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 June 30, 2017
 
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, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.  (Check one):
 
Large
accelerated filer
 
Accelerated
filer
 
Non-accelerated
filer
 
Smaller reporting company
 
Emerging growth company
 
 
 
 
 
 
 
 
 
 
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
 
¨
 
¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

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, 2017
 
 
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:
Access Northeast
A project being developed jointly by Eversource, Enbridge, Inc. ("Enbridge"), and National Grid plc ("National Grid") through Algonquin Gas Transmission, LLC to bring needed additional natural gas pipeline and storage capacity to New England.
ADIT
Accumulated Deferred Income Taxes
AFUDC
Allowance For Funds Used During Construction
AOCL
Accumulated Other Comprehensive Loss
ARO
Asset Retirement Obligation
Bay State Wind
A project being developed jointly by Eversource and Denmark-based DONG Energy to construct an offshore wind farm off the coast of Massachusetts
Bcf
Billion cubic feet
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

i


ESOP
Employee Stock Ownership Plan
ESPP
Employee Share Purchase Plan
Eversource 2016 Form 10-K
The Eversource Energy and Subsidiaries 2016 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
MMcf
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
NETOs
New England Transmission Owners
Northern Pass
The high-voltage direct-current and associated alternating-current transmission line project from Canada into New Hampshire
NOx
Nitrogen oxides
OCI
Other Comprehensive Income/(Loss)
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)
As of June 30, 2017

As of December 31, 2016





ASSETS
 


 
Current Assets:
 


 
Cash and Cash Equivalents
$
24,638


$
30,251

Receivables, Net
833,945


847,301

Unbilled Revenues
158,183


168,490

Fuel, Materials, Supplies and Inventory
286,296


328,721

Regulatory Assets
870,393


887,625

Prepayments and Other Current Assets
157,359


215,284

Total Current Assets
2,330,814


2,477,672







Property, Plant and Equipment, Net
22,071,496


21,350,510







Deferred Debits and Other Assets:
 


 

Regulatory Assets
3,580,981


3,638,688

Goodwill
3,519,401


3,519,401

Marketable Securities
565,460


544,642

Other Long-Term Assets
590,688


522,260

Total Deferred Debits and Other Assets
8,256,530


8,224,991







Total Assets
$
32,658,840


$
32,053,173





LIABILITIES AND CAPITALIZATION
 

 
Current Liabilities:
 

 
Notes Payable
$
937,500


$
1,148,500

Long-Term Debt – Current Portion
1,483,883


773,883

Accounts Payable
587,174


884,521

Regulatory Liabilities
185,930


146,787

Other Current Liabilities
591,222


684,914

Total Current Liabilities
3,785,709


3,638,605





Deferred Credits and Other Liabilities:
 

 
Accumulated Deferred Income Taxes
5,900,052


5,607,207

Regulatory Liabilities
696,740


702,255

Derivative Liabilities
402,138


413,676

Accrued Pension and SERP
1,073,510


1,141,514

Other Long-Term Liabilities
860,579


853,260

Total Deferred Credits and Other Liabilities
8,933,019


8,717,912







Capitalization:
 

 
Long-Term Debt
8,899,021


8,829,354







Noncontrolling Interest - Preferred Stock of Subsidiaries
155,568


155,568







Equity:
 

 
Common Shareholders' Equity:
 

 
Common Shares
1,669,392


1,669,392

Capital Surplus, Paid In
6,232,501


6,250,224

Retained Earnings
3,364,336


3,175,171

Accumulated Other Comprehensive Loss
(62,935
)

(65,282
)
Treasury Stock
(317,771
)

(317,771
)
Common Shareholders' Equity
10,885,523


10,711,734

Total Capitalization
19,940,112


19,696,656







Total Liabilities and Capitalization
$
32,658,840


$
32,053,173


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 June 30,
 
For the Six Months Ended June 30,
(Thousands of Dollars, Except Share Information)
2017
 
2016
 
2017
 
2016
 
 
 
 
 
 
 
 
Operating Revenues
$
1,762,811

 
$
1,767,184

 
$
3,867,946

 
$
3,822,819

 
 
 
 
 
 
 
 
Operating Expenses:
 
 
 
 
 
 
 
Purchased Power, Fuel and Transmission
549,704

 
581,260

 
1,303,353

 
1,336,119

Operations and Maintenance
302,714

 
320,714

 
632,979

 
640,850

Depreciation
189,881

 
176,507

 
376,686

 
350,492

Amortization of Regulatory (Liabilities)/Assets, Net
(7,807
)
 
(8,716
)
 
16,210

 
12,281

Energy Efficiency Programs
116,398

 
119,667

 
262,556

 
256,842

Taxes Other Than Income Taxes
156,234

 
154,330

 
311,455

 
314,277

Total Operating Expenses
1,307,124

 
1,343,762

 
2,903,239

 
2,910,861

Operating Income
455,687

 
423,422

 
964,707

 
911,958

Interest Expense
107,329

 
100,492

 
210,758

 
198,703

Other Income, Net
21,543

 
8,038

 
35,120

 
10,049

Income Before Income Tax Expense
369,901

 
330,968

 
789,069

 
723,304

Income Tax Expense
137,272

 
125,439

 
295,103

 
271,742

Net Income
232,629

 
205,529

 
493,966

 
451,562

Net Income Attributable to Noncontrolling Interests
1,880

 
1,880

 
3,759

 
3,759

Net Income Attributable to Common Shareholders
$
230,749

 
$
203,649

 
$
490,207

 
$
447,803

 
 
 
 
 
 
 
 
Basic and Diluted Earnings Per Common Share
$
0.72

 
$
0.64

 
$
1.54

 
$
1.41

 
 
 
 
 
 
 
 
Dividends Declared Per Common Share
$
0.48

 
$
0.45

 
$
0.95

 
$
0.89

 
 
 
 
 
 
 
 
Weighted Average Common Shares Outstanding:
 
 
 
 
 
 
 
Basic
317,391,365

 
317,785,495

 
317,427,258

 
317,651,319

Diluted
317,947,194

 
318,476,699

 
318,035,864

 
318,478,876


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 June 30,
 
For the Six Months Ended June 30,
(Thousands of Dollars)
2017
 
2016
 
2017
 
2016
 
 
 
 
 
 
 
 
Net Income
$
232,629

 
$
205,529

 
$
493,966

 
$
451,562

Other Comprehensive (Loss)/Income, Net of Tax:
 
 
 
 
 
 
 
Qualified Cash Flow Hedging Instruments
514

 
534

 
1,048

 
1,068

Changes in Unrealized Gains on Marketable
  Securities
960

 
1,061

 
2,605

 
1,325

Changes in Funded Status of Pension, SERP and
  PBOP Benefit Plans
(2,268
)
 
(1,784
)
 
(1,306
)
 
(913
)
Other Comprehensive (Loss)/Income, Net of Tax
(794
)
 
(189
)
 
2,347

 
1,480

Comprehensive Income Attributable to
  Noncontrolling Interests
(1,880
)
 
(1,880
)
 
(3,759
)
 
(3,759
)
Comprehensive Income Attributable to Common
  Shareholders
$
229,955

 
$
203,460

 
$
492,554

 
$
449,283


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 Six Months Ended June 30,
(Thousands of Dollars)
2017
 
2016




Operating Activities:
 

 
Net Income
$
493,966


$
451,562

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

 
Depreciation
376,686


350,492

Deferred Income Taxes
269,505


250,851

Pension, SERP and PBOP Expense, Net
11,242


22,659

Pension and PBOP Contributions
(91,400
)

(65,929
)
Regulatory Over/(Under) Recoveries, Net
85,792


(5,768
)
Amortization of Regulatory Assets, Net
16,210


12,281

Other
(94,666
)

(10,808
)
Changes in Current Assets and Liabilities:
 

 
Receivables and Unbilled Revenues, Net
(7,660
)

(76,751
)
Fuel, Materials, Supplies and Inventory
42,425


43,930

Taxes Receivable/Accrued, Net
23,980


230,075

Accounts Payable
(168,221
)

(151,996
)
Other Current Assets and Liabilities, Net
(49,889
)

(72,160
)
Net Cash Flows Provided by Operating Activities
907,970


978,438





Investing Activities:
 

 
Investments in Property, Plant and Equipment
(1,146,952
)

(869,168
)
Proceeds from Sales of Marketable Securities
373,853


327,581

Purchases of Marketable Securities
(394,379
)

(322,244
)
Other Investing Activities
(11,050
)

(2,991
)
Net Cash Flows Used in Investing Activities
(1,178,528
)

(866,822
)




Financing Activities:
 

 
Cash Dividends on Common Shares
(301,042
)

(282,314
)
Cash Dividends on Preferred Stock
(3,759
)

(3,759
)
Decrease in Notes Payable
(211,000
)

(393,953
)
Issuance of Long-Term Debt
950,000


800,000

Retirements of Long-Term Debt
(150,000
)

(200,000
)
Other Financing Activities
(19,254
)

(16,811
)
Net Cash Flows Provided by/(Used in) Financing Activities
264,945


(96,837
)
Net (Decrease)/Increase in Cash and Cash Equivalents
(5,613
)

14,779

Cash and Cash Equivalents - Beginning of Period
30,251


23,947

Cash and Cash Equivalents - End of Period
$
24,638


$
38,726


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)
As of June 30, 2017
 
As of December 31, 2016
 
 
 
 
ASSETS
 
 
 
Current Assets:
 
 
 
Cash
$
5,837

 
$
6,579

Receivables, Net
371,504

 
359,132

Accounts Receivable from Affiliated Companies
22,805

 
16,851

Unbilled Revenues
50,436

 
50,373

Materials, Supplies and Inventory
57,324

 
52,050

Regulatory Assets
346,520

 
335,526

Prepayments and Other Current Assets
14,608

 
52,670

Total Current Assets
869,034

 
873,181

 
 
 
 
Property, Plant and Equipment, Net
7,940,398

 
7,632,392

 
 
 
 
Deferred Debits and Other Assets:
 
 
 
Regulatory Assets
1,343,011

 
1,391,564

Other Long-Term Assets
138,405

 
137,907

Total Deferred Debits and Other Assets
1,481,416

 
1,529,471

 
 
 
 
Total Assets
$
10,290,848

 
$
10,035,044

 
 
 
 
LIABILITIES AND CAPITALIZATION
 
 
 
Current Liabilities:
 
 
 
Notes Payable to Eversource Parent
$
101,100

 
$
80,100

Long-Term Debt – Current Portion
400,000

 
250,000

Accounts Payable
229,435

 
289,532

Accounts Payable to Affiliated Companies
54,046

 
88,075

Obligations to Third Party Suppliers
52,854

 
55,520

Regulatory Liabilities
62,195

 
47,055

Derivative Liabilities
64,301

 
77,765

Other Current Liabilities
143,998

 
120,399

Total Current Liabilities
1,107,929

 
1,008,446

 
 
 
 
Deferred Credits and Other Liabilities:
 
 
 
Accumulated Deferred Income Taxes
2,071,421

 
1,987,661

Regulatory Liabilities
101,863

 
100,138

Derivative Liabilities
402,002

 
412,750

Accrued Pension, SERP and PBOP
301,691

 
300,208

Other Long-Term Liabilities
125,996

 
123,244

Total Deferred Credits and Other Liabilities
3,002,973

 
2,924,001

 
 
 
 
Capitalization:
 
 
 
Long-Term Debt
2,513,522

 
2,516,010

 
 
 
 
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
2,110,739

 
2,110,714

Retained Earnings
1,378,895

 
1,299,374

Accumulated Other Comprehensive Income/(Loss)
238

 
(53
)
Common Stockholder's Equity
3,550,224

 
3,470,387

Total Capitalization
6,179,946

 
6,102,597

 
 
 
 
Total Liabilities and Capitalization
$
10,290,848

 
$
10,035,044


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 June 30,
 
For the Six Months Ended June 30,
(Thousands of Dollars)
2017
 
2016
 
2017
 
2016
 
 
 
 
 
 
 
 
Operating Revenues
$
666,558

 
$
679,787

 
$
1,398,867

 
$
1,415,103

 
 
 
 
 
 
 
 
Operating Expenses:
 
 
 
 
 
 
 
Purchased Power and Transmission
207,211

 
234,504

 
452,149

 
507,104

Operations and Maintenance
108,501

 
122,532

 
236,727

 
233,375

Depreciation
60,797

 
57,532

 
120,549

 
114,500

Amortization of Regulatory Assets/(Liabilities), Net
11,422

 
(2,988
)
 
24,225

 
6,891

Energy Efficiency Programs
32,153

 
35,498

 
68,744

 
73,589

Taxes Other Than Income Taxes
70,437

 
70,568

 
144,414

 
146,030

Total Operating Expenses
490,521

 
517,646

 
1,046,808

 
1,081,489

Operating Income
176,037

 
162,141

 
352,059

 
333,614

Interest Expense
35,299

 
35,978

 
70,264

 
72,477

Other Income, Net
3,804

 
6,275

 
6,561

 
7,211

Income Before Income Tax Expense
144,542

 
132,438

 
288,356

 
268,348

Income Tax Expense
53,249

 
49,563

 
106,855

 
98,427

Net Income
$
91,293

 
$
82,875

 
$
181,501

 
$
169,921


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


CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
(Thousands of Dollars)
2017
 
2016
 
2017
 
2016
 
 
 
 
 
 
 
 
Net Income
$
91,293

 
$
82,875

 
$
181,501

 
$
169,921

Other Comprehensive Income, Net of Tax:
 
 
 
 
 
 
 
Qualified Cash Flow Hedging Instruments
91

 
111

 
202

 
222

Changes in Unrealized Gains on Marketable
  Securities
33

 
36

 
89

 
45

Other Comprehensive Income, Net of Tax
124

 
147

 
291

 
267

Comprehensive Income
$
91,417

 
$
83,022

 
$
181,792

 
$
170,188


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 Six Months Ended June 30,
(Thousands of Dollars)
2017
 
2016
 
 
 
 
Operating Activities:
 
 
 
Net Income
$
181,501

 
$
169,921

Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
 
 
 
Depreciation
120,549

 
114,500

Deferred Income Taxes
73,277

 
97,913

Pension, SERP, and PBOP Expense, Net of PBOP Contributions
3,071

 
3,325

Regulatory Over/(Under) Recoveries, Net
9,762

 
(40,386
)
Amortization of Regulatory Assets, Net
24,225

 
6,891

Other
(27,623
)
 
(4,477
)
Changes in Current Assets and Liabilities:
 
 
 
Receivables and Unbilled Revenues, Net
(22,333
)
 
(26,729
)
Taxes Receivable/Accrued, Net
41,733

 
145,852

Accounts Payable
(63,813
)
 
(38,137
)
Other Current Assets and Liabilities, Net
13,541

 
774

Net Cash Flows Provided by Operating Activities
353,890

 
429,447

 
 
 
 
Investing Activities:
 
 
 
Investments in Property, Plant and Equipment
(419,891
)
 
(288,630
)
Proceeds from the Sale of Property, Plant and Equipment
—

 
9,047

Other Investing Activities
132

 
205

Net Cash Flows Used in Investing Activities
(419,759
)
 
(279,378
)
 
 
 
 
Financing Activities:
 
 
 
Cash Dividends on Common Stock
(99,200
)
 
(99,800
)
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
(150,000
)
 
—

Increase/(Decrease) in Notes Payable to Eversource Parent
21,000

 
(184,400
)
Other Financing Activities
(3,894
)
 
(398
)
Net Cash Flows Provided by/(Used in) Financing Activities
65,127

 
(141,677
)
Net (Decrease)/Increase in Cash
(742
)
 
8,392

Cash - Beginning of Period
6,579

 
1,057

Cash - End of Period
$
5,837

 
$
9,449


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)
As of June 30, 2017
 
As of December 31, 2016
 
 
 
 
ASSETS
 

 
 

Current Assets:
 
 
 
Cash and Cash Equivalents
$
4,475

 
$
3,494

Receivables, Net
261,344

 
257,557

Accounts Receivable from Affiliated Companies
28,619

 
8,581

Unbilled Revenues
40,163

 
31,632

Taxes Receivable
3,532

 
39,738

Materials, Supplies and Inventory
35,067

 
62,288

Regulatory Assets
270,230

 
289,400

Prepayments and Other Current Assets
17,730

 
14,906

Total Current Assets
661,160

 
707,596

 
 
 
 
Property, Plant and Equipment, Net
6,188,535

 
6,051,835

 
 
 
 
Deferred Debits and Other Assets:
 
 
 
Regulatory Assets
1,064,099

 
1,057,746

Prepaid PBOP
109,658

 
95,073

Other Long-Term Assets
71,657

 
60,572

Total Deferred Debits and Other Assets
1,245,414

 
1,213,391

 
 
 
 
Total Assets
$
8,095,109

 
$
7,972,822

 
 
 
 
LIABILITIES AND CAPITALIZATION
 
 
 
Current Liabilities:
 
 
 
Notes Payable
$
—

 
$
126,500

Long-Term Debt – Current Portion
400,000

 
400,000

Accounts Payable
151,056

 
232,599

Accounts Payable to Affiliated Companies
8,389

 
91,532

Obligations to Third Party Suppliers
67,254

 
55,863

Renewable Portfolio Standards Compliance Obligations
44,258

 
75,571

Regulatory Liabilities
48,350

 
63,653

Other Current Liabilities
48,736

 
71,122

Total Current Liabilities
768,043

 
1,116,840

 
 
 
 
Deferred Credits and Other Liabilities:
 
 
 
Accumulated Deferred Income Taxes
1,898,526

 
1,836,292

Regulatory Liabilities
394,527

 
391,823

Accrued Pension and SERP
111,994

 
111,827

Other Long-Term Liabilities
130,023

 
123,194

Total Deferred Credits and Other Liabilities
2,535,070

 
2,463,136

 
 
 
 
Capitalization:
 
 
 
Long-Term Debt
2,025,929

 
1,678,116

 
 
 
 
Preferred Stock Not Subject to Mandatory Redemption
43,000

 
43,000

 
 
 
 
Common Stockholder's Equity:
 
 
 
Common Stock
—

 
—

Capital Surplus, Paid In
1,047,178

 
1,045,378

Retained Earnings
1,675,529

 
1,625,984

Accumulated Other Comprehensive Income
360

 
368

Common Stockholder's Equity
2,723,067

 
2,671,730

Total Capitalization
4,791,996

 
4,392,846

 
 
 
 
Total Liabilities and Capitalization
$
8,095,109


$
7,972,822


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 June 30,
 
For the Six Months Ended June 30,
(Thousands of Dollars)
2017
 
2016
 
2017
 
2016
 
 
 
 
 
 
 
 
Operating Revenues
$
584,069

 
$
591,301

 
$
1,187,848

 
$
1,205,517

 
 
 
 
 
 
 
 
Operating Expenses:
 

 
 

 
 

 
 

Purchased Power and Transmission
197,291

 
219,189

 
430,384

 
473,525

Operations and Maintenance
85,281

 
88,954

 
173,632

 
183,650

Depreciation
56,181

 
52,571

 
111,397

 
104,457

Amortization of Regulatory Assets, Net
2,984

 
3,971

 
7,961

 
8,654

Energy Efficiency Programs
59,876

 
61,922

 
127,188

 
128,165

Taxes Other Than Income Taxes
34,648

 
34,194

 
62,041

 
66,750

Total Operating Expenses
436,261

 
460,801

 
912,603

 
965,201

Operating Income
147,808

 
130,500

 
275,245

 
240,316

Interest Expense
23,445

 
20,216

 
45,473

 
41,104

Other Income, Net
2,029

 
2,836

 
5,277

 
2,502

Income Before Income Tax Expense
126,392

 
113,120

 
235,049

 
201,714

Income Tax Expense
49,029

 
44,953

 
91,524

 
79,053

Net Income
$
77,363

 
$
68,167

 
$
143,525

 
$
122,661


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 June 30,
 
For the Six Months Ended June 30,
(Thousands of Dollars)
2017
 
2016
 
2017
 
2016
 
 
 
 
 
 
 
 
Net Income
$
77,363

 
$
68,167

 
$
143,525

 
$
122,661

Other Comprehensive Loss, Net of Tax:
 
 
 
 
 
 
 
  Changes in Funded Status of SERP Benefit Plan
(4
)
 
(11
)
 
(8
)
 
(21
)
Other Comprehensive Loss, Net of Tax
(4
)
 
(11
)
 
(8
)
 
(21
)
Comprehensive Income
$
77,359

 
$
68,156

 
$
143,517

 
$
122,640


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 Six Months Ended June 30,
(Thousands of Dollars)
2017
 
2016
 
 
 
 
Operating Activities:
 

 
 

Net Income
$
143,525

 
$
122,661

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

 
 

Depreciation
111,397

 
104,457

Deferred Income Taxes
60,673

 
48,505

Pension, SERP and PBOP (Benefits)/Expense, Net
(4,944
)
 
2,192

Pension and PBOP Contributions
(15,360
)
 
(15,428
)
Regulatory Overrecoveries, Net
8,257

 
26,277

Amortization of Regulatory Assets, Net
7,961

 
8,654

Other
(15,309
)
 
(3,978
)
Changes in Current Assets and Liabilities:
 

 
 

Receivables and Unbilled Revenues, Net
(42,050
)
 
(56,140
)
Materials, Supplies and Inventory
27,221

 
35,194

Taxes Receivable/Accrued, Net
36,207

 
45,608

Accounts Payable
(133,614
)
 
(88,774
)
Other Current Assets and Liabilities, Net
(45,430
)
 
(64,084
)
Net Cash Flows Provided by Operating Activities
138,534

 
165,144

 
 
 
 
Investing Activities:
 

 
 

Investments in Property, Plant and Equipment
(262,097
)
 
(199,824
)
Other Investing Activities
(3,617
)
 
—

Net Cash Flows Used in Investing Activities
(265,714
)
 
(199,824
)
 
 
 
 
Financing Activities:
 

 
 

Cash Dividends on Common Stock
(93,000
)
 
(278,300
)
Cash Dividends on Preferred Stock
(980
)
 
(980
)
Capital Contributions from Eversource Parent
1,800

 
—

(Decrease)/Increase in Notes Payable
(126,500
)
 
266,500

Issuance of Long-Term Debt
350,000

 
250,000

Retirements of Long-Term Debt
—

 
(200,000
)
Other Financing Activities
(3,159
)
 
(2,495
)
Net Cash Flows Provided by Financing Activities
128,161

 
34,725

Increase in Cash and Cash Equivalents
981

 
45

Cash and Cash Equivalents - Beginning of Period
3,494

 
3,346

Cash and Cash Equivalents - End of Period
$
4,475

 
$
3,391


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)
As of June 30, 2017
 
As of December 31, 2016
 
 
 
 
ASSETS
 
 
 
Current Assets:
 
 
 
Cash
$
192

 
$
4,646

Receivables, Net
81,937

 
84,450

Accounts Receivable from Affiliated Companies
3,781

 
4,185

Unbilled Revenues
41,723

 
41,004

Taxes Receivable
27,122

 
6,177

Fuel, Materials, Supplies and Inventory
150,066

 
162,354

Regulatory Assets
132,424

 
117,240

Prepayments and Other Current Assets
20,514

 
22,731

Total Current Assets
457,759

 
442,787

 
 
 
 
Property, Plant and Equipment, Net
3,118,456

 
3,039,313

 
 
 
 
Deferred Debits and Other Assets:
 
 
 
Regulatory Assets
249,612

 
245,525

Other Long-Term Assets
47,075

 
37,720

Total Deferred Debits and Other Assets
296,687

 
283,245

 
 
 
 
Total Assets
$
3,872,902

 
$
3,765,345

 
 
 
 
LIABILITIES AND CAPITALIZATION
 
 
 
Current Liabilities:
 
 
 
Notes Payable to Eversource Parent
$
194,100

 
$
160,900

Long-Term Debt – Current Portion
180,000

 
70,000

Accounts Payable
78,218

 
85,716

Accounts Payable to Affiliated Companies
21,207

 
29,154

Regulatory Liabilities
13,696

 
12,659

Other Current Liabilities
46,415

 
43,253

Total Current Liabilities
533,636

 
401,682

 
 
 
 
Deferred Credits and Other Liabilities:
 
 
 
Accumulated Deferred Income Taxes
821,799

 
785,385

Regulatory Liabilities
43,845

 
44,779

Accrued Pension, SERP and PBOP
101,143

 
94,652

Other Long-Term Liabilities
50,051

 
49,442

Total Deferred Credits and Other Liabilities
1,016,838

 
974,258

 
 
 
 
Capitalization:
 
 
 
Long-Term Debt
892,333

 
1,002,048

 
 
 
 
Common Stockholder's Equity:
 
 
 
Common Stock
—

 
—

Capital Surplus, Paid In
843,134

 
843,134

Retained Earnings
591,288

 
549,286

Accumulated Other Comprehensive Loss
(4,327
)
 
(5,063
)
Common Stockholder's Equity
1,430,095

 
1,387,357

Total Capitalization
2,322,428

 
2,389,405

 
 
 
 
Total Liabilities and Capitalization
$
3,872,902

 
$
3,765,345


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 June 30,
 
For the Six Months Ended June 30,
(Thousands of Dollars)
2017
 
2016
 
2017
 
2016
 
 
 
 
 
 
 
 
Operating Revenues
$
230,383

 
$
218,517

 
$
483,541

 
$
460,807

 
 
 
 
 
 
 
 
Operating Expenses:
 
 
 
 
 
 
 
Purchased Power, Fuel and Transmission
60,442

 
45,653

 
122,189

 
95,867

Operations and Maintenance
65,134

 
63,788

 
127,484

 
123,001

Depreciation
32,447

 
28,644

 
63,182

 
56,879

Amortization of Regulatory (Liabilities)/Assets, Net
(18,937
)
 
(8,186
)
 
(13,492
)
 
332

Energy Efficiency Programs
3,287

 
3,259

 
7,032

 
6,879

Taxes Other Than Income Taxes
23,118

 
22,287

 
44,001

 
44,082

Total Operating Expenses
165,491

 
155,445

 
350,396

 
327,040

Operating Income
64,892

 
63,072

 
133,145

 
133,767

Interest Expense
12,970

 
12,526

 
25,780

 
24,987

Other Income, Net
456

 
282

 
1,654

 
432

Income Before Income Tax Expense
52,378

 
50,828

 
109,019

 
109,212

Income Tax Expense
20,787

 
19,573

 
43,116

 
41,899

Net Income
$
31,591

 
$
31,255

 
$
65,903

 
$
67,313


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 June 30,
 
For the Six Months Ended June 30,
(Thousands of Dollars)
2017
 
2016
 
2017
 
2016
 
 
 
 
 
 
 
 
Net Income
$
31,591

 
$
31,255

 
$
65,903

 
$
67,313

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

 
291

 
581

 
581

Changes in Unrealized Gains on Marketable
  Securities
58

 
63

 
155

 
79

Other Comprehensive Income, Net of Tax
348

 
354

 
736

 
660

Comprehensive Income
$
31,939

 
$
31,609

 
$
66,639

 
$
67,973


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 Six Months Ended June 30,
(Thousands of Dollars)
2017
 
2016
 
 
 
 
Operating Activities:
 
 
 
Net Income
$
65,903

 
$
67,313

Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
 
 
 
Depreciation
63,182

 
56,879

Deferred Income Taxes
37,670

 
45,976

Regulatory Underrecoveries, Net
(1,964
)
 
(10,740
)
Amortization of Regulatory (Liabilities)/Assets, Net
(13,492
)
 
332

Other
(6,763
)
 
(8,484
)
Changes in Current Assets and Liabilities:
 
 
 
Receivables and Unbilled Revenues, Net
(1,427
)
 
(5,247
)
Fuel, Materials, Supplies and Inventory
12,288

 
5,394

Taxes Receivable/Accrued, Net
(20,945
)
 
33,840

Accounts Payable
2,236

 
20,417

Other Current Assets and Liabilities, Net
5,419

 
(1,422
)
Net Cash Flows Provided by Operating Activities
142,107

 
204,258

 
 
 
 
Investing Activities:
 
 
 
Investments in Property, Plant and Equipment
(155,737
)
 
(138,713
)
Other Investing Activities
26

 
172

Net Cash Flows Used in Investing Activities
(155,711
)
 
(138,541
)
 
 
 
 
Financing Activities:
 
 
 
Cash Dividends on Common Stock
(23,900
)
 
(38,800
)
Capital Contributions from Eversource Parent
—

 
83,000

Increase/(Decrease) in Notes Payable to Eversource Parent
33,200

 
(110,400
)
Other Financing Activities
(150
)
 
(166
)
Net Cash Flows Provided by/(Used in) Financing Activities
9,150

 
(66,366
)
Net Decrease in Cash
(4,454
)
 
(649
)
Cash - Beginning of Period
4,646

 
1,733

Cash - End of Period
$
192

 
$
1,084


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)
As of June 30, 2017
 
As of December 31, 2016
 
 
 
 
ASSETS
 
 
 
Current Assets:
 
 
 
Receivables, Net
$
54,178

 
$
54,940

Accounts Receivable from Affiliated Companies
11,393

 
14,425

Unbilled Revenues
17,335

 
15,329

Materials, Supplies and Inventory
5,784

 
8,618

Regulatory Assets
67,310

 
64,123

Prepayments and Other Current Assets
1,821

 
2,595

Total Current Assets
157,821

 
160,030

 
 
 
 
Property, Plant and Equipment, Net
1,719,824

 
1,678,262

 
 
 
 
Deferred Debits and Other Assets:
 
 
 
Regulatory Assets
124,899

 
127,291

Other Long-Term Assets
33,780

 
29,062

Total Deferred Debits and Other Assets
158,679

 
156,353

 
 
 
 
Total Assets
$
2,036,324

 
$
1,994,645

 
 
 
 
LIABILITIES AND CAPITALIZATION
 
 
 
Current Liabilities:
 
 
 
Notes Payable to Eversource Parent
$
68,700

 
$
51,000

Accounts Payable
32,258

 
56,036

Accounts Payable to Affiliated Companies
28,484

 
19,478

Obligations to Third Party Suppliers
9,458

 
10,508

Renewable Portfolio Standards Compliance Obligations
11,114

 
20,383

Regulatory Liabilities
11,062

 
14,888

Other Current Liabilities
12,574

 
14,984

Total Current Liabilities
173,650

 
187,277

 
 
 
 
Deferred Credits and Other Liabilities:
 

 
 
Accumulated Deferred Income Taxes
523,028

 
490,793

Regulatory Liabilities
20,887

 
17,227

Accrued Pension, SERP and PBOP
19,798

 
20,390

Other Long-Term Liabilities
45,471

 
41,308

Total Deferred Credits and Other Liabilities
609,184

 
569,718

 
 
 
 
Capitalization:
 

 
 
Long-Term Debt
566,293

 
566,536

 
 
 
 
Common Stockholder's Equity:
 

 
 
Common Stock
10,866

 
10,866

Capital Surplus, Paid In
444,398

 
444,398

Retained Earnings
234,051

 
218,212

Accumulated Other Comprehensive Loss
(2,118
)
 
(2,362
)
Common Stockholder's Equity
687,197

 
671,114