BUSINESS ORGANIZATION AND STATEMENT OF ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2011

Business Organization And Statement of Accounting Policies [Abstract]

Fair Value of Gross Derivative Assets and Liabilities

The fair value of the gross derivative assets and liabilities as of September 30, 2011 and December 31, 2010 were as follows:

	September 30, 2011
	(In Thousands)
	Current Assets		Deferred Charges and Other Assets		Current Liabilities			Noncurrent Liabilities
Derivative assets/(liabilities), gross	$	10,375	$	74,359	$	(28,306	)	$	(259,418	)
	December 31, 2010
	(In Thousands)
	Current Assets		Deferred Charges and Other Assets		Current Liabilities			Noncurrent Liabilities
Derivative assets/(liabilities), gross	$	6,057	$	28,131	$	(13,246	)	$	(129,560	)

Unrealized Gains and Losses From Mark-To-Market Adjustments

The unrealized gains and losses from mark-to-market adjustments to derivatives recorded in regulatory assets or regulatory liabilities for the three and nine month periods ended September 30, 2011 and 2010 were as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2011			2010		2011		2010
	(In Thousands)					(In Thousands)
Regulatory Assets - Derivative liabilities	$	17,753		$	21,006	$	88,289	$	(36,547	)
Regulatory Liabilities - Derivative assets	$	(11	)	$	502	$	5,737	$	409

Reconciliation of Basic and Diluted Earnings Per Share

The following table presents a reconciliation of the basic and diluted earnings per share calculations for the three and nine month periods ended September 30, 2011 and 2010:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010			2011		2010
	(In Thousands, except per share amounts)
Numerator:
Net Income attributable to UIL Holdings	$	12,180	$	16,976		$	78,380	$	44,380
Less:  Net income allocated to unvested units		25		51			167		155
Net Income attributable to common shareholders	$	12,155	$	16,925		$	78,213	$	44,225
Denominator:
Basic average number of shares outstanding		50,643		32,176			50,597		30,743
Effect of dilutive securities		284		283			289		324
Diluted average number of shares outstanding		50,927		32,459			50,886		31,067
Earnings per share:
Basic	$	0.24	$	0.52		$	1.55	$	1.44
Diluted	$	0.24	$	0.52		$	1.54	$	1.42

Regulatory Assets and Liabilities

UIL Holdings' regulatory assets and liabilities as of September 30, 2011 and December 31, 2010 included the following:

	Remaining Period	September 30, 2011		December 31, 2010
		(In Thousands)
Regulatory Assets:
Nuclear plant investments – above market	(a)	$	278,054	$	293,388
Income taxes due principally to book-tax differences	(b)		2,574		11,910
Connecticut Yankee	5 years		15,030		17,175
Unamortized redemption costs	11 to 23 years		13,106		13,708
Pension and other post-retirement benefit plans	(c)		321,378		351,610
Environmental remediation costs	4 to 5 years		17,363		17,285
Customer rate surcharge	(g)		19,038		12,816
Low income program	(h)		37,727		40,674
Debt premium	1 to 27 years		50,124		56,865
Deferred purchased gas	(i)		-		26,650
Deferred income taxes	(j)		11,659		5,859
Unfunded future income taxes	(j)		12,797		25,684
Contracts for differences	(d)		202,997		114,662
Excess generation service charge	(e)		5,957		8,711
Storm costs	(l)		27,080		7,460
Other	(b)		29,075		37,280
Total regulatory assets			1,043,959		1,041,737
Less current portion of regulatory assets			87,414		115,848
Regulatory Assets, Net		$	956,545	$	925,889
Regulatory Liabilities:
Accumulated deferred investment tax credits	33 years	$	4,795	$	4,905
Deferred gain on sale of property	(a)		37,798		37,798
Middletown/Norwalk local transmission network service collections	39 years		22,691		23,121
Pension and other post-retirement benefit plans	4 to 8 years		23,231		33,685
Deferred income taxes	(j)		15,584		29,793
Asset retirement obligation	(k)		7,735		8,451
Deferred purchased gas	(i)		4,024		-
Asset removal costs	(b)		224,405		219,121
Deferred transmission expense	(f)		27,498		27,036
Other	(b)		40,005		52,057
Total regulatory liabilities			407,766		435,967
Less current portion of regulatory liabilities			45,743		53,601
Regulatory Liabilities, Net		$	362,023	$	382,366

(a) Asset/Liability relates to the Competitive Transition Assessment (CTA).  Total CTA costs recovery is currently projected to be completed in 2015, with stranded cost amortization expected to end in 2013.  The remaining balances will be fully offset by amounts primarily included in income taxes due principally to book-tax differences.

(b) Amortization period and/or balance vary depending on the nature, cost of removal and/or remaining life of the underlying assets/liabilities.

(c) Asset life is dependent upon timing of final pension plan distribution; balance is recalculated each year in accordance with ASC 715 "Compensation-Retirement Benefits" (Note G).

(d) Asset life is equal to delivery term of related contracts (which vary from approximately 9 - 16 years); balance fluctuates based upon quarterly market analysis performed on the related derivatives (Note K).

(e) Working capital allowance for generation service charge; this amount fluctuates based upon cash inflows and outflows in a given period.

(f) Regulatory asset or liability which defers transmission income or expense and fluctuates based upon actual revenues and revenue requirements.

(g) Deferral of revenue received for excess refund of overearnings to be recovered over 2 - 3 years.

(h) Various hardship and payment plan programs approved for recovery.

(i) Deferred purchase gas costs balances at the end of the rate year are normally recorded/returned in the next year.

(j) The balance will be extinguished when the asset or liability has been realized or settled, respectively.

(k) The liability will be extinguished simultaneous with the retirement of the assets and settlement of the corresponding asset retirement obligation.

(l) Storm costs include accumulated costs for major storms occurring from January 2009 forward. UI will seek recovery of these costs in future rate proceedings.