NORTHEAST UTILITIES AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

September 30,

December 31,

(Thousands of Dollars)

2012 

2011 

LIABILITIES AND CAPITALIZATION

Current Liabilities:

  Notes Payable

$

 1,359,250 

$

 317,000 

  Long-Term Debt - Current Portion

 879,746 

 331,582 

  Accounts Payable

 542,691 

 633,282 

  Regulatory Liabilities

 226,606 

 167,844 

  Derivative Liabilities

 113,907 

 107,558 

  Other Current Liabilities

 678,523 

 390,416 

Total Current Liabilities

 3,800,723 

 1,947,682 

Rate Reduction Bonds

 101,347 

 112,260 

Deferred Credits and Other Liabilities:

  Accumulated Deferred Income Taxes

 3,429,538 

 1,868,316 

  Regulatory Liabilities

 561,555 

 266,145 

  Derivative Liabilities

 912,352 

 959,876 

  Accrued Pension, SERP and PBOP

 2,015,649 

 1,326,037 

  Other Long-Term Liabilities

 871,428 

 420,011 

Total Deferred Credits and Other Liabilities

 7,790,522 

 4,840,385 

Capitalization:

  Long-Term Debt

 6,732,536 

 4,614,913 

   Noncontrolling Interest - Preferred Stock of Subsidiaries

 155,568 

 116,200 

   Equity:

Common Shareholders' Equity:

  Common Shares

 1,662,358 

 980,264 

  Capital Surplus, Paid In

 6,183,715 

 1,797,884 

  Retained Earnings

 1,735,690 

 1,651,875 

  Accumulated Other Comprehensive Loss

 (64,209)

 (70,686)

  Treasury Stock

 (340,688)

 (346,667)

   Common Shareholders' Equity

 9,176,866 

 4,012,670 

   Noncontrolling Interests

 - 

 2,956 

  Total Equity

 9,176,866 

 4,015,626 

Total Capitalization

 16,064,970 

 8,746,739 

Total Liabilities and Capitalization

$

 27,757,562 

$

 15,647,066 

NORTHEAST UTILITIES AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

(Thousands of Dollars, Except Share Information)

2012 

2011 

2012 

2011 

Operating Revenues

$

 1,861,529 

$

 1,114,892 

$

 4,589,835 

$

 3,397,624 

Operating Expenses:

Purchased Power, Fuel and Transmission

 602,751 

 406,237 

 1,540,110 

 1,285,483 

Operations and Maintenance

 395,531 

 255,551 

 1,187,471 

 788,875 

Depreciation

 144,475 

 75,196 

 369,798 

 222,784 

Amortization of Regulatory Assets, Net

 43,835 

 36,163 

 74,851 

 86,653 

Amortization of Rate Reduction Bonds

 43,044 

 17,680 

 102,144 

 52,047 

Energy Efficiency Programs

 98,326 

 35,255 

 209,089 

 99,658 

Taxes Other Than Income Taxes

 120,662 

 84,994 

 319,559 

 252,817 

Total Operating Expenses

 1,448,624 

 911,076 

 3,803,022 

 2,788,317 

Operating Income

 412,905 

 203,816 

 786,813 

 609,307 

Interest Expense:

Interest on Long-Term Debt

 86,459 

 57,461 

 233,352 

 171,905 

Interest on Rate Reduction Bonds

 1,681 

 2,018 

 5,168 

 6,889 

Other Interest

 2,221 

 4,453 

 7,336 

 5,922 

Interest Expense

 90,361 

 63,932 

 245,856 

 184,716 

Other Income, Net

 4,324 

 1,430 

 14,904 

 19,077 

Income Before Income Tax Expense

 326,868 

 141,314 

 555,861 

 443,668 

Income Tax Expense

 117,360 

 49,883 

 199,379 

 157,934 

Net Income

 209,508 

 91,431 

 356,482 

 285,734 

Net Income Attributable to Noncontrolling Interests

 1,880 

 1,470 

 5,253 

 4,340 

Net Income Attributable to Controlling Interest

$

 207,628 

$

 89,961 

$

 351,229 

$

 281,394 

Basic Earnings Per Common Share

$

 0.66 

$

 0.51 

$

 1.33 

$

 1.59 

Diluted Earnings Per Common Share

$

 0.66 

$

 0.51 

$

 1.32 

$

 1.58 

Dividends Declared Per Common Share

$

 0.34 

$

 0.28 

$

 0.97 

$

 0.83 

Weighted Average Common Shares Outstanding:

Basic

 314,806,441 

 177,497,862 

 264,636,636 

 177,344,481 

Diluted

 315,805,796 

 177,835,348 

 265,353,377 

 177,647,694 

NORTHEAST UTILITIES AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Nine Months Ended September 30,

(Thousands of Dollars)

2012 

2011 

Operating Activities:

Net Income

$

 356,482 

$

 285,734 

Adjustments to Reconcile Net Income to Net Cash Flows

Provided by Operating Activities:

 Bad Debt Expense

 24,249 

 12,435 

 Depreciation

 369,798 

 222,784 

 Deferred Income Taxes

 186,181 

 133,528 

 Pension, SERP and PBOP Expense

 160,209 

 103,106 

 Pension and PBOP Contributions

 (237,123)

 (159,220)

 Regulatory Underrecoveries, Net

 (26,236)

 (24,245)

 Amortization of Regulatory Assets, Net

 74,851 

 86,653 

 Amortization of Rate Reduction Bonds

 102,144 

 52,047 

 Derivative Assets and Liabilities

 (7,907)

 (33,767)

 Other

 (9,702)

 (14,802)

Changes in Current Assets and Liabilities:

 Receivables and Unbilled Revenues, Net

 (27,677)

 61,657 

 Fuel, Materials and Supplies

 32,887 

 (4,072)

 Taxes Receivable/Accrued, Net

 26,302 

 109,410 

 Accounts Payable

 (208,308)

 66,618 

 Other Current Assets and Liabilities, Net

 (20,145)

 (9,419)

Net Cash Flows Provided by Operating Activities

 796,005 

 888,447 

Investing Activities:

Investments in Property, Plant and Equipment

 (1,081,750)

 (749,060)

Proceeds from Sales of Marketable Securities

 232,911 

 116,463 

Purchases of Marketable Securities

 (252,762)

 (118,251)

Proceeds from Sale of Assets

 - 

 46,841 

Other Investing Activities

 40,265 

 (5,849)

Net Cash Flows Used in Investing Activities

 (1,061,336)

 (709,856)

Financing Activities:

Cash Dividends on Common Shares

 (267,356)

 (145,865)

Cash Dividends on Preferred Stock

 (5,149)

 (4,169)

Increase/(Decrease) in Short-Term Debt

 654,250 

 (237,000)

Issuance of Long-Term Debt

 300,000 

 382,000 

Retirements of Long-Term Debt

 (267,561)

 (124,086)

Retirements of Rate Reduction Bonds

 (95,225)

 (51,198)

Other Financing Activities

 13,262 

 (4,947)

Net Cash Flows Provided by/(Used in) Financing Activities

 332,221 

 (185,265)

Net Increase/(Decrease) in Cash and Cash Equivalents

 66,890 

 (6,674)

Cash and Cash Equivalents - Beginning of Period

 6,559 

 23,395 

Cash and Cash Equivalents - End of Period

$

 73,449 

$

 16,721