Susan Allen - Vice President, Investor Relations Jim Torgerson - President and CEO Rich Nicholas - Executive Vice President and CFO

Brian Russo - Ladenburg Thalmann Caroline Bone - Deutsche Bank Chris Ellinghaus - Williams Capital

Good morning. My name is [Bobby Gene], and I will be your conference operator for today. At this time, I’d like to welcome everyone to the UIL Holdings Fourth Quarter and Full Year 2013 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. I’d like to turn the call over to Susan Allen. Ms. Allen, you may begin your conference.

Thank you, [Bobby Gene], and good morning to everyone. Thank you for joining us to discuss UIL Holdings’ fourth quarter and full year 2013 earnings results. I am Susan Allen, Vice President of Investor Relations. Participating on the call today is Jim Torgerson, UIL’s President and Chief Executive Officer; and Rich Nicholas, UIL’s Executive Vice President and Chief Financial Officer. If you do not have a copy of our press release or presentation for today’s call, they are on our website at www.uil.com. During today’s call, we will make various forward-looking statements within the meaning of the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Significant factors that could cause results to differ from those anticipated are described in our earnings release and filings with the SEC. With that said, I will turn the call over to Jim Torgerson.

Thanks, Sue, and good morning, everybody. Our year end results and fourth quarter turned out to be very good. The financial results were excellent. We had a good -- ended up with a good year. We also ended up with the electric distribution rate case decision and reconsideration in December that reversed $5.5 million of after-tax income from the write-offs that we have taken in the third quarter. The rate case result is now final. We also make natural gas and the rate case that was finalized, we will talk about those two and now those two rate cases are behind us. We also have the comprehensive Energy Strategy final order that was passed through the Public Utilities Regulatory Authority. But for the year we had net income was $115.3 million which was up 11%. Earnings per share were $2.18, which were up 8% over the 2012 results. Now in 2013 that included a net regulatory charge of $5 million after-tax from the electric distribution rate case. So if we excluded that net income would have been up 16% to $120.3 million and earnings per share up 13% at $2.28 a share for a significant increase over the 2012 results. We have been executing successfully on our strategic initiatives, investing in both the Electric & Gas Infrastructure as we need to. And also we have added just under 15,000 customers, 14,947 new natural gas heating customers, which is a 34% increase over 2012. We continue to focus on short-term cost controls. We did that when we got the initial electric rate decision because of the write-offs. We focused on cutting some of our expenses and mainly because they were short-term freezing hiring, eliminating much, if not all of our discretionary activities, such as travel, training and so forth. Another thing was good for 2012, we actually had normal weather, really was normal for the year, it was 0.1% colder actually, but so basically normal. And compared to 2012 there was big change from the warm winter we had in 2012. We also successfully completed an equity offering in the fourth quarter to get the financial resources for be able to implement our strategic plans. On page of our presentation, we have some of the strategic initiatives that we are looking through and we have growth both in the Electric & Gas Infrastructures, and gas in particular on adding new natural gas heating customer as a result of the Comprehensive Energy Strategy and what went through the regulatory, this really is now rate base growth that we are seeing in both gas and electric. We continued to manage our cost prudently to make sure that we are being as efficient as we possibly can. And we are pursuing opportunities invest in other projects that have allowed returns that basically cost to service type programs. One is the construction of the renewals generation project. It expected to begin in the 2014, one of the components which in Bridgeport which would have fuel cell and a solar array. The solar array is on a landfill that there is some debate now in the city council but the parks department is to whether not landfill is a park and who has jurisdiction of that. So that delaying things a little bit. We expect that will get resolved and then we also will be putting a fuel cell in the New Haven area. We are going to continue to leverage our system such as the SAP system we put in to support the entire enterprise, and we should see some benefits from those system as we move forward. On page five we have our long-term growth forecast for capital spending and you can see that from what you thought when we gave the presentation in last November that 2014 capital spending is down about $13 million but it’s picked up in 2015 and ’16. This is one of our substation project that have been pushed off a little bit and blended in with the upgrade of some of the cable -- transition cable that we are doing on the Metro North rail line. So that’s a big -- that’s one part of it. But basically we are still going to be spending the $4.2 billion over the next 10 years, a lot of it is in gas, which is up considerably from our last forecast that we did a year before about $1.8 billion. And again much of that is growth but also replacement of cast iron bare steel projects. On our next page, we have our average rate base growth and you can see for all of our businesses, the compound annual growth rates through the next four, five years is 8.3%. Gas is growing 7.5%, electric transition 6% and electric distribution 10.8%. We have added the renewable project and then -- it's at very top of the slide, the graph. You can see the expected spending and rate base that will occur for that. And we also pick up our GenConn project and then UIL Corporate at the bottom which -- that’s growing. But those are mainly software projects such as our SAP project and then refreshes, renewals, whatever else we’re doing at the corporate level that acts as capital spending there and then it gets passed on to our -- as our capital contribution and then charged to our operating companies. For gas heating customers, which as I said, we added almost 15,000 households and businesses as new gas heating customers to significant increase over 2012. When we go back to when we first bought the gas companies, we said we would add 30,000 to 35,000 new customers over the first three years, at the time that seems somewhat arbitrary but we forced to get that done. We came near the top end of that range. For 2014, we’re expecting -- we're targeting 15,800 households and businesses to be converted to natural gas heating. And you can see the split by the company, the Connecticut companies, it’s pretty evenly split and then we added about 10% of additions were from Massachusetts at our Berkshire subsidiary. The gas customer additions for the projection, our estimate as you can see for 2014 are target on 15,800. Then the rest that really comes from the comprehensive energy strategy and the plan that we developed for Connecticut in the blue. And then Massachusetts have layered on top with red. So you can see the buildup, assuming these targets that would be up in the 21,000,. 22,000 range down the road. So that will get us to the target of the governor of Connecticut has set up of converting 300,000 people for two natural gas in the state. And our piece of that is about $200,000 and then in Massachusetts, we’ve seen about 1500 conversion annually at this point. On Page 9, we have our regulatory update. The gas distribution rate case for Connecticut Natural Gas was determined in January. They had an annual revenue increase of $7.25 million. That gave us an ROE of 9.18% in equity component of 52.5 -- 52.52%. And then we have the implementation of a decoupling mechanism. Now this applies to existing customers and that won’t change the number of those existing customers who don’t change until we get the next rate case. And it’s also the system expansion reconciliation. And as new customers are added, we reflect the allowed ROE in the rate base and then the rates get trued up. And I believe we will reflect the earning -- in our earnings. The return on equity for the rate base that is added for new customers and then that gets trued up annually. Also we now have a cast iron/bare steel replacement program tracker. It’s really one of the distribution integrity management program, operates very similarly. It’s not the same to new customer tracker where we make the investments, we record the revenue requirement in the year when investments are made and then it gets trued up into rate actually on an annual basis. We also have a new customer rate now for the -- that's for any new customer that after January 1 of this year that the level of paying our rate is 30% higher of the distribution rate and that will -- those will help fund the expansion of the system for adding new customers and adding new range. We also -- so we have those rate trackers in place, they also put in an earnings sharing mechanism which is 50:50 sharing on all dollars after -- above the allowed ROE that we should earn above the allowed ROE. Our electric distribution rate case, the reconsideration was handed down in December. It provided for a revenue of $20.3 million in the first year. And the first year actually started in August of 2013 runs to August 2014. The second year -- rate year then begins and goes to August of 2015 and we’ll pick up $25.8 million there. The allowed ROE is 9.15 million with a 50:50 debt-to-capital structure. Continuation of our existing decoupling mechanism and then we actually did recover nearly $45 million of storm-related costs and that’s being done over several years in the continuation of the earning sharing mechanism. The FERC ROE complain is still ongoing. There is really nothing new. We’re waiting for FERC commission to actually decide that we do still expect that they occur sometime in 2014. I’m going to turn it over to Rich Nicholas to talk about the financial results.

Thank you Jim and thanks everyone for joining us today. I’m on Slide 10 of our presentation where we provide the details by operating segment for the fourth quarter and the full year, both net income and earnings per share. Note that we had broken out there the adjustments that came out of the UI distribution rate case, the regulatory disallowances as provided from the final reconsideration order. In addition, as Jim mentioned we -- follow-on equity offering that closed in early October and so you see the dilution resulting from that, above $0.08 in the fourth quarter year-over-year comparison and on the full year above $0.06, that was about 5.75 million shares and over $200 million of net proceeds. Moving to Slide 11. I will go into the components in a little more detail. Overall consolidated UIL earnings for the fourth quarter and full year of $40.4 million, for the quarter $115.3 million, up significantly in the quarter and full year as Jim mentioned 11%. So moving products in the quarter, we did have the recovery of $5.5 million after tax on regulatory adjustment but for the full year that was unmet charge of $5 million. So excluding those regulatory adjustments, fourth quarter was up 21% and full year, 16%. Moving to electric distribution, 2013 was the last year of the CTA rate base. It’s now fully amortized, so going forward there are no further earnings on rate base from CTA. But we did earned 8.45% on the distribution in the small CTA rate base, but that did include the regulatory charge of $5 million. If you were to exclude that, the return on equity would have been 9.67%. Looking at the fourth quarter earnings of $0.13 of diluted share, was down slightly compared to the same period in 2012 but primarily due to an increase in pension benefits expense, which we’ve been talking about all years as a result of -- at the end of 2012, our discount rates were very-very low and you will see when we get to looking forward, discount rates have obviously moved back up. And some changes in depreciation expense in the fourth quarter. Moving to Slide 12, looking at the full year results, the main drivers there were actually that we had in 2012. We had picked up $1.6 million after-tax from the settlement of our power procurement incentives and obviously that did not reoccur in 2013. GenConn, no major changes year-over-year as a result of our GenConn peaking generation joint venture with NRG. Moving to electric transmission, earnings up in the fourth quarter, about $300,000 after-tax, primarily due to the increases in rate base and increases on our investments in the NEEWS transmission projects. They were about equally contributing to the positive results in the fourth quarter. Looking at the full year for transmission, again, increases in rate base along with the allowance for funds used during construction on our construction work in process were the main drivers there. On the negative side, we did establish a reserve of $1.5 million after-tax, which we have previously disclosed based on the Administrative Law Judge’s decision for the refund period on the pending FERC ROE. So for the year, the transmission rate of return on equity of 12.5%, if you were to exclude that reserve, including reserve would be approximately 11.4%. Moving to gas distribution, as Jim mentioned, we returned to normal weather as that was a significant uplift on a year-over-year comparison. And so while the year was basically normal, when you look ’12. In the fourth quarter 2013, we did have some favorable variances in our O&M expenses and a significant piece of that was actually lower on collectible expenses as we have stepped up our collection efforts there. Full year, in addition to the weather, we did see an increase in the normalized use per customer or some of that maybe, the regression models that we used to forecast weather variances or if you account for weather variances, may not have fully taken into account the truly extraordinarily warm weather in 2012. Also in 2012 because it was so warm, we did have weather insurance proceeds that show up in other income and reductions that did not reoccur in 2013. Moving on to Slide 14, continuing with some of the components driving our gas results, looking at it from a gross margin perspective, you can see on a full year basis, the weather variance almost $19 million of gross margin. The normalized use per customer and other $2 million and then the customer growth from all of the gas heating conversions, a $7 million contribution to gross margin on a full year basis. So looking at how those results translate into return on equity, both normal and weather adjusted, again since the full year was close to normal, not a big adjustment there. But it was all right around 8% for CNG and SCG. And then finally on the corporate segment, for the fourth quarter and full year results, we did see a benefit on the tax side associated with a unitary tax filing and that’s for the state of Massachusetts where we actually, from a book perspective allocate a portion of the UIL total taxes based on a three factor allocation consisting of assets, payroll and revenue. And that resulted in a benefit versus the standalone Berkshire Gas tax calculation. And that affected again both the fourth quarter and the full year results. Also, a pick up on allowance for funds used during construction, primarily as a result of the SAP project that Jim mentioned as that was in under construction throughout the year and went into service on January 1st. So we did have pickup there as well. And even though you see a pickup in the corporate as a result of additional investment and additional capital charges, you will see the negative side of that reflected in the operating company results. So moving to Slide 16, from a debt maturity and liquidity standpoint, we are in a very strong position at year end, our cash on the books of $69 million, fully availability of our credit facility except for $4 million of outstanding letters of credit. And with the equity offering that we made and we did get the debt to total capitalization ratio down to 55%. Looking at the maturities over the near term, there is not a lot of significant maturities coming out. It was only $6 million in 2014 and $29 million in 2015. Of note, Moody’s recently did a review of the utility sector and upgraded some companies including UIL and the operating companies. As you can see, UIL moved up to be Baa2 from Baa3. And while it was part of the overall industry review, they did specifically look at UIL and the OpCos. Moving to Slide 17 and turning to 2014 now, looking forward on our earnings guidance, put out a range now of $2.15 to $2.35 and that does reflect a full year of dilution from the equity offering, which on a stand on basis if we hadn’t done any equity is about 25% -- $0.25, excuse me -- dilutive impact compare to 2013, since we had $0.06 of dilution there. It’s actually $0.19 year-over-year of dilution. Some of the assumptions underlying our guidance on Slide 18, for electric distribution, we’ve got a full year now of the electric distribution rate case that went in August. We did see a decline in pension of postretirement, as a result interest rates moving up and discount rates moving up at the end of the year, a benefit there of about $0.06 a share. As I mentioned earlier, the higher allocation of the UIL corporate charges for shared systems is a drag at the operating company level that gets offset at the whole at company level. And we are now fully on SAP across all of our operating companies for customer information, for financials, for payroll, for other HR and supply chain requirements. And we will look in the future now to leverage that investment moving forward. On the electric, excuse me -- electric transmission side, we do assume we’ll earn what’s currently allowed by FERC for a return on equity. We’ve not put in any adjustment at this point for the pending proceeding regarding the New England return on equity at FERC. And the earnings are really driven by the increase in rate base from our transmission projects as well as our investment in the newest projects. Slide 19 on the gas distribution side, well, the full year effect, almost the full year went into the effect on January 10th, the CNG rate case proceeding and with the target of growth of 15,800 new gas heating customers. In addition now to get into the full year benefit of all of the conversions that we made in 2013, that would be expected of add about $0.07 a share. We basically look at the year on a weather normal basis and well we had some cold weather so far which all the way is to go to finish up the winter, heating season as well as the November and December heating season at the end of the year. Weather will have less of an impact and it has in the past because of the decoupling mechanism at CNG. But obviously, Berkshire gas and Southern Connecticut gas are still subject to weather variances. And we have procured weather insurance that will carry us through heating season in the first part of the year. The gas companies also see the impact of the corporate capital charge for shared systems but again on a net basis and to offset it and play on corporate. And in corporate, you do see that benefit coming through some of the corporate capital charge for SAP. So at this point, I’ll turn the call back to operator, Bobby Gene, for the Q&A session. Bobby Gene, we’d like to start the Q&A session now.

Okay. Thank you, sir. (Operator Instructions) Our first question comes from the line of Brian Russo. You may go ahead. Brian Russo - Ladenburg Thalmann: Hi, good morning.

Good morning. Brian Russo - Ladenburg Thalmann: Just, can you just go over the mechanics of the decoupling mechanism that was approved in the CNG rate case? And are you still able to retain that net income per customer, $280 to $315 in between rate cases?

The way it’s going to work now is the decoupling is on existing customers, so those that are there today. And the decoupling will apply until we get to the next rate case on those customers. For new customers, as they’re added, we will recognize the income for as a return on equity for the investment than we make during the year. So they modified the mechanism somewhat. So, basically as we invest, we will get our return on equity and we will recognize that each during the year as we make investments. Then, it gets trued up at the end of the year because we are not plucking the cash. And so at the end of the year, then it goes into rates at that point in time, then we start collecting the cash. So it’s really an adjustment that the return on equity now as opposed to what we had talked about before. The margin -- in theory, would be the same but it’s been trued up to reflect the return on equity, so that’s really how it’s going to work going forward. And then we don’t -- the new customers are not in the decoupling until the next rate case. So that’s how that’s going to work. Brian Russo - Ladenburg Thalmann: Okay. So does the ROE or does that coincide with the $280 to $315?

No, the ROE will be the allowed ROE that we have currently, which is the 9.18% for CNG. Brian Russo - Ladenburg Thalmann: I see.

So it depends on the -- Brian, this is Richard. It depends on the mix of new customers where they on main, off main, the main expansion, how much capital gets invested will determine ultimately what that regular return trued up looks like. Brian Russo - Ladenburg Thalmann: Okay. Got it. Got it. Okay. And then, I believe in the final order, I think there was some issues with the 338(h)(10) election and PURA may have requested CNG get an IRS letter in terms of the normalization and deferred taxes et cetera. Could you just kind of update us on that?

Yeah, what PURA told us to do is to get a private letter ruling from the IRS, which will look at, if the regulators made a modification to rates to reflect the section 338(h)(10) right up. Would that be a normalization violation? We believe it is a tax consultant attorney -- get in front of the IRS and we strongly believe that, if that is what will occur then it would be a normalization violation. And I think PURA wants to avoid that, so they are asking the private letter ruling. We're supposed to file that, I think its next month, by the end of March and so we will and we will ask for ruling from IRS.

Importantly, Brian, they did allow the full rate base…

Right.

… into the revenue requirements, so we are earning on the full rate basis. Brian Russo - Ladenburg Thalmann: What happens if the IRS rules against you, does the rate base get and revenue requirement get adjusted or is that something that you just wait for the next rate case?

I think then the commission want to look at that and determine if there is anything they needed to do, if the IRS, actually it had all the pretty much reverse the position they have taken previous quite a lot of ruling, so we kind of surprise if that incurs. But, so, yeah, they would be -- then the commission would have the option to do something and whether they wait for the next rate case, it’s a little unclear if they tackle it in the interim but they kind of left it open. Brian Russo - Ladenburg Thalmann: Okay. And remind us what is that dealt in rate base is it, if I recall like $100 million compliant for CNG and SNG?

We have…

We have to look at from a revenue requirement perspective, Brian, because there are tax impacts as well. And for CNG the total revenue requirement differential was $2 million to $3 million for SCG, it is bigger, it's more in the $8 million range. Brian Russo - Ladenburg Thalmann: Okay. Got it. Thank you very much.

Our next question comes from the line of Caroline Bone. You may go ahead. Caroline Bone - Deutsche Bank: Hi. Good morning.

Good morning.

Good morning. Caroline Bone - Deutsche Bank: Actually, Brian, does asked one of my questions but I was wondering if you could also discuss your thoughts on a timing for potential SCG rate case?

We're evaluating that now, one of the thing that actually kind of like to know what the IRS is going to say. Caroline Bone - Deutsche Bank: Yeah.

So we're looking at it now. They earned in the ballpark of 8% on a weather normalized basis in 2013. So and that included the full rate base. So I was kind of looking at it today and trying to decided if it makes sense at all, we don't have decouplings for Southern Connecticut Gas at this point because we haven’t filed anything. Caroline Bone - Deutsche Bank: Yeah.

So we will be looking at it over the next couple of months and then decide pretty quickly, if we want to file one this year for rates to be effective, let's say in the winner or wait awhile and see what happens. But right now, as I said, they are earning -- they earned about 8% weather normalized. Caroline Bone - Deutsche Bank: That's not too bad. All right. I guess, then, just generally, I was wondering, if you could speak to your current thoughts on M&A and opportunities in the space?

Well, I think, what we've said in the past that if there are opportunities we like to look at them for utilities in the area or in the region kind of the broad region, but we will take a look at it and things that may come up for sale. Caroline Bone - Deutsche Bank: And do you see any, I guess, opportunities currently?

We are not going to comment anything currently on that. Caroline Bone - Deutsche Bank: Okay. all right. That's it. Thanks a lot.

Next question comes from Chris Ellinghaus. You may go ahead. Chris Ellinghaus - Williams Capital: Hey. Good morning, guys.

Hi, Chris.

Good morning. Chris Ellinghaus - Williams Capital: Good morning. Just two questions. The guidance includes $6.9 million for new gas customers? Is there anything to be taken from that, I mean, you did $7 million last year with your customer additions. Does that speak anything to margins or is that just a rounding issue?

Some of it, there were a few large customers that, it’s one customer but big margin increases.

In Berkshire.

In Berkshire territory specifically.

Okay. There we had a one very large customer that got added that brought quite good margin. Chris Ellinghaus - Williams Capital: Okay. And can you just remind us what you have discussed about the way that looks like that the FERC might come out with the interest rate adjustment and what not, what you think that impact might be?

Well, the interest rate adjustment if we look at the 9, 7, that the industry (inaudible) going forward, we probably up 100 basis points after that and when that was determined. We have to look a little more closely but it’s in that ballpark, so if they make an adjustment for that interest, it will be up in the 10:7, 10:6 and 10:7 range. So that impact, I think, we have said it in 25 basis points is about $600,000, so off of the 11:14 base rate today. So its not going to be huge impact if its comes in that area and if interest rate go up higher could be back close to where we were. So we don't know anything on the timing, Chris, I mean, that's the one thing with now day being potentially the new chair, I mean, I think it confirm, I don't know if he is going to act on it right away or not. So, chair look forward, we got the impression probably would have sooner rather than later, but so now I don't know, we are probably unsure at the moment and they may still go ahead in the interim, but (inaudible) is still the Interim Chair, or acting Chair. Chris Ellinghaus - Williams Capital: One more thing, you are saying that there was a large customer that was very impactful last year, are there any other large customers out there that might switch in the future?

Not of hand but we are, I know we are extending a main, it's going to be several miles in part of FX, but that's in Connecticut, it’s going to pick up manufacturing side, which will use a lot of gas but so that's one that in our plans for this year that will get put in. We can’t say it’s on the same order of magnitude though but that was a big school that got -- that we hooked up now. Chris Ellinghaus - Williams Capital: Thanks a lot.

So, now nothing else that big that comes to mind right now. Chris Ellinghaus - Williams Capital: Okay. I appreciate the inputs.

Thanks, Chris.

And there are no further questions at this time.

Okay. Well, I want to thank everybody for participating. If you have follow-up questions please contact Michelle Hanson or Sue Allen in our Investor Relations area. And I want to thank you all today and have a good day. Bye.

And that concludes our morning teleconference. You may disconnect your lines.

Thank you.