Edgar Filing: NORTHEAST UTILITIES

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2014

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number	Registrant; State of Incorporation; Address; and Telephone Number	I.R.S. Employer Identification No.

1-5324	NORTHEAST UTILITIES (a Massachusetts voluntary association) One Federal Street Building 111-4 Springfield, Massachusetts 01105 Telephone: (413) 785-5871	04-2147929

0-00404	THE CONNECTICUT LIGHT AND POWER COMPANY (a Connecticut corporation) 107 Selden Street Berlin, Connecticut 06037-1616 Telephone: (860) 665-5000	06-0303850

1-02301	NSTAR ELECTRIC COMPANY (a Massachusetts corporation) 800 Boylston Street Boston, Massachusetts 02199 Telephone: (617) 424-2000	04-1278810

1-6392	PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE (a New Hampshire corporation) Energy Park 780 North Commercial Street Manchester, New Hampshire 03101-1134 Telephone: (603) 669-4000	02-0181050

0-7624	WESTERN MASSACHUSETTS ELECTRIC COMPANY (a Massachusetts corporation) One Federal Street Building 111-4 Springfield, Massachusetts 01105 Telephone: (413) 785-5871	04-1961130

Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.

		Yes		No
		x		o

Indicate by check mark whether the registrants have submitted electronically and posted on its corporate Web sites, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

		Yes		No
		x		o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

	Large Accelerated Filer	Accelerated Filer	Non-accelerated Filer
Northeast Utilities	x	o	o
The Connecticut Light and Power Company	o	o	x
NSTAR Electric Company	o	o	x
Public Service Company of New Hampshire	o	o	x
Western Massachusetts Electric Company	o	o	x

Indicate by check mark whether the registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act):

	Yes	No

Northeast Utilities	o	x
The Connecticut Light and Power Company	o	x
NSTAR Electric Company	o	x
Public Service Company of New Hampshire	o	x
Western Massachusetts Electric Company	o	x

Indicate the number of shares outstanding of each of the issuers’ classes of common stock, as of the latest practicable date:

Company - Class of Stock		Outstanding as of April 30, 2014
Northeast Utilities Common shares, $5.00 par value		315,985,270 shares

The Connecticut Light and Power Company Common stock, $10.00 par value		6,035,205 shares

NSTAR Electric Company Common stock, $1.00 par value		100 shares

Public Service Company of New Hampshire Common stock, $1.00 par value		301 shares

Western Massachusetts Electric Company Common stock, $25.00 par value		434,653 shares

Northeast Utilities holds all of the 6,035,205 shares, 100 shares, 301 shares, and 434,653 shares of the outstanding common stock of The Connecticut Light and Power Company, NSTAR Electric Company, Public Service Company of New Hampshire and Western Massachusetts Electric Company, respectively.

NSTAR Electric Company, Public Service Company of New Hampshire and Western Massachusetts Electric Company each meet the conditions set forth in General Instructions H(1)(a) and (b) of Form 10-Q, and each is therefore filing this Form 10-Q with the reduced disclosure format specified in General Instruction H(2) of Form 10-Q.

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GLOSSARY OF TERMS

The following is a glossary of abbreviations or acronyms that are found in this report:

CURRENT OR FORMER NU COMPANIES, SEGMENTS OR INVESTMENTS:

CL&P		The Connecticut Light and Power Company
CYAPC		Connecticut Yankee Atomic Power Company
Hopkinton		Hopkinton LNG Corp., a wholly owned subsidiary of Yankee Energy System, Inc.
HWP		HWP Company, formerly the Holyoke Water Power Company
MYAPC		Maine Yankee Atomic Power Company
NGS		Northeast Generation Services Company
NPT		Northern Pass Transmission LLC
NSTAR		Parent Company of NSTAR Electric, NSTAR Gas and other subsidiaries (prior to the merger with NU)
NSTAR Electric		NSTAR Electric Company
NSTAR Electric & Gas		NSTAR Electric & Gas Corporation, a former Northeast Utilities service company (effective January 1, 2014 merged into NUSCO)
NSTAR Gas		NSTAR Gas Company
NU Enterprises		NU Enterprises, Inc., the parent company of NGS, Select Energy, Select Energy Contracting, Inc., E.S. Boulos Company and NSTAR Communications, Inc.
NU or the Company		Northeast Utilities and subsidiaries
NU parent and other companies		NU parent and other companies is comprised of NU parent, NUSCO and other subsidiaries, which primarily include NU Enterprises, HWP, RRR (a real estate subsidiary), the non-energy-related subsidiaries of Yankee (Yankee Energy Services Company and Yankee Energy Financial Services Company), and the consolidated operations of CYAPC and YAEC
NUSCO		Northeast Utilities Service Company (effective January 1, 2014 includes the operations of NSTAR Electric & Gas)
NUTV		NU Transmission Ventures, Inc., the parent company of NPT and Renewable Properties, Inc.
PSNH		Public Service Company of New Hampshire
Regulated companies		NU’s Regulated companies, comprised of the electric distribution and transmission businesses of CL&P, NSTAR Electric, PSNH, and WMECO, the natural gas distribution businesses of Yankee Gas and NSTAR Gas, the generation activities of PSNH and WMECO, and NPT
RRR		The Rocky River Realty Company
Select Energy		Select Energy, Inc.
WMECO		Western Massachusetts Electric Company
YAEC		Yankee Atomic Electric Company
Yankee		Yankee Energy System, Inc.
Yankee Companies		CYAPC, YAEC and MYAPC
Yankee Gas		Yankee Gas Services Company
REGULATORS:
DEEP		Connecticut Department of Energy and Environmental Protection
DOE		U.S. Department of Energy
DOER		Massachusetts Department of Energy Resources
DPU		Massachusetts Department of Public Utilities
EPA		U.S. Environmental Protection Agency
FERC		Federal Energy Regulatory Commission
ISO-NE		ISO New England, Inc., the New England Independent System Operator
MA DEP		Massachusetts Department of Environmental Protection
NHPUC		New Hampshire Public Utilities Commission
PURA		Connecticut Public Utilities Regulatory Authority
SEC		U.S. Securities and Exchange Commission
SJC		Supreme Judicial Court of Massachusetts
OTHER:
AFUDC		Allowance For Funds Used During Construction
AOCI		Accumulated Other Comprehensive Income/(Loss)
ARO		Asset Retirement Obligation
C&LM		Conservation and Load Management
CfD		Contract for Differences
Clean Air Project		The construction of a wet flue gas desulphurization system, known as “scrubber technology,” to reduce mercury emissions of the Merrimack coal-fired generation station in Bow, New Hampshire
CO2		Carbon dioxide
CPSL		Capital Projects Scheduling List
CTA		Competitive Transition Assessment
CWIP		Construction work in progress
EPS		Earnings Per Share
ERISA		Employee Retirement Income Security Act of 1974
ES		Default Energy Service
ESOP		Employee Stock Ownership Plan
ESPP		Employee Share Purchase Plan
FERC ALJ		FERC Administrative Law Judge
Fitch		Fitch Ratings
FMCC		Federally Mandated Congestion Charge
FTR		Financial Transmission Rights

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GAAP		Accounting principles generally accepted in the United States of America
GSC		Generation Service Charge
GSRP		Greater Springfield Reliability Project
GWh		Gigawatt-Hours
HG&E		Holyoke Gas and Electric, a municipal department of the City of Holyoke, MA
HQ		Hydro-Québec, a corporation wholly owned by the Québec government, including its divisions that produce, transmit and distribute electricity in Québec, Canada
HVDC		High voltage direct current
Hydro Renewable Energy		Hydro Renewable Energy, Inc., a wholly owned subsidiary of Hydro-Québec
IPP		Independent Power Producers
ISO-NE Tariff		ISO-NE FERC Transmission, Markets and Services Tariff
kV		Kilovolt
kW		Kilowatt (equal to one thousand watts)
kWh		Kilowatt-Hours (the basic unit of electricity energy equal to one kilowatt of power supplied for one hour)
LNG		Liquefied natural gas
LOC		Letter of Credit
LRS		Supplier of last resort service
MGP		Manufactured Gas Plant
Millstone		Millstone Nuclear Generating station, made up of Millstone 1, Millstone 2, and Millstone 3. All three units were sold in March 2001.
MMBtu		One million British thermal units
Moody’s		Moody’s Investors Services, Inc.
MW		Megawatt
MWh		Megawatt-Hours
NEEWS		New England East-West Solution
Northern Pass		The high voltage direct current transmission line project from Canada into New Hampshire
NOx		Nitrogen oxide
NU 2013 Form 10-K		The Northeast Utilities and Subsidiaries 2013 combined Annual Report on Form 10-K as filed with the SEC
PAM		Pension and PBOP Rate Adjustment Mechanism
PBOP		Postretirement Benefits Other Than Pension
PBOP Plan		Postretirement Benefits Other Than Pension Plan that provides certain retiree health care benefits, primarily medical and dental, and life insurance benefits
PCRBs		Pollution Control Revenue Bonds
Pension Plan		Single uniform noncontributory defined benefit retirement plan
PPA		Pension Protection Act
RECs		Renewable Energy Certificates
Regulatory ROE		The average cost of capital method for calculating the return on equity related to the distribution and generation business segment excluding the wholesale transmission segment
ROE		Return on Equity
RRB		Rate Reduction Bond or Rate Reduction Certificate
RSUs		Restricted share units
S&P		Standard & Poor’s Financial Services LLC
SBC		Systems Benefits Charge
SCRC		Stranded Cost Recovery Charge
SERP		Supplemental Executive Retirement Plans and non-qualified defined benefit retirement plans
Settlement Agreements		The comprehensive settlement agreements reached by NU and NSTAR with the Massachusetts Attorney General and the DOER on February 15, 2012 related to the merger of NU and NSTAR (Massachusetts settlement agreements) and the comprehensive settlement agreement reached by NU and NSTAR with both the Connecticut Attorney General and the Connecticut Office of Consumer Counsel on March 13, 2012 related to the merger of NU and NSTAR (Connecticut settlement agreement).
SIP		Simplified Incentive Plan
SO2		Sulfur dioxide
SS		Standard service
TCAM		Transmission Cost Adjustment Mechanism
TSA		Transmission Service Agreement
UI		The United Illuminating Company

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NORTHEAST UTILITIES AND SUBSIDIARIES
THE CONNECTICUT LIGHT AND POWER COMPANY
NSTAR ELECTRIC COMPANY AND SUBSIDIARY
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARY
WESTERN MASSACHUSETTS ELECTRIC COMPANY

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PART I - FINANCIAL INFORMATION

ITEM 1 - Unaudited Condensed Consolidated Financial Statements for the Following Companies:

Northeast Utilities and Subsidiaries (Unaudited)

Condensed Consolidated Balance Sheets — March 31, 2014 and December 31, 2013	1

Condensed Consolidated Statements of Income — Three Months Ended March 31, 2014 and 2013	3

Condensed Consolidated Statements of Comprehensive Income — Three Months Ended March 31, 2014 and 2013	3

Condensed Consolidated Statements of Cash Flows — Three Months Ended March 31, 2014 and 2013	4

The Connecticut Light and Power Company (Unaudited)

Condensed Balance Sheets — March 31, 2014 and December 31, 2013	5

Condensed Statements of Income — Three Months Ended March 31, 2014 and 2013	7

Condensed Statements of Comprehensive Income — Three Months Ended March 31, 2014 and 2013	7

Condensed Statements of Cash Flows — Three Months Ended March 31, 2014 and 2013	8

NSTAR Electric Company and Subsidiary (Unaudited)

Condensed Consolidated Balance Sheets — March 31, 2014 and December 31, 2013	9

Condensed Consolidated Statements of Income — Three Months Ended March 31, 2014 and 2013	11

Condensed Consolidated Statements of Cash Flows — Three Months Ended March 31, 2014 and 2013	12

Public Service Company of New Hampshire and Subsidiary (Unaudited)

Condensed Consolidated Balance Sheets — March 31, 2014 and December 31, 2013	13

Condensed Consolidated Statements of Income — Three Months Ended March 31, 2014 and 2013	15

Condensed Consolidated Statements of Comprehensive Income — Three Months Ended March 31, 2014 and 2013	15

Condensed Consolidated Statements of Cash Flows — Three Months Ended March 31, 2014 and 2013	16

Western Massachusetts Electric Company (Unaudited)

Condensed Balance Sheets — March 31, 2014 and December 31, 2013	17

Condensed Statements of Income — Three Months Ended March 31, 2014 and 2013	19

Condensed Statements of Comprehensive Income — Three Months Ended March 31, 2014 and 2013	19

Condensed Statements of Cash Flows — Three Months Ended March 31, 2014 and 2013	20

Combined Notes to Condensed Consolidated Financial Statements (Unaudited)	21

iii

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ITEM 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations for the following companies:

Northeast Utilities and Subsidiaries	38

The Connecticut Light and Power Company	49

NSTAR Electric Company and Subsidiary	51

Public Service Company of New Hampshire and Subsidiary	53

Western Massachusetts Electric Company	55

ITEM 3 — Quantitative and Qualitative Disclosures About Market Risk	57

ITEM 4 — Controls and Procedures	57

PART II — OTHER INFORMATION

ITEM 1 — Legal Proceedings	58

ITEM 1A — Risk Factors	58

ITEM 2 — Unregistered Sales of Equity Securities and Use of Proceeds	58

ITEM 6 — Exhibits	59

SIGNATURES	61

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NORTHEAST UTILITIES AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31,		December 31,
(Thousands of Dollars)	2014		2013

ASSETS

Current Assets:
Cash and Cash Equivalents	$	89,150	$	43,364
Receivables, Net	980,033		765,391
Unbilled Revenues	202,867		224,982
Fuel, Materials and Supplies	228,192		303,233
Regulatory Assets	573,028		535,791
Prepayments and Other Current Assets	292,539		214,288
Total Current Assets	2,365,809		2,087,049

Property, Plant and Equipment, Net	17,713,027		17,576,186

Deferred Debits and Other Assets:
Regulatory Assets	3,486,645		3,758,694
Goodwill	3,519,401		3,519,401
Marketable Securities	507,931		488,515
Other Long-Term Assets	504,057		365,692
Total Deferred Debits and Other Assets	8,018,034		8,132,302

Total Assets	$	28,096,870	$	27,795,537

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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NORTHEAST UTILITIES AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31,			December 31,
(Thousands of Dollars)	2014			2013

LIABILITIES AND CAPITALIZATION

Current Liabilities:
Notes Payable	$	571,147		$	1,093,000
Long-Term Debt - Current Portion	530,533			533,346
Accounts Payable	711,594			742,251
Regulatory Liabilities	263,754			204,278
Other Current Liabilities	713,116			702,776
Total Current Liabilities	2,790,144			3,275,651

Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes	4,209,969			4,029,026
Regulatory Liabilities	591,468			502,984
Derivative Liabilities	546,387			624,050
Accrued Pension, SERP and PBOP	890,019			896,844
Other Long-Term Liabilities	871,050			923,053
Total Deferred Credits and Other Liabilities	7,108,893			6,975,957

Capitalization:
Long-Term Debt	8,318,332			7,776,833

Noncontrolling Interest - Preferred Stock of Subsidiaries	155,568			155,568

Equity:
Common Shareholders’ Equity:
Common Shares	1,666,580			1,665,351
Capital Surplus, Paid In	6,185,027			6,192,765
Retained Earnings	2,237,710			2,125,980
Accumulated Other Comprehensive Loss	(44,321		)	(46,031		)
Treasury Stock	(321,063		)	(326,537		)
Common Shareholders’ Equity	9,723,933			9,611,528
Total Capitalization	18,197,833			17,543,929

Total Liabilities and Capitalization	$	28,096,870		$	27,795,537

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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NORTHEAST UTILITIES AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	For the Three Months Ended March 31,
(Thousands of Dollars, Except Share Information)	2014		2013

Operating Revenues	$	2,290,590	$	1,995,023

Operating Expenses:
Purchased Power, Fuel and Transmission	978,150		747,809
Operations and Maintenance	351,688		346,092
Depreciation	150,807		154,977
Amortization of Regulatory Assets, Net	57,898		54,049
Amortization of Rate Reduction Bonds	—		34,499
Energy Efficiency Programs	138,825		105,771
Taxes Other Than Income Taxes	145,533		132,881
Total Operating Expenses	1,822,901		1,576,078
Operating Income	467,689		418,945

Interest Expense:
Interest on Long-Term Debt	87,377		85,906
Other Interest	2,598		(9,651		)
Interest Expense	89,975		76,255
Other Income, Net	1,667		7,765
Income Before Income Tax Expense	379,381		350,455
Income Tax Expense	141,545		120,487
Net Income	237,836		229,968
Net Income Attributable to Noncontrolling Interests	1,879		1,879
Net Income Attributable to Controlling Interest	$	235,957	$	228,089

Basic Earnings Per Common Share	$	0.75	$	0.72

Diluted Earnings Per Common Share	$	0.74	$	0.72

Dividends Declared Per Common Share	$	0.39	$	0.37

Weighted Average Common Shares Outstanding:
Basic	315,534,512		315,129,782
Diluted	316,892,119		316,002,538

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

Net Income	$	237,836		$	229,968
Other Comprehensive Income, Net of Tax:
Qualified Cash Flow Hedging Instruments	509			516
Changes in Unrealized Gains/(Losses) on Other Securities	240			(181		)
Changes in Funded Status of Pension, SERP and PBOP Benefit Plans	961			1,621
Other Comprehensive Income, Net of Tax	1,710			1,956
Comprehensive Income Attributable to Noncontrolling Interests	(1,879		)	(1,879		)
Comprehensive Income Attributable to Controlling Interest	$	237,667		$	230,045

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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NORTHEAST UTILITIES AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Three Months Ended March 31,
(Thousands of Dollars)	2014			2013

Operating Activities:
Net Income	$	237,836		$	229,968
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
Depreciation	150,807			154,977
Deferred Income Taxes	137,417			168,938
Pension, SERP and PBOP Expense	24,995			53,102
Pension and PBOP Contributions	(6,622		)	(47,048		)
Regulatory Overrecoveries, Net	872			39,218
Amortization of Regulatory Assets, Net	57,898			54,049
Amortization of Rate Reduction Bonds	—			34,499
Proceeds from DOE Damages Claim	163,300			77,936
Deferred DOE Proceeds	(163,300		)	—
Other	(7,574		)	(51,106		)
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net	(182,221		)	(129,431		)
Fuel, Materials and Supplies	75,041			28,487
Taxes Receivable/Accrued, Net	(59,840		)	(21,295		)
Accounts Payable	53,905			(86,916		)
Other Current Assets and Liabilities, Net	11,282			(32,235		)
Net Cash Flows Provided by Operating Activities	493,796			473,143

Investing Activities:
Investments in Property, Plant and Equipment	(348,691		)	(388,950		)
Proceeds from Sales of Marketable Securities	128,505			98,070
Purchases of Marketable Securities	(132,605		)	(184,030		)
Other Investing Activities	1,637			27,997
Net Cash Flows Used in Investing Activities	(351,154		)	(446,913		)

Financing Activities:
Cash Dividends on Common Shares	(118,460		)	(116,431		)
Cash Dividends on Preferred Stock	(1,879		)	(1,879		)
Decrease in Short-Term Debt	(299,500		)	(228,000		)
Issuance of Long-Term Debt	400,000			400,000
Retirements of Long-Term Debt	(75,000		)	—
Retirements of Rate Reduction Bonds	—			(62,529		)
Other Financing Activities	(2,017		)	(2,322		)
Net Cash Flows Used in Financing Activities	(96,856		)	(11,161		)
Net Increase in Cash and Cash Equivalents	45,786			15,069
Cash and Cash Equivalents - Beginning of Period	43,364			45,748
Cash and Cash Equivalents - End of Period	$	89,150		$	60,817

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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THE CONNECTICUT LIGHT AND POWER COMPANY

CONDENSED BALANCE SHEETS

(Unaudited)

	March 31,		December 31,
(Thousands of Dollars)	2014		2013

ASSETS

Current Assets:
Cash	$	15,675	$	7,237
Receivables, Net	386,876		319,670
Accounts Receivable from Affiliated Companies	14,721		13,777
Unbilled Revenues	98,095		92,401
Regulatory Assets	175,926		150,943
Materials and Supplies	51,376		54,606
Prepayments and Other Current Assets	73,602		53,082
Total Current Assets	816,271		691,716

Property, Plant and Equipment, Net	6,506,245		6,451,259

Deferred Debits and Other Assets:
Regulatory Assets	1,580,609		1,663,147
Other Long-Term Assets	170,814		174,380
Total Deferred Debits and Other Assets	1,751,423		1,837,527

Total Assets	$	9,073,939	$	8,980,502

The accompanying notes are an integral part of these unaudited condensed financial statements.

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THE CONNECTICUT LIGHT AND POWER COMPANY

CONDENSED BALANCE SHEETS

(Unaudited)

	March 31,			December 31,
(Thousands of Dollars)	2014			2013

LIABILITIES AND CAPITALIZATION

Current Liabilities:
Notes Payable to NU Parent	$	351,600		$	287,300
Long-Term Debt - Current Portion	150,000			150,000
Accounts Payable	186,792			201,047
Accounts Payable to Affiliated Companies	52,760			56,531
Obligations to Third Party Suppliers	76,236			73,914
Regulatory Liabilities	107,284			93,961
Derivative Liabilities	92,040			92,233
Other Current Liabilities	154,312			134,716
Total Current Liabilities	1,171,024			1,089,702

Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes	1,579,498			1,510,586
Regulatory Liabilities	90,053			93,757
Derivative Liabilities	539,444			617,072
Accrued Pension, SERP and PBOP	94,820			95,895
Other Long-Term Liabilities	152,920			163,588
Total Deferred Credits and Other Liabilities	2,456,735			2,480,898

Capitalization:
Long-Term Debt	2,591,405			2,591,208

Preferred Stock Not Subject to Mandatory Redemption	116,200			116,200

Common Stockholder’s Equity:
Common Stock	60,352			60,352
Capital Surplus, Paid In	1,682,900			1,682,047
Retained Earnings	996,591			961,482
Accumulated Other Comprehensive Loss	(1,268		)	(1,387		)
Common Stockholder’s Equity	2,738,575			2,702,494
Total Capitalization	5,446,180			5,409,902

Total Liabilities and Capitalization	$	9,073,939		$	8,980,502

The accompanying notes are an integral part of these unaudited condensed financial statements.

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THE CONNECTICUT LIGHT AND POWER COMPANY

CONDENSED STATEMENTS OF INCOME

(Unaudited)

	For the Three Months Ended March 31,
(Thousands of Dollars)	2014		2013

Operating Revenues	$	734,614	$	624,097

Operating Expenses:
Purchased Power and Transmission	281,381		229,259
Operations and Maintenance	109,514		108,895
Depreciation	46,130		42,448
Amortization of Regulatory Assets, Net	29,931		10,787
Energy Efficiency Programs	42,694		22,813
Taxes Other Than Income Taxes	66,953		60,192
Total Operating Expenses	576,603		474,394
Operating Income	158,011		149,703

Interest Expense:
Interest on Long-Term Debt	32,908		32,635
Other Interest	1,335		(2,941		)
Interest Expense	34,243		29,694
Other Income, Net	1,072		4,187
Income Before Income Tax Expense	124,840		124,196
Income Tax Expense	45,541		39,188
Net Income	$	79,299	$	85,008

The accompanying notes are an integral part of these unaudited condensed financial statements.

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

Net Income	$	79,299	$	85,008
Other Comprehensive Income, Net of Tax:
Qualified Cash Flow Hedging Instruments	111		111
Changes in Unrealized Gains/(Losses) on Other Securities	8		(6		)
Other Comprehensive Income, Net of Tax	119		105
Comprehensive Income	$	79,418	$	85,113

The accompanying notes are an integral part of these unaudited condensed financial statements.

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THE CONNECTICUT LIGHT AND POWER COMPANY

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Three Months Ended March 31,
(Thousands of Dollars)	2014			2013

Operating Activities:
Net Income	$	79,299		$	85,008
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
Depreciation	46,130			42,448
Deferred Income Taxes	59,334			65,475
Pension, SERP and PBOP Expense, Net of PBOP Contributions	4,086			8,183
Regulatory Underrecoveries, Net	(40,399		)	(15,835		)
Amortization of Regulatory Assets, Net	29,931			10,787
Other	4,536			3,653
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net	(82,833		)	(32,041		)
Taxes Receivable/Accrued, Net	7,015			(12,777		)
Accounts Payable	(2,872		)	(106,140		)
Other Current Assets and Liabilities, Net	(8,730		)	(22,340		)
Net Cash Flows Provided by Operating Activities	95,497			26,421

Investing Activities:
Investments in Property, Plant and Equipment	(107,993		)	(89,360		)
Other Investing Activities	1,027			447
Net Cash Flows Used in Investing Activities	(106,966		)	(88,913		)

Financing Activities:
Cash Dividends on Common Stock	(42,800		)	(38,000		)
Cash Dividends on Preferred Stock	(1,390		)	(1,390		)
Issuance of Long Term Debt	—			400,000
Increase/(Decrease) in Notes Payable to NU Parent	64,300			(194,700		)
Decrease in Short-Term Debt	—			(89,000		)
Other Financing Activities	(203		)	(6,112		)
Net Cash Flows Provided by Financing Activities	19,907			70,798
Net Increase in Cash	8,438			8,306
Cash - Beginning of Period	7,237			1
Cash - End of Period	$	15,675		$	8,307

The accompanying notes are an integral part of these unaudited condensed financial statements.

Table of Contents

NSTAR ELECTRIC COMPANY AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31,		December 31,
(Thousands of Dollars)	2014		2013

ASSETS

Current Assets:
Cash and Cash Equivalents	$	42,035	$	8,021
Receivables, Net	231,082		209,711
Accounts Receivable from Affiliated Companies	123,953		27,264
Unbilled Revenues	28,249		41,368
Materials and Supplies	47,843		44,236
Regulatory Assets	222,598		204,144
Prepayments and Other Current Assets	5,686		36,710
Total Current Assets	701,446		571,454

Property, Plant and Equipment, Net	5,069,203		5,043,887

Deferred Debits and Other Assets:
Regulatory Assets	1,041,925		1,235,156
Other Long-Term Assets	65,983		60,624
Total Deferred Debits and Other Assets	1,107,908		1,295,780

Total Assets	$	6,878,557	$	6,911,121

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

NSTAR ELECTRIC COMPANY AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31,		December 31,
(Thousands of Dollars)	2014		2013

LIABILITIES AND CAPITALIZATION

Current Liabilities:
Notes Payable	$	—	$	103,500
Long-Term Debt - Current Portion	301,650		301,650
Accounts Payable	264,834		207,559
Accounts Payable to Affiliated Companies	42,879		75,707
Accumulated Deferred Income Taxes	55,763		50,128
Regulatory Liabilities	73,596		53,958
Other Current Liabilities	140,146		118,410
Total Current Liabilities	878,868		910,912

Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes	1,400,532		1,466,835
Regulatory Liabilities	257,101		253,108
Accrued Pension, SERP and PBOP	150,938		118,010
Payable to Affiliated Companies	—		64,172
Other Long-Term Liabilities	132,679		142,214
Total Deferred Credits and Other Liabilities	1,941,250		2,044,339

Capitalization:
Long-Term Debt	1,797,389		1,499,417

Preferred Stock Not Subject to Mandatory Redemption	43,000		43,000

Common Stockholder’s Equity:
Common Stock	—		—
Capital Surplus, Paid In	992,625		992,625
Retained Earnings	1,225,425		1,420,828
Common Stockholder’s Equity	2,218,050		2,413,453
Total Capitalization	4,058,439		3,955,870

Total Liabilities and Capitalization	$	6,878,557	$	6,911,121

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

NSTAR ELECTRIC COMPANY AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	For the Three Months Ended March 31,
(Thousands of Dollars)	2014			2013

Operating Revenues	$	666,188		$	592,257

Operating Expenses:
Purchased Power and Transmission	319,082			214,053
Operations and Maintenance	85,924			92,301
Depreciation	46,626			45,441
Amortization of Regulatory Assets, Net	15,664			46,994
Amortization of Rate Reduction Bonds	—			15,054
Energy Efficiency Programs	48,329			51,703
Taxes Other Than Income Taxes	32,151			32,174
Total Operating Expenses	547,776			497,720
Operating Income	118,412			94,537

Interest Expense:
Interest on Long-Term Debt	20,756			19,991
Other Interest	304			(4,068		)
Interest Expense	21,060			15,923
Other Income/(Loss), Net	(31		)	773
Income Before Income Tax Expense	97,321			79,387
Income Tax Expense	39,234			31,265
Net Income	$	58,087		$	48,122

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

NSTAR ELECTRIC COMPANY AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Three Months Ended March 31,
(Thousands of Dollars)	2014			2013

Operating Activities, SERP:
Net Income	$	58,087		$	48,122
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
Depreciation	46,626			45,441
Deferred Income Taxes	1,585			26,571
Pension, SERP and PBOP Expense, Net of Contributions	(4,908		)	6,420
Regulatory Underrecoveries, Net	6,423			(2,951		)
Amortization of Regulatory Assets, Net	15,664			46,994
Amortization of Rate Reduction Bonds	—			15,054
Bad Debt Expense	6,096			5,523
Other	(15,538		)	(23,969		)
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net	(14,348		)	(31,455		)
Materials and Supplies	(3,606		)	(7,060		)
Taxes Receivable/Accrued, Net	21,504			(22,501		)
Accounts Payable	86,309			1,867
Accounts Receivable from/Payable to Affiliates, Net	(43,654		)	(37,547		)
Other Current Assets and Liabilities, Net	31,112			18,916
Net Cash Flows Provided by Operating Activities	191,352			89,425

Investing Activities:
Investments in Property, Plant and Equipment	(94,957		)	(107,573		)
(Increase)/Decrease in Special Deposits	(530		)	33,631
Other Investing Activities	41			(86		)
Net Cash Flows Used in Investing Activities	(95,446		)	(74,028		)

Financing Activities:
Cash Dividends on Common Stock	(253,000		)	—
Cash Dividends on Preferred Stock	(490		)	(490		)
(Decrease)/Increase in Notes Payable	(103,500		)	32,000
Issuance of Long-Term Debt	300,000			—
Retirements of Rate Reduction Bonds	—			(43,493		)
Other Financing Activities	(4,902		)	—
Net Cash Flows Used in Financing Activities	(61,892		)	(11,983		)
Net Increase in Cash and Cash Equivalents	34,014			3,414
Cash and Cash Equivalents - Beginning of Period	8,021			13,695
Cash and Cash Equivalents - End of Period	$	42,035		$	17,109

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31,		December 31,
(Thousands of Dollars)	2014		2013

ASSETS

Current Assets:
Cash	$	4,284	$	130
Receivables, Net	88,143		76,331
Accounts Receivable from Affiliated Companies	479		90
Unbilled Revenues	38,327		38,344
Taxes Receivable	20,968		2,180
Fuel, Materials and Supplies	94,410		128,736
Regulatory Assets	83,832		92,194
Prepayments and Other Current Assets	7,270		21,920
Total Current Assets	337,713		359,925

Property, Plant and Equipment, Net	2,486,440		2,467,556

Deferred Debits and Other Assets:
Regulatory Assets	210,702		219,346
Other Long-Term Assets	40,621		39,891
Total Deferred Debits and Other Assets	251,323		259,237

Total Assets	$	3,075,476	$	3,086,718

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31,			December 31,
(Thousands of Dollars)	2014			2013

LIABILITIES AND CAPITALIZATION

Current Liabilities:
Notes Payable to NU Parent	$	39,900		$	86,500
Long-Term Debt - Current Portion	50,000			50,000
Accounts Payable	59,847			82,920
Accounts Payable to Affiliated Companies	28,009			22,040
Regulatory Liabilities	27,333			20,643
Accumulated Deferred Income Taxes	22,811			28,596
Other Current Liabilities	46,880			51,729
Total Current Liabilities	274,780			342,428

Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes	539,255			500,166
Regulatory Liabilities	51,769			51,723
Accrued SERP and PBOP	15,321			15,272
Other Long-Term Liabilities	46,559			46,247
Total Deferred Credits and Other Liabilities	652,904			613,408

Capitalization:
Long-Term Debt	999,081			999,006

Common Stockholder’s Equity:
Common Stock	—			—
Capital Surplus, Paid In	702,304			701,911
Retained Earnings	454,653			438,515
Accumulated Other Comprehensive Loss	(8,246		)	(8,550		)
Common Stockholder’s Equity	1,148,711			1,131,876
Total Capitalization	2,147,792			2,130,882

Total Liabilities and Capitalization	$	3,075,476		$	3,086,718

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	For the Three Months Ended March 31,
(Thousands of Dollars)	2014		2013

Operating Revenues	$	299,833	$	273,829

Operating Expenses:
Purchased Power, Fuel and Transmission	115,246		101,024
Operations and Maintenance	62,212		59,729
Depreciation	24,215		22,568
Amortization of Regulatory Assets/(Liabilities), Net	12,562		(3,051		)
Amortization of Rate Reduction Bonds	—		14,756
Energy Efficiency Programs	3,839		3,669
Taxes Other Than Income Taxes	17,715		17,016
Total Operating Expenses	235,789		215,711
Operating Income	64,044		58,118

Interest Expense:
Interest on Long-Term Debt	11,526		11,881
Other Interest	445		287
Interest Expense	11,971		12,168
Other Income, Net	265		1,030
Income Before Income Tax Expense	52,338		46,980
Income Tax Expense	19,700		17,984
Net Income	$	32,638	$	28,996

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

Net Income	$	32,638	$	28,996
Other Comprehensive Income, Net of Tax:
Qualified Cash Flow Hedging Instruments	290		291
Changes in Unrealized Gains/(Losses) on Other Securities	14		(11		)
Changes in Funded Status of Pension, SERP and PBOP Benefit Plans	—		(3		)
Other Comprehensive Income, Net of Tax	304		277
Comprehensive Income	$	32,942	$	29,273

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Three Months Ended March 31,
(Thousands of Dollars)	2014			2013

Operating Activities:
Net Income	$	32,638		$	28,996
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
Depreciation	24,215			22,568
Deferred Income Taxes	33,667			10,143
Pension, SERP and PBOP Expense	1,961			8,022
Pension and PBOP Contributions	(30		)	(35,146		)
Regulatory Over/(Under) Recoveries, Net	6,827			(799		)
Amortization of Regulatory Assets/(Liabilities), Net	12,562			(3,051		)
Amortization of Rate Reduction Bonds	—			14,756
Other	2,729			(1,505		)
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net	(14,268		)	(13,889		)
Fuel, Materials and Supplies	34,326			562
Taxes Receivable/Accrued, Net	(30,254		)	23,137
Accounts Payable	3,403			31,257
Other Current Assets and Liabilities, Net	21,505			22,152
Net Cash Flows Provided by Operating Activities	129,281			107,203

Investing Activities:
Investments in Property, Plant and Equipment	(61,864		)	(64,956		)
Other Investing Activities	(76		)	(17		)
Net Cash Flows Used in Investing Activities	(61,940		)	(64,973		)

Financing Activities:
Cash Dividends on Common Stock	(16,500		)	(17,000		)
Decrease in Notes Payable to NU Parent	(46,600		)	(9,900		)
Retirements of Rate Reduction Bonds	—			(14,320		)
Other Financing Activities	(87		)	(127		)
Net Cash Flows Used in Financing Activities	(63,187		)	(41,347		)
Net Increase in Cash	4,154			883
Cash - Beginning of Period	130			2,493
Cash - End of Period	$	4,284		$	3,376

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

WESTERN MASSACHUSETTS ELECTRIC COMPANY

CONDENSED BALANCE SHEETS

(Unaudited)

	March 31,		December 31,
(Thousands of Dollars)	2014		2013

ASSETS

Current Assets:
Cash	$	4,227	$	—
Receivables, Net	54,844		49,018
Accounts Receivable from Affiliated Companies	5,996		47,607
Unbilled Revenues	16,531		16,562
Taxes Receivable	12,845		432
Regulatory Assets	49,578		43,024
Marketable Securities	19,194		26,628
Prepayments and Other Current Assets	9,663		10,479
Total Current Assets	172,878		193,750

Property, Plant and Equipment, Net	1,398,810		1,381,060

Deferred Debits and Other Assets:
Regulatory Assets	132,181		146,088
Marketable Securities	38,710		31,243