Edgar Filing: EVERSOURCE ENERGY

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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, 2016
	or
¨	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	EVERSOURCE ENERGY (a Massachusetts voluntary association) 300 Cadwell Drive Springfield, Massachusetts 01104 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) 300 Cadwell Drive Springfield, Massachusetts 01104 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	¨

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 registrants were required to submit and post such files).


	Yes	No

	x	¨

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

Eversource Energy	x	¨	¨
The Connecticut Light and Power Company	¨	¨	x
NSTAR Electric Company	¨	¨	x
Public Service Company of New Hampshire	¨	¨	x
Western Massachusetts Electric Company	¨	¨	x

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


	Yes	No

Eversource Energy	¨	x
The Connecticut Light and Power Company	¨	x
NSTAR Electric Company	¨	x
Public Service Company of New Hampshire	¨	x
Western Massachusetts Electric Company	¨	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, 2016
Eversource Energy Common shares, $5.00 par value	317,207,036 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

Eversource Energy 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.

Eversource Energy, The Connecticut Light and Power Company, NSTAR Electric Company, Public Service Company of New Hampshire, and Western Massachusetts Electric Company each separately file this combined Form 10-Q. Information contained herein relating to any individual registrant is filed by such registrant on its own behalf. Each registrant makes no representation as to information relating to the other registrants.

GLOSSARY OF TERMS


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


Current or former Eversource Energy companies, segments or investments:
Eversource, ES or the Company	Eversource Energy and subsidiaries
Eversource parent or ES parent	Eversource Energy, a public utility holding company
ES parent and other companies	ES parent and other companies are comprised of Eversource parent, Eversource Service and other subsidiaries, which primarily includes our unregulated businesses, HWP Company, The Rocky River Realty Company (a real estate subsidiary), and the consolidated operations of CYAPC and YAEC
CL&P	The Connecticut Light and Power Company
NSTAR Electric	NSTAR Electric Company
PSNH	Public Service Company of New Hampshire
WMECO	Western Massachusetts Electric Company
NSTAR Gas	NSTAR Gas Company
Yankee Gas	Yankee Gas Services Company
NPT	Northern Pass Transmission LLC
Eversource Service	Eversource Energy Service Company
CYAPC	Connecticut Yankee Atomic Power Company
MYAPC	Maine Yankee Atomic Power Company
YAEC	Yankee Atomic Electric Company
Yankee Companies	CYAPC, YAEC and MYAPC
Regulated companies	The Eversource Regulated companies are 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

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 Terms and Abbreviations:
ADIT	Accumulated Deferred Income Taxes
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
EDC	Electric distribution company
EPS	Earnings Per Share
ERISA	Employee Retirement Income Security Act of 1974
ESOP	Employee Stock Ownership Plan
ESPP	Employee Share Purchase Plan
Eversource 2015 Form 10-K	The Eversource Energy and Subsidiaries 2015 combined Annual Report on Form 10-K as filed with the SEC
FERC ALJ	FERC Administrative Law Judge
Fitch	Fitch Ratings
FMCC	Federally Mandated Congestion Charge
FTR	Financial Transmission Rights
GAAP	Accounting principles generally accepted in the United States of America
GSC	Generation Service Charge
GSRP	Greater Springfield Reliability Project
GWh	Gigawatt-Hours


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
kVa	Kilovolt-ampere
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)
LBR	Lost Base Revenue
LNG	Liquefied natural gas
LRS	Supplier of last resort service
MGP	Manufactured Gas Plant
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
NO_x	Nitrogen oxides
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 benefits, primarily medical, dental and life insurance
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
RNS	Regional Network Service
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
SIP	Simplified Incentive Plan
SO₂	Sulfur dioxide
SS	Standard service
TCAM	Transmission Cost Adjustment Mechanism
TSA	Transmission Service Agreement
UI	The United Illuminating Company

EVERSOURCE ENERGY 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

TABLE OF CONTENTS


		Page
PART I – FINANCIAL INFORMATION

ITEM 1.	Financial Statements (Unaudited)

	Eversource Energy and Subsidiaries (Unaudited)
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Income	2
	Condensed Consolidated Statements of Comprehensive Income	2
	Condensed Consolidated Statements of Cash Flows	3

	The Connecticut Light and Power Company (Unaudited)
	Condensed Balance Sheets	4
	Condensed Statements of Income	5
	Condensed Statements of Comprehensive Income	5
	Condensed Statements of Cash Flows	6

	NSTAR Electric Company and Subsidiary (Unaudited)
	Condensed Consolidated Balance Sheets	7
	Condensed Consolidated Statements of Income	8
	Condensed Consolidated Statements of Comprehensive Income	8
	Condensed Consolidated Statements of Cash Flows	9

	Public Service Company of New Hampshire and Subsidiary (Unaudited)
	Condensed Consolidated Balance Sheets	10
	Condensed Consolidated Statements of Income	11
	Condensed Consolidated Statements of Comprehensive Income	11
	Condensed Consolidated Statements of Cash Flows	12

	Western Massachusetts Electric Company (Unaudited)
	Condensed Balance Sheets	13
	Condensed Statements of Income	14
	Condensed Statements of Comprehensive Income	14
	Condensed Statements of Cash Flows	15

	Combined Notes to Condensed Consolidated Financial Statements (Unaudited)	16

ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations

	Eversource Energy and Subsidiaries	31
	The Connecticut Light and Power Company	42
	NSTAR Electric Company and Subsidiary	44
	Public Service Company of New Hampshire and Subsidiary	46
	Western Massachusetts Electric Company	48

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	50

ITEM 4.	Controls and Procedures	50

iii


PART II – OTHER INFORMATION

ITEM 1.	Legal Proceedings	51

ITEM 1A.	Risk Factors	51

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	51

ITEM 6.	Exhibits	52

SIGNATURES		54


EVERSOURCE ENERGY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)


			March 31,		December 31,
(Thousands of Dollars)			2016		2015

ASSETS

Current Assets:
	Cash and Cash Equivalents		$	50,966	$	23,947
	Receivables, Net			890,977		775,480
	Unbilled Revenues			192,084		202,647
	Taxes Receivable			44,171		305,359
	Fuel, Materials, Supplies and Inventory			359,225		336,476
	Regulatory Assets			919,311		845,843
	Prepayments and Other Current Assets			133,813		129,034
Total Current Assets				2,590,547		2,618,786

Property, Plant and Equipment, Net				20,096,693		19,892,441

Deferred Debits and Other Assets:
	Regulatory Assets			3,703,486		3,737,960
	Goodwill			3,519,401		3,519,401
	Marketable Securities			502,948		516,478
	Other Long-Term Assets			299,400		295,243
Total Deferred Debits and Other Assets				8,025,235		8,069,082

Total Assets			$	30,712,475	$	30,580,309

LIABILITIES AND CAPITALIZATION

Current Liabilities:
	Notes Payable		$	769,500	$	1,160,953
	Long-Term Debt - Current Portion			378,883		228,883
	Accounts Payable			646,440		813,646
	Obligations to Third Party Suppliers			135,978		128,564
	Renewable Portfolio Standards Compliance Obligations			170,021		130,354
	Regulatory Liabilities			111,414		107,759
	Other Current Liabilities			381,678		419,631
Total Current Liabilities				2,593,914		2,989,790

Deferred Credits and Other Liabilities:
	Accumulated Deferred Income Taxes			5,284,255		5,147,678
	Regulatory Liabilities			526,452		513,595
	Derivative Liabilities			344,458		337,102
	Accrued Pension, SERP and PBOP			1,355,422		1,407,288
	Other Long-Term Liabilities			869,220		871,499
Total Deferred Credits and Other Liabilities				8,379,807		8,277,162

Capitalization:
	Long-Term Debt			9,144,687		8,805,574

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

	Equity:
	Common Shareholders' Equity:
		Common Shares		1,669,392		1,669,313
		Capital Surplus, Paid In		6,243,908		6,262,368
		Retained Earnings		2,900,351		2,797,355
		Accumulated Other Comprehensive Loss		(65,175)		(66,844)
		Treasury Stock		(309,977)		(309,977)
	Common Shareholders' Equity			10,438,499		10,352,215
Total Capitalization				19,738,754		19,313,357

Total Liabilities and Capitalization			$	30,712,475	$	30,580,309

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


EVERSOURCE ENERGY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)


			For the Three Months Ended March 31,
(Thousands of Dollars, Except Share Information)			2016		2015

Operating Revenues			$	2,055,635	$	2,513,431

Operating Expenses:
	Purchased Power, Fuel and Transmission			754,859		1,162,049
	Operations and Maintenance			320,136		333,382
	Depreciation			173,986		163,837
	Amortization of Regulatory Assets, Net			20,997		60,604
	Energy Efficiency Programs			137,175		146,603
	Taxes Other Than Income Taxes			159,946		149,481
		Total Operating Expenses		1,567,099		2,015,956
Operating Income				488,536		497,475
Interest Expense				98,212		94,843
Other Income, Net				2,011		5,727
Income Before Income Tax Expense				392,335		408,359
Income Tax Expense				146,302		153,226
Net Income				246,033		255,133
Net Income Attributable to Noncontrolling Interests				1,880		1,879
Net Income Attributable to Common Shareholders			$	244,153	$	253,254

Basic and Diluted Earnings Per Common Share			$	0.77	$	0.80

Dividends Declared Per Common Share			$	0.45	$	0.42

Weighted Average Common Shares Outstanding:
	Basic			317,517,141		317,090,841
	Diluted			318,481,050		318,491,188


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




CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

Net Income			$	246,033	$	255,133
Other Comprehensive Income, Net of Tax:
	Qualified Cash Flow Hedging Instruments			534		509
	Changes in Unrealized Gains on Marketable Securities			264		132
	Changes in Funded Status of Pension, SERP and PBOP Benefit Plans			871		954
Other Comprehensive Income, Net of Tax				1,669		1,595
Comprehensive Income Attributable to Noncontrolling Interests				(1,880)		(1,879)
Comprehensive Income Attributable to Common Shareholders			$	245,822	$	254,849


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


EVERSOURCE ENERGY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)



			For the Three Months Ended March 31,
(Thousands of Dollars)			2016		2015

Operating Activities:
	Net Income		$	246,033	$	255,133
	Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
		Depreciation		173,986		163,837
		Deferred Income Taxes		141,132		148,193
		Pension, SERP and PBOP Expense		11,583		26,495
		Pension and PBOP Contributions		(30,383)		(26,659)
		Regulatory Underrecoveries, Net		(82,772)		(110,748)
		Amortization of Regulatory Assets, Net		20,997		60,604
		Other		(16,532)		(11,891)
	Changes in Current Assets and Liabilities:
		Receivables and Unbilled Revenues, Net		(133,965)		(328,299)
		Fuel, Materials, Supplies and Inventory		(22,748)		68,172
		Taxes Receivable/Accrued, Net		279,106		272,021
		Accounts Payable		(76,317)		(59,496)
		Other Current Assets and Liabilities, Net		(10,156)		34,179
Net Cash Flows Provided by Operating Activities				499,964		491,541

Investing Activities:
	Investments in Property, Plant and Equipment			(431,472)		(362,586)
	Proceeds from Sales of Marketable Securities			136,805		114,730
	Purchases of Marketable Securities			(135,427)		(116,735)
	Other Investing Activities			5,494		66
Net Cash Flows Used in Investing Activities				(424,600)		(364,525)

Financing Activities:
	Cash Dividends on Common Shares			(141,157)		(132,433)
	Cash Dividends on Preferred Stock			(1,880)		(1,879)
	Decrease in Notes Payable			(391,453)		(399,575)
	Issuance of Long-Term Debt			500,000		450,000
	Other Financing Activities			(13,855)		(10,805)
Net Cash Flows Used in Financing Activities				(48,345)		(94,692)
Net Increase in Cash and Cash Equivalents				27,019		32,324
Cash and Cash Equivalents - Beginning of Period				23,947		38,703
Cash and Cash Equivalents - End of Period			$	50,966	$	71,027

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


THE CONNECTICUT LIGHT AND POWER COMPANY
CONDENSED BALANCE SHEETS
(Unaudited)

			March 31,		December 31,
(Thousands of Dollars)			2016		2015

ASSETS

Current Assets:
	Cash		$	16,482	$	1,057
	Receivables, Net			379,758		352,536
	Accounts Receivable from Affiliated Companies			21,377		21,214
	Unbilled Revenues			93,853		99,879
	Taxes Receivable			4,650		137,643
	Regulatory Assets			324,559		268,318
	Materials and Supplies			48,083		43,124
	Prepayments and Other Current Assets			49,753		32,234
Total Current Assets				938,515		956,005

Property, Plant and Equipment, Net				7,231,214		7,156,809

Deferred Debits and Other Assets:
	Regulatory Assets			1,379,484		1,369,028
	Other Long-Term Assets			113,017		111,115
Total Deferred Debits and Other Assets				1,492,501		1,480,143

Total Assets			$	9,662,230	$	9,592,957

LIABILITIES AND CAPITALIZATION

Current Liabilities:
	Notes Payable to Eversource Parent		$	115,500	$	277,400
	Long-Term Debt - Current Portion			150,000		-
	Accounts Payable			246,475		267,764
	Accounts Payable to Affiliated Companies			59,275		66,456
	Obligations to Third Party Suppliers			61,674		60,746
	Regulatory Liabilities			62,999		61,155
	Derivative Liabilities			92,953		91,820
	Other Current Liabilities			118,697		110,631
Total Current Liabilities				907,573		935,972

Deferred Credits and Other Liabilities:
	Accumulated Deferred Income Taxes			1,881,725		1,820,865
	Regulatory Liabilities			77,744		74,830
	Derivative Liabilities			342,698		336,189
	Accrued Pension, SERP and PBOP			267,706		271,056
	Other Long-Term Liabilities			131,953		133,446
Total Deferred Credits and Other Liabilities				2,701,826		2,636,386

Capitalization:
	Long-Term Debt			2,614,324		2,763,682

	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		2,056,376		1,910,663
		Retained Earnings		1,206,035		1,170,278
		Accumulated Other Comprehensive Loss		(456)		(576)
	Common Stockholder's Equity			3,322,307		3,140,717
Total Capitalization				6,052,831		6,020,599

Total Liabilities and Capitalization			$	9,662,230	$	9,592,957

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


THE CONNECTICUT LIGHT AND POWER COMPANY
CONDENSED STATEMENTS OF INCOME
(Unaudited)


			For the Three Months Ended March 31,
(Thousands of Dollars)			2016		2015

Operating Revenues			$	735,317	$	804,917

Operating Expenses:
	Purchased Power and Transmission			272,600		333,619
	Operations and Maintenance			110,843		117,357
	Depreciation			56,969		52,902
	Amortization of Regulatory Assets, Net			9,878		48,306
	Energy Efficiency Programs			38,090		42,807
	Taxes Other Than Income Taxes			75,465		68,080
		Total Operating Expenses		563,845		663,071
Operating Income				171,472		141,846
Interest Expense				36,498		36,624
Other Income, Net				936		2,159
Income Before Income Tax Expense				135,910		107,381
Income Tax Expense				48,863		38,147
Net Income			$	87,047	$	69,234



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





CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

Net Income			$	87,047	$	69,234
Other Comprehensive Income, Net of Tax:
	Qualified Cash Flow Hedging Instruments			111		111
	Changes in Unrealized Gains on Marketable Securities			9		4
Other Comprehensive Income, Net of Tax				120		115
Comprehensive Income			$	87,167	$	69,349



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


THE CONNECTICUT LIGHT AND POWER COMPANY
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)


			For the Three Months Ended March 31,
(Thousands of Dollars)			2016		2015

Operating Activities:
	Net Income		$	87,047	$	69,234
	Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
	Depreciation			56,969		52,902
		Deferred Income Taxes		58,363		19,340
		Regulatory Underrecoveries, Net		(70,195)		(67,393)
		Amortization of Regulatory Assets, Net		9,878		48,306
		Other		2,216		6,205
	Changes in Current Assets and Liabilities:
		Receivables and Unbilled Revenues, Net		(37,501)		(124,969)
		Taxes Receivable/Accrued, Net		141,951		158,163
		Accounts Payable		(5,040)		(20,194)
		Other Current Assets and Liabilities, Net		(22,533)		(7,727)
Net Cash Flows Provided by Operating Activities				221,155		133,867

Investing Activities:
	Investments in Property, Plant and Equipment			(147,131)		(127,631)
	Proceeds from the Sale of Property, Plant and Equipment			9,047		-
	Other Investing Activities			49		1,981
Net Cash Flows Used in Investing Activities				(138,035)		(125,650)

Financing Activities:
	Cash Dividends on Common Stock			(49,900)		(49,000)
	Cash Dividends on Preferred Stock			(1,390)		(1,390)
	(Decrease)/Increase in Notes Payable to Eversource Parent			(161,900)		56,700
	Capital Contribution from Eversource Parent			145,700		-
	Other Financing Activities			(205)		(65)
Net Cash Flows (Used in)/Provided by Financing Activities				(67,695)		6,245
Net Increase in Cash				15,425		14,462
Cash - Beginning of Period				1,057		2,356
Cash - End of Period			$	16,482	$	16,818

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


NSTAR ELECTRIC COMPANY AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)


			March 31,		December 31,
(Thousands of Dollars)			2016		2015

ASSETS

Current Assets:
	Cash and Cash Equivalents		$	3,504	$	3,346
	Receivables, Net			256,760		229,936
	Accounts Receivable from Affiliated Companies			2,990		4,034
	Unbilled Revenues			28,596		29,464
	Taxes Receivable			33,234		70,236
	Materials, Supplies and Inventory			115,809		75,487
	Regulatory Assets			361,307		348,408
	Prepayments and Other Current Assets			13,957		11,448
Total Current Assets				816,157		772,359

Property, Plant and Equipment, Net				5,700,068		5,655,458

Deferred Debits and Other Assets:
	Regulatory Assets			1,108,037		1,112,977
	Other Long-Term Assets			58,323		62,467
Total Deferred Debits and Other Assets				1,166,360		1,175,444

Total Assets			$	7,682,585	$	7,603,261

LIABILITIES AND CAPITALIZATION

Current Liabilities:
	Notes Payable		$	148,500	$	62,500
	Long-Term Debt - Current Portion			200,000		200,000
	Accounts Payable			189,594		228,250
	Accounts Payable to Affiliated Companies			66,673		38,648
	Obligations to Third Party Suppliers			62,588		56,718
	Renewable Portfolio Standards Compliance Obligations			132,386		104,847
	Regulatory Liabilities			4,997		3,281
	Other Current Liabilities			58,776		72,007
Total Current Liabilities				863,514		766,251

Deferred Credits and Other Liabilities:
	Accumulated Deferred Income Taxes			1,793,183		1,760,339
	Regulatory Liabilities			267,440		264,352
	Accrued Pension, SERP and PBOP			188,974		209,153
	Other Long-Term Liabilities			123,336		120,939
Total Deferred Credits and Other Liabilities				2,372,933		2,354,783

Capitalization:
	Long-Term Debt			1,829,984		1,829,766

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

	Common Stockholder's Equity:
		Common Stock		-		-
		Capital Surplus, Paid In		995,378		995,378
		Retained Earnings		1,577,241		1,613,538
		Accumulated Other Comprehensive Income		535		545
	Common Stockholder's Equity			2,573,154		2,609,461
Total Capitalization				4,446,138		4,482,227

Total Liabilities and Capitalization			$	7,682,585	$	7,603,261

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


NSTAR ELECTRIC COMPANY AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)


			For the Three Months Ended March 31,
(Thousands of Dollars)			2016		2015

Operating Revenues			$	614,216	$	766,808

Operating Expenses:
	Purchased Power and Transmission			254,336		401,867
	Operations and Maintenance			94,696		75,824
	Depreciation			51,886		48,768
	Amortization of Regulatory Assets/(Liabilities), Net			4,683		(5,565)
	Energy Efficiency Programs			66,243		55,417
	Taxes Other Than Income Taxes			32,555		30,962
		Total Operating Expenses		504,399		607,273
Operating Income				109,817		159,535
Interest Expense				20,889		20,446
Other (Loss)/Income, Net				(334)		602
Income Before Income Tax Expense				88,594		139,691
Income Tax Expense				34,101		56,130
Net Income			$	54,493	$	83,561



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





CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

Net Income			$	54,493	$	83,561
Other Comprehensive Loss, Net of Tax:
	Changes in Funded Status of SERP Benefit Plan			(10)		(180)
Other Comprehensive Loss, Net of Tax				(10)		(180)
Comprehensive Income			$	54,483	$	83,381



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


NSTAR ELECTRIC COMPANY AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)


			For the Three Months Ended March 31,
(Thousands of Dollars)			2016		2015

Operating Activities:
	Net Income		$	54,493	$	83,561
	Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
		Depreciation		51,886		48,768
		Deferred Income Taxes		32,878		41,297
		Pension and PBOP Contributions, Net of Pension, SERP and PBOP Expense		(12,953)		1,164
		Regulatory Underrecoveries, Net		(16,746)		(103,142)
		Amortization of Regulatory Assets/(Liabilities), Net		4,683		(5,565)
		Bad Debt Expense		6,875		8,049
		Other		(10,120)		(21,885)
	Changes in Current Assets and Liabilities:
		Receivables and Unbilled Revenues, Net		(30,176)		(90,465)
		Materials, Supplies and Inventory		(40,322)		(13,504)
		Taxes Receivable/Accrued, Net		33,938		96,319
		Accounts Payable		(26,838)		29,210
		Accounts Receivable from/Payable to Affiliates, Net		29,069		96,368
		Other Current Assets and Liabilities, Net		19,600		51,157
Net Cash Flows Provided by Operating Activities				96,267		221,332

Investing Activities:
	Investments in Property, Plant and Equipment			(91,319)		(79,776)
	Other Investing Activities			-		53
Net Cash Flows Used in Investing Activities				(91,319)		(79,723)

Financing Activities:
	Cash Dividends on Common Stock			(90,300)		(49,500)
	Cash Dividends on Preferred Stock			(490)		(490)
	Increase/(Decrease) in Notes Payable			86,000		(86,500)
	Other Financing Activities			-		5
Net Cash Flows Used in Financing Activities				(4,790)		(136,485)
Increase in Cash and Cash Equivalents				158		5,124
Cash and Cash Equivalents - Beginning of Period				3,346		12,773
Cash and Cash Equivalents - End of Period			$	3,504	$	17,897



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


PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)


			March 31,		December 31,
(Thousands of Dollars)			2016		2015

ASSETS

Current Assets:
	Cash		$	3,580	$	1,733
	Receivables, Net			89,138		77,546
	Accounts Receivable from Affiliated Companies			7,667		2,352
	Unbilled Revenues			36,497		38,207
	Taxes Receivable			-		43,128
	Fuel, Materials, Supplies and Inventory			149,965		156,868
	Regulatory Assets			101,633		104,971
	Prepayments and Other Current Assets			5,963		24,302
Total Current Assets				394,443		449,107

Property, Plant and Equipment, Net				2,881,435		2,855,363

Deferred Debits and Other Assets:
	Regulatory Assets			245,760		257,873
	Other Long-Term Assets			34,703		34,176
Total Deferred Debits and Other Assets				280,463		292,049

Total Assets			$	3,556,341	$	3,596,519

LIABILITIES AND CAPITALIZATION

Current Liabilities:
	Notes Payable to Eversource Parent		$	157,100	$	231,300
	Accounts Payable			64,717		87,925
	Accounts Payable to Affiliated Companies			29,814		24,214
	Accrued Taxes			21,231		4,648
	Regulatory Liabilities			4,723		6,898
	Other Current Liabilities			43,132		39,273
Total Current Liabilities				320,717		394,258

Deferred Credits and Other Liabilities:
	Accumulated Deferred Income Taxes			723,110		705,894
	Regulatory Liabilities			47,930		47,851
	Accrued Pension, SERP and PBOP			77,218		89,579
	Other Long-Term Liabilities			50,453		50,746
Total Deferred Credits and Other Liabilities				898,711		894,070

Capitalization:
	Long-Term Debt			1,071,275		1,071,017

	Common Stockholder's Equity:
		Common Stock		-		-
		Capital Surplus, Paid In		760,134		748,634
		Retained Earnings		511,559		494,901
		Accumulated Other Comprehensive Loss		(6,055)		(6,361)
	Common Stockholder's Equity			1,265,638		1,237,174
Total Capitalization				2,336,913		2,308,191

Total Liabilities and Capitalization			$	3,556,341	$	3,596,519

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


PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)


			For the Three Months Ended March 31,
(Thousands of Dollars)			2016		2015

Operating Revenues			$	242,290	$	284,847

Operating Expenses:
	Purchased Power, Fuel and Transmission			50,214		99,579
	Operations and Maintenance			59,213		58,428
	Depreciation			28,235		25,646
	Amortization of Regulatory Assets, Net			8,518		15,132
	Energy Efficiency Programs			3,620		3,772
	Taxes Other Than Income Taxes			21,795		19,079
		Total Operating Expenses		171,595		221,636
Operating Income				70,695		63,211
Interest Expense				12,461		11,272
Other Income, Net				150		382
Income Before Income Tax Expense				58,384		52,321
Income Tax Expense				22,326		20,276
Net Income			$	36,058	$	32,045



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





CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

Net Income			$	36,058	$	32,045
Other Comprehensive Income, Net of Tax:
	Qualified Cash Flow Hedging Instruments			290		291
	Changes in Unrealized Gains on Marketable Securities			16		8
Other Comprehensive Income, Net of Tax				306		299
Comprehensive Income			$	36,364	$	32,344



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


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)			2016		2015

Operating Activities:
	Net Income		$	36,058	$	32,045
	Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
		Depreciation		28,235		25,646
		Deferred Income Taxes		21,181		38,767
		Regulatory Underrecoveries, Net		(2,291)		(288)
		Amortization of Regulatory Assets, Net		8,518		15,132
		Other		(9,166)		2,999
	Changes in Current Assets and Liabilities:
		Receivables and Unbilled Revenues, Net		(17,207)		(31,556)
		Fuel, Materials, Supplies and Inventory		6,903		34,572
		Taxes Receivable/Accrued, Net		57,935		(16,576)
		Accounts Payable		2,100		(4,285)
		Other Current Assets and Liabilities, Net		24,021		17,468
Net Cash Flows Provided by Operating Activities				156,287		113,924

Investing Activities:
	Investments in Property, Plant and Equipment			(72,338)		(71,905)
	Other Investing Activities			84		(2,277)
Net Cash Flows Used in Investing Activities				(72,254)		(74,182)

Financing Activities:
	Cash Dividends on Common Stock			(19,400)		(26,500)
	Decrease in Notes Payable to Eversource Parent			(74,200)		(8,500)
	Capital Contribution from Eversource Parent			11,500		-
	Other Financing Activities			(86)		(82)
Net Cash Flows Used in Financing Activities				(82,186)		(35,082)
Net Increase in Cash				1,847		4,660
Cash - Beginning of Period				1,733		489
Cash - End of Period			$	3,580	$	5,149



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


WESTERN MASSACHUSETTS ELECTRIC COMPANY
CONDENSED BALANCE SHEETS
(Unaudited)


			March 31,		December 31,
(Thousands of Dollars)			2016		2015

ASSETS

Current Assets:
	Cash		$	2,269	$	834
	Receivables, Net			59,324		50,912
	Accounts Receivable from Affiliated Companies			8,612		18,633
	Unbilled Revenues			13,753		15,065
	Taxes Receivable			6,431		33,407
	Regulatory Assets			61,363		56,166
	Prepayments and Other Current Assets			8,396		7,882
Total Current Assets				160,148		182,899

Property, Plant and Equipment, Net				1,590,524		1,575,306

Deferred Debits and Other Assets:
	Regulatory Assets			131,432		135,010
	Other Long-Term Assets			26,148		24,875
Total Deferred Debits and Other Assets				157,580		159,885

Total Assets			$	1,908,252	$	1,918,090

LIABILITIES AND CAPITALIZATION

Current Liabilities:
	Notes Payable to Eversource Parent		$	143,500	$	143,400
	Accounts Payable			34,240		58,364
	Accounts Payable to Affiliated Companies			16,740		19,896
	Renewable Portfolio Standards Compliance Obligations			11,899		6,395
	Regulatory Liabilities			9,760		13,122
	Other Current Liabilities			18,404		23,532
Total Current Liabilities				234,543		264,709

Deferred Credits and Other Liabilities:
	Accumulated Deferred Income Taxes			480,250		470,539
	Regulatory Liabilities			13,775		11,597
	Accrued Pension, SERP and PBOP			17,897		19,515
	Other Long-Term Liabilities			39,566		36,819
Total Deferred Credits and Other Liabilities				551,488		538,470

Capitalization:
	Long-Term Debt			517,200		517,329

	Common Stockholder's Equity:
		Common Stock		10,866		10,866
		Capital Surplus, Paid In		391,398		391,398
		Retained Earnings		205,467		198,140
		Accumulated Other Comprehensive Loss		(2,710)		(2,822)
	Common Stockholder's Equity			605,021		597,582
Total Capitalization				1,122,221		1,114,911

Total Liabilities and Capitalization			$	1,908,252	$	1,918,090

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


WESTERN MASSACHUSETTS ELECTRIC COMPANY
CONDENSED STATEMENTS OF INCOME
(Unaudited)


			For the Three Months Ended March 31,
(Thousands of Dollars)			2016		2015

Operating Revenues			$	128,095	$	152,864

Operating Expenses:
	Purchased Power and Transmission			39,563		69,661
	Operations and Maintenance			21,805		19,784
	Depreciation			11,371		10,375
	Amortization of Regulatory Assets, Net			1,212		3,927
	Energy Efficiency Programs			10,856		11,075
	Taxes Other Than Income Taxes			10,232		9,437
		Total Operating Expenses		95,039		124,259
Operating Income				33,056		28,605
Interest Expense				6,004		6,823
Other (Loss)/Income, Net				(149)		575
Income Before Income Tax Expense				26,903		22,357
Income Tax Expense				10,076		9,113
Net Income			$	16,827	$	13,244



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





CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

Net Income			$	16,827	$	13,244
Other Comprehensive Income, Net of Tax:
	Qualified Cash Flow Hedging Instruments			109		85
	Changes in Unrealized Gains on Marketable Securities			3		1
Other Comprehensive Income, Net of Tax				112		86
Comprehensive Income			$	16,939	$	13,330



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


WESTERN MASSACHUSETTS ELECTRIC COMPANY
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)


			For the Three Months Ended March 31,
(Thousands of Dollars)			2016		2015

Operating Activities:
	Net Income		$	16,827	$	13,244
	Adjustments to Reconcile Net Income to Net Cash Flows Provided by/(Used in) Operating Activities:
		Depreciation		11,371		10,375
		Deferred Income Taxes		9,921		12,759
		Regulatory Underrecoveries, Net		(6,100)		(14,442)
		Amortization of Regulatory Assets, Net		1,212		3,927
		Other		(541)		(1,197)
	Changes in Current Assets and Liabilities:
		Receivables and Unbilled Revenues, Net		2,197		(26,298)
		Taxes Receivable/Accrued, Net		26,976		64
		Accounts Payable		(11,011)		85
		Other Current Assets and Liabilities, Net		(136)		65
Net Cash Flows Provided by/(Used in) Operating Activities				50,716		(1,418)

Investing Activities:
	Investments in Property, Plant and Equipment			(39,891)		(35,899)
	Proceeds from Sales of Marketable Securities			479		23,249
	Purchases of Marketable Securities			(466)		(23,442)
Net Cash Flows Used in Investing Activities				(39,878)		(36,092)

Financing Activities:
	Cash Dividends on Common Stock			(9,500)		(9,300)
	Increase in Notes Payable to Eversource Parent			100		49,100
	Other Financing Activities			(3)		(245)
Net Cash Flows (Used in)/Provided by Financing Activities				(9,403)		39,555
Net Increase in Cash				1,435		2,045
Cash - Beginning of Period				834		-
Cash - End of Period			$	2,269	$	2,045


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

EVERSOURCE ENERGY 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

COMBINED NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited)

Refer to the Glossary of Terms included in this combined Quarterly Report on Form 10-Q for abbreviations and acronyms used throughout the combined notes to the unaudited condensed financial statements.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

Eversource Energy is a public utility holding company primarily engaged, through its wholly owned regulated utility subsidiaries, in the energy delivery business. Eversource Energy's wholly owned regulated utility subsidiaries consist of CL&P, NSTAR Electric, PSNH, WMECO, Yankee Gas and NSTAR Gas. Eversource provides energy delivery service to approximately 3.6 million electric and natural gas customers through these six regulated utilities in Connecticut, Massachusetts and New Hampshire.

The unaudited condensed consolidated financial statements of Eversource, NSTAR Electric and PSNH include the accounts of each of their respective subsidiaries. Intercompany transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements of Eversource, NSTAR Electric and PSNH and the unaudited condensed financial statements of CL&P and WMECO are herein collectively referred to as the "financial statements."

The combined notes to the financial statements have been prepared pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures included in annual financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations. The accompanying financial statements should be read in conjunction with the entirety of this combined Quarterly Report on Form 10-Q and the 2015 combined Annual Report on Form 10-K of Eversource, CL&P, NSTAR Electric, PSNH and WMECO, which was filed with the SEC. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The financial statements contain, in the opinion of management, all adjustments (including normal, recurring adjustments) necessary to present fairly Eversource's, CL&P's, NSTAR Electric's, PSNH's and WMECO's financial position as of March 31, 2016 and December 31, 2015, and the results of operations, comprehensive income and cash flows for the three months ended March 31, 2016 and 2015. The results of operations, comprehensive income and cash flows for the three months ended March 31, 2016 and 2015 are not necessarily indicative of the results expected for a full year.

Eversource consolidates CYAPC and YAEC because CL&P's, NSTAR Electric's, PSNH's and WMECO's combined ownership interest in each of these entities is greater than 50 percent. Intercompany transactions between CL&P, NSTAR Electric, PSNH and WMECO and the CYAPC and YAEC companies have been eliminated in consolidation of the Eversource financial statements.

Access Northeast is a natural gas pipeline and storage project (the "Project") being developed jointly by Eversource, Spectra Energy Corp and National Grid. Access Northeast will enhance the Algonquin and Maritimes & Northeast pipeline systems using existing routes. Eversource and Spectra Energy Corp each own a 40 percent interest in the Project, with the remaining 20 percent interest owned by National Grid. The total projected cost for both the pipeline and the LNG storage is expected to be approximately $3 billion, to be funded in proportion to ownership interest (approximately $1.2 billion by Eversource), with anticipated in-service dates commencing in November 2018. Eversource’s cumulative equity investment in the Project as of March 31, 2016 of $14.4 million is presented in Other Long-Term Assets.

Eversource's utility subsidiaries' distribution (including generation) and transmission businesses are subject to rate-regulation that is based on cost recovery and meets the criteria for application of accounting guidance for entities with rate-regulated operations, which considers the effect of regulation on the differences in the timing of the recognition of certain revenues and expenses from those of other businesses and industries. See Note 2, "Regulatory Accounting," for further information.

Certain reclassifications of prior period data were made in the accompanying financial statements to conform to the current period presentation and as a result of the adoption of new accounting guidance. See Note 1B,"Summary of Significant Accounting Policies – Accounting Standards," for further information.

Accounting Standards

Accounting Standards Issued but not Yet Effective: In May 2014, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers, which amends existing revenue recognition guidance and is required to be applied retrospectively (either to each reporting period presented or cumulatively at the date of initial application). In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers – Deferral of the Effective Date, which defers the effective date of ASU 2014-09 to the first quarter of 2018, with 2017 application permitted. The guidance continues to be interpreted on an industry specific level. The Company is evaluating the requirements and potential impacts of ASU 2014-09 and will implement the standard in the first quarter of 2018. The ASU is not currently expected to have a material impact on the financial statements of Eversource, CL&P, NSTAR Electric, PSNH or WMECO.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Liabilities, which is required to be implemented in the first quarter of 2018. The Company is reviewing the requirements of the ASU. The ASU will remove the available-for-sale designation for equity securities, whereby changes in fair value are recorded in other comprehensive income in shareholders' equity, and will require changes in fair value of all equity securities to be recorded in earnings beginning on January 1, 2018, with the unrealized gain or loss on available-for-sale equity securities as of that date reclassified to retained earnings as a cumulative effect of adoption. The fair value of available-for-sale equity securities subject to this guidance as of March 31, 2016 was approximately $52 million. The remaining available-for-sale equity securities included in marketable securities on the balance sheet are held in nuclear decommissioning trusts and are subject to regulatory accounting treatment and will not be impacted by this guidance. Implementation of the ASU for other financial instruments is not expected to have a material impact on the financial statements of Eversource, CL&P, NSTAR Electric, PSNH or WMECO.

In February 2016, the FASB issued ASU 2016-02, Leases, which changes existing lease accounting guidance and is required to be applied in the first quarter of 2019, with earlier application permitted. The ASU is required to be implemented for leases beginning on the date of initial application. For prior periods presented, leases are required to be recognized and measured using a modified retrospective approach. The Company is reviewing the requirements of ASU 2016-02.

Recently Adopted Accounting Standards: In February 2015, the FASB issued ASU 2015-02, Consolidation: Amendments to the Consolidation Analysis. As required, the Company implemented this guidance as of January 1, 2016, which had no effect on the financial position or results of operations of Eversource, CL&P, NSTAR Electric, PSNH or WMECO.

In April 2015, the FASB issued ASU 2015-05, Intangibles – Goodwill and Other – Internal-Use Software: Customer's Accounting for Fees Paid in a Cloud Computing Arrangement, effective for annual periods, including interim periods, beginning after December 15, 2015. The ASU amends existing guidance on intangibles and internal-use software and may be applied prospectively or retrospectively. On January 1, 2016, Eversource adopted the new accounting guidance prospectively, which did not have an impact on the financial statements of Eversource, CL&P, NSTAR Electric, PSNH or WMECO.

In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting. The ASU is intended to simplify some aspects of the accounting for share-based payment transactions. The ASU is required to be implemented in the first quarter of 2017, with early adoption permitted. The Company implemented this guidance in the first quarter of 2016. Beginning in the first quarter of 2016, the excess tax benefit associated with the distribution of stock compensation awards, previously recognized in Capital Surplus, Paid In in Common Shareholders' Equity on the balance sheet, are recognized in income tax expense in the income statement. The implementation reduced income tax expense by $2.5 million for the three months ended March 31, 2016. Also, beginning in 2016, in the statement of cash flows, the excess tax benefits are presented as an operating activity rather than a financing activity, and in both periods presented, cash paid to satisfy the statutory income tax withholding obligation previously reflected within operating activities in 2015 is now treated as a financing activity. The cash payments to satisfy this obligation for the three months ended March 31, 2016 and 2015 were $9.1 million and $9.7 million, respectively, and are included in Other Financing Activities on the statements of cash flows.

Provision for Uncollectible Accounts

Eversource, including CL&P, NSTAR Electric, PSNH and WMECO, presents its receivables at estimated net realizable value by maintaining a provision for uncollectible accounts. This provision is determined based upon a variety of judgments and factors, including the application of an estimated uncollectible percentage to each receivable aging category. The estimate is based upon historical collection and write-off experience and management's assessment of collectability from customers. Management continuously assesses the collectability of receivables and adjusts collectability estimates based on actual experience. Receivable balances are written off against the provision for uncollectible accounts when the customer accounts are terminated and these balances are deemed to be uncollectible.

The PURA allows CL&P and Yankee Gas to accelerate the recovery of accounts receivable balances attributable to qualified customers under financial or medical duress (uncollectible hardship accounts receivable) outstanding for greater than 180 days and 90 days, respectively. The DPU allows WMECO and NSTAR Gas to also recover in rates amounts associated with certain uncollectible hardship accounts receivable. Certain of NSTAR Electric's uncollectible hardship accounts receivable are expected to be recovered in future rates, similar to WMECO and NSTAR Gas. These uncollectible customer account balances, which are expected to be recovered in rates, are included in Regulatory Assets or Other Long-Term Assets on the balance sheets.

The total provision for uncollectible accounts and for uncollectible hardship accounts, which is included in the total provision, are included in Receivables, Net on the balance sheets, and were as follows:


	Total Provision for Uncollectible Accounts				Uncollectible Hardship
(Millions of Dollars)	As of March 31, 2016		As of December 31, 2015		As of March 31, 2016		As of December 31, 2015
Eversource	$	197.6	$	190.7	$	118.9	$	118.5
CL&P		84.9		79.5		71.3		68.1
NSTAR Electric		51.5		52.6		22.7		25.3
PSNH		9.1		8.7		-		-
WMECO		13.6		14.0		7.1		7.4

Fair Value Measurements

Fair value measurement guidance is applied to derivative contracts that are not elected or designated as "normal purchases or normal sales" (normal) and to the marketable securities held in trusts. Fair value measurement guidance is also applied to valuations of the investments used to calculate the funded status of pension and PBOP plans, the nonrecurring fair value measurements of nonfinancial assets such as goodwill and AROs, and the estimated fair value of preferred stock and long-term debt.

Fair Value Hierarchy: In measuring fair value, Eversource uses observable market data when available in order to minimize the use of unobservable inputs. Inputs used in fair value measurements are categorized into three fair value hierarchy levels for disclosure purposes. The entire fair value measurement is categorized based on the lowest level of input that is significant to the fair value measurement. Eversource evaluates the classification of assets and liabilities measured at fair value on a quarterly basis, and Eversource's policy is to recognize transfers between levels of the fair value hierarchy as of the end of the reporting period. The three levels of the fair value hierarchy are described below:

Level 1 - Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 - Inputs are quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs are observable.

Level 3 - Quoted market prices are not available. Fair value is derived from valuation techniques in which one or more significant inputs or assumptions are unobservable. Where possible, valuation techniques incorporate observable market inputs that can be validated to external sources such as industry exchanges, including prices of energy and energy-related products.

Determination of Fair Value: The valuation techniques and inputs used in Eversource's fair value measurements are described in Note 4, "Derivative Instruments," Note 5, "Marketable Securities," and Note 9, "Fair Value of Financial Instruments," to the financial statements.

Other Income, Net

Items included within Other Income, Net on the statements of income primarily consist of investment income/(loss), interest income, AFUDC related to equity funds, and equity in earnings of equity method investees. Investment income/(loss) primarily relates to debt and equity securities held in trust. For further information, see Note 5, "Marketable Securities," to the financial statements.

Other Taxes

Gross receipts taxes levied by the state of Connecticut are collected by CL&P and Yankee Gas from their respective customers. These gross receipts taxes are shown separately with collections in Operating Revenues and with payments in Taxes Other Than Income Taxes on the statements of income as follows:


	For the Three Months Ended
(Millions of Dollars)	March 31, 2016		March 31, 2015
Eversource	$	42.2	$	41.9
CL&P		36.0		33.0

As agents for state and local governments, Eversource's companies that serve customers in Connecticut and Massachusetts collect certain sales taxes that are recorded on a net basis with no impact on the statements of income.


G. Supplemental Cash Flow Information
Non-cash investing activities include plant additions included in Accounts Payable as follows:

(Millions of Dollars)	As of March 31, 2016		As of March 31, 2015
Eversource	$	125.6	$	110.4
CL&P		52.6		42.3
NSTAR Electric		11.7		21.9
PSNH		26.8		21.7
WMECO		10.7		8.3

REGULATORY ACCOUNTING

Eversource's Regulated companies are subject to rate-regulation that is based on cost recovery and meets the criteria for application of accounting guidance for rate-regulated operations, which considers the effect of regulation on the timing of the recognition of certain revenues and expenses. The Regulated companies' financial statements reflect the effects of the rate-making process. The rates charged to the customers of Eversource's Regulated companies are designed to collect each company's costs to provide service, including a return on investment.

Management believes it is probable that each of the Regulated companies will recover their respective investments in long-lived assets, including regulatory assets. If management were to determine that it could no longer apply the accounting guidance applicable to rate-regulated enterprises to any of the Regulated companies' operations, or if management could not conclude it is probable that costs would be recovered from customers in future rates, the costs would be charged to net income in the period in which the determination is made.

Regulatory Assets: The components of regulatory assets were as follows:


	As of March 31, 2016		As of December 31, 2015
(Millions of Dollars)	Eversource		Eversource
Benefit Costs	$	1,796.2	$	1,828.2
Derivative Liabilities		389.6		388.0
Income Taxes, Net		646.6		650.9
Storm Restoration Costs		450.5		436.9
Goodwill-related		479.8		484.9
Regulatory Tracker Mechanisms		604.4		526.5
Contractual Obligations - Yankee Companies		130.4		134.4
Other Regulatory Assets		125.3		134.0
Total Regulatory Assets		4,622.8		4,583.8
Less: Current Portion		919.3		845.8
Total Long-Term Regulatory Assets	$	3,703.5	$	3,738.0


	As of March 31, 2016								As of December 31, 2015
			NSTAR								NSTAR
(Millions of Dollars)	CL&P		Electric		PSNH		WMECO		CL&P		Electric		PSNH		WMECO
Benefit Costs	$	406.3	$	471.4	$	161.5	$	83.4	$	413.6	$	479.9	$	164.2	$	84.9
Derivative Liabilities		385.1		3.9		-		-		380.8		1.3		-		-
Income Taxes, Net		444.3		85.7		29.9		31.3		444.4		85.7		34.5		31.8
Storm Restoration Costs		284.2		118.3		26.6		21.4		271.4		110.9		31.5		23.1
Goodwill-related		-		411.9		-		-		-		416.3		-		-
Regulatory Tracker Mechanisms		104.3		325.9		98.1		45.3		45.1		311.0		101.2		40.1
Other Regulatory Assets		79.9		52.2		31.3		11.4		82.0		56.3		31.5		11.3
Total Regulatory Assets		1,704.1		1,469.3		347.4		192.8		1,637.3		1,461.4		362.9		191.2
Less: Current Portion		324.6		361.3		101.6		61.4		268.3		348.4		105.0		56.2
Total Long-Term Regulatory Assets	$	1,379.5	$	1,108.0	$	245.8	$	131.4	$	1,369.0	$	1,113.0	$	257.9	$	135.0

Regulatory Costs in Other Long-Term Assets: The Regulated companies had $76.1 million (including $2.8 million for CL&P, $33 million for NSTAR Electric, $5.4 million for PSNH and $18 million for WMECO) and $75.3 million (including $3.1 million for CL&P, $35.4 million for NSTAR Electric, $4.8 million for PSNH, and $16.7 million for WMECO) of additional regulatory costs as of March 31, 2016 and December 31, 2015, respectively, that were included in Other Long-Term Assets on the balance sheets. These amounts represent incurred costs for which recovery has not yet been specifically approved by the applicable regulatory agency. However, based on regulatory policies or past precedent on similar costs, management believes it is probable that these costs will ultimately be approved and recovered from customers in rates.

Regulatory Liabilities: The components of regulatory liabilities were as follows:


	As of March 31, 2016		As of December 31, 2015
(Millions of Dollars)	Eversource		Eversource
Cost of Removal	$	444.7	$	437.1
Regulatory Tracker Mechanisms		101.1		99.7
AFUDC – Transmission		65.9		66.1
Other Regulatory Liabilities		26.2		18.5
Total Regulatory Liabilities		637.9		621.4
Less: Current Portion		111.4		107.8
Total Long-Term Regulatory Liabilities	$	526.5	$	513.6


	As of March 31, 2016								As of December 31, 2015
			NSTAR								NSTAR
(Millions of Dollars)	CL&P		Electric		PSNH		WMECO		CL&P		Electric		PSNH		WMECO
Cost of Removal	$	26.7	$	260.2	$	47.3	$	3.7	$	24.1	$	257.4	$	47.2	$	2.8
Regulatory Tracker Mechanisms		49.7		4.5		2.6		10.9		56.2		3.3		3.4		12.9
AFUDC – Transmission		51.2		5.8		-		8.9		51.5		5.7		-		8.9
Other Regulatory Liabilities		13.1		1.9		2.7		0.1		4.2		1.3		4.2		0.1
Total Regulatory Liabilities		140.7		272.4		52.6		23.6		136.0		267.7		54.8		24.7
Less: Current Portion		63.0		5.0		4.7		9.8		61.2		3.3		6.9		13.1
Total Long-Term Regulatory Liabilities	$	77.7	$	267.4	$	47.9	$	13.8	$	74.8	$	264.4	$	47.9	$	11.6

PROPERTY, PLANT AND EQUIPMENT AND ACCUMULATED DEPRECIATION

The following tables summarize the investments in utility property, plant and equipment by asset category:


		As of March 31, 2016		As of December 31, 2015
(Millions of Dollars)		Eversource		Eversource
Distribution – Electric		$	13,227.4	$	13,054.8
Distribution - Natural Gas			2,759.1		2,727.2
Transmission – Electric			7,725.3		7,691.9
Generation			1,210.3		1,194.1
Electric and Natural Gas Utility			24,922.1		24,668.0
Other ⁽¹⁾			575.5		558.6
Property, Plant and Equipment, Gross			25,497.6		25,226.6
Less: Accumulated Depreciation
	Electric and Natural Gas Utility		(6,249.0)		(6,141.1)
	Other		(264.8)		(255.6)
Total Accumulated Depreciation			(6,513.8)		(6,396.7)
Property, Plant and Equipment, Net			18,983.8		18,829.9
Construction Work in Progress			1,112.9		1,062.5
Total Property, Plant and Equipment, Net		$	20,096.7	$	19,892.4

⁽¹⁾

These assets are primarily comprised of building improvements, computer software, hardware and equipment at Eversource Service.


	As of March 31, 2016								As of December 31, 2015
			NSTAR								NSTAR
(Millions of Dollars)	CL&P		Electric		PSNH		WMECO		CL&P		Electric		PSNH		WMECO
Distribution	$	5,429.5	$	5,176.1	$	1,839.5	$	822.2	$	5,377.2	$	5,100.5	$	1,804.8	$	812.3
Transmission		3,631.3		2,137.7		936.1		971.0		3,618.0		2,131.3		928.2		964.9
Generation		-		-		1,174.3		36.0		-		-		1,158.1		36.0
Property, Plant and Equipment, Gross		9,060.8		7,313.8		3,949.9		1,829.2		8,995.2		7,231.8		3,891.1		1,813.2
Less: Accumulated Depreciation		(2,073.7)		(1,924.4)		(1,192.0)		(317.0)		(2,041.9)		(1,886.8)		(1,171.0)		(307.0)
Property, Plant and Equipment, Net		6,987.1		5,389.4		2,757.9		1,512.2		6,953.3		5,345.0		2,720.1		1,506.2
Construction Work in Progress		244.1		310.7		123.5		78.3		203.5		310.5		135.3		69.1
Total Property, Plant and Equipment, Net	$	7,231.2	$	5,700.1	$	2,881.4	$	1,590.5	$	7,156.8	$	5,655.5	$	2,855.4	$	1,575.3

As of March 31, 2016, PSNH had $1.2 billion in gross generation utility plant assets and related Accumulated Depreciation of $531.7 million. These generation assets are the subject of a divestiture agreement entered into on June 10, 2015 between Eversource, PSNH and key New Hampshire officials whereby PSNH agreed to divest these generation assets upon NHPUC approval. Upon completion of the divestiture process, all remaining costs not recovered by the sale of these assets (stranded costs) will be recovered via bonds that will be secured by a non-bypassable charge or other recovery mechanisms in rates billed to PSNH's customers. See Note 8E, "Commitments and Contingencies – PSNH Generation Restructuring," for further information.

DERIVATIVE INSTRUMENTS

The Regulated companies purchase and procure energy and energy-related products, which are subject to price volatility, for their customers. The costs associated with supplying energy to customers are recoverable from customers in future rates. The Regulated companies manage the risks associated with the price volatility of energy and energy-related products through the use of derivative and nonderivative contracts.

Many of the derivative contracts meet the definition of, and are designated as, normal and qualify for accrual accounting under the applicable accounting guidance. The costs and benefits of derivative contracts that meet the definition of normal are recognized in Operating Expenses or Operating Revenues on the statements of income, as applicable, as electricity or natural gas is delivered.

Derivative contracts that are not designated as normal are recorded at fair value as current or long-term Derivative Assets or Derivative Liabilities on the balance sheets. For the Regulated companies, regulatory assets or regulatory liabilities are recorded to offset the fair values of derivatives, as contract settlement amounts are recovered from, or refunded to, customers in their respective energy supply rates.

The gross fair values of derivative assets and liabilities with the same counterparty are offset and reported as net Derivative Assets or Derivative Liabilities, with current and long-term portions, on the balance sheets. The following table presents the gross fair values of contracts, categorized by risk type, and the net amounts recorded as current or long-term derivative assets or liabilities:



		As of March 31, 2016						As of December 31, 2015
		Commodity Supply				Net Amount		Commodity Supply				Net Amount
		and Price Risk				Recorded as		and Price Risk					Recorded as
(Millions of Dollars)		Management		Netting ⁽¹⁾		a Derivative		Management		Netting ⁽¹⁾		a Derivative
Current Derivative Assets:
Level 3:
	Eversource	$	17.2	$	(11.0)	$	6.2	$	16.7	$	(10.9)	$	5.8
	CL&P		16.7		(11.0)		5.7		16.7		(10.9)		5.8
	NSTAR Electric		0.5		-		0.5		-		-		-

Long-Term Derivative Assets:
Level 2:
	Eversource	$	-	$	-	$	-	$	0.1	$	-	$	0.1
Level 3:
	Eversource		62.6		(16.9)		45.7		62.0		(19.3)		42.7
	CL&P		61.8		(16.9)		44.9		60.7		(19.3)		41.4
	NSTAR Electric		0.8		-		0.8		1.3		-		1.3

Current Derivative Liabilities:
Level 2:
	Eversource	$	(0.9)	$	0.2	$	(0.7)	$	(5.8)	$	-	$	(5.8)
Level 3:
	Eversource		(95.1)		-		(95.1)		(92.3)		-		(92.3)
	CL&P		(93.0)		-		(93.0)		(91.8)		-		(91.8)
	NSTAR Electric		(2.1)		-		(2.1)		(0.5)		-		(0.5)

Long-Term Derivative Liabilities:
Level 3:
	Eversource	$	(344.5)	$	-	$	(344.5)	$	(337.1)	$	-	$	(337.1)
	CL&P		(342.7)		-		(342.7)		(336.2)		-		(336.2)
	NSTAR Electric		(1.8)		-		(1.8)		(0.9)		-		(0.9)

⁽¹⁾

Amounts represent derivative assets and liabilities that Eversource elected to record net on the balance sheets. These amounts are subject to master netting agreements or similar agreements for which the right of offset exists.

For further information on the fair value of derivative contracts, see Note 1D, "Summary of Significant Accounting Policies - Fair Value Measurements," to the financial statements.

Derivative Contracts at Fair Value with Offsetting Regulatory Amounts

Commodity Supply and Price Risk Management: As required by regulation, CL&P, along with UI, has capacity-related contracts with generation facilities. CL&P has a sharing agreement with UI, with 80 percent of the costs or benefits of each contract borne by or allocated to CL&P and 20 percent borne by or allocated to UI. The combined capacity of these contracts is 787 MW. The capacity contracts extend through 2026 and obligate both CL&P and UI to make or receive payments on a monthly basis to or from the generation facilities based on the difference between a set capacity price and the capacity market price received in the ISO-NE capacity markets. In addition, CL&P has a contract to purchase 0.1 million MWh of energy per year through 2020.

NSTAR Electric has a renewable energy contract to purchase 0.1 million MWh of energy per year through 2018 and a capacity-related contract to purchase up to 35 MW per year through 2019.

As of March 31, 2016 and December 31, 2015, Eversource had NYMEX financial contracts for natural gas futures in order to reduce variability associated with the purchase price of approximately 5.3 million and 9.1 million MMBtu of natural gas, respectively.

For the three months ended March 31, 2016 and 2015, there were losses of $30.5 million and $16.6 million, respectively, deferred as regulatory costs, which reflect the change in fair value associated with Eversource's derivative contracts.

Credit Risk

Certain of Eversource's derivative contracts contain credit risk contingent provisions. These provisions require Eversource to maintain investment grade credit ratings from the major rating agencies and to post collateral for contracts in a net liability position over specified credit limits. As of March 31, 2016 and December 31, 2015, Eversource had $0.7 million and $5.8 million, respectively, of derivative contracts in a net liability position that were subject to credit risk contingent provisions and would have been required to post additional collateral of $0.9 million and $5.8 million, respectively, if certain of Eversource's unsecured debt credit ratings had been downgraded to below investment grade.

Fair Value Measurements of Derivative Instruments

Derivative contracts classified as Level 2 in the fair value hierarchy relate to the financial contracts for natural gas futures. Prices are obtained from broker quotes and are based on actual market activity. The contracts are valued using NYMEX natural gas prices. Valuations of these contracts also incorporate discount rates using the yield curve approach.

The fair value of derivative contracts classified as Level 3 utilizes significant unobservable inputs. The fair value is modeled using income techniques, such as discounted cash flow valuations adjusted for assumptions relating to exit price. Significant observable inputs for valuations of these contracts include energy and energy-related product prices in future years for which quoted prices in an active market exist. Fair value measurements categorized in Level 3 of the fair value hierarchy are prepared by individuals with expertise in valuation techniques, pricing of energy and energy-related products, and accounting requirements. The future power and capacity prices for periods that are not quoted in an active market or established at auction are based on available market data and are escalated based on estimates of inflation in order to address the full time period of the contract.

Valuations of derivative contracts using a discounted cash flow methodology include assumptions regarding the timing and likelihood of scheduled payments and also reflect non-performance risk, including credit, using the default probability approach based on the counterparty's credit rating for assets and the Company's credit rating for liabilities. Valuations incorporate estimates of premiums or discounts that would be required by a market participant to arrive at an exit price, using historical market transactions adjusted for the terms of the contract.

The following is a summary of Eversource's, including CL&P's and NSTAR Electric's, Level 3 derivative contracts and the range of the significant unobservable inputs utilized in the valuations over the duration of the contracts:


	As of March 31, 2016						As of December 31, 2015
		Range				Period Covered		Range				Period Covered
Capacity Prices:
Eversource	$	11.08	-	15.82	per kW-Month	2017 - 2026	$	10.81	-	15.82	per kW-Month	2016 - 2026
CL&P	$	11.08	-	12.60	per kW-Month	2020 - 2026	$	10.81	-	12.60	per kW-Month	2019 - 2026
NSTAR Electric	$	12.11	-	15.82	per kW-Month	2017 - 2018	$	10.81	-	15.82	per kW-Month	2016 - 2019

Forward Reserve:
Eversource, CL&P	$	2.00			per kW-Month	2016 - 2024	$	2.00			per kW-Month	2016 - 2024

REC Prices:
Eversource, NSTAR El