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 March 31, 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 April 30, 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 proposed offshore wind project being developed 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
CO 2
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
McF
Million cubic feet
MGP
Manufactured Gas Plant
MMBtu
One million British thermal units
Moody's
Moody's Investors Services, Inc.
MW
Megawatt
MWh
Megawatt-Hours
NEEWS
New England East-West Solution
NETOs
New England Transmission Owners
Northern Pass
The high-voltage direct-current and associated alternating-current transmission line project from Canada into New Hampshire
NO x
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
SO 2
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 March 31, 2017

As of December 31, 2016





ASSETS
 


 
Current Assets:
 


 
Cash and Cash Equivalents
$
45,763


$
30,251

Receivables, Net
879,451


847,301

Unbilled Revenues
166,710


168,490

Fuel, Materials, Supplies and Inventory
361,779


328,721

Regulatory Assets
875,037


887,625

Prepayments and Other Current Assets
182,659


215,284

Total Current Assets
2,511,399


2,477,672







Property, Plant and Equipment, Net
21,641,898


21,350,510







Deferred Debits and Other Assets:
 


 

Regulatory Assets
3,564,700


3,638,688

Goodwill
3,519,401


3,519,401

Marketable Securities
561,585


544,642

Other Long-Term Assets
556,193


522,260

Total Deferred Debits and Other Assets
8,201,879


8,224,991







Total Assets
$
32,355,176


$
32,053,173





LIABILITIES AND CAPITALIZATION
 

 
Current Liabilities:
 

 
Notes Payable
$
975,500


$
1,148,500

Long-Term Debt – Current Portion
773,883


773,883

Accounts Payable
745,856


884,521

Regulatory Liabilities
199,160


146,787

Other Current Liabilities
639,366


684,914

Total Current Liabilities
3,333,765


3,638,605





Deferred Credits and Other Liabilities:
 

 
Accumulated Deferred Income Taxes
5,758,603


5,607,207

Regulatory Liabilities
692,989


702,255

Derivative Liabilities
415,795


413,676

Accrued Pension and SERP
1,077,593


1,141,514

Other Long-Term Liabilities
848,776


853,260

Total Deferred Credits and Other Liabilities
8,793,756


8,717,912







Capitalization:
 

 
Long-Term Debt
9,267,891


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
6,230,608


6,250,224

Retained Earnings
3,284,108


3,175,171

Accumulated Other Comprehensive Loss
(62,141
)

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

(317,771
)
Common Shareholders' Equity
10,804,196


10,711,734

Total Capitalization
20,227,655


19,696,656







Total Liabilities and Capitalization
$
32,355,176


$
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 March 31,
(Thousands of Dollars, Except Share Information)
2017
 
2016
 
 
 
 
Operating Revenues
$
2,105,135

 
$
2,055,635

 
 
 
 
Operating Expenses:
 
 
 
Purchased Power, Fuel and Transmission
753,649

 
754,859

Operations and Maintenance
330,265

 
320,136

Depreciation
186,805

 
173,986

Amortization of Regulatory Assets, Net
24,017

 
20,997

Energy Efficiency Programs
146,158

 
137,175

Taxes Other Than Income Taxes
155,222

 
159,946

Total Operating Expenses
1,596,116

 
1,567,099

Operating Income
509,019

 
488,536

Interest Expense
103,429

 
98,212

Other Income, Net
13,577

 
2,011

Income Before Income Tax Expense
419,167

 
392,335

Income Tax Expense
157,829

 
146,302

Net Income
261,338

 
246,033

Net Income Attributable to Noncontrolling Interests
1,880

 
1,880

Net Income Attributable to Common Shareholders
$
259,458

 
$
244,153

 
 
 
 
Basic and Diluted Earnings Per Common Share
$
0.82

 
$
0.77

 
 
 
 
Dividends Declared Per Common Share
$
0.48

 
$
0.45

 
 
 
 
Weighted Average Common Shares Outstanding:
 
 
 
Basic
317,463,151

 
317,517,141

Diluted
318,124,536

 
318,481,050


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 March 31,
(Thousands of Dollars)
2017
 
2016
 
 
 
 
Net Income
$
261,338

 
$
246,033

Other Comprehensive Income, Net of Tax:
 
 
 
Qualified Cash Flow Hedging Instruments
534

 
534

Changes in Unrealized Gains on Marketable Securities
1,645

 
264

Changes in Funded Status of Pension, SERP and PBOP Benefit Plans
962

 
871

Other Comprehensive Income, Net of Tax
3,141

 
1,669

Comprehensive Income Attributable to Noncontrolling Interests
(1,880
)
 
(1,880
)
Comprehensive Income Attributable to Common Shareholders
$
262,599

 
$
245,822


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 Three Months Ended March 31,
(Thousands of Dollars)
2017
 
2016




Operating Activities:
 

 
Net Income
$
261,338


$
246,033

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

 
Depreciation
186,805


173,986

Deferred Income Taxes
141,398


141,132

Pension, SERP and PBOP Expense, Net
5,828


11,583

Pension and PBOP Contributions
(45,700
)

(30,383
)
Regulatory Over/(Under) Recoveries, Net
56,734


(82,772
)
Amortization of Regulatory Assets, Net
24,017


20,997

Other
(42,428
)

(16,532
)
Changes in Current Assets and Liabilities:
 

 
Receivables and Unbilled Revenues, Net
(50,251
)

(133,965
)
Fuel, Materials, Supplies and Inventory
(33,058
)

(22,748
)
Taxes Receivable/Accrued, Net
32,313


279,106

Accounts Payable
(57,701
)

(76,317
)
Other Current Assets and Liabilities, Net
(42,793
)

(10,156
)
Net Cash Flows Provided by Operating Activities
436,502


499,964





Investing Activities:
 

 
Investments in Property, Plant and Equipment
(523,560
)

(431,472
)
Proceeds from Sales of Marketable Securities
154,772


136,805

Purchases of Marketable Securities
(149,688
)

(135,427
)
Other Investing Activities
(11,281
)

5,494

Net Cash Flows Used in Investing Activities
(529,757
)

(424,600
)




Financing Activities:
 

 
Cash Dividends on Common Shares
(150,521
)

(141,157
)
Cash Dividends on Preferred Stock
(1,880
)

(1,880
)
Decrease in Notes Payable
(173,000
)

(391,453
)
Issuance of Long-Term Debt
600,000


500,000

Retirements of Long-Term Debt
(150,000
)


Other Financing Activities
(15,832
)

(13,855
)
Net Cash Flows Provided by/(Used in) Financing Activities
108,767


(48,345
)
Net Increase in Cash and Cash Equivalents
15,512


27,019

Cash and Cash Equivalents - Beginning of Period
30,251


23,947

Cash and Cash Equivalents - End of Period
$
45,763


$
50,966


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 March 31, 2017
 
As of December 31, 2016
 
 
 
 
ASSETS
 
 
 
Current Assets:
 
 
 
Cash
$
15,315

 
$
6,579

Receivables, Net
349,714

 
359,132

Accounts Receivable from Affiliated Companies
17,184

 
16,851

Unbilled Revenues
51,069

 
50,373

Materials, Supplies and Inventory
56,432

 
52,050

Regulatory Assets
370,083

 
335,526

Prepayments and Other Current Assets
52,406

 
52,670

Total Current Assets
912,203

 
873,181

 
 
 
 
Property, Plant and Equipment, Net
7,754,894

 
7,632,392

 
 
 
 
Deferred Debits and Other Assets:
 
 
 
Regulatory Assets
1,367,486

 
1,391,564

Other Long-Term Assets
140,157

 
137,907

Total Deferred Debits and Other Assets
1,507,643

 
1,529,471

 
 
 
 
Total Assets
$
10,174,740

 
$
10,035,044

 
 
 
 
LIABILITIES AND CAPITALIZATION
 
 
 
Current Liabilities:
 
 
 
Notes Payable to Eversource Parent
$
3,400

 
$
80,100

Long-Term Debt – Current Portion
100,000

 
250,000

Accounts Payable
281,414

 
289,532

Accounts Payable to Affiliated Companies
67,250

 
88,075

Obligations to Third Party Suppliers
51,885

 
55,520

Regulatory Liabilities
58,946

 
47,055

Derivative Liabilities
70,739

 
77,765

Other Current Liabilities
127,869

 
120,399

Total Current Liabilities
761,503

 
1,008,446

 
 
 
 
Deferred Credits and Other Liabilities:
 
 
 
Accumulated Deferred Income Taxes
2,037,638

 
1,987,661

Regulatory Liabilities
101,241

 
100,138

Derivative Liabilities
415,187

 
412,750

Accrued Pension, SERP and PBOP
296,105

 
300,208

Other Long-Term Liabilities
123,931

 
123,244

Total Deferred Credits and Other Liabilities
2,974,102

 
2,924,001

 
 
 
 
Capitalization:
 
 
 
Long-Term Debt
2,813,151

 
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
2,110,726

 
2,110,714

Retained Earnings
1,338,592

 
1,299,374

Accumulated Other Comprehensive Income/(Loss)
114

 
(53
)
Common Stockholder's Equity
3,509,784

 
3,470,387

Total Capitalization
6,439,135

 
6,102,597

 
 
 
 
Total Liabilities and Capitalization
$
10,174,740

 
$
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 March 31,
(Thousands of Dollars)
2017
 
2016
 
 
 
 
Operating Revenues
$
732,310

 
$
735,317

 
 
 
 
Operating Expenses:
 
 
 
Purchased Power and Transmission
244,938

 
272,600

Operations and Maintenance
128,226

 
110,843

Depreciation
59,751

 
56,969

Amortization of Regulatory Assets, Net
12,803

 
9,878

Energy Efficiency Programs
36,591

 
38,090

Taxes Other Than Income Taxes
73,979

 
75,465

Total Operating Expenses
556,288

 
563,845

Operating Income
176,022

 
171,472

Interest Expense
34,964

 
36,498

Other Income, Net
2,756

 
936

Income Before Income Tax Expense
143,814

 
135,910

Income Tax Expense
53,606

 
48,863

Net Income
$
90,208

 
$
87,047


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


CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 
For the Three Months Ended March 31,
(Thousands of Dollars)
2017
 
2016
 
 
 
 
Net Income
$
90,208

 
$
87,047

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

 
111

Changes in Unrealized Gains on Marketable Securities
56

 
9

Other Comprehensive Income, Net of Tax
167

 
120

Comprehensive Income
$
90,375

 
$
87,167


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 Three Months Ended March 31,
(Thousands of Dollars)
2017
 
2016
 
 
 
 
Operating Activities:
 
 
 
Net Income
$
90,208

 
$
87,047

Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
 
 
 
Depreciation
59,751

 
56,969

Deferred Income Taxes
47,864

 
58,363

Regulatory Underrecoveries, Net
(18,734
)
 
(70,195
)
Amortization of Regulatory Assets, Net
12,803

 
9,878

Other
(2,373
)
 
2,216

Changes in Current Assets and Liabilities:
 
 
 
Receivables and Unbilled Revenues, Net
(1,280
)
 
(37,501
)
Taxes Receivable/Accrued, Net
32,920

 
141,951

Accounts Payable
(16,957
)
 
(5,040
)
Other Current Assets and Liabilities, Net
(32,576
)
 
(22,533
)
Net Cash Flows Provided by Operating Activities
171,626

 
221,155

 
 
 
 
Investing Activities:
 
 
 
Investments in Property, Plant and Equipment
(181,601
)
 
(147,131
)
Proceeds from the Sale of  Property, Plant and Equipment

 
9,047

Other Investing Activities
32

 
49

Net Cash Flows Used in Investing Activities
(181,569
)
 
(138,035
)
 
 
 
 
Financing Activities:
 
 
 
Cash Dividends on Common Stock
(49,600
)
 
(49,900
)
Cash Dividends on Preferred Stock
(1,390
)
 
(1,390
)
Capital Contributions from Eversource Parent

 
145,700

Issuance of Long-Term Debt
300,000

 

Retirement of Long-Term Debt
(150,000
)
 

Decrease in Notes Payable to Eversource Parent
(76,700
)
 
(161,900
)
Other Financing Activities
(3,631
)
 
(205
)
Net Cash Flows Provided by/(Used in) Financing Activities
18,679

 
(67,695
)
Net Increase in Cash
8,736

 
15,425

Cash - Beginning of Period
6,579

 
1,057

Cash - End of Period
$
15,315

 
$
16,482


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 March 31, 2017
 
As of December 31, 2016
 
 
 
 
ASSETS
 

 
 

Current Assets:
 
 
 
Cash and Cash Equivalents
$
2,448

 
$
3,494

Receivables, Net
264,337

 
257,557

Accounts Receivable from Affiliated Companies
4,565

 
8,581

Unbilled Revenues
28,393

 
31,632

Taxes Receivable
2,884

 
39,738

Materials, Supplies and Inventory
94,338

 
62,288

Regulatory Assets
276,476

 
289,400

Prepayments and Other Current Assets
17,109

 
14,906

Total Current Assets
690,550

 
707,596

 
 
 
 
Property, Plant and Equipment, Net
6,108,944

 
6,051,835

 
 
 
 
Deferred Debits and Other Assets:
 
 
 
Regulatory Assets
1,051,090

 
1,057,746

Prepaid PBOP
100,609

 
95,073

Other Long-Term Assets
63,371

 
60,572

Total Deferred Debits and Other Assets
1,215,070

 
1,213,391

 
 
 
 
Total Assets
$
8,014,564

 
$
7,972,822

 
 
 
 
LIABILITIES AND CAPITALIZATION
 
 
 
Current Liabilities:
 
 
 
Notes Payable
$
174,500

 
$
126,500

Long-Term Debt – Current Portion
400,000

 
400,000

Accounts Payable
177,110

 
232,599

Accounts Payable to Affiliated Companies
96,924

 
91,532

Obligations to Third Party Suppliers
60,650

 
55,863

Renewable Portfolio Standards Compliance Obligations
94,800

 
75,571

Regulatory Liabilities
62,154

 
63,653

Other Current Liabilities
54,166

 
71,122

Total Current Liabilities
1,120,304

 
1,116,840

 
 
 
 
Deferred Credits and Other Liabilities:
 
 
 
Accumulated Deferred Income Taxes
1,866,259

 
1,836,292

Regulatory Liabilities
390,458

 
391,823

Accrued Pension and SERP
99,491

 
111,827

Other Long-Term Liabilities
125,640

 
123,194

Total Deferred Credits and Other Liabilities
2,481,848

 
2,463,136

 
 
 
 
Capitalization:
 
 
 
Long-Term Debt
1,678,514

 
1,678,116

 
 
 
 
Preferred Stock Not Subject to Mandatory Redemption
43,000

 
43,000

 
 
 
 
Common Stockholder's Equity:
 
 
 
Common Stock

 

Capital Surplus, Paid In
1,045,378

 
1,045,378

Retained Earnings
1,645,156

 
1,625,984

Accumulated Other Comprehensive Income
364

 
368

Common Stockholder's Equity
2,690,898

 
2,671,730

Total Capitalization
4,412,412

 
4,392,846

 
 
 
 
Total Liabilities and Capitalization
$
8,014,564


$
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 March 31,
(Thousands of Dollars)
2017
 
2016
 
 
 
 
Operating Revenues
$
603,779

 
$
614,216

 
 
 
 
Operating Expenses:
 

 
 

Purchased Power and Transmission
233,093

 
254,336

Operations and Maintenance
88,351

 
94,696

Depreciation
55,216

 
51,886

Amortization of Regulatory Assets, Net
4,977

 
4,683

Energy Efficiency Programs
67,312

 
66,243

Taxes Other Than Income Taxes
27,393

 
32,555

Total Operating Expenses
476,342

 
504,399

Operating Income
127,437

 
109,817

Interest Expense
22,029

 
20,889

Other Income/(Loss), Net
3,249

 
(334
)
Income Before Income Tax Expense
108,657

 
88,594

Income Tax Expense
42,495

 
34,101

Net Income
$
66,162

 
$
54,493


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 March 31,
(Thousands of Dollars)
2017
 
2016
 
 
 
 
Net Income
$
66,162

 
$
54,493

Other Comprehensive Loss, Net of Tax:
 
 
 
  Changes in Funded Status of SERP Benefit Plan
(4
)
 
(10
)
Other Comprehensive Loss, Net of Tax
(4
)
 
(10
)
Comprehensive Income
$
66,158

 
$
54,483


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 Three Months Ended March 31,
(Thousands of Dollars)
2017
 
2016
 
 
 
 
Operating Activities:
 

 
 

Net Income
$
66,162

 
$
54,493

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

 
 

Depreciation
55,216

 
51,886

Deferred Income Taxes
29,199

 
32,878

Pension, SERP and PBOP Benefits and Contributions, Net of Expense
(10,422
)
 
(12,953
)
Regulatory Over/(Under) Recoveries, Net
4,373

 
(16,746
)
Amortization of Regulatory Assets, Net
4,977

 
4,683

Other
(3,691
)
 
(3,245
)
Changes in Current Assets and Liabilities:
 

 
 

Receivables and Unbilled Revenues, Net
(2,376
)
 
(29,132
)
Materials, Supplies and Inventory
(32,050
)
 
(40,322
)
Taxes Receivable/Accrued, Net
38,970

 
33,938

Accounts Payable
(19,025
)
 
1,187

Other Current Assets and Liabilities, Net
2,371

 
19,600

Net Cash Flows Provided by Operating Activities
133,704

 
96,267

 
 
 
 
Investing Activities:
 

 
 

Investments in Property, Plant and Equipment
(132,105
)
 
(91,319
)
Other Investing Activities
(3,617
)
 

Net Cash Flows Used in Investing Activities
(135,722
)
 
(91,319
)
 
 
 
 
Financing Activities:
 

 
 

Cash Dividends on Common Stock
(46,500
)
 
(90,300
)
Cash Dividends on Preferred Stock
(490
)
 
(490
)
Increase in Notes Payable
48,000

 
86,000

Other Financing Activities
(38
)
 

Net Cash Flows Provided by/(Used in) Financing Activities
972

 
(4,790
)
(Decrease)/Increase in Cash and Cash Equivalents
(1,046
)
 
158

Cash and Cash Equivalents - Beginning of Period
3,494

 
3,346

Cash and Cash Equivalents - End of Period
$
2,448

 
$
3,504


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 March 31, 2017
 
As of December 31, 2016
 
 
 
 
ASSETS
 
 
 
Current Assets:
 
 
 
Cash
$
7,743

 
$
4,646

Receivables, Net
81,899

 
84,450

Accounts Receivable from Affiliated Companies
2,098

 
4,185

Unbilled Revenues
42,784

 
41,004

Fuel, Materials, Supplies and Inventory
165,725

 
162,354

Regulatory Assets
111,274

 
117,240

Prepayments and Other Current Assets
9,423

 
28,908

Total Current Assets
420,946

 
442,787

 
 
 
 
Property, Plant and Equipment, Net
3,076,608

 
3,039,313

 
 
 
 
Deferred Debits and Other Assets:
 
 
 
Regulatory Assets
243,643

 
245,525

Other Long-Term Assets
42,797

 
37,720

Total Deferred Debits and Other Assets
286,440

 
283,245

 
 
 
 
Total Assets
$
3,783,994

 
$
3,765,345

 
 
 
 
LIABILITIES AND CAPITALIZATION
 
 
 
Current Liabilities:
 
 
 
Notes Payable to Eversource Parent
$
144,900

 
$
160,900

Long-Term Debt – Current Portion
70,000

 
70,000

Accounts Payable
70,710

 
85,716

Accounts Payable to Affiliated Companies
40,463

 
29,154

Regulatory Liabilities
17,224

 
12,659

Other Current Liabilities
52,771

 
43,253

Total Current Liabilities
396,068

 
401,682

 
 
 
 
Deferred Credits and Other Liabilities:
 
 
 
Accumulated Deferred Income Taxes
796,118

 
785,385

Regulatory Liabilities
45,600

 
44,779

Accrued Pension, SERP and PBOP
91,911

 
94,652

Other Long-Term Liabilities
48,435

 
49,442

Total Deferred Credits and Other Liabilities
982,064

 
974,258

 
 
 
 
Capitalization:
 
 
 
Long-Term Debt
1,002,305

 
1,002,048

 
 
 
 
Common Stockholder's Equity:
 
 
 
Common Stock

 

Capital Surplus, Paid In
843,134

 
843,134

Retained Earnings
565,098

 
549,286

Accumulated Other Comprehensive Loss
(4,675
)
 
(5,063
)
Common Stockholder's Equity
1,403,557

 
1,387,357

Total Capitalization
2,405,862

 
2,389,405

 
 
 
 
Total Liabilities and Capitalization
$
3,783,994

 
$
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 March 31,
(Thousands of Dollars)
2017
 
2016
 
 
 
 
Operating Revenues
$
253,157

 
$
242,290

 
 
 
 
Operating Expenses:
 
 
 
Purchased Power, Fuel and Transmission
61,747

 
50,214

Operations and Maintenance
62,351

 
59,213

Depreciation
30,735

 
28,235

Amortization of Regulatory Assets, Net
5,445

 
8,518

Energy Efficiency Programs
3,746

 
3,620

Taxes Other Than Income Taxes
20,881

 
21,795

Total Operating Expenses
184,905

 
171,595

Operating Income
68,252

 
70,695

Interest Expense
12,808

 
12,461

Other Income, Net
1,198

 
150

Income Before Income Tax Expense
56,642

 
58,384

Income Tax Expense
22,330

 
22,326

Net Income
$
34,312

 
$
36,058


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 March 31,
(Thousands of Dollars)
2017
 
2016
 
 
 
 
Net Income
$
34,312

 
$
36,058

Other Comprehensive Income, Net of Tax:
 
 
 
Qualified Cash Flow Hedging Instruments
291

 
290

Changes in Unrealized Gains on Marketable Securities
97

 
16

Other Comprehensive Income, Net of Tax
388

 
306

Comprehensive Income
$
34,700

 
$
36,364


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 Three Months Ended March 31,
(Thousands of Dollars)
2017
 
2016
 
 
 
 
Operating Activities:
 
 
 
Net Income
$
34,312

 
$
36,058

Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
 
 
 
Depreciation
30,735

 
28,235

Deferred Income Taxes
11,290

 
21,181

Regulatory Over/(Under) Recoveries, Net
3,507

 
(2,291
)
Amortization of Regulatory Assets, Net
5,445

 
8,518

Other
(4,471
)
 
(9,166
)
Changes in Current Assets and Liabilities:
 
 
 
Receivables and Unbilled Revenues, Net
1,149

 
(17,207
)
Fuel, Materials, Supplies and Inventory
(3,371
)
 
6,903

Taxes Receivable/Accrued, Net
1,778

 
57,935

Accounts Payable
5,475

 
2,100

Other Current Assets and Liabilities, Net
27,332

 
24,021

Net Cash Flows Provided by Operating Activities
113,181

 
156,287

 
 
 
 
Investing Activities:
 
 
 
Investments in Property, Plant and Equipment
(75,327
)
 
(72,338
)
Other Investing Activities
(145
)
 
84

Net Cash Flows Used in Investing Activities
(75,472
)
 
(72,254
)
 
 
 
 
Financing Activities:
 
 
 
Cash Dividends on Common Stock
(18,500
)
 
(19,400
)
Capital Contributions from Eversource Parent

 
11,500

Decrease in Notes Payable to Eversource Parent
(16,000
)
 
(74,200
)
Other Financing Activities
(112
)
 
(86
)
Net Cash Flows Used in Financing Activities
(34,612
)
 
(82,186
)
Net Increase in Cash
3,097

 
1,847

Cash - Beginning of Period
4,646

 
1,733

Cash - End of Period
$
7,743

 
$
3,580


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 March 31, 2017
 
As of December 31, 2016
 
 
 
 
ASSETS
 
 
 
Current Assets:
 
 
 
Cash
$
769

 
$

Receivables, Net
57,340

 
54,940

Accounts Receivable from Affiliated Companies
16,588

 
14,425

Unbilled Revenues
16,850

 
15,329

Materials, Supplies and Inventory
9,911

 
8,618

Regulatory Assets
66,033

 
64,123

Prepayments and Other Current Assets
3,365

 
2,595

Total Current Assets
170,856

 
160,030

 
 
 
 
Property, Plant and Equipment, Net
1,694,818

 
1,678,262

 
 
 
 
Deferred Debits and Other Assets:
 
 
 
Regulatory Assets
123,317

 
127,291

Other Long-Term Assets
31,171

 
29,062

Total Deferred Debits and Other Assets
154,488

 
156,353

 
 
 
 
Total Assets
$
2,020,162

 
$
1,994,645

 
 
 
 
LIABILITIES AND CAPITALIZATION
 
 
 
Current Liabilities:
 
 
 
Notes Payable to Eversource Parent
$
71,400

 
$
51,000

Accounts Payable
44,023

 
56,036

Accounts Payable to Affiliated Companies
14,837

 
19,478

Obligations to Third Party Suppliers
9,705

 
10,508

Renewable Portfolio Standards Compliance Obligations
25,110

 
20,383

Regulatory Liabilities
12,897

 
14,888

Other Current Liabilities
7,659

 
14,984

Total Current Liabilities
185,631

 
187,277

 
 
 
 
Deferred Credits and Other Liabilities:
 

 
 
Accumulated Deferred Income Taxes
507,203

 
490,793

Regulatory Liabilities
19,119

 
17,227

Accrued Pension, SERP and PBOP
18,660

 
20,390

Other Long-Term Liabilities
44,177

 
41,308

Total Deferred Credits and Other Liabilities
589,159

 
569,718

 
 
 
 
Capitalization:
 

 
 
Long-Term Debt
566,415

 
566,536

 
 
 
 
Common Stockholder's Equity:
 

 
 
Common Stock
10,866

 
10,866

Capital Surplus, Paid In
444,398

 
444,398

Retained Earnings
225,930

 
218,212

Accumulated Other Comprehensive Loss
(2,237
)
 
(2,362
)
Common Stockholder's Equity
678,957

 
671,114

Total Capitalization
1,245,372

 
1,237,650

 
 
 
 
Total Liabilities and Capitalization
$
2,020,162

 
$
1,994,645


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


13



WESTERN MASSACHUSETTS ELECTRIC COMPANY
CONDENSED STATEMENTS OF INCOME
(Unaudited)
 
For the Three Months Ended March 31,
(Thousands of Dollars)
2017
 
2016
 
 
 
 
Operating Revenues
$
130,136

 
$
128,095

 
 
 
 
Operating Expenses:
 
 
 
Purchased Power and Transmission
40,867

 
39,563

Operations and Maintenance
22,498

 
21,805

Depreciation
12,002

 
11,371

Amortization of Regulatory (Liabilities)/Assets, Net
(488
)
 
1,212

Energy Efficiency Programs
10,664

 
10,856

Taxes Other Than Income Taxes
10,428

 
10,232

Total Operating Expenses
95,971

 
95,039

Operating Income
34,165

 
33,056

Interest Expense
6,249

 
6,004

Other Income/(Loss), Net
77

 
(149
)
Income Before Income Tax Expense
27,993

 
26,903

Income Tax Expense
10,775

 
10,076

Net Income
$
17,218

 
$
16,827


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


CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 
For the Three Months Ended March 31,
(Thousands of Dollars)
2017
 
2016
 
 
 
 
Net Income
$
17,218

 
$
16,827

Other Comprehensive Income, Net of Tax:
 

 
 
Qualified Cash Flow Hedging Instruments
109

 
109

Changes in Unrealized Gains on Marketable Securities
16

 
3

Other Comprehensive Income, Net of Tax
125

 
112

Comprehensive Income
$
17,343

 
$
16,939


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

14



WESTERN MASSACHUSETTS ELECTRIC COMPANY
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
 
For the Three Months Ended March 31,
(Thousands of Dollars)
2017
 
2016
 
 
 
 
Operating Activities:
 
 
 
Net Income
$
17,218

 
$
16,827

Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
 
 
 
Depreciation
12,002

 
11,371

Deferred Income Taxes
16,176

 
9,921

Regulatory Underrecoveries, Net
(452
)
 
(6,100
)
Amortization of Regulatory (Liabilities)/Assets, Net
(488
)
 
1,212

Other
(326
)
 
(541
)
Changes in Current Assets and Liabilities:
 
 
 
Receivables and Unbilled Revenues, Net
(5,924
)
 
2,197

Taxes Receivable/Accrued, Net
(1,404
)
 
26,976

Accounts Payable
(10,141
)
 
(11,011
)
Other Current Assets and Liabilities, Net
(4,057
)
 
(136
)
Net Cash Flows Provided by Operating Activities
22,604

 
50,716

 
 
 
 
Investing Activities:
 
 
 
Investments in Property, Plant and Equipment
(32,744
)
 
(39,891
)
Other Investing Activities
9

 
13

Net Cash Flows Used in Investing Activities
(32,735
)
 
(39,878
)
 
 
 
 
Financing Activities:
 
 
 
Cash Dividends on Common Stock
(9,500
)
 
(9,500
)
Increase in Notes Payable to Eversource Parent
20,400

 
100

Other Financing Activities

 
(3
)
Net Cash Flows Provided by/(Used in) Financing Activities
10,900

 
(9,403
)
Net Increase in Cash
769

 
1,435

Cash - Beginning of Period

 
834

Cash - End of Period
$
769

 
$
2,269


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


15



EVERSOURCE ENERGY AND SUBSIDIARIES
THE CONNECTICUT LIGHT AND POWER COMPANY
NSTAR ELECTRIC COMPANY AND SUBSIDIARY
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARY
WESTERN MASSACHUSETTS ELECTRIC COMPANY

COMBINED NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited)

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

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, PSNH, WMECO, Yankee Gas and NSTAR Gas.  Eversource provides energy delivery service to approximately 3.7 million electric and natural gas customers through these six regulated utilities in Connecticut, Massachusetts and New Hampshire.  

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

The combined notes to the financial statements have been prepared pursuant to the rules and regulations of the SEC.  Certain information and footnote disclosures included in annual financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations.  The accompanying financial statements should be read in conjunction with the Combined Notes to Financial Statements included in Item 8, "Financial Statements and Supplementary Data," of the Eversource 2016 Form 10-K, which was filed with the SEC.  The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

The financial statements contain, in the opinion of management, all adjustments (including normal, recurring adjustments) necessary to present fairly Eversource's, CL&P's, NSTAR Electric's, PSNH's and WMECO's financial position as of March 31, 2017 and December 31, 2016 , and the results of operations, comprehensive income and cash flows for the three months ended March 31, 2017 and 2016 .  The results of operations, comprehensive income and cash flows for the three months ended March 31, 2017 and 2016