uil_exh99-7.htm

EXHIBIT 99.7

The Southern Connecticut Gas Company

Financial Statements (Unaudited)

For the Three Months Ended March 31, 2011 and 2010

Table of Contents


March 31, 2011 and 2010


Financial Statements (Unaudited)	Page(s)

Statements of Income	1

Statements of Comprehensive Income	1

Balance Sheets	2

Statements of Cash Flows	4

Statement of Changes in Common Stock Equity	5

The Southern Connecticut Gas Company
Statements of Income (Unaudited)



Three months ended March 31,	2011			2010
(Thousands)
Operating Revenues
Sales and services	$	165,656		$	151,460
Operating Expenses
Natural gas purchased		105,145			90,732
Other operating expenses		17,453			13,568
Maintenance		2,410			2,077
Depreciation and amortization		4,248			4,376
Other taxes		8,249			8,386
Total Operating Expenses		137,505			119,139
Operating Income		28,151			32,321
Other (Income)		(79	)		(152	)
Other Deductions		128			-
Interest Charges, Net		3,583			4,226
Income Before Income Taxes		24,519			28,247
Income Taxes		9,700			11,719
Net Income	$	14,819		$	16,528




The Southern Connecticut Gas Company
Statements of Comprehensive Income

Three months ended March 31,		2011			2010
(Thousands)
Net Income	$	14,819		$	16,528
Other Comprehensive Income, Net of Tax		152			116
Comprehensive Income	$	14,971		$	16,644

The Southern Connecticut Gas Company
Balance Sheets (Unaudited)

	March 31,		December 31,
	2011		2010
(Thousands)
Assets
Current Assets
Cash and cash equivalents	$	1,647	$	11,542
Accounts receivable and unbilled revenues, net		95,975		69,684
Affiliated accounts receivable		613		1,256
Natural gas in storage, at average cost		23,935		48,578
Materials and supplies, at average cost		1,055		883
Deferred income taxes		1,919		1,919
Prepaid taxes		1,500		1,853
Prepayments and other current assets		1,520		2,570
Total Current Assets		128,164		138,285
Utility Plant, at Original Cost
Natural gas		628,809		624,151
Less accumulated depreciation		168,104		165,966
Net Utility Plant in Service		460,705		458,185
Construction work in progress		1,274		2,375
Total Utility Plant		461,979		460,560
Other Property and Investments, Net		12,683		12,422
Regulatory and Other Assets
Regulatory assets
Unfunded future income taxes		13,672		21,725
Environmental remediation costs		2,314		2,522
Deferred purchase gas costs		389		14,922
Low income program		24,197		25,906
Pension and other postretirement benefits		77,207		65,937
Other		51,117		63,688
Total regulatory assets		168,896		194,700
Other assets
Goodwill		132,451		132,474
Other		5,994		6,110
Total other assets		138,445		138,584
Total Regulatory and Other Assets		307,341		333,284
Total Assets	$	910,167	$	944,551

The Southern Connecticut Gas Company
Balance Sheets (Unaudited)

	March 31,			December 31,
	2011			2010
(Thousands)
Liabilities
Current Liabilities
Current portion of long-term debt	$	33,713		$	33,713
Notes payable		-			7,000
Accounts payable and accrued liabilities		12,440			14,275
Accounts payable, natural gas purchased		29,786			29,165
Accounts payable to affiliates		346			1,047
Interest accrued		2,673			1,788
Taxes accrued		12,727			6,336
Other		10,102			11,863
Total Current Liabilities		101,787			105,187
Regulatory and Other Liabilities
Regulatory liabilities
Accrued removal obligation		84,181			83,377
Deferred income taxes		10,233			22,282
Pension benefits		9,738			10,070
Other		28,711			21,342
Total regulatory liabilities		132,863			137,071
Other liabilities
Deferred income taxes		4,912			5,666
Pension and other postretirement benefits		55,443			61,332
Asset retirement obligation		10,942			10,803
Other		12,733			12,947
Total other liabilities		84,030			90,748
Total Regulatory and Other Liabilities		216,893			227,819
Long-term debt		189,722			190,751
Total Liabilities		508,402			523,757
Commitments
Common Stock Equity
Common stock		18,761			18,761
Capital in excess of par value		396,071			396,071
Retained (deficit) earnings		(13,375	)		5,806
Accumulated other comprehensive income		308			156
Total Common Stock Equity		401,765			420,794
Total Liabilities and Equity	$	910,167		$	944,551

The Southern Connecticut Gas Company
Statements of Cash Flows (Unaudited)


Three months ended March 31,	2011			2010
(Thousands)
Operating Activities
Net income	$	14,819		$	16,528
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization		4,248			4,376
Amortization of regulatory and other assets and liabilities		(124	)		(371	)
Deferred income taxes and investment tax credits deferred, net		(5,295	)		(3,465	)
Pension expense		1,468			1,030
Changes in current operating assets and liabilities
Accounts receivable and unbilled revenues, net		(25,648	)		(28,906	)
Inventories		24,471			28,003
Prepayments and other current assets		1,403			5,585
Accounts payable and accrued liabilities		(1,915	)		(3,009	)
Interest accrued		885			1,659
Taxes accrued		6,391			16,459
Other current liabilities		(1,761	)		(358	)
Other assets		24,266			19,580
Other liabilities		(7,414	)		(5,772	)
Net Cash Provided by Operating Activities		35,794			51,339
Investing Activities
Utility plant additions		(4,428	)		(3,017	)
Investments, net		(261	)		(204	)
Net Cash Used in Investing Activities		(4,689	)		(3,221	)
Financing Activities
Notes payable three months or less, net		(7,000	)		-
Dividends paid on common stock		(34,000	)		(14,000	)
Net Cash (Used in) Provided by Financing Activities		(41,000	)		(14,000	)
Net Increase in Cash and Cash Equivalents		(9,895	)		34,118
Cash and Cash Equivalents, Beginning of Period		11,542			17,065
Cash and Cash Equivalents, End of Period	$	1,647		$	51,183

The Southern Connecticut Gas Company
Statement of Changes in Common Stock Equity (Unaudited)
(Thousands)

										Accumulated
	Common Stock									Other
	Outstanding $13.33 Par Value				Capital in		Retained			Comprehensive
	Shares		Amount		Excess of Par		Earnings (Deficit)			Income		Total
Balance, January 1, 2011		1,407	$	18,761	$	396,071	$	5,806		$	156	$	420,794
Net income								14,819					14,819
Other comprehensive income, net of tax											152		152
Comprehensive income													14,971
Dividends								(34,000	)				(34,000	)
Balance, March 31, 2011		1,407	$	18,761	$	396,071	$	(13,375	)	$	308	$	401,765