NORTHEAST UTILITIES AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

As of December 31,

(Thousands of Dollars)

2011 

2010 

ASSETS

Current Assets:

Cash and Cash Equivalents

$

6,559

$

23,395

Receivables, Net

488,002

523,644

Unbilled Revenues

175,207

208,834

Taxes Receivable

4,931

89,638

Fuel, Materials and Supplies

248,958

244,043

Regulatory Assets

255,144

238,699

Marketable Securities

70,970

78,306

Prepayments and Other Current Assets

107,701

100,441

Total Current Assets

1,357,472

1,507,000

Property, Plant and Equipment, Net

10,403,065

9,567,726

Deferred Debits and Other Assets:

Regulatory Assets

3,267,710

2,756,580

Goodwill

287,591

287,591

Marketable Securities

60,311

51,201

Derivative Assets

98,357

123,242

Other Long-Term Assets

172,560

179,261

Total Deferred Debits and Other Assets

3,886,529

3,397,875

Total Assets

$

15,647,066

$

14,472,601

NORTHEAST UTILITIES AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

As of December 31,

(Thousands of Dollars)

2011 

2010 

LIABILITIES AND CAPITALIZATION

Current Liabilities:

  Notes Payable to Banks

$

317,000 

$

267,000 

  Long-Term Debt - Current Portion

331,582 

66,286 

  Accounts Payable

633,282 

417,285 

  Obligations to Third Party Suppliers

75,068 

74,659 

  Accrued Taxes

69,592 

107,067 

  Accrued Interest

69,198 

74,740 

  Regulatory Liabilities

167,844 

99,403 

  Derivative Liabilities

107,558 

71,501 

  Other Current Liabilities

176,558 

167,206 

Total Current Liabilities

1,947,682 

1,345,147 

Rate Reduction Bonds

112,260 

181,572 

Deferred Credits and Other Liabilities:

  Accumulated Deferred Income Taxes

1,868,316 

1,636,750 

  Regulatory Liabilities

266,145 

339,655 

  Derivative Liabilities

959,876 

909,668 

  Accrued Pension, SERP and PBOP

1,326,037 

1,050,614 

  Other Long-Term Liabilities

420,011 

447,496 

Total Deferred Credits and Other Liabilities

4,840,385 

4,384,183 

Capitalization:

  Long-Term Debt

4,614,913 

4,632,866 

   Noncontrolling Interest in Consolidated Subsidiary:

Preferred Stock Not Subject to Mandatory Redemption

116,200 

116,200 

   Equity:

Common Shareholders' Equity:

  Common Shares

980,264 

978,909 

  Capital Surplus, Paid In

1,797,884 

1,777,592 

  Retained Earnings

1,651,875 

1,452,777 

  Accumulated Other Comprehensive Loss

(70,686)

(43,370)

  Treasury Stock

(346,667)

(354,732)

   Common Shareholders' Equity

4,012,670 

3,811,176 

   Noncontrolling Interests

2,956 

1,457 

  Total Equity

4,015,626 

3,812,633 

Total Capitalization

8,746,739 

8,561,699 

Total Liabilities and Capitalization

$

15,647,066 

$

14,472,601 

NORTHEAST UTILITIES AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

For the Three Months Ended December 31,

(Thousands of Dollars, Except Share Information)

2011

2010

Operating Revenues

$

1,068,033

$

1,203,985 

Operating Expenses:

   Fuel, Purchased and Net Interchange Power

366,333

445,931 

   Other Operating Expenses

273,820

270,008 

   Maintenance

66,241

47,878 

   Depreciation

79,408

72,052 

   Amortization of Regulatory Assets, Net

8,705

44,685 

   Amortization of Rate Reduction Bonds

17,865

57,870 

   Taxes Other Than Income Taxes

70,792

70,311 

      Total Operating Expenses

883,164

1,008,735 

Operating Income

184,869

195,250 

Interest Expense:

   Interest on Long-Term Debt

59,725

57,496 

   Interest on Rate Reduction Bonds

1,722

3,589 

   Other Interest

4,262

(24,151)

      Interest Expense

65,709

36,934 

Other Income, Net

8,638

22,190 

Income Before Income Tax Expense

127,798

180,506 

Income Tax Expense

13,019

49,282 

Net Income

114,779

131,224 

Net Income Attributable to Noncontrolling Interests

1,480

1,955 

Net Income Attributable to Controlling Interests

$

113,299

$

129,269 

Basic and Diluted Earnings Per Common Share

$

0.64

$

0.73 

Dividends Declared Per Common Share

$

0.28

$

0.26 

Weighted Average Common Shares Outstanding:

  Basic

177,645,092

176,870,678 

  Diluted

178,093,879

177,255,261 

NORTHEAST UTILITIES AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

For the Years Ended December 31,

(Thousands of Dollars)

2011 

2010 

2009 

Operating Activities:

Net Income

$

400,513 

$

394,107 

$

335,592 

Adjustments to Reconcile Net Income to Net Cash Flows

Provided by Operating Activities:

 Bad Debt Expense

16,420 

31,352 

53,947 

 Depreciation

302,192 

300,737 

309,618 

 Deferred Income Taxes

196,761 

210,939 

125,890 

 Pension and PBOP Expense

133,000 

103,861 

58,732 

 Pension and PBOP Contributions

(191,101)

(90,633)

(37,160)

 Regulatory (Under)/Over Recoveries, Net

(76,896)

20,750 

37,868 

 Amortization of Regulatory Assets, Net

97,113 

95,593 

13,315 

 Amortization of Rate Reduction Bonds

69,912 

232,871 

217,941 

 Derivative Assets and Liabilities

(35,441)

(11,812)

(18,798)

 Other

(29,751)

(72,151)

(26,003)

Changes in Current Assets and Liabilities:

 Receivables and Unbilled Revenues, Net

17,570 

(51,285)

91,081 

 Fuel, Materials and Supplies

(11,033)

38,126 

25,957 

 Taxes Receivable/Accrued

49,642 

(82,103)

16,194 

 Accounts Payable

18,916 

(44,355)

(208,180)

 Other Current Assets and Liabilities

12,569 

17,466 

(6,876)

Net Cash Flows Provided by Operating Activities

970,386 

1,093,463 

989,118 

Investing Activities:

Investments in Property, Plant and Equipment

(1,076,730)

(954,472)

(908,146)

Proceeds from Sales of Marketable Securities

149,441 

174,865 

208,947 

Purchases of Marketable Securities

(151,972)

(177,204)

(211,243)

Proceeds from Sale of Assets

46,841 

- 

- 

Other Investing Activities

13,833 

(1,157)

7,963 

Net Cash Flows Used in Investing Activities

(1,018,587)

(957,968)

(902,479)

Financing Activities:

Issuance of Common Shares

- 

- 

383,295 

Cash Dividends on Common Shares

(194,555)

(180,542)

(162,381)

Cash Dividends on Preferred Stock

(5,559)

(5,559)

(5,559)

Increase/(Decrease) in Short-Term Debt

50,000 

166,687 

(518,584)

Issuance of Long-Term Debt

627,500 

145,000 

462,000 

Retirements of Long-Term Debt

(369,586)

(4,286)

(54,286)

Retirements of Rate Reduction Bonds

(69,312)

(260,864)

(244,075)

Other Financing Activities

(7,123)

512 

(9,913)

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

31,365 

(139,052)

(149,503)

Net Decrease in Cash and Cash Equivalents

(16,836)

(3,557)

(62,864)

Cash and Cash Equivalents - Beginning of Year

23,395 

26,952 

89,816 

Cash and Cash Equivalents - End of Year

$

6,559 

$

23,395 

$

26,952