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NU earned $72.7 million, or $0.47 per share, in the third quarter of 2008,compared with $50.2 million, or $0.32 per share, in the third quarter of 2007.NU earned $188.9 million, or $1.21 per share, in the first nine months of2008, compared with $173.8 million, or $1.12 per share, in the first ninemonths of 2007. Nine-month 2008 results include an after-tax charge of$29.8 million, or $0.19 per share, associated with the settlement oflitigation in the first quarter of 2008. Excluding the litigation charge, NUearned $218.7 million, or $1.40 per share(1), in the first nine months of2008.

Charles W. Shivery, NU's chairman, president and chief executive officer,attributed NU's improved operating results in 2008 primarily to growth in thecompany's transmission segment, in which the company continues to investheavily to meet the regional energy needs of customers.

"Our investment focus continues to produce a more reliable New Englandenergy infrastructure and lower congestion costs for our customers, as well asmore predictable earnings and dividend growth for our investors," Shiverysaid.

2008 and 2009 earnings guidance and capital expenditure projections

NU today affirmed its 2008 consolidated earnings guidance of between $1.60per share and $1.75 per share including the litigation settlement charge, andbetween $1.80 per share(1) and $1.95 per share(1) excluding it.

NU also established its 2009 consolidated earnings guidance of between$1.80 per share and $2.00 per share. That guidance includes estimates ofbetween $1.00 per share and $1.10 per share for its distribution andgeneration segment, between $0.85 per share and $0.90 per share for itstransmission segment, between $0.00 and $0.05 for its remaining competitivebusinesses, and net expenses of approximately $0.05 per share for NU parentand other subsidiaries.

Shivery said NU's 2009 earnings guidance reflects a number of factors,including a smaller capital program in 2009 than in 2008. NU projects capitalexpenditures of approximately $900 million in 2009, compared with nearly$1.3 billion in 2008. NU's previous projection for 2009 capital expenditureswas nearly $1.07 billion. Shivery said the lower projection is due in part tothe company completing the last of its four major transmission projects insouthwest Connecticut as much as one year ahead of schedule, thereby reducingsignificantly the level of transmission capital expenditures in 2009.Additionally, Shivery said NU expects to complete the four major projects at atotal cost of approximately $1.6 billion, or $80 million below budget.

"Customers are benefiting in two ways from our success in executing oursouthwest Connecticut projects," Shivery said. "First, they have a morereliable transmission system that is also better able to import less costlyenergy from outside southwest Connecticut. Second, completing our projectsbelow budget translates directly into lower transmission-related costs for ourcustomers."

Also today, NU outlined a number of investments it will pursue over thenext five years to enhance the reliability of electric and natural gas servicein Connecticut, New Hampshire and Massachusetts, and meet a number of otherpublic policy priorities of the region. The most significant of thoseinitiatives is construction of the New England East-West Solutions (NEEWS)family of projects, which by their expected completion in 2013, willsignificantly improve the reliability of the region's high-voltagetransmission system. Siting applications for the Greater SpringfieldReliability Project were filed with state siting regulators in Connecticut andMassachusetts last month. The Greater Springfield project accounts for nearlyhalf of NU's projected $1.49 billion expenditures on NEEWS.

"These projects, some of which must undergo extensive regulatory review,will provide significant reliability and environmental benefits to NewEngland," Shivery said. "Execution of this plan will provide the opportunityto invest up to $7 billion in New England's infrastructure from 2009 through2013, investments that not only will produce significant benefits to theregion, but also provide growing earnings and cash flow."

Cash flow projections and debt maturities

Shivery said the company expects to finance an increasing amount of itscapital expenditures over the next five years through internally generatedfunds. NU's internally generated cash, after the scheduled repayment of ratereduction bonds, is projected to increase from approximately $450 million in2008 to approximately $550 million in 2009. Internally generated cash isprojected to increase to approximately $1 billion in 2013, assuming thecompany's projects are completed at forecasted levels and on schedule.

Shivery said NU's financing needs over the next several years also aremitigated by the fact that the NU system only has a single $50 million bondmaturity before 2012.

"Fortunately, our strong current liquidity position, improving cash flow,and lower 2009 capital program and debt maturities will afford us significantflexibility in the timing of our financings next year," Shivery said. He addedthat the company continues to review the timing and amount of its capitalexpenditures in light of today's challenging market conditions.

2008 results -- Transmission

NU's transmission segment earned $35.9 million in the third quarter of2008, compared with $20.0 million in the third quarter of 2007, and$103.6 million in the first nine months of 2008, compared with $57.0 millionin the first nine months of 2007. The increases in third quarter and ninemonths net income in 2008, compared with the same periods of 2007, primarilyreflect a higher level of investment in NU's transmission facilities.

Distribution and Generation

NU's distribution and generation segment earned $35.5 million in the thirdquarter of 2008, compared with $28.5 million in the third quarter of 2007, and$114.9 million in the first nine months of 2008, compared with $100.1 millionin the first nine months of 2007.

The Connecticut Light and Power Company's (CL&P) distribution segmentearned $23.5 million in the third quarter of 2008, compared with $16.7 millionin the third quarter of 2007 and $57.2 million in the first nine months of2008, compared with $44.3 million in the first nine months of 2007. The higherresults reflect the benefits of rate changes that were effective February 1,2008 and a federal tax settlement, offset by higher amortization, depreciationand interest expenses, as well as a 3.6 percent decline in year-to-date retailsales.

Public Service Company of New Hampshire's (PSNH) distribution andgeneration segment earned $10.7 million in the third quarter of 2008, comparedwith $11.0 million in the third quarter of 2007, and $32.3 million in thefirst nine months of 2008, compared with $31.7 million in the first ninemonths of 2007. PSNH's electric sales were down 1.1 percent over the firstnine months of 2008, compared with the same period of 2007, but up 0.1 percenton a weather-adjusted basis.

Western Massachusetts Electric Company's (WMECO) distribution segmentearned $3.6 million in the third quarter of 2008, compared with $4.2 millionin the third quarter of 2007, and $10.1 million in the first nine months of2008, compared with $13.6 million in the first nine months of 2007. Lower 2008results were primarily due to a 3.9 percent decline in year-to-date,kilowatt-hour sales and certain regulatory disallowances.

Overall, NU's electric sales were down 2.9 percent in the third quarter of2008, compared with the same period of 2007 and down 0.7 percent on aweather-adjusted basis. Over the first nine months of 2008, NU's electricsales were down 3.0 percent, compared with the same period of 2007, and down2.0 percent on a weather-adjusted basis.

Yankee Gas Services Company lost $2.3 million in the third quarter of2008, compared with a loss of $3.4 million in the third quarter of 2007, andearned $15.3 million in the first nine months of 2008, compared with earningsof $10.5 million in the first nine months of 2007. The improved third quarterand year-to-date results were largely due to higher revenues that resultedfrom new rates that took effect in mid-2007 and an increase in theinstallation of natural gas-fired distributed generation in Connecticut.Yankee Gas firm sales were up 13.0 percent in the third quarter of 2008,compared with the same period of 2007. Sales were essentially unchanged overthe first nine months of 2008, compared with 2007, and up 2.9 percent on aweather-adjusted basis.

Competitive businesses

NU Enterprises, Inc. (NUEI), the holding company for NU's competitivebusinesses, earned $4.6 million in the third quarter of 2008, compared with$0.7 million in the third quarter of 2007, and $8.7 million in the first ninemonths of 2008, compared with $8.1 million in the first nine months of 2007.The improved year-to-date results were primarily due to favorablemark-to-market results and improved margins on remaining wholesale marketingcontracts.

Parent and other NU subsidiaries

NU parent and affiliates had net expenses of $3.3 million in the thirdquarter of 2008, compared with net income of $1.0 million in the third quarterof 2007. Their net expenses totaled $8.5 million in the first nine months of2008, excluding the $29.8 million after-tax litigation settlement charge,compared with net income of $8.6 million in the first nine months of 2007.Lower results primarily reflect the absence of interest earned on NU parent'scash balances held in 2007 as a result of the sale of the company'scompetitive generation facilities in late 2006.

The following table reconciles 2008 and 2007 third-quarter and firstnine-month results: First Third Nine Quarter(1) Months(1) 2007 Reported EPS $0.32 $1.12 Improved transmission earnings in 2008 $0.10 $0.29 Improved distribution, generation results in 2008 $0.05 $0.09 Lower Parent/Other results in 2008, ex. litigation settlement impact ($0.03) ($0.10) Improved competitive business results in 2008 $0.03 $0.00 Consolidated results, ex. litigation settlement impact $0.47 $1.40 Impact of litigation settlement - ($0.19) 2008 Reported EPS $0.47 $1.21 Financial results for the third quarter and first nine months of 2008 and2007 are noted below.

Three months ended: (in millions, except EPS) September September Increase 2008 30, 2008 30, 2007 (Decrease) EPS(1) CL&P Distribution $23.5 $16.7 $6.8 $0.15 PSNH Distribution/Generation $10.7 $11.0 ($0.3) $0.07 WMECO Distribution $3.6 $4.2 ($0.6) $0.02 Yankee Gas ($2.3) ($3.4) $1.1 ($0.01) Total-Distribution/Generation $35.5 $28.5 $7.0 $0.23 CL&P Transmission $30.7 $16.9 $13.8 $0.20 PSNH Transmission $3.6 $2.0 $1.6 $0.02 WMECO Transmission $1.6 $1.1 $0.5 $0.01 Total-Transmission $35.9 $20.0 $15.9 $0.23 NU Parent and Other Affiliates ($3.3) $1.0 ($4.3) ($0.02) Competitive $4.6 $0.7 $3.9 $0.03 Reported Earnings $72.7 $50.2 $22.5 $0.47 Nine months ended: (in millions, except EPS) September September Increase 2008 30, 2008(1) 30, 2007 (Decrease) EPS(1) CL&P Distribution $57.2 $44.3 $12.9 $0.37 PSNH Distribution/Generation $32.3 $31.7 $0.6 $0.21 WMECO Distribution $10.1 $13.6 ($3.5) $0.06 Yankee Gas $15.3 $10.5 $4.8 $0.10 Total-Distribution/Generation $114.9 $100.1 $14.8 $0.74 CL&P Transmission $86.5 $47.3 $39.2 $0.55 PSNH Transmission $12.4 $6.5 $5.9 $0.08 WMECO Transmission $4.7 $3.2 $1.5 $0.03 Total-Transmission $103.6 $57.0 $46.6 $0.66 NU Parent and Other Affiliates, excluding litigation charge ($8.5) $8.6 ($17.1) ($0.05) Competitive $8.7 $8.1 $0.6 $0.05 Total before litigation settlement impact $218.7 $173.8 $44.9 $1.40 Litigation charge ($29.8) - ($29.8) ($0.19) Reported Earnings $188.9 $173.8 $15.1 $1.21 Retail sales data: Gwh for three months ended September September % Change % Change 30, 2008 30, 2007 Actual Weather Norm. CL&P 6,215 6,387 (2.7%) (0.6%) PSNH 2,088 2,135 (2.2%) 0.7% WMECO 984 1,043 (5.6%) (4.2%) Total NU 9,282 9,560 (2.9%) (0.7%) Gwh for nine months ended CL&P 17,501 18,145 (3.6%) (2.5%) PSNH 6,050 6,119 (1.1%) 0.1% WMECO 2,903 3,020 (3.9%) (3.1%) Total NU 26,442 27,271 (3.0%) (2.0%) Yankee Gas firm volumes in mmcf for three months ended 5,185 4,590 13.0% 11.3% Yankee Gas firm volumes in mmcf for nine months ended 27,504 27,508 - 2.9% NU has approximately 156 million common shares outstanding. It operatesNew England's largest energy delivery system, serving more than 2 millioncustomers 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 nothistorical facts. These statements are "forward-looking statements" within themeaning of the Private Securities Litigation Reform Act of 1995. In somecases, readers 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 involverisks and uncertainties that may cause actual results or outcomes to differmaterially from those included in the forward-looking statements. Factors thatmay cause actual results to differ materially from those included in theforward-looking statements include, but are not limited to, actions orinactions by local, state and federal regulatory bodies; competition andindustry restructuring; changes in economic conditions; changes in weatherpatterns; changes in laws, regulations or regulatory policy; changes in levelsor timing of capital expenditures; developments in legal or public policydoctrines; technological developments; changes in accounting standards andfinancial reporting regulations; fluctuations in the value of our remainingcompetitive electricity positions; actions of rating agencies; subsequentrecognition, derecognition and measurement of tax positions; and otherpresently unknown or unforeseen factors. Other risk factors are detailed fromtime to time in our reports to the Securities and Exchange Commission. Anyforward looking statement speaks only as of the date on which such statementis made, and we undertake no obligation to update the information contained inany forward-looking statements to reflect developments or circumstancesoccurring after the statement is made.

(1) All per share amounts in this news release are reported on a fullydiluted basis. The only common equity securities that are publicly traded arecommon shares of NU. The earnings and EPS of each segment do not represent adirect legal interest in the assets and liabilities allocated to any onesegment but rather represent a direct interest in NU's assets and liabilitiesas a whole. EPS by segment is a non-GAAP (not determined using generallyaccepted accounting principles) measure that is calculated by dividing the netincome or loss of each segment by the average fully diluted NU common sharesoutstanding for the period. Management uses this measure to provide segmentedearnings guidance and believes that this measurement is useful to investors toevaluate the actual and projected financial performance and contribution ofNU's business segments. This release also references our 2008 earnings and EPSand 2008 guidance excluding a significant charge associated with a litigationsettlement payment made to Consolidated Edison, Inc., which are non-GAAPmeasures. Due to the nature and significance of the litigation charge,management believes that this non-GAAP presentation is more representative ofour performance and provides additional and useful information to investors inanalyzing historical and future performance. These non-GAAP measures shouldnot be considered alternatives to NU consolidated net income and EPSdetermined in accordance with GAAP as an indicator of NU's operatingperformance.

Note: NU will webcast an investor presentation today at 9:15 a.m. EasternStandard Time. The webcast can be accessed through NU's website athttp://www.nu.com.

NORTHEAST UTILITIES AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) September 30, December 31, 2008 2007 (Thousands of Dollars) ASSETS Current Assets: Cash and cash equivalents $82,818 $15,104 Investments in securitizable assets - 308,182 Receivables, less provision for uncollectible accounts of $44,423 in 2008 and $25,529 in 2007 623,834 401,283 Unbilled revenues 193,685 101,860 Taxes receivable 1,102 13,850 Fuel, materials and supplies 270,375 210,850 Marketable securities - current 80,623 70,816 Derivative assets - current 44,054 105,517 Prepayments and other 77,756 58,794 1,374,247 1,286,256 Property, Plant and Equipment: Electric utility 8,378,452 7,594,606 Gas utility 1,011,311 977,290 Other 288,890 310,535 9,678,653 8,882,431 Less: Accumulated depreciation: $2,591,645 for electric and gas utility and $158,751 for other in 2008; $2,483,570 for electric and gas utility and $178,193 for other in 2007 2,750,396 2,661,763 6,928,257 6,220,668 Construction work in progress 1,012,770 1,009,277 7,941,027 7,229,945 Deferred Debits and Other Assets: Regulatory assets 2,372,197 2,057,083 Goodwill 287,591 287,591 Prepaid pension 222,484 202,512 Marketable securities - long-term 35,020 53,281 Derivative assets - long-term 266,346 298,001 Other 164,821 167,153 3,348,459 3,065,621 Total Assets $12,663,733 $11,581,822 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 CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) September 30, December 31, 2008 2007 (Thousands of Dollars) LIABILITIES AND CAPITALIZATION Current Liabilities: Notes payable to banks $442,187 $79,000 Long-term debt - current portion 116,286 154,286 Accounts payable 463,966 598,546 Accrued interest 77,062 56,592 Derivative liabilities - current 64,175 71,601 Other 172,226 246,125 1,335,902 1,206,150 Rate Reduction Bonds 743,345 917,436 Deferred Credits and Other Liabilities: Accumulated deferred income taxes 1,175,988 1,067,490 Accumulated deferred investment tax credits 26,239 28,845 Deferred contractual obligations 197,304 222,908 Regulatory liabilities 645,235 851,780 Derivative liabilities - long-term 785,908 208,461 Accrued postretirement benefits 162,910 181,507 Other 427,289 383,611 3,420,873 2,944,602 Capitalization: Long-Term Debt 4,031,432 3,483,599 Preferred Stock of Subsidiary - Non-Redeemable 116,200 116,200 Common Shareholders' Equity: Common shares, $5 par value - authorized 225,000,000 shares; 176,179,925 shares issued and 155,661,854 shares outstanding in 2008 and 175,924,694 shares issued and 155,079,770 shares outstanding in 2007 880,899 879,623 Capital surplus, paid in 1,472,550 1,465,946 Deferred contribution plan - employee stock ownership plan (18,726) (26,352) Retained earnings 1,039,984 946,792 Accumulated other comprehensive income 2,877 9,359 Treasury stock, 19,708,136 shares in 2008 and 19,705,545 shares in 2007 (361,603) (361,533) Common Shareholders' Equity 3,015,981 2,913,835 Total Capitalization 7,163,613 6,513,634 Total Liabilities and Capitalization $12,663,733 $11,581,822 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 CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2008 2007 2008 2007 (Thousands of Dollars, except share information) Operating Revenues $1,506,897 $1,450,977 $4,352,209 $4,546,267 Operating Expenses: Operation - Fuel, purchased and net interchange power 801,050 881,234 2,286,066 2,756,522 Other 232,222 195,112 755,306 678,224 Maintenance 71,287 53,854 198,892 159,681 Depreciation 69,717 64,522 205,792 191,393 Amortization of regulatory assets, net 61,386 17,007 132,186 19,795 Amortization of rate reduction bonds 53,132 52,403 154,366 151,316 Taxes other than income taxes 69,026 63,485 200,133 193,435 Total operating expenses 1,357,820 1,327,617 3,932,741 4,150,366 Operating Income 149,077 123,360 419,468 395,901 Interest Expense: Interest on long- term debt 53,111 41,706 142,333 118,153 Interest on rate reduction bonds 12,207 15,111 38,910 47,300 Other interest 5,579 4,949 18,355 15,172 Interest expense, net 70,897 61,766 199,598 180,625 Other Income, Net 17,682 10,734 41,610 36,676 Income from Continuing Operations Before Income Tax Expense 95,862 72,328 261,480 251,952 Income Tax Expense 21,783 20,756 68,381 75,182 Income from Continuing Operations Before Preferred Dividends of Subsidiary 74,079 51,572 193,099 176,770 Preferred Dividends of Subsidiary 1,390 1,390 4,169 4,169 Income from Continuing Operations 72,689 50,182 188,930 172,601 Discontinued Operations: Income from Discontinued Operations - 16 - 264 (Losses)/Gains from Sale/Disposition of Discontinued Operations - (90) - 1,927 Income Tax (Benefit)/Expense - (16) - 1,021 (Loss)/Income from Discontinued Operations - (58) - 1,170 Net Income $72,689 $50,124 $188,930 $173,771 Basic Earnings Per Common Share: Income from Continuing Operations $0.47 $0.32 $1.22 $1.12 Income from Discontinued Operations - - - - Basic Earnings Per Common Share $0.47 $0.32 $1.22 $1.12 Fully Diluted Earnings Per Common Share: Income from Continuing Operations $0.47 $0.32 $1.21 $1.11 Income from Discontinued Operations - - - 0.01 Fully Diluted Earnings Per Common Share $0.47 $0.32 $1.21 $1.12 Basic Common Shares Outstanding (weighted average) 155,607,201 154,930,930 155,456,606 154,672,270 Fully Diluted Common Shares Outstanding (weighted average) 156,097,641 155,420,239 155,904,871 155,210,704 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 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Nine Months Ended September 30, 2008 2007 (Thousands of Dollars) Operating Activities: Net income $188,930 $173,771 Adjustments to reconcile to net cash flows provided by operating activities: Bad debt expense 21,341 19,983 Depreciation 205,792 191,393 Deferred income taxes 31,125 (41,144) Pension expense, net of capitalized portion 5,956 13,776 (Deferral)/amortization of recoverable energy costs (5,898) 1,494 Amortization of rate reduction bonds 154,366 151,316 Amortization of regulatory assets, net 132,186 19,795 Regulatory (refunds and underrecoveries)/overrecoveries (97,888) 95,766 Derivative assets and liabilities (32,369) (31,641) Deferred contractual obligations (25,604) (32,760) Other non-cash adjustments (19,532) (2,561) Other sources of cash 2,907 - Other uses of cash (28,315) (33,101) Changes in current assets and liabilities: Receivables and unbilled revenues, net (10,356) 43,511 Fuel, materials and supplies (59,554) (57,281) Investments in securitizable assets (25,787) 18,137 Other current assets (26,189) (6,483) Accounts payable (58,594) (91,473) Counterparty deposits and margin special deposits 7,965 20,858 Taxes receivable/accrued 64,425 (350,529) Other current liabilities (2,801) (34,676) Net cash flows provided by operating activities 422,106 68,151 Investing Activities: Investments in property and plant (951,831) (750,231) Proceeds from sales of investment securities 195,445 196,083 Purchases of investment securities (197,453) (199,964) Rate reduction bond escrow and other deposits 465 8,436 Other investing activities 2,765 996 Net cash flows used in investing activities (950,609) (744,680) Financing Activities: Issuance of common shares 5,002 8,988 Issuance of long-term debt 660,000 655,000 Retirements of rate reduction bonds (174,091) (161,926) Increase in short-term debt 363,187 - Retirements of long-term debt (154,286) (4,877) Cash dividends on common shares (95,824) (89,745) Other financing activities (7,771) (5,169) Net cash flows provided by financing activities 596,217 402,271 Net increase/(decrease) in cash and cash equivalents 67,714 (274,258) Cash and cash equivalents - beginning of period 15,104 481,911 Cash and cash equivalents - end of period $82,818 $207,653 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.SOURCE Northeast Utilities