Document



 
eversourcea01.jpg
 

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 September 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:  (800) 286-5000
04-2147929
 
 
 
0-00404
THE CONNECTICUT LIGHT AND POWER COMPANY
(a Connecticut corporation)
107 Selden Street
Berlin, Connecticut 06037-1616
Telephone:  (800) 286-5000
06-0303850
 
 
 
1-02301
NSTAR ELECTRIC COMPANY
(a Massachusetts corporation)
800 Boylston Street
Boston, Massachusetts 02199
Telephone:  (800) 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:  (800) 286-5000
02-0181050
 
 
 
0-7624
WESTERN MASSACHUSETTS ELECTRIC COMPANY
(a Massachusetts corporation)
300 Cadwell Drive
Springfield, Massachusetts 01104
Telephone:  (800) 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 October 31, 2016
Eversource Energy
Common shares, $5.00 par value
316,885,808 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
Clean Energy Connect Project
The Clean Energy Connect project is a planned transmission, wind and hydro generation project that Eversource plans to co-develop with experienced renewable generation companies.
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

i


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
NOx
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



ii


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
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PART II – OTHER INFORMATION
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

iii



EVERSOURCE ENERGY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Thousands of Dollars)
September 30, 2016
 
December 31, 2015
 
 
 
 
ASSETS
 

 
 
Current Assets:
 

 
 
Cash and Cash Equivalents
$
40,056

 
$
23,947

Receivables, Net
963,279

 
775,480

Unbilled Revenues
187,749

 
202,647

Taxes Receivable
4,527

 
305,359

Fuel, Materials, Supplies and Inventory
311,051

 
336,476

Regulatory Assets
752,378

 
845,843

Prepayments and Other Current Assets
155,612

 
129,034

Total Current Assets
2,414,652

 
2,618,786

 
 
 
 
Property, Plant and Equipment, Net
20,807,943

 
19,892,441

 
 
 
 
Deferred Debits and Other Assets:
 

 
 

Regulatory Assets
3,469,879

 
3,737,960

Goodwill
3,519,401

 
3,519,401

Marketable Securities
525,809

 
516,478

Other Long-Term Assets
344,653

 
295,243

Total Deferred Debits and Other Assets
7,859,742

 
8,069,082

 
 
 
 
Total Assets
$
31,082,337

 
$
30,580,309

 
 
 
 
LIABILITIES AND CAPITALIZATION
 
 
 
Current Liabilities:
 
 
 
Notes Payable
$
734,500

 
$
1,160,953

Long-Term Debt - Current Portion
373,883

 
228,883

Accounts Payable
679,505

 
813,646

Obligations to Third Party Suppliers
166,845

 
128,564

Regulatory Liabilities
160,442

 
107,759

Other Current Liabilities
526,853

 
549,985

Total Current Liabilities
2,642,028

 
2,989,790

 
 
 
 
Deferred Credits and Other Liabilities:
 
 
 
Accumulated Deferred Income Taxes
5,442,856

 
5,147,678

Regulatory Liabilities
550,162

 
513,595

Derivative Liabilities
427,382

 
337,102

Accrued Pension, SERP and PBOP
1,116,240

 
1,407,288

Other Long-Term Liabilities
875,589

 
871,499

Total Deferred Credits and Other Liabilities
8,412,229

 
8,277,162

 
 
 
 
Capitalization:
 
 
 
Long-Term Debt
9,235,128

 
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
6,256,580

 
6,262,368

Retained Earnings
3,087,006

 
2,797,355

Accumulated Other Comprehensive Loss
(65,617
)
 
(66,844
)
Treasury Stock
(309,977
)
 
(309,977
)
Common Shareholders’ Equity
10,637,384

 
10,352,215

Total Capitalization
20,028,080

 
19,313,357

 
 
 
 
Total Liabilities and Capitalization
$
31,082,337

 
$
30,580,309


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

1


EVERSOURCE ENERGY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
For the Three Months Ended September 30,
 
For the Nine Months Ended September 30,
(Thousands of Dollars, Except Share Information)
2016
 
2015
 
2016
 
2015
 
 
 
 
 
 
 
 
Operating Revenues
$
2,039,706

 
$
1,933,105

 
$
5,862,525

 
$
6,263,597

 
 
 
 
 
 
 
 
Operating Expenses:
 
 
 
 
 
 
 
Purchased Power, Fuel and Transmission
665,810

 
702,640

 
2,001,929

 
2,549,807

Operations and Maintenance
324,734

 
327,283

 
965,584

 
977,306

Depreciation
181,288

 
167,884

 
531,781

 
495,389

Amortization of Regulatory Assets/(Liabilities), Net
43,942

 
(16,851
)
 
56,223

 
42,587

Energy Efficiency Programs
149,121

 
132,107

 
405,962

 
380,559

Taxes Other Than Income Taxes
164,942

 
150,804

 
479,219

 
439,221

Total Operating Expenses
1,529,837

 
1,463,867

 
4,440,698

 
4,884,869

Operating Income
509,869

 
469,238

 
1,421,827

 
1,378,728

Interest Expense
99,865

 
92,534

 
298,568

 
279,635

Other Income, Net
13,641

 
5,241

 
23,689

 
23,866

Income Before Income Tax Expense
423,645

 
381,945

 
1,146,948

 
1,122,959

Income Tax Expense
156,446

 
144,146

 
428,186

 
420,640

Net Income
267,199

 
237,799

 
718,762

 
702,319

Net Income Attributable to Noncontrolling Interests
1,880

 
1,879

 
5,639

 
5,639

Net Income Attributable to Common Shareholders
$
265,319

 
$
235,920

 
$
713,123

 
$
696,680

 
 
 
 
 
 
 
 
Basic Earnings Per Common Share
$
0.83

 
$
0.74

 
$
2.24

 
$
2.20

 
 
 
 
 
 
 
 
Diluted Earnings Per Common Share
$
0.83

 
$
0.74

 
$
2.24

 
$
2.19

 
 
 
 
 
 
 
 
Dividends Declared Per Common Share
$
0.45

 
$
0.42

 
$
1.34

 
$
1.25

 
 
 
 
 
 
 
 
Weighted Average Common Shares Outstanding:
 
 
 
 
 
 
 
Basic
317,787,836

 
317,452,212

 
317,696,823

 
317,296,107

Diluted
318,577,079

 
318,405,269

 
318,511,609

 
318,396,042


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


CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 
For the Three Months Ended September 30,
 
For the Nine Months Ended September 30,
(Thousands of Dollars)
2016
 
2015
 
2016
 
2015
 
 
 
 
 
 
 
 
Net Income
$
267,199

 
$
237,799

 
$
718,762

 
$
702,319

Other Comprehensive (Loss)/Income, Net of Tax:
 
 
 
 
 
 
 
Qualified Cash Flow Hedging Instruments
534

 
526

 
1,602

 
1,544

Changes in Unrealized Gains/(Losses) on
Marketable Securities
946

 
(2,803
)
 
2,271

 
(3,919
)
Changes in Funded Status of Pension,
SERP and PBOP Benefit Plans
(1,733
)
 
764

 
(2,646
)
 
2,838

Other Comprehensive (Loss)/Income, Net of Tax
(253
)
 
(1,513
)
 
1,227

 
463

Comprehensive Income Attributable to
Noncontrolling Interests
(1,880
)
 
(1,879
)
 
(5,639
)
 
(5,639
)
Comprehensive Income Attributable to
Common Shareholders
$
265,066

 
$
234,407

 
$
714,350

 
$
697,143


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

2


EVERSOURCE ENERGY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
For the Nine Months Ended September 30,
(Thousands of Dollars)
2016
 
2015




Operating Activities:
 

 
Net Income
$
718,762


$
702,319

Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
 

 
Depreciation
531,781


495,389

Deferred Income Taxes
301,413


153,353

Pension, SERP and PBOP Expense
31,627


71,802

Pension and PBOP Contributions
(121,854
)

(162,880
)
Regulatory Overrecoveries, Net
152,808


31,874

Amortization of Regulatory Assets, Net
56,223


42,587

Other
(27,671
)

(39,822
)
Changes in Current Assets and Liabilities:
 

 
Receivables and Unbilled Revenues, Net
(191,454
)

(148,442
)
Fuel, Materials, Supplies and Inventory
25,425


47,380

Taxes Receivable/Accrued, Net
347,898


383,047

Accounts Payable
(121,513
)

(233,660
)
Other Current Assets and Liabilities, Net
(53,077
)

8,370

Net Cash Flows Provided by Operating Activities
1,650,368


1,351,317





Investing Activities:
 

 
Investments in Property, Plant and Equipment
(1,359,171
)

(1,177,285
)
Proceeds from Sales of Marketable Securities
444,209


556,582

Purchases of Marketable Securities
(437,197
)

(535,044
)
Other Investing Activities
(9,463
)

(2,769
)
Net Cash Flows Used in Investing Activities
(1,361,622
)

(1,158,516
)




Financing Activities:
 

 
Cash Dividends on Common Shares
(423,471
)

(397,363
)
Cash Dividends on Preferred Stock
(5,639
)

(5,639
)
Decrease in Notes Payable
(426,453
)

(387,575
)
Issuance of Long-Term Debt
800,000


825,000

Retirements of Long-Term Debt
(200,000
)

(216,700
)
Other Financing Activities
(17,074
)

(13,446
)
Net Cash Flows Used in Financing Activities
(272,637
)

(195,723
)
Net Increase/(Decrease) in Cash and Cash Equivalents
16,109


(2,922
)
Cash and Cash Equivalents - Beginning of Period
23,947


38,703

Cash and Cash Equivalents - End of Period
$
40,056


$
35,781


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



3



THE CONNECTICUT LIGHT AND POWER COMPANY
CONDENSED BALANCE SHEETS
(Unaudited)
(Thousands of Dollars)
September 30, 2016
 
December 31, 2015
 
 
 
 
ASSETS
 
 
 
Current Assets:
 
 
 
Cash
$
8,607

 
$
1,057

Receivables, Net
425,421

 
352,536

Accounts Receivable from Affiliated Companies
24,012

 
21,214

Unbilled Revenues
87,771

 
99,879

Taxes Receivable
—

 
137,643

Materials and Supplies
51,598

 
43,124

Regulatory Assets
267,733

 
268,318

Prepaid Property Taxes
54,619

 
18,019

Prepayments and Other Current Assets
15,439

 
14,215

Total Current Assets
935,200

 
956,005

 
 
 
 
Property, Plant and Equipment, Net
7,453,200

 
7,156,809

 
 
 
 
Deferred Debits and Other Assets:
 
 
 
Regulatory Assets
1,398,610

 
1,369,028

Other Long-Term Assets
131,049

 
111,115

Total Deferred Debits and Other Assets
1,529,659

 
1,480,143

 
 
 
 
Total Assets
$
9,918,059

 
$
9,592,957

 
 
 
 
LIABILITIES AND CAPITALIZATION
 
 
 
Current Liabilities:
 
 
 
Notes Payable to Eversource Parent
$
108,500

 
$
277,400

Long-Term Debt - Current Portion
250,000

 
—

Accounts Payable
228,744

 
267,764

Accounts Payable to Affiliated Companies
63,718

 
66,456

Obligations to Third Party Suppliers
66,952

 
60,746

Accrued Taxes
71,238

 
12,068

Regulatory Liabilities
75,654

 
61,155

Derivative Liabilities
85,342

 
91,820

Other Current Liabilities
94,762

 
98,563

Total Current Liabilities
1,044,910

 
935,972

 
 
 
 
Deferred Credits and Other Liabilities:
 
 
 
Accumulated Deferred Income Taxes
1,931,369

 
1,820,865

Regulatory Liabilities
89,599

 
74,830

Derivative Liabilities
426,053

 
336,189

Accrued Pension, SERP and PBOP
274,456

 
271,056

Other Long-Term Liabilities
130,477

 
133,446

Total Deferred Credits and Other Liabilities
2,851,954

 
2,636,386

 
 
 
 
Capitalization:
 
 
 
Long-Term Debt
2,515,444

 
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
2,056,402

 
1,910,663

Retained Earnings
1,272,962

 
1,170,278

Accumulated Other Comprehensive Loss
(165
)
 
(576
)
Common Stockholder’s Equity
3,389,551

 
3,140,717

Total Capitalization
6,021,195

 
6,020,599

 
 
 
 
Total Liabilities and Capitalization
$
9,918,059

 
$
9,592,957


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

4


THE CONNECTICUT LIGHT AND POWER COMPANY
CONDENSED STATEMENTS OF INCOME
(Unaudited)
 
For the Three Months Ended September 30,
 
For the Nine Months Ended September 30,
(Thousands of Dollars)
2016
 
2015
 
2016
 
2015
 
 
 
 
 
 
 
 
Operating Revenues
$
760,037

 
$
704,262

 
$
2,175,141

 
$
2,175,733

 
 
 
 
 
 
 
 
Operating Expenses:
 
 
 
 
 
 
 
Purchased Power and Transmission
253,509

 
274,762

 
760,613

 
861,562

Operations and Maintenance
123,034

 
122,280

 
356,409

 
358,324

Depreciation
57,675

 
54,809

 
172,175

 
159,903

Amortization of Regulatory Assets/(Liabilities), Net
23,418

 
(22,859
)
 
30,308

 
17,917

Energy Efficiency Programs
44,381

 
42,590

 
117,969

 
119,360

Taxes Other Than Income Taxes
81,948

 
71,563

 
227,981

 
201,743

Total Operating Expenses
583,965

 
543,145

 
1,665,455

 
1,718,809

Operating Income
176,072

 
161,117

 
509,686

 
456,924

Interest Expense
36,083

 
36,716

 
108,561

 
109,463

Other Income, Net
3,669

 
2,356

 
10,881

 
8,576

Income Before Income Tax Expense
143,658

 
126,757

 
412,006

 
356,037

Income Tax Expense
57,026

 
46,569

 
155,453

 
127,845

Net Income
$
86,632

 
$
80,188

 
$
256,553

 
$
228,192


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


CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 
For the Three Months Ended September 30,
 
For the Nine Months Ended September 30,
(Thousands of Dollars)
2016
 
2015
 
2016
 
2015
 
 
 
 
 
 
 
 
Net Income
$
86,632

 
$
80,188

 
$
256,553

 
$
228,192

Other Comprehensive Income, Net of Tax:
 
 
 
 
 
 
 
Qualified Cash Flow Hedging Instruments
111

 
111

 
333

 
333

Changes in Unrealized Gains/(Losses)
  on Marketable Securities
33

 
(98
)
 
78

 
(137
)
Other Comprehensive Income, Net of Tax
144

 
13

 
411

 
196

Comprehensive Income
$
86,776

 
$
80,201

 
$
256,964

 
$
228,388


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


5


THE CONNECTICUT LIGHT AND POWER COMPANY
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
 
For the Nine Months Ended September 30,
(Thousands of Dollars)
2016
 
2015
 
 
 
 
Operating Activities:
 
 
 
Net Income
$
256,553

 
$
228,192

Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
 
 
 
Depreciation
172,175

 
159,903

Deferred Income Taxes
109,637

 
(11,011
)
Pension, SERP, and PBOP Expense, Net of PBOP Contributions
4,825

 
10,654

Regulatory Overrecoveries, Net
33,492

 
12,504

Amortization of Regulatory Assets, Net
30,308

 
17,917

Other
(14,873
)
 
(13,048
)
Changes in Current Assets and Liabilities:
 
 
 
Receivables and Unbilled Revenues, Net
(100,074
)
 
(91,842
)
Taxes Receivable/Accrued, Net
197,422

 
160,031

Accounts Payable
(30,168
)
 
(20,485
)
Other Current Assets and Liabilities, Net
(44,908
)
 
(31,044
)
Net Cash Flows Provided by Operating Activities
614,389

 
421,771

 
 
 
 
Investing Activities:
 
 
 
Investments in Property, Plant and Equipment
(438,518
)
 
(359,339
)
Proceeds from the Sale of  Property, Plant and Equipment
9,047

 
—

Other Investing Activities
310

 
(740
)
Net Cash Flows Used in Investing Activities
(429,161
)
 
(360,079
)
 
 
 
 
Financing Activities:
 
 
 
Cash Dividends on Common Stock
(149,700
)
 
(147,000
)
Cash Dividends on Preferred Stock
(4,169
)
 
(4,169
)
Capital Contributions from Eversource Parent
145,700

 
105,000

Issuance of Long-Term Debt
—

 
300,000

Retirement of Long-Term Debt
—

 
(162,000
)
Decrease in Notes Payable to Eversource Parent
(168,900
)
 
(133,400
)
Other Financing Activities
(609
)
 
(9,072
)
Net Cash Flows Used in Financing Activities
(177,678
)
 
(50,641
)
Net Increase in Cash
7,550

 
11,051

Cash - Beginning of Period
1,057

 
2,356

Cash - End of Period
$
8,607

 
$
13,407


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




6



NSTAR ELECTRIC COMPANY AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Thousands of Dollars)
September 30, 2016
 
December 31, 2015
 
 
 
 
ASSETS
 

 
 

Current Assets:
 
 
 
Cash and Cash Equivalents
$
6,154

 
$
3,346

Receivables, Net
300,692

 
229,936

Accounts Receivable from Affiliated Companies
8,891

 
4,034

Unbilled Revenues
40,370

 
29,464

Taxes Receivable
—

 
70,236

Materials, Supplies and Inventory
44,827

 
75,487

Regulatory Assets
259,213

 
348,408

Prepayments and Other Current Assets
11,025

 
11,448

Total Current Assets
671,172

 
772,359

 
 
 
 
Property, Plant and Equipment, Net
5,875,874

 
5,655,458

 
 
 
 
Deferred Debits and Other Assets:
 
 
 
Regulatory Assets
1,043,237

 
1,112,977

Other Long-Term Assets
118,924

 
62,467

Total Deferred Debits and Other Assets
1,162,161

 
1,175,444

 
 
 
 
Total Assets
$
7,709,207

 
$
7,603,261

 
 
 
 
LIABILITIES AND CAPITALIZATION
 
 
 
Current Liabilities:
 
 
 
Notes Payable
$
36,000

 
$
62,500

Long-Term Debt - Current Portion
—

 
200,000

Accounts Payable
194,894

 
228,250

Accounts Payable to Affiliated Companies
64,912

 
38,648

Obligations to Third Party Suppliers
87,183

 
56,718

Renewable Portfolio Standards Compliance Obligations
56,741

 
104,847

Accrued Taxes
78,429

 
6,585

Regulatory Liabilities
48,842

 
3,281

Other Current Liabilities
56,879

 
65,422

Total Current Liabilities
623,880

 
766,251

 
 
 
 
Deferred Credits and Other Liabilities:
 
 
 
Accumulated Deferred Income Taxes
1,795,763

 
1,760,339

Regulatory Liabilities
357,168

 
264,352

Accrued Pension, SERP and PBOP
91,788

 
209,153

Other Long-Term Liabilities
125,137

 
120,939

Total Deferred Credits and Other Liabilities
2,369,856

 
2,354,783

 
 
 
 
Capitalization:
 
 
 
Long-Term Debt
2,077,955

 
1,829,766

 
 
 
 
Preferred Stock Not Subject to Mandatory Redemption
43,000

 
43,000

 
 
 
 
Common Stockholder’s Equity:
 
 
 
Common Stock
—

 
—

Capital Surplus, Paid In
1,020,378

 
995,378

Retained Earnings
1,573,624

 
1,613,538

Accumulated Other Comprehensive Income
514

 
545

Common Stockholder’s Equity
2,594,516

 
2,609,461

Total Capitalization
4,715,471

 
4,482,227

 
 
 
 
Total Liabilities and Capitalization
$
7,709,207


$
7,603,261


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

7


NSTAR ELECTRIC COMPANY AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
For the Three Months Ended September 30,
 
For the Nine Months Ended September 30,
(Thousands of Dollars)
2016
 
2015
 
2016
 
2015
 
 
 
 
 
 
 
 
Operating Revenues
$
780,462

 
$
750,724

 
$
1,985,979

 
$
2,134,728

 
 
 
 
 
 
 
 
Operating Expenses:
 

 
 

 
 

 
 

Purchased Power and Transmission
291,382

 
299,040

 
764,907

 
984,035

Operations and Maintenance
96,282

 
83,486

 
279,932

 
228,740

Depreciation
54,695

 
49,101

 
159,151

 
146,818

Amortization of Regulatory Assets/(Liabilities), Net
9,621

 
2,257

 
18,275

 
(10,643
)
Energy Efficiency Programs
84,717

 
67,693

 
212,882

 
164,843

Taxes Other Than Income Taxes
35,050

 
34,982

 
101,800

 
95,821

Total Operating Expenses
571,747

 
536,559

 
1,536,947

 
1,609,614

Operating Income
208,715

 
214,165

 
449,032

 
525,114

Interest Expense
21,101

 
18,992

 
62,206

 
57,218

Other Income, Net
5,022

 
513

 
7,524

 
3,649

Income Before Income Tax Expense
192,636

 
195,686

 
394,350

 
471,545

Income Tax Expense
75,440

 
77,062

 
154,493

 
187,397

Net Income
$
117,196

 
$
118,624

 
$
239,857

 
$
284,148


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


CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 
For the Three Months Ended September 30,
 
For the Nine Months Ended September 30,
(Thousands of Dollars)
2016
 
2015
 
2016
 
2015
 
 
 
 
 
 
 
 
Net Income
$
117,196

 
$
118,624

 
$
239,857

 
$
284,148

Other Comprehensive Loss, Net of Tax:
 
 
 
 
 
 
 
  Changes in Funded Status of SERP Benefit Plan
(10
)
 
(2
)
 
(31
)
 
(184
)
Other Comprehensive Loss, Net of Tax
(10
)
 
(2
)
 
(31
)
 
(184
)
Comprehensive Income
$
117,186

 
$
118,622

 
$
239,826

 
$
283,964


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


8


NSTAR ELECTRIC COMPANY AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
For the Nine Months Ended September 30,
(Thousands of Dollars)
2016
 
2015
 
 
 
 
Operating Activities:
 

 
 

Net Income
$
239,857

 
$
284,148

Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
 

 
 

Depreciation
159,151

 
146,818

Deferred Income Taxes
40,960

 
54,188

Pension and PBOP Contributions, Net of Pension, SERP and PBOP Expense
(25,364
)
 
(1,138
)
Regulatory Over/(Under) Recoveries, Net
131,774

 
(48,903
)
Amortization of Regulatory Assets/(Liabilities), Net
18,275

 
(10,643
)
Other
(20,088
)
 
(34,223
)
Changes in Current Assets and Liabilities:
 

 
 

Receivables and Unbilled Revenues, Net
(103,444
)
 
(84,587
)
Materials, Supplies and Inventory
30,659

 
21,863

Taxes Receivable/Accrued, Net
141,379

 
207,516

Accounts Payable
(22,913
)
 
(79,449
)
Other Current Assets and Liabilities, Net
(25,942
)
 
46,671

Net Cash Flows Provided by Operating Activities
564,304

 
502,261

 
 
 
 
Investing Activities:
 

 
 

Investments in Property, Plant and Equipment
(327,731
)
 
(314,055
)
Net Cash Flows Used in Investing Activities
(327,731
)
 
(314,055
)
 
 
 
 
Financing Activities:
 

 
 

Cash Dividends on Common Stock
(278,300
)
 
(148,500
)
Cash Dividends on Preferred Stock
(1,470
)
 
(1,470
)
Decrease in Notes Payable
(26,500
)
 
(43,500
)
Issuance of Long-Term Debt
250,000

 
—

Retirements of Long-Term Debt
(200,000
)
 
(4,700
)
Capital Contributions from Eversource Parent
25,000

 
—

Other Financing Activities
(2,495
)
 
—

Net Cash Flows Used in Financing Activities
(233,765
)
 
(198,170
)
Increase/(Decrease) in Cash and Cash Equivalents
2,808

 
(9,964
)
Cash and Cash Equivalents - Beginning of Period
3,346

 
12,773

Cash and Cash Equivalents - End of Period
$
6,154

 
$
2,809


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


9



PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Thousands of Dollars)
September 30, 2016
 
December 31, 2015
 
 
 
 
ASSETS
 
 
 
Current Assets:
 
 
 
Cash
$
4,436

 
$
1,733

Receivables, Net
97,613

 
77,546

Accounts Receivable from Affiliated Companies
4,190

 
2,352

Unbilled Revenues
39,168

 
38,207

Taxes Receivable
7,913

 
43,128

Fuel, Materials, Supplies and Inventory
160,882

 
156,868

Regulatory Assets
100,598

 
104,971

Prepayments and Other Current Assets
4,271

 
24,302

Total Current Assets
419,071

 
449,107

 
 
 
 
Property, Plant and Equipment, Net
2,973,057

 
2,855,363

 
 
 
 
Deferred Debits and Other Assets:
 
 
 
Regulatory Assets
252,609

 
257,873

Other Long-Term Assets
35,793

 
34,176

Total Deferred Debits and Other Assets
288,402

 
292,049

 
 
 
 
Total Assets
$
3,680,530

 
$
3,596,519

 
 
 
 
LIABILITIES AND CAPITALIZATION
 
 
 
Current Liabilities:
 
 
 
Notes Payable to Eversource Parent
$
107,500

 
$
231,300

Long-Term Debt - Current Portion
70,000

 
—

Accounts Payable
76,762

 
87,925

Accounts Payable to Affiliated Companies
34,350

 
24,214

Regulatory Liabilities
5,519

 
6,898

Other Current Liabilities
48,339

 
43,921

Total Current Liabilities
342,470

 
394,258

 
 
 
 
Deferred Credits and Other Liabilities:
 
 
 
Accumulated Deferred Income Taxes
774,737

 
705,894

Regulatory Liabilities
46,428

 
47,851

Accrued Pension, SERP and PBOP
84,547

 
89,579

Other Long-Term Liabilities
50,249

 
50,746

Total Deferred Credits and Other Liabilities
955,961

 
894,070

 
 
 
 
Capitalization:
 
 
 
Long-Term Debt
1,001,790

 
1,071,017

 
 
 
 
Common Stockholder’s Equity:
 
 
 
Common Stock
—

 
—

Capital Surplus, Paid In
843,134

 
748,634

Retained Earnings
542,530

 
494,901

Accumulated Other Comprehensive Loss
(5,355
)
 
(6,361
)
Common Stockholder’s Equity
1,380,309

 
1,237,174

Total Capitalization
2,382,099

 
2,308,191

 
 
 
 
Total Liabilities and Capitalization
$
3,680,530

 
$
3,596,519


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


10


PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
For the Three Months Ended September 30,
 
For the Nine Months Ended September 30,
(Thousands of Dollars)
2016
 
2015
 
2016
 
2015
 
 
 
 
 
 
 
 
Operating Revenues
$
266,946

 
$
234,364

 
$
727,753

 
$
761,086

 
 
 
 
 
 
 
 
Operating Expenses:
 
 
 
 
 
 
 
Purchased Power, Fuel and Transmission
59,833

 
53,017

 
155,700

 
200,533

Operations and Maintenance
64,183

 
65,190

 
187,184

 
200,085

Depreciation
29,646

 
26,592

 
86,524

 
77,989

Amortization of Regulatory Assets, Net
14,158

 
1,967

 
14,490

 
29,148

Energy Efficiency Programs
3,983

 
3,873

 
10,862

 
11,001

Taxes Other Than Income Taxes
20,460

 
20,104

 
64,543

 
61,435

Total Operating Expenses
192,263

 
170,743

 
519,303

 
580,191

Operating Income
74,683

 
63,621

 
208,450

 
180,895

Interest Expense
12,397

 
11,647

 
37,386

 
34,582

Other Income, Net
574

 
685

 
1,007

 
2,313

Income Before Income Tax Expense
62,860

 
52,659

 
172,071

 
148,626

Income Tax Expense
24,345

 
20,158

 
66,242

 
56,135

Net Income
$
38,515

 
$
32,501

 
$
105,829

 
$
92,491


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


CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 
For the Three Months Ended September 30,
 
For the Nine Months Ended September 30,
(Thousands of Dollars)
2016
 
2015
 
2016
 
2015
 
 
 
 
 
 
 
 
Net Income
$
38,515

 
$
32,501

 
$
105,829

 
$
92,491

Other Comprehensive Income, Net of Tax:
 
 
 
 
 
 
 
Qualified Cash Flow Hedging Instruments
290

 
291

 
871

 
872

Changes in Unrealized Gains/(Losses)
   on Marketable Securities
56

 
(169
)
 
135

 
(236
)
Other Comprehensive Income, Net of Tax
346

 
122

 
1,006

 
636

Comprehensive Income
$
38,861

 
$
32,623

 
$
106,835

 
$
93,127


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


11


PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
For the Nine Months Ended September 30,
(Thousands of Dollars)
2016
 
2015
 
 
 
 
Operating Activities:
 
 
 
Net Income
$
105,829

 
$
92,491

Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
 
 
 
Depreciation
86,524

 
77,989

Deferred Income Taxes
74,522

 
42,563

Regulatory (Under)/Over Recoveries, Net
(4,289
)
 
2,639

Amortization of Regulatory Assets, Net
14,490

 
29,148

Other
(12,660
)
 
10,894

Changes in Current Assets and Liabilities:
 
 
 
Receivables and Unbilled Revenues, Net
(28,754
)
 
(25,126
)
Fuel, Materials, Supplies and Inventory
(4,014
)
 
4,156

Taxes Receivable/Accrued, Net
33,589

 
9,026

Accounts Payable
14,508

 
(20,058
)
Other Current Assets and Liabilities, Net
26,207

 
20,141

Net Cash Flows Provided by Operating Activities
305,952

 
243,863

 
 
 
 
Investing Activities:
 
 
 
Investments in Property, Plant and Equipment
(215,804
)
 
(209,522
)
Other Investing Activities
272

 
241

Net Cash Flows Used in Investing Activities
(215,532
)
 
(209,281
)
 
 
 
 
Financing Activities:
 
 
 
Cash Dividends on Common Stock
(58,200
)
 
(79,500
)
Capital Contributions from Eversource Parent
94,500

 
—

(Decrease)/Increase in Notes Payable to Eversource Parent
(123,800
)
 
46,800

Other Financing Activities
(217
)
 
(268
)
Net Cash Flows Used in Financing Activities
(87,717
)
 
(32,968
)
Net Increase in Cash
2,703

 
1,614

Cash - Beginning of Period
1,733

 
489

Cash - End of Period
$
4,436

 
$
2,103


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


12



WESTERN MASSACHUSETTS ELECTRIC COMPANY
CONDENSED BALANCE SHEETS
(Unaudited)
(Thousands of Dollars)
September 30, 2016
 
December 31, 2015
 
 
 
 
ASSETS
 
 
 
Current Assets:
 
 
 
Cash
$
—

 
$
834

Receivables, Net
59,685

 
50,912

Accounts Receivable from Affiliated Companies
11,962

 
18,633

Unbilled Revenues
12,169

 
15,065

Taxes Receivable
1

 
33,407

Materials, Supplies and Inventory
8,068

 
5,992

Regulatory Assets
54,081

 
56,166

Prepayments and Other Current Assets
1,374

 
1,890

Total Current Assets
147,340

 
182,899

 
 
 
 
Property, Plant and Equipment, Net
1,643,335

 
1,575,306

 
 
 
 
Deferred Debits and Other Assets:
 
 
 
Regulatory Assets
128,308

 
135,010

Other Long-Term Assets
28,165

 
24,875

Total Deferred Debits and Other Assets
156,473

 
159,885

 
 
 
 
Total Assets
$
1,947,148

 
$
1,918,090

 
 
 
 
LIABILITIES AND CAPITALIZATION
 
 
 
Current Liabilities:
 
 
 
Notes Payable to Eversource Parent
$
48,200

 
$
143,400

Accounts Payable
38,191

 
58,364

Accounts Payable to Affiliated Companies
14,501

 
19,896

Obligations to Third Party Suppliers
11,444

 
9,654

Renewable Portfolio Standards Compliance Obligations
16,314

 
6,395

Regulatory Liabilities
12,384

 
13,122

Other Current Liabilities
12,258

 
13,878

Total Current Liabilities
153,292

 
264,709

 
 
 
 
Deferred Credits and Other Liabilities:
 

 
 
Accumulated Deferred Income Taxes
486,137

 
470,539

Regulatory Liabilities
14,422

 
11,597

Accrued Pension, SERP and PBOP
16,032

 
19,515

Other Long-Term Liabilities
42,072

 
36,819

Total Deferred Credits and Other Liabilities
558,663

 
538,470

 
 
 
 
Capitalization:
 

 
 
Long-Term Debt
566,657

 
517,329

 
 
 
 
Common Stockholder’s Equity:
 

 
 
Common Stock
10,866

 
10,866

Capital Surplus, Paid In
444,399

 
391,398

Retained Earnings
215,743

 
198,140

Accumulated Other Comprehensive Loss
(2,472
)
 
(2,822
)
Common Stockholder’s Equity
668,536

 
597,582

Total Capitalization
1,235,193

 
1,114,911

 
 
 
 
Total Liabilities and Capitalization
$
1,947,148

 
$
1,918,090


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


13


WESTERN MASSACHUSETTS ELECTRIC COMPANY
CONDENSED STATEMENTS OF INCOME
(Unaudited)
 
For the Three Months Ended September 30,
 
For the Nine Months Ended September 30,
(Thousands of Dollars)
2016
 
2015
 
2016