NU Reports 2005 Results, Cites Progress in Executing Strategic Plan

BERLIN, Conn., Feb. 15 /PRNewswire-FirstCall/ -- Northeast Utilities today released year-end 2005 results and reported on the progress made on its strategic plan to transform the company. That plan focuses on the company's regulated transmission, distribution and generation operations, while pursuing the exit from the company's competitive energy businesses. NU also reaffirmed its combined 2006 earnings guidance for its regulated subsidiaries and parent company.

"2005 was a year when critical decisions were made affecting our company," said Charles W. Shivery, NU chairman, president and chief executive officer. "We announced and began implementing our strategic plan and received siting authority to build several major transmission projects in southwest Connecticut. In 2006, we will continue to divest our competitive businesses and invest more heavily in the construction of vital transmission infrastructure improvements in southwest Connecticut. We believe this strategy, when successfully implemented, will result in compounded annual earnings per share growth of between 8 and 10 percent beginning in 2007."

Shivery noted that two of NU's major capital projects are on schedule for completion in 2006 and a third is due for completion in 2007. The Connecticut Light and Power Company's (CL&P) $350 million 345-kV transmission line between Bethel and Norwalk, Connecticut is nearly 70 percent complete. Public Service Company of New Hampshire's (PSNH) Northern Wood Power Project, involving conversion of a 50-megawatt coal-fired unit in Portsmouth, New Hampshire to burn wood chips, is nearly 90 percent complete. Both are due to be operational later this year.

Yankee Gas Service Company's $108 million 1.2 bcf natural gas storage facility in Waterbury, Connecticut is about 44 percent complete with a target of a mid-2007 completion date. Additionally, CL&P expects to begin construction of a 69-mile 345-kV transmission project between Middletown and Norwalk, Connecticut by mid-year 2006. CL&P's share of that project is expected to cost approximately $1.05 billion. Shivery said the projects are critical to improving energy service reliability for customers.

Shivery noted that NU Enterprises, Inc. (NUEI), the holding company for NU's competitive businesses, made significant progress in 2005 in completing the divestiture of its business operations. All New England wholesale obligations were divested, almost half of its energy service companies were sold, and the process to sell its competitive generation and retail marketing businesses was initiated.

With respect to the retail marketing and generation businesses, Shivery said that, "We are encouraged by the progress and the feedback we have received from the market and expect to complete the divestiture of these operations this year."

Earnings guidance

NU today reaffirmed its 2006 combined earnings guidance for its regulated businesses and parent company of between $1.09 per share and $1.22 per share. That range incorporates the issuance of an additional 23 million NU shares completed on December 12, 2005.

Full-year and fourth-quarter 2005 results

NU's regulated businesses earned $163.4 million in 2005, or $1.24 per share, compared with earnings of $155.6 million, or $1.21 per share, in 2004. The 2005 results include earnings of $42.5 million, or $0.32 per share in NU's electric transmission business, compared with earnings of $29.5 million, or $0.23 per share, in 2004. NU's electric and natural gas distribution businesses and regulated generation earned $120.9 million in 2005, or $0.92 per share, compared with earnings of $126.1 million, or $0.98 per share, in 2004.

In 2005, NU parent and other expenses, including write-downs, were $18.7 million, or $0.14 per share, compared with parent and other expenses, including write-downs, of $23.9 million, or $0.18 per share, in 2004.

NU's competitive energy businesses, which the company is divesting, lost $398.2 million, or $3.03 per share, in 2005, primarily as a result of the marking to market and terminating wholesale electricity contracts, as well as various impairments and restructuring charges. Those businesses lost $15.1 million, or $0.12 per share, in 2004.

Overall, NU lost $253.5 million in 2005, or $1.93 per share, compared with earnings of $116.6 million, or $0.91 per share, in 2004.

In the fourth quarter of 2005, NU's regulated companies earned $49.1 million, or $0.36 per share, including one-time employee termination and benefit plan curtailment charges of $12.3 million after-tax, compared with earnings of $37.2 million, or $0.29 per share, in the same period of 2004. Parent company and other expenses totaled $8.6 million, or $0.07 per share, including $3.8 million of write-downs in the fourth quarter of 2005, compared with parent company and other expenses of $9.2 million, or $0.07 per share, including $4.9 million of write-downs in 2004. NU's competitive businesses lost $54.1 million, or $0.39 per share, in the fourth quarter of 2005, compared with earnings of $5.1 million, or $0.04 per share, in the fourth quarter of 2004. Overall, NU lost $13.6 million, or $0.10 per share, in the fourth quarter of 2005, compared with earnings of $33.1 million, or $0.26 per share, in the fourth quarter of 2004.

Regulated businesses

CL&P earned $89.3 million in 2005 and $27.0 million in the fourth quarter of 2005, after payment of preferred dividends, compared with earnings of $82.5 million in 2004 and $17.3 million in the fourth quarter of 2004. The improved 2005 results, which include $8.5 million of after-tax termination costs and benefit plan curtailment charges, were due primarily to higher electric transmission business earnings resulting from increased investment in CL&P's transmission system.

PSNH earned $41.7 million in 2005 and $12.0 million in the fourth quarter of 2005, compared with earnings of $46.6 million in 2004 and $10.6 million in the fourth quarter of 2004. Lower 2005 full-year results were due primarily to higher operation and maintenance costs.

Western Massachusetts Electric Company (WMECO) earned $15.1 million in 2005 and $3.1 million in the fourth quarter of 2005, compared with earnings of $12.4 million in 2004 and $3.7 million in the fourth quarter of 2004. Improved full year results were due primarily to a $6 million distribution rate increase that took effect January 1, 2005.

Yankee Gas earned $17.3 million in 2005 and $7.0 million in the fourth quarter of 2005, compared with earnings of $14.1 million in 2004 and $5.6 million in the fourth quarter of 2004. Higher earnings were due primarily to a $14 million distribution rate increase that took effect January 1, 2005.

In 2005, regulated electric sales grew 2.6 percent, compared with 2004 levels, but were down 0.1 percent on a weather-adjusted basis. Shivery said the company continues to watch sales levels closely and is concerned that higher electric and natural gas rates, driven by higher fuel costs, may restrain sales growth at NU's distribution companies in 2006.

Competitive businesses

NU's four competitive businesses, all of which are slated for divestiture, include retail marketing, wholesale marketing, energy services, and competitive generation. To date, NU has sold two of its energy services businesses and portions of a third for $8.5 million and divested all of its New England wholesale contracts. NU's financial adviser in the divestiture of its competitive generation and retail marketing businesses, J. P. Morgan Securities, has issued offering documents to bidders on the retail business and expects to issue offering documents on the competitive generation business later this quarter. NU expects to close on the retail marketing business by mid-year and the generation business by the end of 2006.

The vast majority of the losses in the competitive businesses -- $278.9 million of $398.2 million -- were due to marking to market and divesting the wholesale energy contracts of Select Energy, Inc., NUEI's energy marketing subsidiary. Exclusive of mark-to-market impacts, the wholesale marketing group lost $41.9 million after-tax in 2005 and $1.5 million in the fourth quarter of 2005, primarily as a result of heavier than expected loads that required NUEI to purchase additional energy supplies at higher than projected price levels. Also exclusive of charges related to wholesale supply, the retail marketing business earned $6.3 million in 2005, compared with $4.9 million in 2004. Exclusive of impairment charges and discontinued operations, the energy services business lost $4.0 million in 2005, compared with a loss of $1.4 million in 2004.

The following table reconciles 2005 and 2004 fourth quarter and year-end results.

Fourth Quarter Year End 2004 Reported EPS $0.26 $0.91 Investment write-downs in 2004 $0.04 $0.07 Losses on natural gas contracts $0.02 $0.38 Adjusted EPS in 2004 $0.32 $1.36 Higher regulated results in 2005 $0.07 $0.03 Lower competitive results in 2005, excluding charges, retail transfer, natural gas contracts ($0.03) ($0.53) Investment write-downs in 2005 ($0.03) ($0.03) Other ($0.01) --- Adjusted EPS in 2005 $0.32 $0.83 Competitive energy restructuring and impairment charges in 2005 ($0.07) ($0.13) Energy services businesses restructuring and impairment charges in 2005 --- ($0.08) Wholesale contract market changes in 2005* ($0.29) ($2.12) Retail Marketing transfer price from Wholesale* ($0.02) ($0.22) Discontinued operations ($0.04) ($0.21) 2005 Reported EPS ($0.10) ($1.93)

Fourth-quarter and year-to-date financial results for NU's regulated businesses and competitive business lines are noted below:

Three months ended: (in millions) December 31, 2005 December 31, 2004 Increase (Decrease) CL&P Distribution $18.8 $13.0 $5.8 PSNH Distribution/Generation $9.9 $9.8 $0.1 WMECO Distribution $2.5 $2.8 ($0.3) Yankee Gas $7.0 $5.6 $1.4 Total -- Distribution/ Regulated Generation $38.2 $31.2 $7.0 CL&P Transmission $8.2 $4.3 $3.9 PSNH Transmission $2.1 $0.8 $1.3 WMECO Transmission $0.6 $0.9 ($0.3) Total -- Transmission $10.9 $6.0 $4.9 Total -- Regulated Businesses $49.1 $37.2 $11.9 Wholesale competitive energy -- excluding gains/charges ($1.5) $1.5 ($3.0) Retail competitive energy -- excluding gains/charges $2.4 $1.9 $0.5 Wholesale contract market changes($39.6) --- ($39.6) Losses on natural gas contracts --- ($2.4) $2.4 Restructuring and impairment charges related to Competitive Energy ($9.2) --- ($9.2) Retail Marketing transfer price from Wholesale ($3.2) --- ($3.2) Total-Competitive Energy ($51.1) $1.0 ($52.1) Energy Services results and NUEI Parent ($1.6) $0.1 ($1.7) Restructuring and impairment charges related to Energy Services, NUEI Parent $0.4 --- $0.4 Discontinued operations ($1.8) $4.0 ($5.8) Total -- Services, NUEI Parent ($3.0) $4.1 ($7.1) Total -- Competitive Businesses ($54.1) $5.1 ($59.2) Investment write-downs ($3.8) ($4.9) $1.1 NU Parent and other ($4.8) ($4.3) ($0.5) Reported Earnings ($13.6) $33.1 ($46.7) Twelve months ended: (in millions) December 31, 2005 December 31, 2004 Increase (Decrease) CL&P Distribution $58.6 $62.7 ($4.1) PSNH Distribution/Generation $33.9 $39.9 ($6.0) WMECO Distribution $11.1 $9.4 $1.7 Yankee Gas $17.3 $14.1 $3.2 Total-Distribution/ Regulated Generation $120.9 $126.1 ($5.2) CL&P Transmission $30.7 $19.8 $10.9 PSNH Transmission $7.8 $6.7 $1.1 WMECO Transmission $4.0 $3.0 $1.0 Total -- Transmission $42.5 $29.5 $13.0 Total -- Utility Group $163.4 $155.6 $7.8 Wholesale Competitive Energy -- excluding gains/charges ($41.9) $26.1 ($68.0) Retail Competitive Energy -- excluding gains/charges $6.3 $4.9 $1.4 Wholesale contract market changes* ($278.9) --- ($278.9) Losses on natural gas contracts --- ($48.3) $48.3 Restructuring and impairment charges related to Merchant Energy ($17.0) --- ($17.0) Retail Marketing transfer price from Wholesale* ($29.1) --- ($29.1) Total Competitive Energy ($360.6) ($17.3) ($343.3) Energy Services results and NUEI Parent ($4.0) ($1.4) ($2.6) Restructuring and impairment charges related to Energy Services, NUEI Parent ($10.3) --- ($10.3) Discontinued operations ($23.3) $3.6 ($26.9) Total -- Services, NUEI Parent ($37.6) $2.2 ($39.8) Total -- Competitive Businesses($398.2) ($15.1) ($383.1) Investment write-downs ($4.3) ($8.8) $4.5 NU Parent and other ($14.4) ($15.1) $0.7 Reported Earnings ($253.5) $116.6 ($370.1)

* $59.9 million gain in the first quarter of 2005 that affected the retail transfer price is classified as a wholesale contract market change.

NU has approximately 153 million common shares outstanding. It operates New England's largest energy delivery system, serving approximately 2 million customers in Connecticut, New Hampshire and Massachusetts.

This news release includes statements concerning NU's expectations, plans, objectives, future financial performance and other statements that are not historical facts. These statements are "forward-looking statements" within the meaning of the Private Litigation Reform Act of 1995. In some cases the reader can identify these forward looking statements by words such as "estimate", "expect", "anticipate", "intend", "plan", "believe", "forecast", "should", "could", and similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results or outcomes to differ materially from those included in the forward-looking statements. Factors that may cause actual results to differ materially from those included in the forward looking statements include, but are not limited to, actions by state and federal regulatory bodies, competition and industry restructuring, changes in economic conditions, changes in weather patterns, changes in laws, regulations or regulatory policy, expiration or initiation of significant energy supply contracts, changes in levels of capital expenditures, developments in legal or public policy doctrines, technological developments, volatility in electric and natural gas commodity markets, effectiveness of our risk management policies and procedures, changes in accounting standards and financial reporting regulations, fluctuations in the value of electricity positions, the methods, timing, and results of the disposition of competitive businesses, actions of rating agencies, terrorist attacks on domestic energy facilities, and other presently unknown or unforeseen factors. Other risk factors are detailed from time to time in our reports to the Securities and Exchange Commission. We undertake no obligation to update the information contained in any forward-looking statements to reflect developments or circumstances occurring after the statement is made.

NOTE: NU will webcast an investor call Thursday, February 16, 2006, at 10 a.m. Eastern Standard Time. The call can be accessed through NU's website at http://www.nu.com/.

NORTHEAST UTILITIES AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS At December 31, 2005 2004 (Thousands of Dollars) ASSETS Current Assets: Cash and cash equivalents $45,782 $46,989 Special deposits 103,789 82,584 Investments in securitizable assets 252,801 139,391 Receivables, less provision for uncollectible accounts of $24,444 in 2005 and $25,325 in 2004 901,516 771,257 Unbilled revenues 175,853 144,438 Taxes receivable - 61,420 Fuel, materials and supplies 206,557 185,180 Marketable securities 56,012 52,498 Derivative assets - current 403,507 81,567 Prepayments and other 129,242 154,395 Assets held for sale 101,784 - 2,376,843 1,719,719 Property, Plant and Equipment: Electric utility 6,378,838 5,918,539 Gas utility 825,872 786,545 Competitive energy 908,776 918,183 Other 254,659 241,190 8,368,145 7,864,457 Less: Accumulated depreciation 2,551,322 2,382,927 5,816,823 5,481,530 Construction work in progress 600,407 382,631 6,417,230 5,864,161 Deferred Debits and Other Assets: Regulatory assets 2,483,851 2,746,219 Goodwill 287,591 319,986 Prepaid pension 298,545 352,750 Marketable securities 56,527 51,924 Derivative assets - long-term 425,049 198,769 Other 223,439 384,868 3,775,002 4,054,516 Total Assets $12,569,075 $11,638,396 The data contained in this report is preliminary and is unaudited. This report is being submitted for the sole purpose of providing information to present shareholders about Northeast Utilities and Subsidiaries and is not a representation, prospectus, or intended for use in connection with any purchase or sale of securities. NORTHEAST UTILITIES AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS At December 31, 2005 2004 (Thousands of Dollars) LIABILITIES AND CAPITALIZATION Current Liabilities: Notes payable to banks $32,000 $180,000 Long-term debt -- current portion 22,673 90,759 Accounts payable 972,368 825,247 Accrued taxes 95,210 - Accrued interest 47,742 49,449 Derivative liabilities -- current 402,530 130,275 Counterparty deposits 28,944 57,650 Other 272,252 212,239 Liabilities of assets held for sale 101,511 - 1,975,230 1,545,619 Rate Reduction Bonds 1,350,502 1,546,490 Deferred Credits and Other Liabilities: Accumulated deferred income taxes 1,306,340 1,434,403 Accumulated deferred investment tax credits 95,444 99,124 Deferred contractual obligations 358,174 413,056 Regulatory liabilities 1,273,501 1,070,187 Derivative liabilities -- long-term 272,995 58,737 Other 364,157 267,895 3,670,611 3,343,402 Capitalization: Long-Term Debt 3,027,288 2,789,974 Preferred Stock of Subsidiary -- Non-Redeemable 116,200 116,200 Common Shareholders' Equity: Common shares, $5 par value -- authorized 225,000,000 shares; 174,897,704 shares issued and 153,225,892 shares outstanding in 2005 and 151,230,981 shares issued and 129,034,442 shares outstanding in 2004 874,489 756,155 Capital surplus, paid in 1,437,561 1,116,106 Deferred contribution plan - employee stock ownership plan (46,884) (60,547) Retained earnings 504,301 845,343 Accumulated other comprehensive income/(loss) 19,987 (1,220) (360,210) (359,126) 2,429,244 2,296,711 Total Capitalization 5,572,732 5,202,885 Total Liabilities and Capitalization $12,569,075 $11,638,396 The data contained in this report is preliminary and is unaudited. This report is being submitted for the sole purpose of providing information to present shareholders about Northeast Utilities and Subsidiaries and is not a representation, prospectus, or intended for use in connection with any purchase or sale of securities. NORTHEAST UTILITIES AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF (LOSS)/INCOME For the Three Months Ended December 31, 2005 2004 (Thousands of Dollars, except share information) Operating Revenues $1,877,834 $1,633,282 Operating Expenses: Operation -- Fuel, purchased and net interchange power 1,235,090 1,034,350 Other 271,357 256,871 Wholesale contract market changes, net 81,262 - Restructuring and impairment charges 15,682 - Maintenance 47,206 50,279 Depreciation 59,673 57,344 Amortization 75,928 38,214 Amortization of rate reduction bonds 43,327 40,336 Taxes other than income taxes 61,989 53,392 Total operating expenses 1,891,514 1,530,786 Operating (Loss)/Income (13,680) 102,496 Interest Expense: Interest on long-term debt 41,893 38,211 Interest on rate reduction bonds 20,664 23,715 Other interest 4,405 1,891 Interest expense, net 66,962 63,817 Other Income, Net 18,576 2,177 (Loss)/Income from Continuing Operations Before Income Tax (Benefit)/Expense (62,066) 40,856 Income Tax (Benefit)/Expense (52,733) 10,425 (Loss)/Income from Continuing Operations Before Preferred Dividends of Subsidiary (9,333) 30,431 Preferred Dividends of Subsidiary 1,390 1,390 (Loss)/Income from Continuing Operations (10,723) 29,041 Discontinued Operations: (Loss)/Income from Discontinued Operations Before Income Taxes (3,815) 5,173 Losses from Dispositions (1,123) - Income Tax (Benefit)/Expense (3,093) 1,152 (Loss)/Income from Discontinued Operations (1,845) 4,021 (Loss)/Income Before Cumulative Effect of Accounting Change, Net of Tax Benefit (12,568) 33,062 Cumulative effect of accounting change, net of tax benefit of $689 in 2005 (1,005) - Net (Loss)/Income $(13,573) $33,062 Basic and Fully Diluted (Loss)/Earnings Per Common Share: (Loss)/Income from Continuing Operations $(0.08) $0.23 (Loss)/Income from Discontinued Operations (0.01) 0.03 Cumulative Effect of Accounting Change, Net of Tax Benefit (0.01) - Basic and Fully Diluted (Loss)/Earnings Per Common Share $(0.10) $0.26 Basic Common Shares Outstanding (weighted average) 137,799,257 128,790,347 Fully Diluted Common Shares Outstanding (weighted average) 137,799,257 128,889,049 The data contained in this report is preliminary and is unaudited. This report is being submitted for the sole purpose of providing information to present shareholders about Northeast Utilities and Subsidiaries and is not a representation, prospectus, or intended for use in connection with any purchase or sale of securities. NORTHEAST UTILITIES AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF (LOSS)/INCOME For the Years Ended December 31, 2005 2004 2003 (Thousands of Dollars, except share information) Operating Revenues $7,397,390 $6,542,120 $5,943,514 Operating Expenses: Operation -- Fuel, purchased and net interchange power 4,933,080 4,231,192 3,735,154 Other 1,061,159 951,877 848,163 Wholesale contract market changes, net 440,946 - - Restructuring and impairment charges 44,143 - - Maintenance 200,263 188,092 174,594 Depreciation 234,652 224,132 203,469 Amortization 202,949 138,271 191,805 Amortization of rate reduction bonds 176,356 164,915 153,172 Taxes other than income taxes 257,707 241,424 231,062 Total operating expenses 7,551,255 6,139,903 5,537,419 Operating (Loss)/Income (153,865) 402,217 406,095 Interest Expense: Interest on long-term debt 163,012 139,988 121,887 Interest on rate reduction bonds 87,439 98,899 108,359 Other interest 19,350 8,610 10,333 Interest expense, net 269,801 247,497 240,579 Other Income, Net 37,237 14,562 4,105 (Loss)/Income from Continuing Operations Before Income Tax (Benefit)/Expense (386,429) 169,282 169,621 Income Tax (Benefit)/Expense (162,765) 50,728 47,628 (Loss)/Income from Continuing Operations Before Preferred Dividends of Subsidiary (223,664) 118,554 121,993 Preferred Dividends of Subsidiary 5,559 5,559 5,559 (Loss)/Income from Continuing Operations (229,223) 112,995 116,434 Discontinued Operations: (Loss)/Income from Discontinued Operations Before Income Taxes (38,057) 4,621 7,822 Losses from Dispositions (1,123) - - Income Tax (Benefit)/Expense (15,920) 1,028 3,104 (Loss)/Income from Discontinued Operations (23,260) 3,593 4,718 (Loss)/Income Before Cumulative Effects of Accounting Changes, Net of Tax Benefits (252,483) 116,588 121,152 Cumulative effects of accounting changes, net of tax benefits of $689 in 2005 and $2,553 in 2003 (1,005) - (4,741) Net (Loss)/Income $(253,488) $116,588 $116,411 Basic and Fully Diluted (Loss)/Earnings Per Common Share: (Loss)/Income from Continuing Operations $(1.74) $0.88 $0.91 (Loss)/Income from Discontinued Operations (0.18) 0.03 0.04 Cumulative Effects of Accounting Changes, Net of Tax Benefits (0.01) - (0.04) Basic and Fully Diluted (Loss)/Earnings Per Common Share $(1.93) $0.91 $0.91 Basic Common Shares Outstanding (weighted average) 131,638,953 128,245,860 127,114,743 Fully Diluted Common Shares Outstanding (weighted average) 131,638,953 128,396,076 127,240,724 The data contained in this report is preliminary and is unaudited. This report is being submitted for the sole purpose of providing information to present shareholders about Northeast Utilities and Subsidiaries and is not a representation, prospectus, or intended for use in connection with any purchase or sale of securities. NORTHEAST UTILITIES AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2005 2004 2003 (Thousands of Dollars) Operating Activities: Net (loss)/income $(253,488) $116,588 $116,411 Adjustments to reconcile to net cash flows provided by operating activities: Wholesale contract market changes, net 440,946 - - Restructuring and impairment charges 69,239 - - Bad debt expense 27,528 19,062 23,229 Depreciation 235,221 224,855 204,388 Deferred income taxes and investment tax credits, net (202,789) 111,710 (129,733) Amortization 202,949 138,271 191,805 Amortization of rate reduction bonds 176,356 164,915 153,172 Amortization/(deferral) of recoverable energy costs 38,789 (22,751) 20,486 Loss from sale of discontinued operations 1,123 - - Pension expense/(income) 42,662 10,636 (16,416) Wholesale contract buyout payments (186,531) - - Regulatory (refunds)/overrecoveries (140,913) (150,119) 287,974 Derivatives - changes in fair value 2,405 85,592 (12,175) Deferred contractual obligations (20,300) (56,161) (52,961) Other sources of cash 70,021 51,213 20,002 Other uses of cash (1,376) (63,977) (123,554) Changes in current assets and liabilities: Receivables and unbilled revenues, net (208,519) (103,983) 39,322 Fuel, materials and supplies (25,930) (31,104) (34,223) Investments in securitizable assets (113,410) 27,074 12,443 Other current assets (11,061) (38,648) 121,249 Accounts payable 131,043 69,131 (25,352) Counterparty deposits (28,706) 11,154 46,496 Accrued taxes 156,630 (112,300) (83,625) Other current liabilities 41,009 (44,935) (56,357) Net cash flows provided by operating activities 442,898 406,223 702,581 Investing Activities: Investments in property and plant: Electric, gas and other utility plant (752,124) (598,398) (552,410) Competitive energy assets (23,231) (17,771) (16,728) Cash flows used for investments in property and plant (775,355) (616,169) (569,138) Net proceeds from sale of property 25,253 - - Net proceeds from sale of discontinued operations 6,203 - - Proceeds from sales of investment securities 137,099 106,217 34,147 Purchases of investment securities (142,260) (171,511) (49,729) Restricted cash - LMP costs - 93,630 (93,630) CVEC acquisition special deposit - - (30,104) Other investing activities 31,529 23,131 1,261 Net cash flows used in investing activities (717,531) (564,702) (707,193) Financing Activities: Issuance of common shares 450,827 10,937 13,654 Repurchase of common shares - - (20,537) Issuance of long-term debt 350,355 512,762 268,368 Retirement of rate reduction bonds (195,988) (183,470) (169,352) (Decrease)/increase in short-term debt (148,000) 75,000 49,000 Reacquisitions and retirements of long-term debt (98,056) (155,532) (65,600) Cash dividends on common shares (87,554) (80,177) (73,090) Other financing activities 1,842 (17,424) (4,792) Net cash flows provided by/(used in) financing activities 273,426 162,096 (2,349) Net (decrease)/increase in cash and cash equivalents (1,207) 3,617 (6,961) Cash and cash equivalents - beginning of year 46,989 43,372 50,333 Cash and cash equivalents - end of year $45,782 $46,989 $43,372 The data contained in this report is preliminary and is unaudited. This report is being submitted for the sole purpose of providing information to present shareholders about Northeast Utilities and Subsidiaries and is not a representation, prospectus, or intended for use in connection with any purchase or sale of securities.

First Call Analyst: FCMN Contact: