Edgar Filing: EVERSOURCE ENERGY

Document




	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, 2018
	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

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.



	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	¨	¨

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

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, 2018

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

Eversource Energy holds all of the 6,035,205 shares, 200 shares, and 301 shares of the outstanding common stock of The Connecticut Light and Power Company, NSTAR Electric Company, and Public Service Company of New Hampshire, respectively.

NSTAR Electric Company and Public Service Company of New Hampshire 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, and Public Service Company of New Hampshire 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 and 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
NSTAR Gas	NSTAR Gas Company
Yankee Gas	Yankee Gas Services Company
Aquarion	Eversource Aquarion Holdings, Inc and its subsidiaries (formerly known as Macquarie Utilities Inc)
NPT	Northern Pass Transmission LLC
Northern Pass	The HVDC and associated alternating-current transmission line project from Canada into New Hampshire
Eversource Service	Eversource Energy Service Company
Bay State Wind	A project being developed jointly by Eversource and Denmark-based Ørsted (formerly known as DONG Energy) to construct an offshore wind farm off the coast of Massachusetts
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 and PSNH, the natural gas distribution businesses of Yankee Gas and NSTAR Gas, NPT, Aquarion, the generation facilities of PSNH, and the solar power facilities of NSTAR Electric
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 ("AGT") 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
AOCI	Accumulated Other Comprehensive Income
ARO	Asset Retirement Obligation
Bcf	Billion cubic feet
C&LM	Conservation and Load Management
CfD	Contract for Differences
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
Eversource 2017 Form 10-K	The Eversource Energy and Subsidiaries 2017 combined Annual Report on Form 10-K as filed with the SEC
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
MG	Million gallons
MGP	Manufactured Gas Plant
MMBtu	One million British thermal units
MMcf	Million cubic feet
Moody's	Moody's Investors Services, Inc.
MW	Megawatt
MWh	Megawatt-Hours
NEEWS	New England East-West Solution
NETOs	New England Transmission Owners (including Eversource, National Grid and Avangrid)
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
RRBs	Rate Reduction Bonds
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
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 SUBSIDIARIES

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 Subsidiaries (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

	Combined Notes to Condensed Financial Statements (Unaudited)	13

ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations
	Eversource Energy and Subsidiaries	39
	The Connecticut Light and Power Company, NSTAR Electric Company and Subsidiary, and Public Service Company of New Hampshire and Subsidiaries	57

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	64

ITEM 4.	Controls and Procedures	64

PART II – OTHER INFORMATION

ITEM 1.	Legal Proceedings	65

ITEM 1A.	Risk Factors	65

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	65

ITEM 6.	Exhibits	66

SIGNATURES		68

iii

EVERSOURCE ENERGY AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)



(Thousands of Dollars)	As of September 30, 2018			As of December 31, 2017

ASSETS
Current Assets:
Cash and Cash Equivalents	$	59,092		$	38,165
Receivables, Net	1,091,589			925,083
Unbilled Revenues	170,044			201,361
Fuel, Materials, Supplies and Inventory	192,508			223,063
Regulatory Assets	436,704			741,868
Prepayments and Other Current Assets	203,434			138,009
Assets Held for Sale	—			219,550
Total Current Assets	2,153,371			2,487,099

Property, Plant and Equipment, Net	24,967,702			23,617,463

Deferred Debits and Other Assets:
Regulatory Assets	4,716,631			4,497,447
Goodwill	4,427,266			4,427,266
Marketable Securities	585,960			585,419
Other Long-Term Assets	664,739			605,692
Total Deferred Debits and Other Assets	10,394,596			10,115,824

Total Assets	$	37,515,669		$	36,220,386

LIABILITIES AND CAPITALIZATION
Current Liabilities:
Notes Payable	$	1,067,200		$	1,088,087
Long-Term Debt – Current Portion	387,310			549,631
Rate Reduction Bonds – Current Portion	52,332			—
Accounts Payable	962,298			1,085,034
Obligations to Third Party Suppliers	199,762			144,046
Regulatory Liabilities	344,708			128,071
Other Current Liabilities	616,662			594,176
Total Current Liabilities	3,630,272			3,589,045

Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes	3,386,324			3,297,518
Regulatory Liabilities	3,706,792			3,637,273
Derivative Liabilities	385,865			377,257
Accrued Pension, SERP and PBOP	1,013,182			1,228,091
Other Long-Term Liabilities	1,094,019			1,073,501
Total Deferred Credits and Other Liabilities	9,586,182			9,613,640

Long-Term Debt	12,151,536			11,775,889

Rate Reduction Bonds	583,331			—

Noncontrolling Interest – Preferred Stock of Subsidiaries	155,570			155,570

Common Shareholders' Equity:
Common Shares	1,669,392			1,669,392
Capital Surplus, Paid In	6,234,044			6,239,940
Retained Earnings	3,882,695			3,561,084
Accumulated Other Comprehensive Loss	(59,582		)	(66,403		)
Treasury Stock	(317,771		)	(317,771		)
Common Shareholders' Equity	11,408,778			11,086,242

Total Liabilities and Capitalization	$	37,515,669		$	36,220,386

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 September 30,				For the Nine Months Ended September 30,
(Thousands of Dollars, Except Share Information)	2018		2017		2018		2017

Operating Revenues	$	2,271,425	$	1,988,512	$	6,413,243	$	5,856,458

Operating Expenses:
Purchased Power, Fuel and Transmission	842,291		651,776		2,442,953		1,955,129
Operations and Maintenance	344,475		307,773		970,881		956,274
Depreciation	208,671		194,466		612,077		571,152
Amortization	92,711		41,848		174,108		58,058
Energy Efficiency Programs	129,965		129,205		366,162		391,761
Taxes Other Than Income Taxes	187,291		168,193		547,155		479,648
Total Operating Expenses	1,805,404		1,493,261		5,113,336		4,412,022
Operating Income	466,021		495,251		1,299,907		1,444,436
Interest Expense	125,201		108,719		372,734		319,477
Other Income, Net	16,718		28,536		100,656		79,178
Income Before Income Tax Expense	357,538		415,068		1,027,829		1,204,137
Income Tax Expense	66,278		152,818		220,497		447,921
Net Income	291,260		262,250		807,332		756,216
Net Income Attributable to Noncontrolling Interests	1,880		1,880		5,639		5,639
Net Income Attributable to Common Shareholders	$	289,380	$	260,370	$	801,693	$	750,577

Basic Earnings Per Common Share	$	0.91	$	0.82	$	2.53	$	2.36

Diluted Earnings Per Common Share	$	0.91	$	0.82	$	2.52	$	2.36

Dividends Declared Per Common Share	$	0.51	$	0.48	$	1.52	$	1.43

Weighted Average Common Shares Outstanding:
Basic	317,360,110		317,393,029		317,367,252		317,415,848
Diluted	317,967,311		317,949,396		317,948,498		318,007,042

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)	2018			2017			2018			2017

Net Income	$	291,260		$	262,250		$	807,332		$	756,216
Other Comprehensive Income/(Loss), Net of Tax:
Qualified Cash Flow Hedging Instruments	432			519			1,627			1,567
Changes in Unrealized (Losses)/Gains on Marketable Securities	(136		)	(1,872		)	(724		)	733
Changes in Funded Status of Pension, SERP and PBOP Benefit Plans	1,110			673			5,918			(633		)
Other Comprehensive Income/(Loss), Net of Tax	1,406			(680		)	6,821			1,667
Comprehensive Income Attributable to Noncontrolling Interests	(1,880		)	(1,880		)	(5,639		)	(5,639		)
Comprehensive Income Attributable to Common Shareholders	$	290,786		$	259,690		$	808,514		$	752,244

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 Nine Months Ended September 30,
(Thousands of Dollars)	2018			2017

Operating Activities:
Net Income	$	807,332		$	756,216
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
Depreciation	612,077			571,152
Deferred Income Taxes	70,402			374,863
Uncollectible Expense	50,720			30,111
Pension, SERP and PBOP Expense, Net	5,192			16,891
Pension and PBOP Contributions	(188,874		)	(197,900		)
Regulatory Overrecoveries, Net	189,932			185,952
Amortization	174,108			58,058
Other	(129,039		)	(197,876		)
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net	(212,326		)	(107,473		)
Fuel, Materials, Supplies and Inventory	44,702			23,686
Taxes Receivable/Accrued, Net	70,885			88,856
Accounts Payable	(72,591		)	(96,551		)
Other Current Assets and Liabilities, Net	(14,858		)	(30,138		)
Net Cash Flows Provided by Operating Activities	1,407,662			1,475,847

Investing Activities:
Investments in Property, Plant and Equipment	(1,885,081		)	(1,642,280		)
Proceeds from Sales of Marketable Securities	405,276			520,664
Purchases of Marketable Securities	(396,277		)	(506,302		)
Proceeds from the Sale of PSNH Generation Assets	193,924			—
Other Investing Activities	(23,405		)	(24,173		)
Net Cash Flows Used in Investing Activities	(1,705,563		)	(1,652,091		)

Financing Activities:
Cash Dividends on Common Shares	(480,082		)	(451,562		)
Cash Dividends on Preferred Stock	(5,639		)	(5,639		)
Decrease in Notes Payable	(222,110		)	(231,500		)
Issuance of Rate Reduction Bonds	635,663			—
Issuance of Long-Term Debt	1,300,000			1,250,000
Retirement of Long-Term Debt	(860,855		)	(320,000		)
Other Financing Activities	(20,361		)	171
Net Cash Flows Provided by Financing Activities	346,616			241,470
Net Increase in Cash, Cash Equivalents and Restricted Cash	48,715			65,226
Cash, Cash Equivalents and Restricted Cash - Beginning of Period	85,890			106,750
Cash, Cash Equivalents and Restricted Cash - End of Period	$	134,605		$	171,976

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

THE CONNECTICUT LIGHT AND POWER COMPANY

CONDENSED BALANCE SHEETS

(Unaudited)



(Thousands of Dollars)	As of September 30, 2018		As of December 31, 2017

ASSETS
Current Assets:
Cash	$	977	$	6,028
Receivables, Net	466,768		370,676
Accounts Receivable from Affiliated Companies	32,074		28,181
Unbilled Revenues	53,690		54,154
Materials, Supplies and Inventory	45,757		48,438
Regulatory Assets	128,793		200,281
Prepaid Property Taxes	60,532		17,884
Prepayments and Other Current Assets	15,470		29,042
Total Current Assets	804,061		754,684

Property, Plant and Equipment, Net	8,753,744		8,271,030

Deferred Debits and Other Assets:
Regulatory Assets	1,545,012		1,444,935
Other Long-Term Assets	175,488		159,597
Total Deferred Debits and Other Assets	1,720,500		1,604,532

Total Assets	$	11,278,305	$	10,630,246

LIABILITIES AND CAPITALIZATION
Current Liabilities:
Notes Payable to Eversource Parent	$	45,900	$	69,500
Long-Term Debt – Current Portion	250,000		300,000
Accounts Payable	347,443		367,605
Accounts Payable to Affiliated Companies	86,772		82,201
Obligations to Third Party Suppliers	64,283		52,860
Accrued Taxes	78,507		21,665
Regulatory Liabilities	126,574		38,967
Other Current Liabilities	152,147		159,961
Total Current Liabilities	1,151,626		1,092,759

Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes	1,136,221		1,103,367
Regulatory Liabilities	1,131,234		1,112,136
Derivative Liabilities	385,779		376,918
Accrued Pension, SERP and PBOP	301,946		354,469
Other Long-Term Liabilities	130,069		128,135
Total Deferred Credits and Other Liabilities	3,085,249		3,075,025

Long-Term Debt	3,003,625		2,759,135

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	2,210,765		2,110,765
Retained Earnings	1,650,182		1,415,741
Accumulated Other Comprehensive Income	306		269
Common Stockholder's Equity	3,921,605		3,587,127

Total Liabilities and Capitalization	$	11,278,305	$	10,630,246

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 September 30,				For the Nine Months Ended September 30,
(Thousands of Dollars)	2018		2017		2018		2017

Operating Revenues	$	865,028	$	774,762	$	2,344,903	$	2,173,629

Operating Expenses:
Purchased Power and Transmission	314,571		259,005		850,794		711,154
Operations and Maintenance	128,523		123,511		355,500		361,166
Depreciation	72,017		63,727		208,899		184,275
Amortization of Regulatory Assets, Net	54,031		34,574		97,437		58,799
Energy Efficiency Programs	30,240		37,739		71,606		106,483
Taxes Other Than Income Taxes	92,987		79,067		267,662		223,482
Total Operating Expenses	692,369		597,623		1,851,898		1,645,359
Operating Income	172,659		177,139		493,005		528,270
Interest Expense	37,609		36,313		113,107		106,577
Other Income, Net	7,098		7,913		20,722		15,402
Income Before Income Tax Expense	142,148		148,739		400,620		437,095
Income Tax Expense	41,818		52,595		102,010		159,450
Net Income	$	100,330	$	96,144	$	298,610	$	277,645

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)	2018			2017			2018			2017

Net Income	$	100,330		$	96,144		$	298,610		$	277,645
Other Comprehensive (Loss)/Income, Net of Tax:
Qualified Cash Flow Hedging Instruments	(7		)	96			58			298
Changes in Unrealized (Losses)/Gains on Marketable Securities	(5		)	(64		)	(21		)	25
Other Comprehensive (Loss)/Income, Net of Tax	(12		)	32			37			323
Comprehensive Income	$	100,318		$	96,176		$	298,647		$	277,968

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 Nine Months Ended September 30,
(Thousands of Dollars)	2018			2017

Operating Activities:
Net Income	$	298,610		$	277,645
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
Depreciation	208,899			184,275
Deferred Income Taxes	28,637			90,132
Uncollectible Expense	12,135			1,755
Pension, SERP, and PBOP Expense, Net	6,594			6,421
Pension Contributions	(41,150		)	(1,875		)
Regulatory (Under)/Over Recoveries, Net	(1,136		)	71,413
Amortization of Regulatory Assets, Net	97,437			58,799
Other	(55,827		)	(23,911		)
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net	(126,513		)	(70,936		)
Taxes Receivable/Accrued, Net	72,702			69,335
Accounts Payable	(15,303		)	(1,649		)
Other Current Assets and Liabilities, Net	(33,965		)	(36,340		)
Net Cash Flows Provided by Operating Activities	451,120			625,064

Investing Activities:
Investments in Property, Plant and Equipment	(660,673		)	(621,882		)
Other Investing Activities	167			185
Net Cash Flows Used in Investing Activities	(660,506		)	(621,697		)

Financing Activities:
Cash Dividends on Common Stock	(60,000		)	(205,200		)
Cash Dividends on Preferred Stock	(4,169		)	(4,169		)
Capital Contributions from Eversource Parent	100,000			—
Issuance of Long-Term Debt	500,000			525,000
Retirement of Long-Term Debt	(300,000		)	(250,000		)
Decrease in Notes Payable to Eversource Parent	(23,600		)	(80,100		)
Premium on Issuance of Long-Term Debt	—			21,937
Other Financing Activities	(7,584		)	(6,322		)
Net Cash Flows Provided by Financing Activities	204,647			1,146
Net (Decrease)/Increase in Cash and Restricted Cash	(4,739		)	4,513
Cash and Restricted Cash - Beginning of Period	9,619			8,403
Cash and Restricted Cash - End of Period	$	4,880		$	12,916

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

NSTAR ELECTRIC COMPANY AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)



(Thousands of Dollars)	As of September 30, 2018			As of December 31, 2017

ASSETS
Current Assets:
Cash and Cash Equivalents	$	2,367		$	1,763
Receivables, Net	457,695			341,341
Accounts Receivable from Affiliated Companies	43,767			40,723
Unbilled Revenues	55,046			49,865
Materials, Supplies and Inventory	66,361			95,517
Regulatory Assets	193,541			333,882
Prepayments and Other Current Assets	18,128			24,499
Total Current Assets	836,905			887,590

Property, Plant and Equipment, Net	8,576,096			8,246,494

Deferred Debits and Other Assets:
Regulatory Assets	1,226,811			1,190,575
Prepaid PBOP	153,142			126,948
Other Long-Term Assets	107,208			84,766
Total Deferred Debits and Other Assets	1,487,161			1,402,289

Total Assets	$	10,900,162		$	10,536,373

LIABILITIES AND CAPITALIZATION
Current Liabilities:
Notes Payable	$	240,500		$	234,000
Notes Payable to Eversource Parent	16,000			—
Accounts Payable	296,208			340,115
Accounts Payable to Affiliated Companies	77,329			91,260
Obligations to Third Party Suppliers	133,865			88,721
Renewable Portfolio Standards Compliance Obligations	100,782			111,524
Regulatory Liabilities	168,225			79,562
Other Current Liabilities	113,728			79,916
Total Current Liabilities	1,146,637			1,025,098

Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes	1,279,302			1,275,814
Regulatory Liabilities	1,566,285			1,514,451
Accrued Pension and SERP	6,171			89,995
Other Long-Term Liabilities	219,050			198,176
Total Deferred Credits and Other Liabilities	3,070,808			3,078,436

Long-Term Debt	2,944,616			2,943,759

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

Common Stockholder's Equity:
Common Stock	—			—
Capital Surplus, Paid In	1,608,442			1,502,942
Retained Earnings	2,088,157			1,944,961
Accumulated Other Comprehensive Loss	(1,498		)	(1,823		)
Common Stockholder's Equity	3,695,101			3,446,080

Total Liabilities and Capitalization	$	10,900,162		$	10,536,373

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 September 30,				For the Nine Months Ended September 30,
(Thousands of Dollars)	2018		2017		2018		2017

Operating Revenues	$	939,460	$	851,922	$	2,400,324	$	2,290,432

Operating Expenses:
Purchased Power and Transmission	383,208		294,115		981,895		799,007
Operations and Maintenance	123,634		118,777		344,478		346,469
Depreciation	70,616		68,746		205,210		204,442
Amortization of Regulatory Assets, Net	17,149		10,131		35,467		17,243
Energy Efficiency Programs	89,430		82,611		229,408		228,543
Taxes Other Than Income Taxes	49,927		47,830		145,740		130,492
Total Operating Expenses	733,964		622,210		1,942,198		1,726,196
Operating Income	205,496		229,712		458,126		564,236
Interest Expense	26,958		30,810		80,780		88,715
Other Income, Net	13,697		9,165		40,567		24,610
Income Before Income Tax Expense	192,235		208,067		417,913		500,131
Income Tax Expense	51,640		82,301		112,247		196,001
Net Income	$	140,595	$	125,766	$	305,666	$	304,130

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)	2018			2017			2018			2017

Net Income	$	140,595		$	125,766		$	305,666		$	304,130
Other Comprehensive Income, Net of Tax:
Changes in Funded Status of SERP Benefit Plan	1			(4		)	3			(12		)
Qualified Cash Flow Hedging Instruments	110			109			328			328
Changes in Unrealized (Losses)/Gains on Marketable Securities	(1		)	(18		)	(6		)	7
Other Comprehensive Income, Net of Tax	110			87			325			323
Comprehensive Income	$	140,705		$	125,853		$	305,991		$	304,453

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 Nine Months Ended September 30,
(Thousands of Dollars)	2018			2017

Operating Activities:
Net Income	$	305,666		$	304,130
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
Depreciation	205,210			204,442
Deferred Income Taxes	16,203			100,335
Uncollectible Expense	20,433			14,937
Pension, SERP and PBOP Income, Net	(15,855		)	(7,586		)
Pension and PBOP Contributions	(60,454		)	(83,040		)
Regulatory Overrecoveries, Net	180,797			71,647
Amortization of Regulatory Assets, Net	35,467			17,243
Other	(49,178		)	(47,972		)
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net	(155,669		)	(113,960		)
Materials, Supplies and Inventory	29,156			11,483
Taxes Receivable/Accrued, Net	42,148			71,705
Accounts Payable	(13,178		)	(42,519		)
Other Current Assets and Liabilities, Net	33,543			4,982
Net Cash Flows Provided by Operating Activities	574,289			505,827

Investing Activities:
Investments in Property, Plant and Equipment	(538,973		)	(467,275		)
Other Investing Activities	46			(3,565		)
Net Cash Flows Used in Investing Activities	(538,927		)	(470,840		)

Financing Activities:
Cash Dividends on Common Stock	(161,000		)	(214,500		)
Cash Dividends on Preferred Stock	(1,470		)	(1,470		)
Capital Contributions from Eversource Parent	105,500			2,300
Increase in Notes Payable to Eversource Parent	16,000			—
Increase/(Decrease) in Notes Payable	6,500			(80,600		)
Issuance of Long-Term Debt	—			350,000
Other Financing Activities	(239		)	(3,410		)
Net Cash Flows (Used in)/Provided by Financing Activities	(34,709		)	52,320
Increase in Cash, Cash Equivalents and Restricted Cash	653			87,307
Cash, Cash Equivalents and Restricted Cash - Beginning of Period	14,708			15,506
Cash, Cash Equivalents and Restricted Cash - End of Period	$	15,361		$	102,813

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

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)



(Thousands of Dollars)	As of September 30, 2018			As of December 31, 2017

ASSETS
Current Assets:
Cash	$	7,462		$	900
Receivables, Net	115,706			92,774
Accounts Receivable from Affiliated Companies	20,007			5,297
Unbilled Revenues	39,760			49,448
Materials, Supplies and Inventory	39,877			40,285
Regulatory Assets	61,379			130,134
Special Deposits	26,863			728
Prepayments and Other Current Assets	7,600			28,203
Assets Held for Sale	—			219,550
Total Current Assets	318,654			567,319

Property, Plant and Equipment, Net	2,826,541			2,642,274

Deferred Debits and Other Assets:
Regulatory Assets	892,075			810,677
Other Long-Term Assets	19,252			42,391
Total Deferred Debits and Other Assets	911,327			853,068

Total Assets	$	4,056,522		$	4,062,661

LIABILITIES AND CAPITALIZATION
Current Liabilities:
Notes Payable to Eversource Parent	$	46,600		$	262,900
Long-Term Debt – Current Portion	—			110,000
Rate Reduction Bonds – Current Portion	52,332			—
Accounts Payable	118,523			128,685
Accounts Payable to Affiliated Companies	35,699			24,676
Dividends Payable to Eversource Parent	—			150,000
Accrued Interest	19,615			6,722
Renewable Portfolio Standards Compliance Obligations	29,867			27,765
Regulatory Liabilities	39,661			6,251
Other Current Liabilities	34,790			33,437
Total Current Liabilities	377,087			750,436

Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes	457,512			443,468
Regulatory Liabilities	433,822			444,397
Accrued Pension, SERP and PBOP	126,839			124,639
Other Long-Term Liabilities	35,901			56,689
Total Deferred Credits and Other Liabilities	1,054,074			1,069,193

Long-Term Debt	894,100			892,438

Rate Reduction Bonds	583,331			—

Common Stockholder's Equity:
Common Stock	—			—
Capital Surplus, Paid In	538,134			843,134
Retained Earnings	612,919			511,382
Accumulated Other Comprehensive Loss	(3,123		)	(3,922		)
Common Stockholder's Equity	1,147,930			1,350,594

Total Liabilities and Capitalization	$	4,056,522		$	4,062,661

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

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE 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)	2018		2017		2018		2017

Operating Revenues	$	290,203	$	250,032	$	792,700	$	733,572

Operating Expenses:
Purchased Power, Fuel and Transmission	100,763		57,099		293,975		179,289
Operations and Maintenance	55,429		65,104		153,296		195,637
Depreciation	23,223		32,084		69,524		95,266
Amortization of Regulatory Assets/(Liabilities), Net	27,357		2,835		41,318		(10,658		)
Energy Efficiency Programs	5,863		4,007		15,694		11,040
Taxes Other Than Income Taxes	21,095		22,936		59,775		66,935
Total Operating Expenses	233,730		184,065		633,582		537,509
Operating Income	56,473		65,967		159,118		196,063
Interest Expense	16,593		12,896		43,977		38,676
Other Income, Net	16,095		2,664		24,253		7,367
Income Before Income Tax Expense	55,975		55,735		139,394		164,754
Income Tax Expense	15,309		22,012		37,857		65,128
Net Income	$	40,666	$	33,723	$	101,537	$	99,626

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)	2018			2017			2018			2017

Net Income	$	40,666		$	33,723		$	101,537		$	99,626
Other Comprehensive Income, Net of Tax:
Qualified Cash Flow Hedging Instruments	268			291			835			872
Changes in Unrealized (Losses)/Gains on Marketable Securities	(7		)	(112		)	(36		)	43
Other Comprehensive Income, Net of Tax	261			179			799			915
Comprehensive Income	$	40,927		$	33,902		$	102,336		$	100,541

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

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



	For the Nine Months Ended September 30,
(Thousands of Dollars)	2018			2017

Operating Activities:
Net Income	$	101,537		$	99,626
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
Depreciation	69,524			95,266
Deferred Income Taxes	11,473			43,217
Regulatory (Under)/Over Recoveries, Net	(19,764		)	8,910
Amortization of Regulatory Assets/(Liabilities), Net	41,318			(10,658		)
Other	(3,104		)	(7,866		)
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net	(32,819		)	(30,276		)
Fuel, Materials, Supplies and Inventory	14,555			4,263
Taxes Receivable/Accrued, Net	10,929			10,749
Accounts Payable	(3,828		)	18,394
Other Current Assets and Liabilities, Net	27,844			32,300
Net Cash Flows Provided by Operating Activities	217,665			263,925

Investing Activities:
Investments in Property, Plant and Equipment	(236,206		)	(215,470		)
Proceeds from the Sale of Generation Assets	193,924			—
Proceeds from the Sale of Property	4,782			—
Other Investing Activities	367			113
Net Cash Flows Used in Investing Activities	(37,133		)	(215,357		)

Financing Activities:
Cash Dividends on Common Stock	(150,000		)	(23,900		)
Capital Contribution from Eversource Parent	225,000			—
Return of Capital	(530,000		)	—
Issuance of Rate Reduction Bonds	635,663			—
Retirement of Long-Term Debt	(110,000		)	(70,000		)
(Decrease)/Increase in Notes Payable to Eversource Parent	(216,300		)	41,400
Other Financing Activities	1,080			(187		)
Net Cash Flows Used in Financing Activities	(144,557		)	(52,687		)
Net Increase/(Decrease) in Cash and Restricted Cash	35,975			(4,119		)
Cash and Restricted Cash - Beginning of Period	2,191			5,953
Cash and Restricted Cash - End of Period	$	38,166		$	1,834

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

EVERSOURCE ENERGY AND SUBSIDIARIES

THE CONNECTICUT LIGHT AND POWER COMPANY

NSTAR ELECTRIC COMPANY AND SUBSIDIARY

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES

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.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. 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 and PSNH (electric utilities), Yankee Gas and NSTAR Gas (natural gas utilities) and Aquarion (water utilities). Eversource provides energy delivery and/or water service to approximately four million electric, natural gas and water customers through eight regulated utilities in Connecticut, Massachusetts and New Hampshire.

On December 31, 2017, Western Massachusetts Electric Company ("WMECO") was merged into NSTAR Electric. In accordance with accounting guidance on combinations between entities under common control, the net assets, results of operations and cash flows of WMECO are reflected in the NSTAR Electric financial statements. NSTAR Electric's financial statements for all prior periods presented in this combined Quarterly Report on Form 10-Q have been retrospectively recast as if the merger occurred on the first day of the earliest reporting period.

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 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 2017 Form 10-K, which was filed with the SEC on February 26, 2018. 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 and PSNH's financial position as of September 30, 2018 and December 31, 2017, the results of operations and comprehensive income for the three and nine months ended September 30, 2018 and 2017, and the cash flows for the nine months ended September 30, 2018 and 2017. The results of operations and comprehensive income for the three and nine months ended September 30, 2018 and 2017 and the cash flows for the nine months ended September 30, 2018 and 2017 are not necessarily indicative of the results expected for a full year.

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

Eversource's utility subsidiaries' electric and natural gas distribution and transmission businesses, and water distribution business, 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.

B. Accounting Standards

Accounting Standards Issued but Not Yet Effective: In February 2016, the FASB issued Accounting Standards Update ("ASU") 2016-02, Leases (Topic 842), which changes existing lease accounting guidance and is required to be applied in the first quarter of 2019, with earlier application permitted. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842) - Targeted Improvements, allowing a transition method to adopt the new leases standard as of the adoption date and recognizing a cumulative-effect to the opening balance of retained earnings in the period of adoption, with comparative periods presented in the financial statements continuing to follow existing lease accounting guidance under Topic 840 (Leases) in the accounting literature. The Company intends to adopt the transition method allowed in ASU 2018-11. The Company will implement the new leases standard in the first quarter of 2019 and apply the Topic 842 lease criteria to new leases and lease renewals entered into effective on or after January 1, 2019. The requirements of the new leases standard include balance sheet recognition of leases previously deemed to be operating leases, and additional disclosure requirements. The Company is in the process of evaluating what impact the ASU, including the practical expedients, will have on its financial statements, including reviewing its lease population. The Company has decided to elect the practical expedient package whereby it need not reassess whether a contract is or contains a lease or whether a lease is an operating or capital lease and it need not reassess initial direct costs for leases. As of December 31, 2017, Eversource’s total future undiscounted minimum rental payments, excluding executory costs, under long-term noncancelable operating and capital leases were less than $100 million.

Accounting Standards Recently Adopted: On January 1, 2018, Eversource, CL&P, NSTAR Electric and PSNH adopted ASU 2014-09, Revenue from Contracts with Customers, which amended existing revenue recognition guidance, using the modified retrospective method (cumulatively at the date of initial application) applying it only to contracts that were not complete at January 1, 2018. Under this method of adoption, prior year reported results were not restated. Implementation of the ASU did not have a material effect on the results of operations, financial position or cash flows of Eversource, CL&P, NSTAR Electric or PSNH. See Note 16, "Revenues," for further information.

The Company identified an item that was accounted for differently under the new revenue guidance, as compared to the previously existing guidance. As a result of applying guidance on the unit of account under the new standard, purchases of power from and sales of power to ISO-New England are now accounted for net by the hour, rather than net by the month. This change increased Operating Revenues and Purchased Power, Fuel and Transmission by $0.4 million and $22.4 million, respectively, for the three and nine months ended September 30, 2018, with no impact on net income.

On January 1, 2018, Eversource adopted ASU 2016-01, Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Liabilities. The ASU removed the available-for-sale designation for equity securities, whereby changes in fair value were previously recorded in accumulated other comprehensive income within shareholders' equity, and required changes in fair value of all equity securities to be recorded in earnings effective January 1, 2018. There was no cumulative effect of adoption. Unrealized gains recorded in Other Income, Net were $2.4 million and $2.6 million for the three and nine months ended September 30, 2018, respectively. For further information, see Note 5, "Marketable Securities," to the financial statements.

On January 1, 2018, Eversource, CL&P, NSTAR Electric and PSNH adopted ASU 2017-07, Compensation – Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The ASU required separate presentation of service cost from other components of net pension, SERP and PBOP costs, with the other components presented as non-operating income and not subject to capitalization. The ASU has been applied retrospectively for the separate presentation in the income statement of service costs and other components and prospectively in the balance sheet for the capitalization of only the service cost component. As of September 30, 2018, the non-service cost components of net pension, SERP and PBOP costs that were not capitalized in plant were recorded as an increase to regulatory liabilities of approximately $30 million, as these amounts continue to be included in rates. See Note 1G, "Summary of Significant Accounting Policies - Other Income, Net," to the financial statements for the portion of pension, SERP and PBOP costs that are presented as non-operating income for the three and nine months ended September 30, 2018 and 2017. For the three months ended September 30, 2017, the amounts, which were previously presented within Operations and Maintenance expense on the statements of income, totaled $7.3 million at Eversource, $0.4 million at CL&P, $4.7 million at NSTAR Electric and $1.5 million at PSNH, and have been retrospectively presented within Other Income, Net. For the nine months ended September 30, 2017, these amounts were $22.9 million at Eversource, $1.3 million at CL&P, $14.5 million at NSTAR Electric and $4.5 million at PSNH.

On January 1, 2018, Eversource, CL&P, NSTAR Electric and PSNH adopted two accounting standards relating to the statement of cash flows; ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments, and ASU 2016-18, Restricted Cash. As a result of implementing ASU 2016-15, dividends from equity method investments of $16.4 million and $14.0 million for the nine months ended September 30, 2018 and 2017, respectively, are presented in operating activities at Eversource, for which the 2017 amounts were previously classified in investing activities. ASU 2016-18 required that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash and restricted cash equivalents. Both standards were applied retrospectively, as required, and neither had a material impact on Eversource's, CL&P's, NSTAR Electric's or PSNH's statements of cash flows. See Note 1I, "Summary of Significant Accounting Policies - Supplemental Cash Flow Information," to the financial statements for a reconciliation of cash and cash equivalents as reported on the balance sheet to the statement of cash flows, which includes amounts described as restricted cash and restricted cash equivalents.

C. Northern Pass

Northern Pass is Eversource's planned 1,090 MW HVDC transmission line that will interconnect from the Québec-New Hampshire border to Franklin, New Hampshire and an associated alternating current radial transmission line between Franklin and Deerfield, New Hampshire. As of September 30, 2018, our capitalized Northern Pass project costs were approximately $302 million.

In March 2018, the New Hampshire Site Evaluation Committee ("NHSEC") issued a written decision denying Northern Pass’ siting application and the Massachusetts EDCs terminated the selection of, and subsequent contract negotiations with, Northern Pass under the Massachusetts Clean Energy RFP. On April 27, 2018, NPT filed a motion for rehearing with the NHSEC and on July 12, 2018, the NHSEC issued its written decision denying Northern Pass’ motion for rehearing. On August 10, 2018, NPT filed an appeal to the New Hampshire Supreme Court, based on the NHSEC’s failure to follow applicable law in its review of the project. On October 12, 2018, the New Hampshire Supreme Court accepted this appeal and directed the NHSEC to transmit the record of its proceedings to the Court by December 11, 2018. The Supreme Court has not yet issued a schedule for the balance of the appeal process. In parallel, NPT intends to continue to pursue all available options to secure NHSEC approval and to construct the project.

The March 2018 NHSEC denial of Northern Pass' siting application caused us to review the recoverability of our Northern Pass project costs in the first quarter of 2018. In this recoverability review, we estimated undiscounted expected project cash flows and compared the result to our estimated project costs to determine whether the recorded amount was recoverable. Our undiscounted cash flows were substantially in excess of our estimated project costs. We completed this analysis and concluded that our project costs were recoverable as of March 31, 2018, based on our expectation that the Northern Pass project remains probable of being placed in service. The events that occurred subsequent to March 31, 2018 did not require an additional review of the recoverability of the Northern Pass project costs as of September 30, 2018.

Consistent with Eversource’s and HQ’s long-term relationship to bring clean energy into New England, Eversource and HQ remain committed to Northern Pass and the many benefits this project will bring to our customers and the region. If as a result of future events and changes in circumstances a new recoverability review were to conclude that our project costs are not recoverable, then we would reduce Northern Pass' project costs to the estimated fair value, which could result in most of our $302 million of capitalized project costs being impaired. Such an impairment could have a material adverse effect on our financial position and results of operations.

D. Impairment of Access Northeast

Access Northeast is a natural gas pipeline and storage project being developed jointly by Eversource, Enbridge, Inc. ("Enbridge") and National Grid plc ("National Grid"), through Algonquin Gas Transmission, LLC ("AGT"). Eversource's investments include a 40 percent ownership interest in Access Northeast, which is accounted for as an equity method investment. Equity method investments are assessed for impairment when conditions exist that indicate that the fair value of the investment is less than book value. If the decline in value is considered to be other-than-temporary, the investment is written down to its estimated fair value, which establishes a new cost basis in the investment. Impairment evaluations involve a significant degree of judgment and estimation, including identifying circumstances that indicate an impairment may exist and developing undiscounted future cash flows.

In 2015 and 2016, AGT sought to secure long-term natural gas pipeline capacity contracts with EDCs in Massachusetts, Connecticut, New Hampshire, Maine, and Rhode Island. Subsequently, in 2016, the Massachusetts Supreme Judicial Court and the NHPUC each ruled that state statutes precluded the state regulatory agencies from approving those contracts in Massachusetts and New Hampshire, respectively. The New Hampshire Supreme Court overruled the NHPUC decision in May 2018. Legislative changes are needed in Massachusetts to allow the DPU to approve natural gas pipeline capacity contracts. No such changes have occurred during any legislative session in 2017 or 2018.

In September 2018, certain non-Eversource natural gas related events in eastern Massachusetts resulted in widespread property and system damage, personal injuries, and a fatality. As a result of these events, compounded by the failure to secure Massachusetts legislation to date, we believe there is significant uncertainty around the future timing of, and ability to secure, needed legislative change affecting the natural gas industry and pipeline expansion, which may significantly delay the completion of the Access Northeast project.

Eversource identified the September 2018 natural gas related event, compounded by the adverse legislative environment, as negative evidence that indicated potential impairment. Our impairment assessment uses a discounted cash flow income approach, including consideration of the severity and duration of any decline in fair value of our investment in the project, and involves significant management judgment and estimation, including projections of the project’s discounted cash flows and assumptions about exit price. As of September 30, 2018, management determined that the future cash flows of the Access Northeast project are uncertain and can no longer be reasonably estimated and that the book value of our equity method investment is not recoverable. As a result, for the three months ended September 30, 2018, Eversource recorded an other-than-temporary impairment of $32.9 million within Other Income, Net on our statement of income, representing the full carrying value of our equity method investment.

E. Provision for Uncollectible Accounts

Eversource, including CL&P, NSTAR Electric and PSNH, 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 NSTAR Electric and NSTAR Gas to recover in rates, amounts associated with certain uncollectible hardship accounts receivable. These uncollectible hardship customer account balances are included in Regulatory Assets or Other Long-Term Assets on the balance sheets.

The total provision for both uncollectible accounts and for uncollectible hardship accounts (the uncollectible hardship balance is included in the total provision) is included in Receivables, Net on the balance sheets, and is as follows:



	Total Provision for Uncollectible Accounts				Uncollectible Hardship
(Millions of Dollars)	As of September 30, 2018		As of December 31, 2017		As of September 30, 2018		As of December 31, 2017
Eversource	$	218.1	$	195.7	$	132.6	$	122.5
CL&P	84.6		78.9		68.3