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 June 30, 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: (860) 286-5000	04-2147929


0-00404	THE CONNECTICUT LIGHT AND POWER COMPANY (a Connecticut corporation) 107 Selden Street Berlin, Connecticut 06037-1616 Telephone: (860) 286-5000	06-0303850


1-02301	NSTAR ELECTRIC COMPANY (a Massachusetts corporation) 800 Boylston Street Boston, Massachusetts 02199 Telephone: (860) 286-5000	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: (860) 286-5000	02-0181050


0-7624	WESTERN MASSACHUSETTS ELECTRIC COMPANY (a Massachusetts corporation) 300 Cadwell Drive Springfield, Massachusetts 01104 Telephone: (860) 286-5000	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 July 31, 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
McF	Million cubic feet
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 Financial Statements (Unaudited)	16

ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations
	Eversource Energy and Subsidiaries	32
	The Connecticut Light and Power Company	46
	NSTAR Electric Company and Subsidiary	49
	Public Service Company of New Hampshire and Subsidiary	51
	Western Massachusetts Electric Company	53

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	55

ITEM 4.	Controls and Procedures	55

PART II – OTHER INFORMATION

ITEM 1.	Legal Proceedings	56

ITEM 1A.	Risk Factors	56

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	56

ITEM 6.	Exhibits	57

SIGNATURES		59

iii


EVERSOURCE ENERGY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)


			June 30,		December 31,
(Thousands of Dollars)			2016		2015

ASSETS

Current Assets:
	Cash and Cash Equivalents		$	38,726	$	23,947
	Receivables, Net			806,340		775,480
	Unbilled Revenues			203,824		202,647
	Taxes Receivable			103,926		305,359
	Fuel, Materials, Supplies and Inventory			292,547		336,476
	Regulatory Assets			863,360		845,843
	Prepayments and Other Current Assets			106,561		129,034
Total Current Assets				2,415,284		2,618,786

Property, Plant and Equipment, Net				20,448,475		19,892,441

Deferred Debits and Other Assets:
	Regulatory Assets			3,661,578		3,737,960
	Goodwill			3,519,401		3,519,401
	Marketable Securities			518,750		516,478
	Other Long-Term Assets			319,175		295,243
Total Deferred Debits and Other Assets				8,018,904		8,069,082

Total Assets			$	30,882,663	$	30,580,309

LIABILITIES AND CAPITALIZATION

Current Liabilities:
	Notes Payable		$	767,000	$	1,160,953
	Long-Term Debt - Current Portion			178,883		228,883
	Accounts Payable			631,566		813,646
	Obligations to Third Party Suppliers			133,943		128,564
	Regulatory Liabilities			119,413		107,759
	Other Current Liabilities			472,964		549,985
Total Current Liabilities				2,303,769		2,989,790

Deferred Credits and Other Liabilities:
	Accumulated Deferred Income Taxes			5,398,926		5,147,678
	Regulatory Liabilities			527,678		513,595
	Derivative Liabilities			381,572		337,102
	Accrued Pension, SERP and PBOP			1,294,548		1,407,288
	Other Long-Term Liabilities			875,270		871,499
Total Deferred Credits and Other Liabilities				8,477,994		8,277,162

Capitalization:
	Long-Term Debt			9,435,924		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		6,252,514		6,262,368
		Retained Earnings		2,962,843		2,797,355
		Accumulated Other Comprehensive Loss		(65,364)		(66,844)
		Treasury Stock		(309,977)		(309,977)
	Common Shareholders' Equity			10,509,408		10,352,215
Total Capitalization				20,100,900		19,313,357

Total Liabilities and Capitalization			$	30,882,663	$	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 June 30,				For the Six Months Ended June 30,
(Thousands of Dollars, Except Share Information)			2016		2015		2016		2015

Operating Revenues			$	1,767,184	$	1,817,061	$	3,822,819	$	4,330,491

Operating Expenses:
	Purchased Power, Fuel and Transmission			581,260		685,118		1,336,119		1,847,167
	Operations and Maintenance			320,714		316,641		640,850		650,024
	Depreciation			176,507		163,668		350,492		327,505
	Amortization of Regulatory (Liabilities)/Assets, Net			(8,716)		(1,166)		12,281		59,438
	Energy Efficiency Programs			119,667		101,850		256,842		248,452
	Taxes Other Than Income Taxes			154,330		138,935		314,277		288,415
		Total Operating Expenses		1,343,762		1,405,046		2,910,861		3,421,001
Operating Income				423,422		412,015		911,958		909,490
Interest Expense				100,492		92,259		198,703		187,102
Other Income, Net				8,038		12,899		10,049		18,626
Income Before Income Tax Expense				330,968		332,655		723,304		741,014
Income Tax Expense				125,439		123,268		271,742		276,494
Net Income				205,529		209,387		451,562		464,520
Net Income Attributable to Noncontrolling Interests				1,880		1,880		3,759		3,759
Net Income Attributable to Common Shareholders			$	203,649	$	207,507	$	447,803	$	460,761

Basic and Diluted Earnings Per Common Share			$	0.64	$	0.65	$	1.41	$	1.45

Dividends Declared Per Common Share			$	0.45	$	0.42	$	0.89	$	0.84

Weighted Average Common Shares Outstanding:
	Basic			317,785,495		317,613,166		317,651,319		317,352,004
	Diluted			318,476,699		318,559,568		318,478,876		318,525,378


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




CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

Net Income			$	205,529	$	209,387	$	451,562	$	464,520
Other Comprehensive (Loss)/Income, Net of Tax:
	Qualified Cash Flow Hedging Instruments			534		509		1,068		1,018
	Changes in Unrealized Gains/(Losses) on Marketable Securities			1,061		(1,248)		1,325		(1,116)
	Changes in Funded Status of Pension, SERP and PBOP Benefit Plans			(1,784)		1,120		(913)		2,074
Other Comprehensive (Loss)/Income, Net of Tax				(189)		381		1,480		1,976
Comprehensive Income Attributable to Noncontrolling Interests				(1,880)		(1,880)		(3,759)		(3,759)
Comprehensive Income Attributable to Common Shareholders			$	203,460	$	207,888	$	449,283	$	462,737


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 Six Months Ended June 30,
(Thousands of Dollars)			2016		2015

Operating Activities:
	Net Income		$	451,562	$	464,520
	Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
		Depreciation		350,492		327,505
		Deferred Income Taxes		250,851		176,800
		Pension, SERP and PBOP Expense		22,659		48,432
		Pension and PBOP Contributions		(65,929)		(31,032)
		Regulatory Underrecoveries, Net		(5,768)		(73,547)
		Amortization of Regulatory Assets, Net		12,281		59,438
		Other		(10,808)		(38,521)
	Changes in Current Assets and Liabilities:
		Receivables and Unbilled Revenues, Net		(76,751)		(123,984)
		Fuel, Materials, Supplies and Inventory		43,930		60,044
		Taxes Receivable/Accrued, Net		230,075		214,577
		Accounts Payable		(151,996)		(228,176)
		Other Current Assets and Liabilities, Net		(72,160)		9,226
Net Cash Flows Provided by Operating Activities				978,438		865,282

Investing Activities:
	Investments in Property, Plant and Equipment			(869,168)		(740,379)
	Proceeds from Sales of Marketable Securities			327,581		427,990
	Purchases of Marketable Securities			(322,244)		(408,242)
	Other Investing Activities			(2,991)		4,821
Net Cash Flows Used in Investing Activities				(866,822)		(715,810)

Financing Activities:
	Cash Dividends on Common Shares			(282,314)		(264,936)
	Cash Dividends on Preferred Stock			(3,759)		(3,759)
	Decrease in Notes Payable			(393,953)		(449,375)
	Issuance of Long-Term Debt			800,000		750,000
	Retirements of Long-Term Debt			(200,000)		(166,577)
	Other Financing Activities			(16,811)		(17,059)
Net Cash Flows Used in Financing Activities				(96,837)		(151,706)
Net Increase/(Decrease) in Cash and Cash Equivalents				14,779		(2,234)
Cash and Cash Equivalents - Beginning of Period				23,947		38,703
Cash and Cash Equivalents - End of Period			$	38,726	$	36,469

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


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

			June 30,		December 31,
(Thousands of Dollars)			2016		2015

ASSETS

Current Assets:
	Cash		$	9,449	$	1,057
	Receivables, Net			370,982		352,536
	Accounts Receivable from Affiliated Companies			9,703		21,214
	Unbilled Revenues			99,822		99,879
	Taxes Receivable			12,498		137,643
	Regulatory Assets			312,160		268,318
	Materials and Supplies			52,538		43,124
	Prepayments and Other Current Assets			15,826		32,234
Total Current Assets				882,978		956,005

Property, Plant and Equipment, Net				7,336,577		7,156,809

Deferred Debits and Other Assets:
	Regulatory Assets			1,368,897		1,369,028
	Other Long-Term Assets			121,477		111,115
Total Deferred Debits and Other Assets				1,490,374		1,480,143

Total Assets			$	9,709,929	$	9,592,957

LIABILITIES AND CAPITALIZATION

Current Liabilities:
	Notes Payable to Eversource Parent		$	93,000	$	277,400
	Long-Term Debt - Current Portion			150,000		-
	Accounts Payable			219,332		267,764
	Accounts Payable to Affiliated Companies			60,169		66,456
	Obligations to Third Party Suppliers			61,532		60,746
	Regulatory Liabilities			63,287		61,155
	Derivative Liabilities			91,603		91,820
	Other Current Liabilities			122,886		110,631
Total Current Liabilities				861,809		935,972

Deferred Credits and Other Liabilities:
	Accumulated Deferred Income Taxes			1,922,428		1,820,865
	Regulatory Liabilities			80,617		74,830
	Derivative Liabilities			380,643		336,189
	Accrued Pension, SERP and PBOP			247,419		271,056
	Other Long-Term Liabilities			131,883		133,446
Total Deferred Credits and Other Liabilities				2,762,990		2,636,386

Capitalization:
	Long-Term Debt			2,614,878		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		2,056,389		1,910,663
		Retained Earnings		1,237,620		1,170,278
		Accumulated Other Comprehensive Loss		(309)		(576)
	Common Stockholder's Equity			3,354,052		3,140,717
Total Capitalization				6,085,130		6,020,599

Total Liabilities and Capitalization			$	9,709,929	$	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 June 30,				For the Six Months Ended June 30,
(Thousands of Dollars)			2016		2015		2016		2015

Operating Revenues			$	679,787	$	666,554	$	1,415,103	$	1,471,471

Operating Expenses:
	Purchased Power and Transmission			234,504		253,180		507,104		586,799
	Operations and Maintenance			122,532		118,687		233,375		236,044
	Depreciation			57,532		52,191		114,500		105,094
	Amortization of Regulatory (Liabilities)/Assets, Net			(2,988)		(7,530)		6,891		40,776
	Energy Efficiency Programs			35,498		33,963		73,589		76,770
	Taxes Other Than Income Taxes			70,568		62,102		146,030		130,181
		Total Operating Expenses		517,646		512,593		1,081,489		1,175,664
Operating Income				162,141		153,961		333,614		295,807
Interest Expense				35,978		36,124		72,477		72,748
Other Income, Net				6,275		4,062		7,211		6,221
Income Before Income Tax Expense				132,438		121,899		268,348		229,280
Income Tax Expense				49,563		43,129		98,427		81,276
Net Income			$	82,875	$	78,770	$	169,921	$	148,004



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





CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

Net Income			$	82,875	$	78,770	$	169,921	$	148,004
Other Comprehensive Income, Net of Tax:
	Qualified Cash Flow Hedging Instruments			111		111		222		222
	Changes in Unrealized Gains/(Losses) on Marketable Securities			36		(43)		45		(39)
Other Comprehensive Income, Net of Tax				147		68		267		183
Comprehensive Income			$	83,022	$	78,838	$	170,188	$	148,187



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 Six Months Ended June 30,
(Thousands of Dollars)			2016		2015

Operating Activities:
	Net Income		$	169,921	$	148,004
	Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
	Depreciation			114,500		105,094
		Deferred Income Taxes		97,913		30,145
		Pension, SERP, and PBOP Expense, Net of PBOP Contributions		3,325		7,079
		Regulatory Underrecoveries, Net		(40,386)		(55,302)
		Amortization of Regulatory Assets, Net		6,891		40,776
		Other		(4,477)		(2,432)
	Changes in Current Assets and Liabilities:
		Receivables and Unbilled Revenues, Net		(26,729)		(73,279)
		Taxes Receivable/Accrued, Net		145,852		123,051
		Accounts Payable		(38,137)		(55,192)
		Other Current Assets and Liabilities, Net		774		2,085
Net Cash Flows Provided by Operating Activities				429,447		270,029

Investing Activities:
	Investments in Property, Plant and Equipment			(288,630)		(242,346)
	Proceeds from the Sale of Property, Plant and Equipment			9,047		-
	Other Investing Activities			205		(1,362)
Net Cash Flows Used in Investing Activities				(279,378)		(243,708)

Financing Activities:
	Cash Dividends on Common Stock			(99,800)		(98,000)
	Cash Dividends on Preferred Stock			(2,779)		(2,779)
	Capital Contributions from Eversource Parent			145,700		-
	Issuance of Long-Term Debt			-		300,000
	Retirement of Long-Term Debt			-		(162,000)
	Decrease in Notes Payable to Eversource Parent			(184,400)		(47,800)
	Other Financing Activities			(398)		(8,871)
Net Cash Flows Used in Financing Activities				(141,677)		(19,450)
Net Increase in Cash				8,392		6,871
Cash - Beginning of Period				1,057		2,356
Cash - End of Period			$	9,449	$	9,227

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


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


			June 30,		December 31,
(Thousands of Dollars)			2016		2015

ASSETS

Current Assets:
	Cash and Cash Equivalents		$	3,391	$	3,346
	Receivables, Net			254,376		229,936
	Accounts Receivable from Affiliated Companies			12,241		4,034
	Unbilled Revenues			43,115		29,464
	Taxes Receivable			21,564		70,236
	Materials, Supplies and Inventory			40,292		75,487
	Regulatory Assets			316,715		348,408
	Prepayments and Other Current Assets			9,510		11,448
Total Current Assets				701,204		772,359

Property, Plant and Equipment, Net				5,788,659		5,655,458

Deferred Debits and Other Assets:
	Regulatory Assets			1,112,099		1,112,977
	Other Long-Term Assets			61,886		62,467
Total Deferred Debits and Other Assets				1,173,985		1,175,444

Total Assets			$	7,663,848	$	7,603,261

LIABILITIES AND CAPITALIZATION

Current Liabilities:
	Notes Payable		$	329,000	$	62,500
	Long-Term Debt - Current Portion			-		200,000
	Accounts Payable			146,868		228,250
	Accounts Payable to Affiliated Companies			46,174		38,648
	Obligations to Third Party Suppliers			61,538		56,718
	Renewable Portfolio Standards Compliance Obligations			44,239		104,847
	Regulatory Liabilities			6,923		3,281
	Other Current Liabilities			58,770		72,007
Total Current Liabilities				693,512		766,251

Deferred Credits and Other Liabilities:
	Accumulated Deferred Income Taxes			1,809,408		1,760,339
	Regulatory Liabilities			267,809		264,352
	Accrued Pension, SERP and PBOP			194,734		209,153
	Other Long-Term Liabilities			124,877		120,939
Total Deferred Credits and Other Liabilities				2,396,828		2,354,783

Capitalization:
	Long-Term Debt			2,077,687		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		1,456,919		1,613,538
		Accumulated Other Comprehensive Income		524		545
	Common Stockholder's Equity			2,452,821		2,609,461
Total Capitalization				4,573,508		4,482,227

Total Liabilities and Capitalization			$	7,663,848	$	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 June 30,				For the Six Months Ended June 30,
(Thousands of Dollars)			2016		2015		2016		2015

Operating Revenues			$	591,301	$	617,196	$	1,205,517	$	1,384,004

Operating Expenses:
	Purchased Power and Transmission			219,189		283,129		473,525		684,995
	Operations and Maintenance			88,954		69,430		183,650		145,254
	Depreciation			52,571		48,949		104,457		97,716
	Amortization of Regulatory Assets/(Liabilities), Net			3,971		(7,336)		8,654		(12,901)
	Energy Efficiency Programs			61,922		41,733		128,165		97,150
	Taxes Other Than Income Taxes			34,194		29,876		66,750		60,841
		Total Operating Expenses		460,801		465,781		965,201		1,073,055
Operating Income				130,500		151,415		240,316		310,949
Interest Expense				20,216		17,781		41,104		38,227
Other Income, Net				2,836		2,533		2,502		3,136
Income Before Income Tax Expense				113,120		136,167		201,714		275,858
Income Tax Expense				44,953		54,204		79,053		110,335
Net Income			$	68,167	$	81,963	$	122,661	$	165,523



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





CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

Net Income			$	68,167	$	81,963	$	122,661	$	165,523
Other Comprehensive Loss, Net of Tax:
	Changes in Funded Status of SERP Benefit Plan			(11)		(2)		(21)		(182)
Other Comprehensive Loss, Net of Tax				(11)		(2)		(21)		(182)
Comprehensive Income			$	68,156	$	81,961	$	122,640	$	165,341



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 Six Months Ended June 30,
(Thousands of Dollars)			2016		2015

Operating Activities:
	Net Income		$	122,661	$	165,523
	Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
		Depreciation		104,457		97,716
		Deferred Income Taxes		48,505		61,734
		Pension and PBOP Contributions, Net of Pension, SERP and PBOP Expense		(13,236)		(264)
		Regulatory Over/(Under) Recoveries, Net		26,277		(96,290)
		Amortization of Regulatory Assets/(Liabilities), Net		8,654		(12,901)
		Other		(3,978)		(28,653)
	Changes in Current Assets and Liabilities:
		Receivables and Unbilled Revenues, Net		(56,140)		(91,753)
		Materials, Supplies and Inventory		35,194		17,595
		Taxes Receivable/Accrued, Net		45,608		100,661
		Accounts Payable		(88,774)		(30,839)
		Other Current Assets and Liabilities, Net		(64,084)		25,076
Net Cash Flows Provided by Operating Activities				165,144		207,605

Investing Activities:
	Investments in Property, Plant and Equipment			(199,824)		(188,103)
	Other Investing Activities			-		53
Net Cash Flows Used in Investing Activities				(199,824)		(188,050)

Financing Activities:
	Cash Dividends on Common Stock			(278,300)		(99,000)
	Cash Dividends on Preferred Stock			(980)		(980)
	Increase in Notes Payable			266,500		75,200
	Issuance of Long-Term Debt			250,000		-
	Retirements of Long-Term Debt			(200,000)		(4,700)
	Other Financing Activities			(2,495)		-
Net Cash Flows Provided by/(Used in) Financing Activities				34,725		(29,480)
Increase/(Decrease) in Cash and Cash Equivalents				45		(9,925)
Cash and Cash Equivalents - Beginning of Period				3,346		12,773
Cash and Cash Equivalents - End of Period			$	3,391	$	2,848

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)


			June 30,		December 31,
(Thousands of Dollars)			2016		2015

ASSETS

Current Assets:
	Cash		$	1,084	$	1,733
	Receivables, Net			77,389		77,546
	Accounts Receivable from Affiliated Companies			3,938		2,352
	Unbilled Revenues			38,275		38,207
	Taxes Receivable			8,848		43,128
	Fuel, Materials, Supplies and Inventory			151,475		156,868
	Regulatory Assets			122,879		104,971
	Prepayments and Other Current Assets			19,570		24,302
Total Current Assets				423,458		449,107

Property, Plant and Equipment, Net				2,925,288		2,855,363

Deferred Debits and Other Assets:
	Regulatory Assets			238,612		257,873
	Other Long-Term Assets			34,886		34,176
Total Deferred Debits and Other Assets				273,498		292,049

Total Assets			$	3,622,244	$	3,596,519

LIABILITIES AND CAPITALIZATION

Current Liabilities:
	Notes Payable to Eversource Parent		$	120,900	$	231,300
	Accounts Payable			96,059		87,925
	Accounts Payable to Affiliated Companies			21,049		24,214
	Regulatory Liabilities			5,986		6,898
	Other Current Liabilities			37,264		43,921
Total Current Liabilities				281,258		394,258

Deferred Credits and Other Liabilities:
	Accumulated Deferred Income Taxes			746,785		705,894
	Regulatory Liabilities			47,283		47,851
	Accrued Pension, SERP and PBOP			75,721		89,579
	Other Long-Term Liabilities			50,318		50,746
Total Deferred Credits and Other Liabilities				920,107		894,070

Capitalization:
	Long-Term Debt			1,071,532		1,071,017

	Common Stockholder's Equity:
		Common Stock		-		-
		Capital Surplus, Paid In		831,634		748,634
		Retained Earnings		523,414		494,901
		Accumulated Other Comprehensive Loss		(5,701)		(6,361)
	Common Stockholder's Equity			1,349,347		1,237,174
Total Capitalization				2,420,879		2,308,191

Total Liabilities and Capitalization			$	3,622,244	$	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 June 30,				For the Six Months Ended June 30,
(Thousands of Dollars)			2016		2015		2016		2015

Operating Revenues			$	218,517	$	241,875	$	460,807	$	526,722

Operating Expenses:
	Purchased Power, Fuel and Transmission			45,653		47,938		95,867		147,516
	Operations and Maintenance			63,788		76,468		123,001		134,895
	Depreciation			28,644		25,751		56,879		51,397
	Amortization of Regulatory (Liabilities)/Assets, Net			(8,186)		12,050		332		27,181
	Energy Efficiency Programs			3,259		3,356		6,879		7,128
	Taxes Other Than Income Taxes			22,287		22,249		44,082		41,331
		Total Operating Expenses		155,445		187,812		327,040		409,448
Operating Income				63,072		54,063		133,767		117,274
Interest Expense				12,526		11,662		24,987		22,935
Other Income, Net				282		1,245		432		1,628
Income Before Income Tax Expense				50,828		43,646		109,212		95,967
Income Tax Expense				19,573		15,701		41,899		35,977
Net Income			$	31,255	$	27,945	$	67,313	$	59,990



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





CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

Net Income			$	31,255	$	27,945	$	67,313	$	59,990
Other Comprehensive Income, Net of Tax:
	Qualified Cash Flow Hedging Instruments			291		290		581		581
	Changes in Unrealized Gains/(Losses) on Marketable Securities			63		(75)		79		(67)
Other Comprehensive Income, Net of Tax				354		215		660		514
Comprehensive Income			$	31,609	$	28,160	$	67,973	$	60,504



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 Six Months Ended June 30,
(Thousands of Dollars)			2016		2015

Operating Activities:
	Net Income		$	67,313	$	59,990
	Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
		Depreciation		56,879		51,397
		Deferred Income Taxes		45,976		47,454
		Regulatory Underrecoveries, Net		(10,740)		(3,089)
		Amortization of Regulatory Assets, Net		332		27,181
		Other		(8,484)		8,726
	Changes in Current Assets and Liabilities:
		Receivables and Unbilled Revenues, Net		(5,247)		(6,597)
		Fuel, Materials, Supplies and Inventory		5,394		11,019
		Taxes Receivable/Accrued, Net		33,840		(20,414)
		Accounts Payable		20,417		(21,362)
		Other Current Assets and Liabilities, Net		(1,422)		(3,792)
Net Cash Flows Provided by Operating Activities				204,258		150,513

Investing Activities:
	Investments in Property, Plant and Equipment			(138,713)		(140,171)
	Other Investing Activities			172		169
Net Cash Flows Used in Investing Activities				(138,541)		(140,002)

Financing Activities:
	Cash Dividends on Common Stock			(38,800)		(53,000)
	Capital Contributions from Eversource Parent			83,000		-
	(Decrease)/Increase in Notes Payable to Eversource Parent			(110,400)		43,000
	Other Financing Activities			(166)		(182)
Net Cash Flows Used in Financing Activities				(66,366)		(10,182)
Net (Decrease)/Increase in Cash				(649)		329
Cash - Beginning of Period				1,733		489
Cash - End of Period			$	1,084	$	818

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


WESTERN MASSACHUSETTS ELECTRIC COMPANY
CONDENSED BALANCE SHEETS
(Unaudited)


			June 30,		December 31,
(Thousands of Dollars)			2016		2015

ASSETS

Current Assets:
	Cash		$	1,421	$	834
	Receivables, Net			54,685		50,912
	Accounts Receivable from Affiliated Companies			9,139		18,633
	Unbilled Revenues			13,928		15,065
	Taxes Receivable			422		33,407
	Regulatory Assets			57,660		56,166
	Prepayments and Other Current Assets			8,598		7,882
Total Current Assets				145,853		182,899

Property, Plant and Equipment, Net				1,616,305		1,575,306

Deferred Debits and Other Assets:
	Regulatory Assets			124,804		135,010
	Other Long-Term Assets			27,625		24,875
Total Deferred Debits and Other Assets				152,429		159,885

Total Assets			$	1,914,587	$	1,918,090

LIABILITIES AND CAPITALIZATION

Current Liabilities:
	Notes Payable to Eversource Parent		$	53,700	$	143,400
	Accounts Payable			32,783		58,364
	Accounts Payable to Affiliated Companies			19,935		19,896
	Obligations to Third Party Suppliers			10,336		9,654
	Renewable Portfolio Standards Compliance Obligations			11,251		6,395
	Regulatory Liabilities			11,256		13,122
	Other Current Liabilities			11,556		13,878
Total Current Liabilities				150,817		264,709

Deferred Credits and Other Liabilities:
	Accumulated Deferred Income Taxes			487,389		470,539
	Regulatory Liabilities			13,280		11,597
	Accrued Pension, SERP and PBOP			12,135		19,515
	Other Long-Term Liabilities			40,175		36,819
Total Deferred Credits and Other Liabilities				552,979		538,470

Capitalization:
	Long-Term Debt			566,885		517,329

	Common Stockholder's Equity:
		Common Stock		10,866		10,866
		Capital Surplus, Paid In		426,398		391,398
		Retained Earnings		209,232		198,140
		Accumulated Other Comprehensive Loss		(2,590)		(2,822)
	Common Stockholder's Equity			643,906		597,582
Total Capitalization				1,210,791		1,114,911

Total Liabilities and Capitalization			$	1,914,587	$	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 June 30,				For the Six Months Ended June 30,
(Thousands of Dollars)			2016		2015		2016		2015

Operating Revenues			$	116,396	$	125,194	$	244,491	$	278,058

Operating Expenses:
	Purchased Power and Transmission			32,665		43,055		72,228		112,716
	Operations and Maintenance			22,088		20,104		43,893		39,889
	Depreciation			11,476		10,848		22,847		21,223
	Amortization of Regulatory Assets, Net			992		3,336		2,203		7,264
	Energy Efficiency Programs			10,347		9,519		21,203		20,594
	Taxes Other Than Income Taxes			9,600		9,398		19,833		18,833
		Total Operating Expenses		87,168		96,260		182,207		220,519
Operating Income				29,228		28,934		62,284		57,539
Interest Expense				6,072		6,291		12,075		13,112
Other Income/(Loss), Net				104		1,245		(46)		1,819
Income Before Income Tax Expense				23,260		23,888		50,163		46,246
Income Tax Expense				9,995		9,693		20,071		18,807
Net Income			$	13,265	$	14,195	$	30,092	$	27,439



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





CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

Net Income			$	13,265	$	14,195	$	30,092	$	27,439
Other Comprehensive Income, Net of Tax:
	Qualified Cash Flow Hedging Instruments			110		84		219		169
	Changes in Unrealized Gains/(Losses) on Marketable Securities			10		(12)		13		(11)
Other Comprehensive Income, Net of Tax				120		72		232		158
Comprehensive Income			$	13,385	$	14,267	$	30,324	$	27,597



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 Six Months Ended June 30,
(Thousands of Dollars)			2016		2015

Operating Activities:
	Net Income		$	30,092	$	27,439
	Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
		Depreciation		22,847		21,223
		Deferred Income Taxes		17,155		12,503
		Regulatory Underrecoveries, Net		(2,651)		(7,911)
		Amortization of Regulatory Assets, Net		2,203		7,264
		Other		(2,547)		(3,598)
	Changes in Current Assets and Liabilities:
		Receivables and Unbilled Revenues, Net		6,500		(11,593)
		Taxes Receivable/Accrued, Net		32,985		18,774
		Accounts Payable		(13,176)		(21,056)
		Other Current Assets and Liabilities, Net		2,502		859
Net Cash Flows Provided by Operating Activities				95,910		43,904

Investing Activities:
	Investments in Property, Plant and Equipment			(71,459)		(62,966)
	Proceeds from Sales of Marketable Securities			1,484		49,739
	Purchases of Marketable Securities			(1,457)		(50,118)
Net Cash Flows Used in Investing Activities				(71,432)		(63,345)

Financing Activities:
	Cash Dividends on Common Stock			(19,000)		(18,600)
	Capital Contribution from Eversource Parent			35,000		-
	(Decrease)/Increase in Notes Payable to Eversource Parent			(89,700)		39,200
	Issuance of Long-Term Debt			50,000		-
	Other Financing Activities			(191)		(16)
Net Cash Flows (Used in)/Provided by Financing Activities				(23,891)		20,584
Net Increase in Cash				587		1,143
Cash - Beginning of Period				834		-
Cash - End of Period			$	1,421	$	1,143

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 Combined Notes to Financial Statements included in Item 8, "Financial Statements and Supplementary Data," of the Eversource 2015 Form 10-K, 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 June 30, 2016 and December 31, 2015, the results of operations and comprehensive income for the three and six months ended June 30, 2016 and 2015, and the cash flows for the six months ended June 30, 2016 and 2015. The results of operations and comprehensive income for the three and six months ended June 30, 2016 and 2015 and the cash flows for the six months ended June 30, 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 June 30, 2016 of $20.7 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 June 30, 2016 was approximately $48 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, including balance sheet recognition of leases previously deemed operating leases, and expects to implement them in the first quarter of 2019.

Recently Adopted Accounting Standards: 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 benefits 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 $2.7 million for the six months ended June 30, 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 six months ended June 30, 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 are included in Regulatory Assets or Other Long-Term Assets on the balance sheets.

The total provisions 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 June 30, 2016		As of December 31, 2015		As of June 30, 2016		As of December 31, 2015
Eversource	$	205.5	$	190.7	$	123.7	$	118.5
CL&P		82.7		79.5		66.2		68.1
NSTAR Electric		56.9		52.6		28.6		25.3
PSNH		9.6		8.7		-		-
WMECO		15.3		14.0		8.4		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				For the Six Months Ended
(Millions of Dollars)	June 30, 2016		June 30, 2015		June 30, 2016		June 30, 2015
Eversource	$	37.5	$	33.2	$	79.8	$	75.1
CL&P		33.6		29.5		69.6		62.5

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 June 30, 2016		As of June 30, 2015
Eversource	$	186.3	$	142.3
CL&P		59.5		47.2
NSTAR Electric		38.5		29.5
PSNH		31.1		25.6
WMECO		14.6		13.7

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 June 30, 2016		As of December 31, 2015
(Millions of Dollars)	Eversource		Eversource
Benefit Costs	$	1,754.1	$	1,828.2
Derivative Liabilities		413.7		388.0
Income Taxes, Net		644.3		650.9
Storm Restoration Costs		428.9		436.9
Goodwill-related		474.6		484.9
Regulatory Tracker Mechanisms		562.5		526.5
Contractual Obligations - Yankee Companies		117.3		134.4
Other Regulatory Assets		129.6		134.0
Total Regulatory Assets		4,525.0		4,583.8
Less: Current Portion		863.4		845.8
Total Long-Term Regulatory Assets	$	3,661.6	$	3,738.0


	As of June 30, 2016								As of December 31, 2015
			NSTAR								NSTAR
(Millions of Dollars)	CL&P		Electric		PSNH		WMECO		CL&P		Electric		PSNH		WMECO
Benefit Costs	$	383.2	$	477.0	$	160.0	$	77.9	$	413.6	$	479.9	$	164.2	$	84.9
Derivative Liabilities		411.3		2.4		-		-		380.8		1.3		-		-
Income Taxes, Net		442.5		86.3		28.2		31.0		444.4		85.7		34.5		31.8
Storm Restoration Costs		269.5		117.7		21.7		20.0		271.4		110.9		31.5		23.1
Goodwill-related		-		407.5		-		-		-		416.3		-		-
Regulatory Tracker Mechanisms		96.6		287.0		120.5		41.5		45.1		311.0		101.2		40.1
Other Regulatory Assets		78.0		50.9		31.1		12.1		82.0		56.3		31.5		11.3
Total Regulatory Assets		1,681.1		1,428.8		361.5		182.5		1,637.3		1,461.4		362.9		191.2
Less: Current Portion		312.2		316.7		122.9		57.7		268.3		348.4		105.0		56.2
Total Long-Term Regulatory Assets	$	1,368.9	$	1,112.1	$	238.6	$	124.8	$	1,369.0	$	1,113.0	$	257.9	$	135.0

Regulatory Costs in Other Long-Term Assets: The Regulated companies had $83 million (including $2.6 million for CL&P, $38.5 million for NSTAR Electric, $5.5 million for PSNH and $19.4 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 June 30, 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 June 30, 2016		As of December 31, 2015
(Millions of Dollars)	Eversource		Eversource
Cost of Removal	$	448.5	$	437.1
Regulatory Tracker Mechanisms		104.4		99.7
AFUDC - Transmission		65.7		66.1
Other Regulatory Liabilities		28.5		18.5
Total Regulatory Liabilities		647.1		621.4
Less: Current Portion		119.4		107.8
Total Long-Term Regulatory Liabilities	$	527.7	$	513.6

As of June 30, 2016

As of December 31, 2015

NSTAR

(Millions of Dollars)

CL&P

Electric

PSNH

WMECO

CL&P

Electric

PSNH

WMECO

Cost of Removal

30.4