UI Ubiquiti Inc

UIL Holdings Corporation (NYSE: UIL) today reported consolidated net income of $14.2 million, or $0.28 per diluted share, for the second quarter of 2011, compared to net income of $11.5 million, or $0.38 per diluted share, for the same period in 2010. For the first six months of 2011, UIL’s consolidated net income was $66.2 million, or $1.30 per diluted share, compared to $27.4 million, or $0.90 per diluted share, for the same period in 2010. The second quarter and first six months results for 2011 reflect the earnings impact of the gas distribution operations acquired in the fourth quarter of 2010, the corporate expenses associated with that acquisition and the share dilution resulting from the September 2010 equity issuance as detailed in the table below.

“Although it has only been a little over eight months since the closing on the gas companies acquisitions, integration of all our operating companies is well underway,” said James P. Torgerson, UIL’s president and chief executive officer. “In April, we initiated an aggressive multi-media marketing campaign to convert businesses and households to natural gas, as the economical and environmentally friendly fuel of choice. Year-to date, gas conversions are running ahead of 2010 levels and we are on track to meet our 2011 conversions target.”

“GenConn Energy’s Middletown facility, a 50-50 joint venture between NRG Energy, Inc. and The United Illuminating Company, began operating in the ISO markets in June,” added Torgerson. “Both Devon and Middletown provide peaking generation resources, which enhances system reliability in New England, especially when demand for electricity is high.”

“And just yesterday, we received a final decision approving the gas companies’ and Office of Consumer Counsel’s settlement agreement, with minor modifications,” commented Torgerson. “We are pleased with the outcome, as it resolves all pending issues related to the rate case appeals and terminates The Southern Connecticut Gas Company’s potential overearnings investigation.”

The following table provides earnings per diluted share for the second quarter and first six months of 2011, compared to the same periods in 2010.

        Quarter Ended June 30, Six Months Ended June 30, 2011   2010   Difference 2011   2010   Difference

EPS

UIL excl. acquisition & transition related activities $ 0.62 $ 0.52 $ 0.10 $ 1.20 $ 1.04 $ 0.16 Gas distribution $ (0.03 ) $ - $ (0.03 ) $ 0.71 $ - $ 0.71 Interest expense related to $450M debt issuance $ (0.06 ) $ - $ (0.06 ) $ (0.13 ) $ - $ (0.13 ) September 2010 equity issuance $ (0.25 ) $ - $ (0.25 ) $ (0.48 ) $ - $ (0.48 ) Acquisition related expenses $ - $ (0.14 ) $ 0.14 $ - $ (0.14 ) $ 0.14             UIL Consolidated $ 0.28     $ 0.38     $ (0.10 ) $ 1.30     $ 0.90     $ 0.40  

Electric distribution, CTA & other

Earnings from the electric distribution business in the second quarter of 2011 were $11.1 million, or $0.22 per diluted share, compared to $9.4 million, or $0.31 per diluted share, for the same period in 2010. For the first six months of 2011, the electric distribution business had total earnings of $21.8 million, or $0.43 per diluted share, compared to $19.5 million, or $0.64 per diluted share, for the same period in 2010. The increase in earnings for both the quarter and first six months of 2011 were primarily attributable to increased income from the investment in GenConn, partially offset by lower CTA rate base.

Earnings from UI’s equity investment in GenConn in the second quarter of 2011 were $2.6 million, or $0.05 per diluted share, compared to a loss of $0.9 million, or $0.03 per diluted share in the second quarter of 2010. For the first six months of 2011 GenConn earned $4.7 million, or $0.09 per diluted share, compared to a loss of $0.9 million, or $0.03 per diluted share, for the same period in 2010.

Electric transmission

Earnings from the electric transmission business in the second quarter of 2011 were $7.9 million, or $0.15 per diluted share, compared to $6.7 million, or $0.22 per diluted share, for the same period in 2010. For the first six months of 2011, total transmission earnings were $15.6 million, or $0.31 per diluted share, compared to $13.1 million, or $0.43 per diluted share for the same period in 2010. The increase in earnings for both the quarter and first six months of 2011 were primarily attributable to an increase in the allowance for funds used during construction.

Gas distribution

The gas distribution businesses incurred a loss of $1.5 million, or $0.03 per diluted share in the second quarter of 2011, consistent with the seasonal nature of the gas business. For the first six months of 2011, earnings from the gas distribution business were $35.9 million, or $0.71 per diluted share. There were no earnings from the gas distribution businesses for the second quarter and first six months of 2010 as those businesses were not acquired until November 2010.

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 $3.3 million, or $0.06 per diluted share in the second quarter of 2011, compared to net after-tax costs of $4.6 million, or $0.15 per diluted share, in the same period of 2010. The decrease was primarily attributable to the absence in 2011 of after-tax acquisition related costs incurred in the second quarter of 2010, partially offset by interest expense related to the October 2010 issuance of $450 million of public debt, the proceeds of which were used to partially fund the acquisition.

For the first six months of 2011, UIL Corporate incurred net after-tax costs of $7.1 million, or $0.15 per diluted share, compared to $5.2 million, or $0.17 per diluted share, in the same period in 2010. The increase was predominately attributable to interest expense related to the October 2010 debt issuance mentioned above.

Looking Forward

UIL affirms the earnings guidance reported on May 4, 2011, as shown below.

2011 Earnings Expectations    

ApproximateNet Income(2)

EPS - diluted (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 $39 - $45 $0.78 - $0.88   UIL Corporate ($15) - ($14) ($0.30) - ($0.28)   Total UIL (1) $94 - $101 $1.85 - $2.00  

(1) Expectations are not intended to be additive

(2) Rounded to the nearest million

(3) Assumes approximately 51.0 million average shares outstanding

Second Quarter 2011 Earnings Conference Call

In conjunction with this earnings release, UIL will conduct a webcast conference call with financial analysts on Friday, August 5, 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 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.

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 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.

The following are summaries of UIL Holdings’ unaudited consolidated financial information for the second quarter and first six months of 2011 and 2010:

UIL HOLDINGS CORPORATION CONSOLIDATED STATEMENT OF INCOME (In Thousands except per share amounts) (Unaudited)           Three Months Ended Six Months Ended June 30, June 30, 2011 2010 2011 2010   Operating Revenues Electric distribution and transmission $ 183,436 $ 207,113 $ 381,662 $ 427,389 Gas distribution 130,609 - 493,433 - Non-utility   4     3     7   7   Total Operating Revenues   314,049     207,116     875,102   427,396   Operating Expenses Operation Purchased power 37,311 53,567 86,574 128,915 Natural gas purchased 63,537 - 292,880 - Operation and maintenance 95,002 62,367 189,000 113,988 Transmission wholesale 17,607 15,339 34,629 30,815 Depreciation and amortization 34,468 27,038 70,573 54,289 Taxes - other than income taxes 25,900 16,592 61,407 34,296 Acquisition-related costs   -     6,700     -   6,700   Total Operating Expenses   273,825     181,603     735,063   369,003   Operating Income   40,224     25,513     140,039   58,393     Other Income and (Deductions)   5,604     4,904     10,269   8,960     Interest Charges, net Interest on long-term debt 22,670 9,928 44,007 19,805 Other interest   422     138     1,729   419   23,092 10,066 45,736 20,224 Amortization of debt expense and redemption premiums   505     401     1,335   794   Total Interest Charges, net   23,597     10,467     47,071   21,018       Income Before Income Taxes, Equity Earnings 22,231 19,950 103,237 46,335   Income Taxes   10,708     7,564     41,718   18,042     Income Before Equity Earnings 11,523 12,386 61,519 28,293 Income (loss) from Equity Investments   2,647     (897 )   4,709   (889 )   Net Income 14,170 11,489 66,228 27,404 Less: Preferred Stock Dividends of Subsidiary, Noncontrolling Interests   14     -     28   -     Net Income attributable to UIL Holdings $ 14,156   $ 11,489   $ 66,200 $ 27,404     Average Number of Common Shares Outstanding - Basic 50,628 30,093 50,574 30,037 Average Number of Common Shares Outstanding - Diluted 50,872 30,313 50,824 30,317   Earnings Per Share of Common Stock - Basic: $ 0.28   $ 0.38   $ 1.31 $ 0.91     Earnings Per Share of Common Stock - Diluted: $ 0.28   $ 0.38   $ 1.30 $ 0.90     Cash Dividends Declared per share of Common Stock $ 0.432   $ 0.432   $ 0.864 $ 0.864                           UIL HOLDINGS CORPORATION CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the Three and Six Months Ended June 30, 2011 and 2010 (Thousands of Dollars)   Three Months Ended Six Months Ended June 30, June 30, 2011 2010 2011 2010   Net Income $ 14,170 $ 11,489 $ 66,228 $ 27,404 Other Comprehensive Income (26 ) - 146 - Less: Preferred Stock Dividends of Subsidiary, Noncontrolling Interests   14     -     28   -   Comprehensive Income $ 14,130   $ 11,489   $ 66,346 $ 27,404   UIL HOLDINGS CORPORATION CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)     June 30,   December 31, (thousands of dollars)   2011   2010 ASSETS Current assets $ 523,096 $ 697,421 Other investments 92,859 85,717 Net property, plant and equipment 2,438,161 2,327,450 Regulatory assets 963,236 925,889 Goodwill 302,184 298,890 Deferred charges and other assets   167,497   120,066 Total Assets $ 4,487,033 $ 4,455,433       LIABILITIES AND CAPITALIZATION Current liabilities $ 481,957 $ 552,934 Noncurrent liabilities 633,123 577,231 Deferred income taxes 393,624 354,164 Regulatory liabilities   366,916   382,366 Total Liabilities 1,875,620 1,866,695   Long-term debt, net of unamortized discount and premium 1,508,223 1,511,768 Preferred stock of subsidiary 828 828 Net common stock equity   1,102,362   1,076,142 Total Capitalization 2,611,413 2,588,738     Total Liabilities and Capitalization $ 4,487,033 $ 4,455,433