI’s 50% Share ($M):2010A2011P2012P2013P2014P2015P

Avg. GenConn RB Equivalent:$ 51$ 140$ 164$ 156$ 149$ 142

Avg. Gen Conn Equity “Rate Base”$ 25$70$82$78$75$71

Rate Base (Excluding GenConn Equity Investments):

GenConn Equity Investments:

Notes: *2010 Gas distribution average rate base reflects the full year; UIL ownership was for 6 weeks effective with the closing on the acquisition.For comparability purposes, Gas distribution excludes the impacts
of 338(h)(10) election.

Amounts may not add due to rounding.

42%

13

4Q ’10 Earnings

Assumptions

›Bonus depreciation is expected to have a net impact of
($0.05) per share

›Includes one-time costs for the transition of the gas
distribution business support services from IUSA, as well
as the on-going integration costs

,

2011 Operational Snapshot

›Integration of all of the regulated businesses with an emphasis on process integration initiatives and best practices

›Exiting the TSA by year-end for vast majority of services

›Positioning to realize half of IUSA’s ‘09 allocated corporate charges of $23M à expected savings of $11.6M in 2012

›Continued focus on management of O&M expenses at each of our regulated businesses

›Execution of capital expenditure plan at each of our regulated businesses

14

4Q ’10 Earnings

Assumptions

›Bonus depreciation is expected to have a net impact of ($0.10)
per share

2012 Operational Snapshot

›Integration of all of the regulated businesses with an emphasis on process integration initiatives and best practices

›Completely exiting the TSA

›Continued focus on management of O&M expenses at each of our regulated businesses

›Execution of capital expenditure plan at each of our regulated businesses

15

4Q ’10 Earnings

Closing Remarks

ØClosed on gas company acquisitions & moving forward with integration
activities with 2011 being a transition year

ØGenConn Devon operational - Middletown expected to be fully operational by
June 2011

ØExpecting to earn allowed returns on all regulated businesses on an aggregate
basis

ØContinued management of O&M expenses

ØExecuting on capital expenditure plan - realizing rate base growth

ØContinue to seek out Transmission opportunities in our service territory and
beyond

ØExpect no need for external equity for at least the next 3 years

16

Q&A

17

Appendix

18

Expected Impacts of Bonus Depreciation - 2010 & 2011

19

$494

$492

$535

$564

$681

$735

$798

$851

$853

$906

$906

$958

$405

$405

$401

$407

$422

$435

$496

$511

$514

$538

$529

$561

$766

$857

$777

$863

$788

$869

$799

$882

$811

$885

$751

$-

$500

$1,000

$1,500

$2,000

$2,500

Electric distribution

Electric transmission

CTA

Gas distribution

(1)CTA Avg Rate Base figures in current forecast are $127M ’10, $89 ’11, $50M ’12 and $11M ’13

(2)2010 Gas distribution average rate base reflects the full year; UIL ownership was for 6 weeks effective with the closing on the acquisition.For comparability
purposes, Gas distribution excludes the impacts of 338(h)(10) election.

Amounts may not add due to rounding.

(2)

(1)

($M)

$1,025

$1,791

$1,920

$1,930

$1,777

$2,087

$2,093

$2,246

$2,166

$2,326

$2,246

$2,404

Average Rate Base 2010 - 2015
Current Forecast vs. EEI Forecast

20

UI Transmission - NEEWS Investment

UI Participation in CL&P Project:

›UI’s portion of investment: greater of
$60M or 8.4% of CL&P’s costs for the
CT portions …

›8.4% currently estimated at
approximately $69M (increased from
original estimate of $60M)

›First deposit made in December 2010

UI’s anticipated investment increased from $60M to $69M

Refreshed UI Investment Amounts and Timeline:

($ millions)

Potential UI Investment*

2010A

2011P

2012P

2013P

2014P

2015P

2016P

Total

Current Projection

7

$

3

$

9

$

8

$

12

$

23

$

7

$

69

$

Previous Projection

-

$

10

$

9

$

8

$

12

$

23

$

7

$

69

$

Difference

* Based on NU's latest projection of UI's Investment in CL&P's portion of the NEEWS Projects.

21

Renewable-Enabling Transmission

21

Collaborative effort: UI, NU, NSTAR, and NGrid …

to research / identify the most economical means of satisfying future RPS obligations

Significant Region-Wide Need:

›RPS requirement > 3x current
available renewables*

›CT requirement is > UI’s entire load

›Gap will be filled by renewables
remote from load

N.E. Governors’ Blueprint:

›Significant transmission build-out
indicated

›Potential $7 to $10B range - could be
higher or lower to satisfy a 4,000 to
12,000 MW need

›Cost to New England likely much less
than Midwestern wind

Potential Solutions Under Study

›Need will likely be satisfied by a portfolio
of projects

›One promising example is shown below

Notes:*From ISO-NE presentation dated 5/15/09 - driven by 2008 data.

Vast majority of
potential onshore
renewables (wind)

are in northern NE

North-South Interface:

80% of NE electric
load is below this line

22

22

UIL - Corporate Structure, Service Areas

›Service territory: 335 sq
miles

›~325,000 customers

›1,095 employees

›Allowed Distribution ROE
of 8.75%

›Earned ’10 Transmission
ROE (composite) of 12.5%

›50% interest in GenConn
Energy LLC

The United Illuminating
Company (UI)

Note: (1) Includes 10 basis point penalty reduction.Previously authorized 10.0% & 10.1% at SCG & CNG respectively, in effect pending resolution of rate case appeals.

UIL Holdings
Corporation

Service Area Key

SCG

CNG

UI

Berkshire

Overlapping Territory

›Service territory: 716 sq
miles - Greater Hartford-
New Britain & Greenwich

›~160,000 customers

›319 employees

›2,011 miles of mains with
~124,000 services

Connecticut Natural Gas
(CNG)

›Service territory: 738 sq
miles in Western MA
including Pittsfield and
North Adams

›~36,000 customers

›120 employees

›738 miles of mains

›Allowed ROE of 10.50%

Berkshire Gas Company
(Berkshire)

›Service territory: 512 sq
miles from Westport, CT to
Old Saybrook, CT

›~178,000 customers

›290 employees

›2,269 miles of mains with
~131,000 services

Southern Connecticut Gas
(SCG)

23

›Connecticut Department of Public Utility Control (DPUC)

›Currently operating under rates established in 2009*

›Allowed ROE of 8.75%, based on a capital structure of 50.0% equity

›Federal Energy Regulatory Commission (FERC)

›Transmission trued up on an annual basis to allowed composite ROE based on FERC approved formula rate

›2010 composite ROE of 12.5%, based on a capital structure of 50.0% equity

›DPUC approved Contracts for Differences with CL&P (subsidiary of Northeast Utilities) and cost sharing agreement
(80% CL&P / 20% UI)

›Allowed ROE has a lifetime floor of 9.75% based on a capital structure of 50.0% equity

›Connecticut Department of Public Utility Control (DPUC)

›2009 rate case decision is under appeal and has been stayed pending determination of the appeal

›Currently operating under old rates with embedded overearnings credit - new rates per rate case virtually the same as old
rates currently in place

›Allowed ROE of 9.26% (previously allowed return of 10.0% in effect pending appeal), based on a capital structure of 52.0%
equity

›Massachusetts Department of Public Utilities (DPU)

›10 year constructive rate plan expiring 1/31/12

›Rates adjusted annually based on inflation and other factors

Regulatory Overview

Distribution

Transmission

* The revenue decoupling mechanism will be reviewed by the DPUC in 2011.

›Connecticut Department of Public Utility Control (DPUC)

›2009 Rate Case decision is under appeal and has been stayed pending determination of the appeal

›Currently operating under old rates with embedded overearnings credit - new rates per rate case virtually the same as old
rates currently in place

›Allowed ROE of 9.31% (previously allowed return of 10.1% in effect pending appeal), based on a capital structure of 52.5%
equity