NORTHEAST UTILITIES AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

As of December 31,

(Thousands of Dollars)

2012 

2011 

ASSETS

Current Assets:

Cash and Cash Equivalents

$

45,748

$

6,559

Receivables, Net

792,822

488,002

Unbilled Revenues

216,040

175,207

Fuel, Materials and Supplies

267,713

248,958

Regulatory Assets

705,025

255,144

Marketable Securities

91,975

70,970

Prepayments and Other Current Assets

107,972

112,632

Total Current Assets

2,227,295

1,357,472

Property, Plant and Equipment, Net

16,605,010

10,403,065

Deferred Debits and Other Assets:

Regulatory Assets

5,132,411

3,267,710

Goodwill

3,519,401

287,591

Marketable Securities

400,329

60,311

Derivative Assets

90,612

98,357

Other Long-Term Assets

327,766

172,560

Total Deferred Debits and Other Assets

9,470,519

3,886,529

Total Assets

$

28,302,824

$

15,647,066

NORTHEAST UTILITIES AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

As of December 31,

(Thousands of Dollars)

2012 

2011 

LIABILITIES AND CAPITALIZATION

Current Liabilities:

  Notes Payable

$

1,120,196 

$

317,000 

  Long-Term Debt - Current Portion

763,338 

331,582 

  Accounts Payable

764,350 

633,282 

  Regulatory Liabilities

134,115 

167,844 

  Derivative Liabilities

117,194 

107,558 

  Other Current Liabilities

744,497 

390,416 

Total Current Liabilities

3,643,690 

1,947,682 

Rate Reduction Bonds

82,139 

112,260 

Deferred Credits and Other Liabilities:

  Accumulated Deferred Income Taxes

3,463,347 

1,868,316 

  Regulatory Liabilities

540,162 

266,145 

  Derivative Liabilities

882,654 

959,876 

  Accrued Pension, SERP and PBOP

2,130,497 

1,326,037 

  Other Long-Term Liabilities

967,561 

420,011 

Total Deferred Credits and Other Liabilities

7,984,221 

4,840,385 

Capitalization:

  Long-Term Debt

7,200,156 

4,614,913 

   Noncontrolling Interest - Preferred Stock of Subsidiaries

155,568 

116,200 

   Equity:

Common Shareholders' Equity:

  Common Shares

1,662,547 

980,264 

  Capital Surplus, Paid In

6,183,267 

1,797,884 

  Retained Earnings

1,802,714 

1,651,875 

  Accumulated Other Comprehensive Loss

(72,854)

(70,686)

  Treasury Stock

(338,624)

(346,667)

   Common Shareholders' Equity

9,237,050 

4,012,670 

   Noncontrolling Interests

- 

2,956 

  Total Equity

9,237,050 

4,015,626 

Total Capitalization

16,592,774 

8,746,739 

Total Liabilities and Capitalization

$

28,302,824 

$

15,647,066 

NORTHEAST UTILITIES AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

For the Years Ended December 31,

(Thousands of Dollars, Except Share Information)

2012 

2011 

2010 

Operating Revenues

$

6,273,787

$

4,465,657

$

4,898,167 

Operating Expenses:

Purchased Power, Fuel and Transmission

2,084,364

1,657,914

2,034,501 

Operations and Maintenance

1,583,070

1,095,358

1,001,349 

Depreciation

519,010

302,192

300,737 

Amortization of Regulatory Assets, Net

79,762

91,080

90,054 

Amortization of Rate Reduction Bonds

142,019

69,912

232,871 

Energy Efficiency Programs

313,149

131,415

124,023 

Taxes Other Than Income Taxes

434,207

323,610

314,741 

Total Operating Expenses

5,155,581

3,671,481

4,098,276 

Operating Income

1,118,206

794,176

799,891 

Interest Expense:

Interest on Long-Term Debt

316,987

231,630

231,089 

Interest on Rate Reduction Bonds

6,168

8,611

20,573 

Other Interest

6,790

10,184

(14,371)

Interest Expense

329,945

250,425

237,291 

Other Income, Net

19,742

27,715

41,916 

Income Before Income Tax Expense

808,003

571,466

604,516 

Income Tax Expense

274,926

170,953

210,409 

Net Income

533,077

400,513

394,107 

Net Income Attributable to Noncontrolling Interests

7,132

5,820

6,158 

Net Income Attributable to Controlling Interest

$

525,945

$

394,693

$

387,949 

Basic Earnings Per Common Share

$

1.90

$

2.22

$

2.20 

Diluted Earnings Per Common Share

$

1.89

$

2.22

$

2.19 

Weighted Average Common Shares Outstanding:

Basic

277,209,819

177,410,167

176,636,086 

Diluted

277,993,631

177,804,568

176,885,387 

NORTHEAST UTILITIES AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

For the Years Ended December 31,

(Thousands of Dollars)

2012 

2011 

2010 

Operating Activities:

Net Income

$

 533,077 

$

 400,513 

$

 394,107 

Adjustments to Reconcile Net Income to Net Cash Flows

Provided by Operating Activities:

 Bad Debt Expense

 36,275 

 16,420 

 31,352 

 Depreciation

 519,010 

 302,192 

 300,737 

 Deferred Income Taxes

 292,000 

 196,761 

 210,939 

 Pension, SERP and PBOP Expense

 218,540 

 133,000 

 103,861 

 Pension and PBOP Contributions

 (295,028)

 (191,101)

 (90,633)

 Regulatory (Under)/Over Recoveries, Net

 (259,853)

 (70,863)

 26,289 

 Amortization of Regulatory Assets, Net

 79,762 

 91,080 

 90,054 

 Amortization of Rate Reduction Bonds

 142,019 

 69,912 

 232,871 

 Derivative Assets and Liabilities

 (10,455)

 (35,441)

 (11,812)

 Other

 17,032 

 (29,751)

 (72,151)

Changes in Current Assets and Liabilities:

 Receivables and Unbilled Revenues, Net

 (20,214)

 17,570 

 (51,285)

 Fuel, Materials and Supplies

 34,321 

 (11,033)

 38,126 

 Taxes Receivable/Accrued, Net

 (5,450)

 49,642 

 (82,103)

 Accounts Payable

 (128,339)

 18,916 

 (44,355)

 Other Current Assets and Liabilities, Net

 8,532 

 12,569 

 17,466 

Net Cash Flows Provided by Operating Activities

 1,161,229 

 970,386 

 1,093,463 

Investing Activities:

Investments in Property, Plant and Equipment

 (1,472,272)

 (1,076,730)

 (954,472)

Proceeds from Sales of Marketable Securities

 317,294 

 149,441 

 174,865 

Purchases of Marketable Securities

 (348,629)

 (151,972)

 (177,204)

Proceeds from Sale of Assets

 - 

 46,841 

 - 

Other Investing Activities

 35,683 

 13,833 

 (1,157)

Net Cash Flows Used in Investing Activities

 (1,467,924)

 (1,018,587)

 (957,968)

Financing Activities:

Cash Dividends on Common Shares

 (375,047)

 (194,555)

 (180,542)

Cash Dividends on Preferred Stock

 (7,029)

 (5,559)

 (5,559)

Increase in Short-Term Debt

 825,000 

 50,000 

 166,687 

Issuance of Long-Term Debt

 850,000 

 627,500 

 145,000 

Retirements of Long-Term Debt

 (839,136)

 (369,586)

 (4,286)

Retirements of Rate Reduction Bonds

 (114,433)

 (69,312)

 (260,864)

Other Financing Activities

 6,529 

 (7,123)

 512 

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

 345,884 

 31,365 

 (139,052)

Net Increase/(Decrease) in Cash and Cash Equivalents

 39,189 

 (16,836)

 (3,557)

Cash and Cash Equivalents - Beginning of Year

 6,559 

 23,395 

 26,952 

Cash and Cash Equivalents - End of Year

$

 45,748 

$

 6,559 

$

 23,395