UIL Holdings Corporation Files SEC Form 10-Q and Revised 2003 Earnings Guidance.

Business Editors

NEW HAVEN, Conn.--(BUSINESS WIRE)--Aug. 8, 2003

UIL Holdings Corporation, (NYSE: UIL) today filed its second quarter 2003 Form 10-Q, with accompanying certifications, with the Securities and Exchange Commission. The reported revised earnings guidance for 2003 of $2.20-$2.35 per share was reduced from the previous earnings estimate of $2.45-$2.65 per share. The estimated decline is a result of lower estimated earnings from the non-utility businesses.

On July 28, 2003, UIL's Board of Directors declared the quarterly dividend, payable on October 1, 2003. Although the current earnings estimate for 2003 is less than UIL's current annual dividend of $2.88, UIL continues to have positive cash flow and expects that the annual dividend will be justified, absent adverse events that materially affect projected cash flow results.

The United Illuminating Company (UI)

UI is expected to earn $2.50-$2.60 per share in 2003, as compared to the previous estimate of $2.45-$2.60 per share. Achieving the high end of this range will be a challenge for UI under the terms of the Connecticut Department of Public Utility Control (DPUC) Rate Case decision.

Beginning January 1, 2003, UI is incurring approximately $15.5 million of additional pension and post-retirement benefits expenses not presently recovered in rates under the September 26, 2002 Rate Case decision. In response to UI's November 2002 request, in March 2003 the DPUC reopened the 2002 Rate Case docket for the limited purpose of examining these increased costs. In its decision on June 25, 2003, the DPUC denied the request for recovery of these increased expenses but noted, "that the Company may request regulatory treatment for this specific expense in the future by filing a motion to reopen." Through the second quarter of 2003, UI had not achieved the allowed return on common stock equity and therefore filed a motion to reopen the docket on July 29, 2003. A ruling from the DPUC on this motion has not been made at this time.

On August 8, 2003, UI also filed an administrative appeal from the DPUC's June 25, 2003 decision in the Connecticut Superior Court, asserting that the DPUC's decision was contrary to law and should be reversed.

United Resources, Inc. (URI)

UIL Holdings' non-utility businesses, under the wholly-owned subsidiary URI, are expected to lose $0.30-$0.45 per share in 2003, compared to the previously reported range of losses of $0.05 per share to earnings of $0.10 per share. The details of URI's earnings guidance is as follows:

Xcelecom, Inc.

Xcelecom, Inc., a specialty contracting and voice-data-video systems integration business, is expected to earn approximately $0.10-$0.20 per share, reduced from the previous earnings estimate of $0.20-$0.35 per share. The reduction is due to a project loss which was recorded in the first six months of 2003, and the continuation of reduced economic activity in Xcelecom's markets. As with other companies in the construction and systems integration industries, Xcelecom is experiencing customer postponements and cancellations of projects, a reduction in new project orders, a continuing slowdown in spending for technology by its customers, and increased competition for fewer jobs. Xcelecom has taken action to offset the negative impact of these items by working to reduce operation and overhead related costs.

American Payment Systems, Inc.

American Payment Systems, Inc. (APS), a walk-in bill payment and financial services business, is expected to earn up to $0.10 per share, compared to the previous earnings estimate of $0.15-$0.20 per share. APS had incurred significantly higher than anticipated administrative costs during the first six months of 2003. The new estimate for 2003 includes improvements in the second half of the year due to the growth of new products and services and to a reduction in operating expenses.

URI Minority Ownership Interest Investments and URI Headquarters

Losses from URI's minority ownership interest investments, including United Bridgeport Energy, Inc. (UBE) and United Capital Investments, Inc. (UCI), and from URI Headquarters' costs, are expected to be $0.45-$0.55 per share in 2003, compared to the previous estimated losses of $0.40-$0.45 per share. Unallocated costs at URI Headquarters, which reflect interest costs associated with the intercompany debt of the URI businesses, are expected to be $0.25- $0.35, compared to the previous estimate of $0.30-$0.35. The details for UBE and UCI are as follows;

United Bridgeport Energy, Inc.

The earnings estimate for UBE for 2003 is a loss of $0.15-$0.20 per share, compared to the previous earnings estimated loss of $0.10-$0.15 per share. Results at UBE continue to be affected by high gas prices reducing both margins and sales levels. The 2003 estimate also reflects significantly lower installed capability (ICAP) revenues than those recorded in 2002, as a result of the termination of a long-term contract. This is partially offset by the absence of overhauls that occurred in 2002.

United Capital Investments, Inc.

UCI is expected to lose up to $0.10 per share, a reduction from the previous breakeven estimate. The revised estimate reflects decreases in valuations of minority ownership interest investments.

UIL Holdings Corporation is the holding company for The United Illuminating Company and United Resources, Inc. UI is a New Haven-based regional distribution utility that provides electricity and energy-related services to more than 320,000 customers in municipalities in the Greater New Haven and Greater Bridgeport areas. URI is the umbrella for UIL Holdings' non-utility business units, including Xcelecom, Inc., American Payment Systems, Inc., United Capital Investments, Inc. and United Bridgeport Energy, Inc. UIL Holdings World Wide Web address is http://www.uil.com/ and the company is traded on the New York Stock Exchange under the symbol UIL.

Certain statements contained herein, regarding matters that are not historical facts, are forward-looking statements (as defined in the Private Securities Litigation Reform Act of 1995). Such forward-looking statements include risks and uncertainties; consequently, actual results may differ materially from those expressed or implied thereby, including, but not limited to, general economic conditions, legislative and regulatory changes, demand for electricity and other products and services, changes in accounting principles, policies or guidelines, and other economic, competitive, governmental, and technological factors affecting the operations, markets, products, services and prices of the company's subsidiaries. Forward-looking statements included herein speak only as of the date hereof and the company undertakes no obligation to revise or update such statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events or circumstances.