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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q


T

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE     
SECURITIES EXCHANGE ACT OF 1934

 

 

 

For the Quarterly Period Ended June 30, 2014     

 

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

NORTHEAST UTILITIES
(a Massachusetts voluntary association)
300 Cadwell Drive
Springfield, Massachusetts 01104
Telephone:  (413) 785-5871

04-2147929


0-00404

THE CONNECTICUT LIGHT AND POWER COMPANY
(a Connecticut corporation)
107 Selden Street
Berlin, Connecticut 06037-1616
Telephone:  (860) 665-5000

06-0303850


1-02301

NSTAR ELECTRIC COMPANY
(a Massachusetts corporation)
800 Boylston Street
Boston, Massachusetts 02199
Telephone:  (617) 424-2000

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:  (603) 669-4000

02-0181050


0-7624

WESTERN MASSACHUSETTS ELECTRIC COMPANY
(a Massachusetts corporation)
300 Cadwell Drive
Springfield, Massachusetts 01104
Telephone:  (413) 785-5871

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

 

 

 

 

T

£


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 registrant was required to submit and post such files).


 

Yes

No

 

 

 

 

T

£


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act.  (Check one):


 

Large
Accelerated Filer

 

Accelerated
Filer

 

Non-accelerated
Filer

 

 

 

 

 

 

Northeast Utilities

T

 

£

 

£

The Connecticut Light and Power Company

£

 

£

 

T

NSTAR Electric Company

£

 

£

 

T

Public Service Company of New Hampshire

£

 

£

 

T

Western Massachusetts Electric Company

£

 

£

 

T


Indicate by check mark whether the registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act):


 

Yes

No

 

 

 

Northeast Utilities

£

T

The Connecticut Light and Power Company

£

T

NSTAR Electric Company

£

T

Public Service Company of New Hampshire

£

T

Western Massachusetts Electric Company

£

T


Indicate the number of shares outstanding of each of the issuers' classes of common stock, as of the latest practicable date:


Company - Class of Stock

Outstanding as of July 31, 2014

Northeast Utilities
Common shares, $5.00 par value

316,385,790 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


Northeast Utilities 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.




GLOSSARY OF TERMS


The following is a glossary of abbreviations or acronyms that are found in this report:

 

CURRENT OR FORMER NU COMPANIES, SEGMENTS OR INVESTMENTS:

 

 

CL&P

The Connecticut Light and Power Company

CYAPC

Connecticut Yankee Atomic Power Company

Hopkinton

Hopkinton LNG Corp., a wholly owned subsidiary of Yankee Energy System, Inc.

HWP

HWP Company, formerly the Holyoke Water Power Company

MYAPC

Maine Yankee Atomic Power Company

NGS

Northeast Generation Services Company

NPT

Northern Pass Transmission LLC

NSTAR

Parent Company of NSTAR Electric, NSTAR Gas and other subsidiaries (prior to the merger with NU)

NSTAR Electric

NSTAR Electric Company

NSTAR Electric & Gas

NSTAR Electric & Gas Corporation, a former Northeast Utilities service company (effective January 1, 2014 merged into NUSCO)

NSTAR Gas

NSTAR Gas Company

NU Enterprises

NU Enterprises, Inc., the parent company of NGS, Select Energy, Select Energy Contracting, Inc., E.S. Boulos Company and NSTAR Communications, Inc.

NU or the Company

Northeast Utilities and subsidiaries

NU parent and other companies

NU parent and other companies is comprised of NU parent, NUSCO and other subsidiaries, which primarily include NU Enterprises, HWP, RRR (a real estate subsidiary), the non-energy-related subsidiaries of Yankee (Yankee Energy Services Company and Yankee Energy Financial Services Company), and the consolidated operations of CYAPC and YAEC

NUSCO

Northeast Utilities Service Company (effective January 1, 2014 includes the operations of NSTAR Electric & Gas)

NUTV

NU Transmission Ventures, Inc., the parent company of NPT and Renewable Properties, Inc.

PSNH

Public Service Company of New Hampshire

Regulated companies

NU's Regulated companies, 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

RRR

The Rocky River Realty Company

Select Energy

Select Energy, Inc.

WMECO

Western Massachusetts Electric Company

YAEC

Yankee Atomic Electric Company

Yankee

Yankee Energy System, Inc.

Yankee Companies

CYAPC, YAEC and MYAPC

Yankee Gas

Yankee Gas Services Company

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:

 

AFUDC

Allowance For Funds Used During Construction

AOCI

Accumulated Other Comprehensive Income/(Loss)

ARO

Asset Retirement Obligation

C&LM

Conservation and Load Management

CfD

Contract for Differences

Clean Air Project

The construction of a wet flue gas desulphurization system, known as "scrubber technology," to reduce mercury emissions of the Merrimack coal-fired generation station in Bow, New Hampshire

CO2

Carbon dioxide

CPSL

Capital Projects Scheduling List

CTA

Competitive Transition Assessment

CWIP

Construction work in progress

EPS

Earnings Per Share

ERISA

Employee Retirement Income Security Act of 1974

ES

Default Energy Service

ESOP

Employee Stock Ownership Plan

ESPP

Employee Share Purchase Plan

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

HG&E

Holyoke Gas and Electric, a municipal department of the City of Holyoke, MA

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

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)

LNG

Liquefied natural gas

LOC

Letter of Credit

LRS

Supplier of last resort service

MGP

Manufactured Gas Plant

Millstone

Millstone Nuclear Generating station, made up of Millstone 1, Millstone 2, and Millstone 3. All three units were sold in March 2001.

MMBtu

One million British thermal units

Moody's

Moody's Investors Services, Inc.

MW

Megawatt

MWh

Megawatt-Hours

NEEWS

New England East-West Solution

Northern Pass

The high voltage direct current transmission line project from Canada into New Hampshire

NOx

Nitrogen oxide

NU 2013 Form 10-K

The Northeast Utilities and Subsidiaries 2013 combined Annual Report on Form 10-K as filed with the SEC

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 health care benefits, primarily medical and dental, and life insurance benefits

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

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

Settlement Agreements

The comprehensive settlement agreements reached by NU and NSTAR with the Massachusetts Attorney General and the DOER on February 15, 2012 related to the merger of NU and NSTAR (Massachusetts settlement agreements) and the comprehensive settlement agreement reached by NU and NSTAR with both the Connecticut Attorney General and the Connecticut Office of Consumer Counsel on March 13, 2012 related to the merger of NU and NSTAR (Connecticut settlement agreement).

SIP

Simplified Incentive Plan

SO2

Sulfur dioxide

SS

Standard service

TCAM

Transmission Cost Adjustment Mechanism

TSA

Transmission Service Agreement

UI

The United Illuminating Company




ii


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

TABLE OF CONTENTS

 

Page

PART I - FINANCIAL INFORMATION

 

 

ITEM 1 - Unaudited Condensed Consolidated Financial Statements for the Following Companies:

 


Northeast Utilities and Subsidiaries (Unaudited)

 

Condensed Consolidated Balance Sheets

1

Condensed Consolidated Statements of Income

3

Condensed Consolidated Statements of Comprehensive Income

3

Condensed Consolidated Statements of Cash Flows

4

 

The Connecticut Light and Power Company (Unaudited)

 

Condensed Balance Sheets

5

Condensed Statements of Income

7

Condensed Statements of Comprehensive Income

7

Condensed Statements of Cash Flows

8

 

NSTAR Electric Company and Subsidiary (Unaudited)

 

Condensed Consolidated Balance Sheets

9

Condensed Consolidated Statements of Income

11

Condensed Consolidated Statements of Cash Flows

12

 

 

Public Service Company of New Hampshire and Subsidiary (Unaudited)

 

Condensed Consolidated Balance Sheets

13

Condensed Consolidated Statements of Income

15

Condensed Consolidated Statements of Comprehensive Income

15

Condensed Consolidated Statements of Cash Flows

16

 

Western Massachusetts Electric Company (Unaudited)

 

Condensed Balance Sheets

17

Condensed Statements of Income

19

Condensed Statements of Comprehensive Income

19

Condensed Statements of Cash Flows

20

 

 

Combined Notes to Condensed Consolidated Financial Statements (Unaudited)

21


ITEM 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations for the following companies:


Northeast Utilities and Subsidiaries


39

The Connecticut Light and Power Company

51

NSTAR Electric Company and Subsidiary

54

Public Service Company of New Hampshire and Subsidiary

56

Western Massachusetts Electric Company

58

 

 

ITEM 3 – Quantitative and Qualitative Disclosures About Market Risk

60

 

 

ITEM 4 – Controls and Procedures

60

 

 

PART II – OTHER INFORMATION

 

 

 

ITEM 1 – Legal Proceedings

61

 

 

ITEM 1A – Risk Factors

61

 

 

ITEM 2 – Unregistered Sales of Equity Securities and Use of Proceeds

61

 

 

ITEM 6 – Exhibits

62

 

 

SIGNATURES

64




iii





NORTHEAST UTILITIES AND SUBSIDIARIES

 

 

 

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

(Thousands of Dollars)

2014 

 

2013 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash and Cash Equivalents

$

 34,096 

 

$

 43,364 

 

Receivables, Net

 

 807,510 

 

 

 765,391 

 

Unbilled Revenues

 

 193,983 

 

 

 224,982 

 

Fuel, Materials and Supplies

 

 281,721 

 

 

 303,233 

 

Regulatory Assets

 

 467,156 

 

 

 535,791 

 

Marketable Securities

 

 115,987 

 

 

 92,427 

 

Prepayments and Other Current Assets

 

 168,022 

 

 

 121,861 

Total Current Assets

 

 2,068,475 

 

 

 2,087,049 

 

 

 

 

 

 

 

Property, Plant and Equipment, Net

 

 17,978,692 

 

 

 17,576,186 

 

 

 

 

 

 

 

Deferred Debits and Other Assets:

 

 

 

 

 

 

Regulatory Assets

 

 3,339,457 

 

 

 3,758,694 

 

Goodwill

 

 3,519,401 

 

 

 3,519,401 

 

Marketable Securities

 

 513,986 

 

 

 488,515 

 

Other Long-Term Assets

 

 370,434 

 

 

 365,692 

Total Deferred Debits and Other Assets

 

 7,743,278 

 

 

 8,132,302 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

$

 27,790,445 

 

$

 27,795,537 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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



1



NORTHEAST UTILITIES AND SUBSIDIARIES

 

 

 

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

(Thousands of Dollars)

2014 

 

2013 

 

 

 

 

 

 

 

 

LIABILITIES AND CAPITALIZATION

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Notes Payable

$

 905,000 

 

$

 1,093,000 

 

Long-Term Debt - Current Portion

 

 395,583 

 

 

 533,346 

 

Accounts Payable

 

 561,699 

 

 

 742,251 

 

Regulatory Liabilities

 

 359,921 

 

 

 204,278 

 

Other Current Liabilities

 

 580,605 

 

 

 702,776 

Total Current Liabilities

 

 2,802,808 

 

 

 3,275,651 

 

 

 

 

 

 

 

 

Deferred Credits and Other Liabilities:

 

 

 

 

 

  

Accumulated Deferred Income Taxes

 

 4,270,050 

 

 

 4,029,026 

 

Regulatory Liabilities

 

 503,955 

 

 

 502,984 

 

Derivative Liabilities

 

 449,439 

 

 

 624,050 

 

Accrued Pension, SERP and PBOP

 

 825,001 

 

 

 896,844 

 

Other Long-Term Liabilities

 

 882,688 

 

 

 923,053 

Total Deferred Credits and Other Liabilities

 

 6,931,133 

 

 

 6,975,957 

 

 

 

 

 

 

 

 

Capitalization:

 

 

 

 

 

 

Long-Term Debt

 

 8,147,129 

 

 

 7,776,833 

 

 

 

 

 

 

 

 

 

Noncontrolling Interest - Preferred Stock of Subsidiaries

 

 155,568 

 

 

 155,568 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

  Common Shareholders' Equity:

 

 

 

 

 

 

 

Common Shares

 

 1,666,637 

 

 

 1,665,351 

 

  

Capital Surplus, Paid In

 

 6,201,555 

 

 

 6,192,765 

 

 

Retained Earnings

 

 2,241,025 

 

 

 2,125,980 

 

 

Accumulated Other Comprehensive Loss

 

 (41,507)

 

 

 (46,031)

 

 

Treasury Stock

 

 (313,903)

 

 

 (326,537)

 

Common Shareholders' Equity

 

 9,753,807 

 

 

 9,611,528 

Total Capitalization

 

 18,056,504 

 

 

 17,543,929 

 

 

 

 

 

 

 

 

Total Liabilities and Capitalization

$

 27,790,445 

 

$

 27,795,537 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 



2



NORTHEAST UTILITIES AND SUBSIDIARIES

 

 

 

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended June 30,

 

For the Six Months Ended June 30,

(Thousands of Dollars, Except Share Information)

2014 

 

2013 

 

2014 

 

2013 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Revenues

$

 1,677,614 

 

$

 1,635,862 

 

$

 3,968,204 

 

$

 3,630,885 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Purchased Power, Fuel and Transmission

 

 624,211 

 

 

 488,302 

 

 

 1,602,362 

 

 

 1,236,111 

 

Operations and Maintenance

 

 373,234 

 

 

 357,169 

 

 

 724,922 

 

 

 703,261 

 

Depreciation

 

 152,207 

 

 

 159,553 

 

 

 303,014 

 

 

 314,530 

 

Amortization of Regulatory Assets/(Liabilities), Net

 

 (3,542)

 

 

 54,574 

 

 

 54,356 

 

 

 108,623 

 

Amortization of Rate Reduction Bonds

 

 - 

 

 

 8,082 

 

 

 - 

 

 

 42,581 

 

Energy Efficiency Programs

 

 102,711 

 

 

 94,142 

 

 

 241,536 

 

 

 199,913 

 

Taxes Other Than Income Taxes

 

 134,803 

 

 

 123,464 

 

 

 280,335 

 

 

 256,345 

 

 

 

Total Operating Expenses

 

 1,383,624 

 

 

 1,285,286 

 

 

 3,206,525 

 

 

 2,861,364 

Operating Income

 

 293,990 

 

 

 350,576 

 

 

 761,679 

 

 

 769,521 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest on Long-Term Debt

 

 87,491 

 

 

 85,999 

 

 

 174,868 

 

 

 171,294 

 

Other Interest

 

 5,004 

 

 

 851 

 

 

 7,603 

 

 

 (8,188)

 

 

Interest Expense

 

 92,495 

 

 

 86,850 

 

 

 182,471 

 

 

 163,106 

Other Income, Net

 

 5,526 

 

 

 4,944 

 

 

 7,194 

 

 

 12,710 

Income Before Income Tax Expense

 

 207,021 

 

 

 268,670 

 

 

 586,402 

 

 

 619,125 

Income Tax Expense

 

 77,774 

 

 

 95,606 

 

 

 219,319 

 

 

 216,093 

Net Income

 

 129,247 

 

 

 173,064 

 

 

 367,083 

 

 

 403,032 

Net Income Attributable to Noncontrolling Interests

 

 1,880 

 

 

 2,043 

 

 

 3,759 

 

 

 3,922 

Net Income Attributable to Controlling Interest

$

 127,367 

 

$

 171,021 

 

$

 363,324 

 

$

 399,110 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Earnings Per Common Share

$

 0.40 

 

$

 0.54 

 

$

 1.15 

 

$

 1.27 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings Per Common Share

$

 0.40 

 

$

 0.54 

 

$

 1.15 

 

$

 1.26 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends Declared Per Common Share

$

 0.39 

 

$

 0.37 

 

$

 0.79 

 

$

 0.74 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Common Shares Outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 315,950,510 

 

 

 315,154,130 

 

 

 315,742,511 

 

 

 315,141,956 

 

Diluted

 

 317,112,801 

 

 

 315,962,619 

 

 

 317,002,461 

 

 

 315,982,578 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

$

 129,247 

 

$

 173,064 

 

$

 367,083 

 

$

 403,032 

Other Comprehensive Income, Net of Tax:

 

 

 

 

 

 

 

 

 

 

 

 

Qualified Cash Flow Hedging Instruments

 

 510 

 

 

 514 

 

 

 1,019 

 

 

 1,030 

 

Changes in Unrealized Gains/(Losses) on Other Securities

 

 218 

 

 

 (591)

 

 

 458 

 

 

 (772)

 

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

 

 2,086 

 

 

 1,506 

 

 

 3,047 

 

 

 3,127 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Comprehensive Income, Net of Tax

 

 2,814 

 

 

 1,429 

 

 

 4,524 

 

 

 3,385 

Comprehensive Income Attributable to Noncontrolling Interests

 

 (1,880)

 

 

 (2,043)

 

 

 (3,759)

 

 

 (3,922)

Comprehensive Income Attributable to Controlling Interest

$

 130,181 

 

$

 172,450 

 

$

 367,848 

 

$

 402,495 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 



3



NORTHEAST UTILITIES AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Six Months Ended June 30,

(Thousands of Dollars)

2014 

 

2013 

 

 

 

 

 

 

 

 

Operating Activities:

 

 

 

 

 

 

Net Income

$

 367,083 

 

$

 403,032 

 

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

 

 

 

 

 

 

 

 Depreciation

 

 303,014 

 

 

 314,530 

 

 

 Deferred Income Taxes

 

 133,149 

 

 

 256,294 

 

 

 Pension, SERP and PBOP Expense

 

 47,558 

 

 

 97,671 

 

 

 Pension and PBOP Contributions

 

 (40,640)

 

 

 (122,826)

 

 

 Regulatory Over/(Under) Recoveries, Net

 

 164,388 

 

 

 (4,793)

 

 

 Amortization of Regulatory Assets, Net

 

 54,356 

 

 

 108,623 

 

 

 Amortization of Rate Reduction Bonds

 

 - 

 

 

 42,581 

 

 

 Proceeds from DOE Damages Claim, Net

 

 125,658 

 

 

 - 

 

 

 Other

 

 (9,359)

 

 

 19,932 

 

Changes in Current Assets and Liabilities:

 

 

 

 

 

 

 

 Receivables and Unbilled Revenues, Net

 

 (57,570)

 

 

 (101,229)

 

 

 Fuel, Materials and Supplies

 

 26,633 

 

 

 10,964 

 

 

 Taxes Receivable/Accrued, Net

 

 (62,900)

 

 

 (58,350)

 

 

 Accounts Payable

 

 (112,954)

 

 

 (127,379)

 

 

 Other Current Assets and Liabilities, Net

 

 (41,753)

 

 

 (70,026)

Net Cash Flows Provided by Operating Activities

 

 896,663 

 

 

 769,024 

 

 

 

 

 

 

 

 

Investing Activities:

 

 

 

 

 

 

Investments in Property, Plant and Equipment

 

 (724,043)

 

 

 (700,252)

 

Proceeds from Sales of Marketable Securities

 

 256,309 

 

 

 342,251 

 

Purchases of Marketable Securities

 

 (257,168)

 

 

 (424,096)

 

Decrease in Special Deposits

 

 2,894 

 

 

 65,121 

 

Other Investing Activities

 

 579 

 

 

 (843)

Net Cash Flows Used in Investing Activities

 

 (721,429)

 

 

 (717,819)

 

 

 

 

 

 

 

 

Financing Activities:

 

 

 

 

 

 

Cash Dividends on Common Shares

 

 (237,161)

 

 

 (232,068)

 

Cash Dividends on Preferred Stock

 

 (3,759)

 

 

 (3,922)

 

Decrease in Short-Term Debt

 

 (213,000)

 

 

 (720,500)

 

Issuance of Long-Term Debt

 

 650,000 

 

 

 1,350,000 

 

Retirements of Long-Term Debt

 

 (376,650)

 

 

 (360,635)

 

Retirements of Rate Reduction Bonds

 

 - 

 

 

 (82,139)

 

Other Financing Activities

 

 (3,932)

 

 

 (11,634)

Net Cash Flows Used in Financing Activities

 

 (184,502)

 

 

 (60,898)

Net Decrease in Cash and Cash Equivalents

 

 (9,268)

 

 

 (9,693)

Cash and Cash Equivalents - Beginning of Period

 

 43,364 

 

 

 45,748 

Cash and Cash Equivalents - End of Period

$

 34,096 

 

$

 36,055 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 




4



THE CONNECTICUT LIGHT AND POWER COMPANY

 

 

 

 

 

CONDENSED BALANCE SHEETS

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

(Thousands of Dollars)

2014 

 

2013 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash

$

 10,486 

 

$

 7,237 

 

Receivables, Net

 

 359,636 

 

 

 319,670 

 

Accounts Receivable from Affiliated Companies

 

 85,134 

 

 

 13,777 

 

Unbilled Revenues

 

 95,491 

 

 

 92,401 

 

Regulatory Assets

 

 109,951 

 

 

 150,943 

 

Materials and Supplies

 

 49,525 

 

 

 54,606 

 

Prepayments and Other Current Assets

 

 56,238 

 

 

 53,082 

Total Current Assets

 

 766,461 

 

 

 691,716 

 

 

 

 

 

 

 

Property, Plant and Equipment, Net

 

 6,592,833 

 

 

 6,451,259 

 

 

 

 

 

 

 

Deferred Debits and Other Assets:

 

 

 

 

 

 

Regulatory Assets

 

 1,392,529 

 

 

 1,663,147 

 

Other Long-Term Assets

 

 196,935 

 

 

 174,380 

Total Deferred Debits and Other Assets

 

 1,589,464 

 

 

 1,837,527 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

$

 8,948,758 

 

$

 8,980,502 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 



5



THE CONNECTICUT LIGHT AND POWER COMPANY

 

 

CONDENSED BALANCE SHEETS

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

(Thousands of Dollars)

2014 

 

2013 

 

 

 

 

 

 

 

 

LIABILITIES AND CAPITALIZATION

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Notes Payable to NU Parent

$

 6,400 

 

$

 287,300 

 

Long-Term Debt - Current Portion

 

 312,000 

 

 

 150,000 

 

Accounts Payable

 

 189,171 

 

 

 201,047 

 

Accounts Payable to Affiliated Companies

 

 44,031 

 

 

 56,531 

 

Obligations to Third Party Suppliers

 

 59,312 

 

 

 73,914 

 

Accrued Taxes

 

 52,900 

 

 

 37,186 

 

Regulatory Liabilities

 

 143,457 

 

 

 93,961 

 

Derivative Liabilities

 

 85,611 

 

 

 92,233 

 

Other Current Liabilities

 

 94,204 

 

 

 97,530 

Total Current Liabilities

 

 987,086 

 

 

 1,089,702 

 

 

 

 

 

 

 

 

Deferred Credits and Other Liabilities:

 

 

 

 

 

 

Accumulated Deferred Income Taxes

 

 1,610,662 

 

 

 1,510,586 

 

Regulatory Liabilities

 

 86,677 

 

 

 93,757 

 

Derivative Liabilities

 

 445,342 

 

 

 617,072 

 

Accrued Pension, SERP and PBOP

 

 66,543 

 

 

 95,895 

 

Other Long-Term Liabilities

 

 154,001 

 

 

 163,588 

Total Deferred Credits and Other Liabilities

 

 2,363,225 

 

 

 2,480,898 

 

 

 

 

 

 

 

 

Capitalization:

 

 

 

 

 

 

Long-Term Debt

 

 2,679,591 

 

 

 2,591,208 

 

 

 

 

 

 

 

 

 

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

 

 1,753,668 

 

 

 1,682,047 

 

 

Retained Earnings

 

 989,786 

 

 

 961,482 

 

 

Accumulated Other Comprehensive Loss

 

 (1,150)

 

 

 (1,387)

 

Common Stockholder's Equity

 

 2,802,656 

 

 

 2,702,494 

Total Capitalization

 

 5,598,447 

 

 

 5,409,902 

 

 

 

 

 

 

 

 

Total Liabilities and Capitalization

$

 8,948,758 

 

$

 8,980,502 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 



6



THE CONNECTICUT LIGHT AND POWER COMPANY

 

 

 

 

 

 

 

 

 

CONDENSED STATEMENTS OF INCOME

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended June 30,

 

For the Six Months Ended June 30,

(Thousands of Dollars)

2014 

 

2013 

 

 

2014 

 

 

2013 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Revenues

$

 587,324 

 

$

 569,329 

 

$

 1,321,938 

 

$

 1,193,425 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Purchased Power and Transmission

 

 199,785 

 

 

 184,854 

 

 

 481,165 

 

 

 414,113 

 

Operations and Maintenance

 

 131,762 

 

 

 123,760 

 

 

 241,276 

 

 

 232,655 

 

Depreciation

 

 46,581 

 

 

 45,122 

 

 

 92,712 

 

 

 87,570 

 

Amortization of Regulatory Assets, Net

 

 19,615 

 

 

 463 

 

 

 49,546 

 

 

 11,249 

 

Energy Efficiency Programs

 

 35,296 

 

 

 20,854 

 

 

 77,991 

 

 

 43,668 

 

Taxes Other Than Income Taxes

 

 62,159 

 

 

 57,506 

 

 

 129,111 

 

 

 117,697 

 

 

Total Operating Expenses

 

 495,198 

 

 

 432,559 

 

 

 1,071,801 

 

 

 906,952 

Operating Income

 

 92,126 

 

 

 136,770 

 

 

 250,137 

 

 

 286,473 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest on Long-Term Debt

 

 34,639 

 

 

 32,683 

 

 

 67,548 

 

 

 65,318 

 

Other Interest

 

 2,831 

 

 

 1,301 

 

 

 4,165 

 

 

 (1,640)

 

 

Interest Expense

 

 37,470 

 

 

 33,984 

 

 

 71,713 

 

 

 63,678 

Other Income, Net

 

 3,130 

 

 

 2,897 

 

 

 4,202 

 

 

 7,084 

Income Before Income Tax Expense

 

 57,786 

 

 

 105,683 

 

 

 182,626 

 

 

 229,879 

Income Tax Expense

 

 20,401 

 

 

 37,826 

 

 

 65,942 

 

 

 77,014 

Net Income

$

 37,385 

 

$

 67,857 

 

$

 116,684 

 

$

 152,865 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

$

 37,385 

 

$

 67,857 

 

$

 116,684 

 

$

 152,865 

Other Comprehensive Income, Net of Tax:

 

 

 

 

 

 

 

 

 

 

 

 

Qualified Cash Flow Hedging Instruments

 

 111 

 

 

 111 

 

 

222 

 

 

 222 

 

Changes in Unrealized Gains/(Losses) on Other Securities

 

 7 

 

 

 (20)

 

 

15 

 

 

 (26)

Other Comprehensive Income, Net of Tax

 

 118 

 

 

 91 

 

 

 237 

 

 

 196 

Comprehensive Income

$

 37,503 

 

$

 67,948 

 

$

 116,921 

 

$

 153,061 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 



7



THE CONNECTICUT LIGHT AND POWER COMPANY

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Six Months Ended June 30,

(Thousands of Dollars)

2014 

 

2013 

 

 

 

 

 

 

 

 


Operating Activities:

 

 

 

 

 

 

Net Income

$

 116,684 

 

$

 152,865 

 

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

 

 92,712 

 

 

 87,570 

 

 

 Depreciation

 

 

 

 

 

 

 

 Deferred Income Taxes

 

 43,253 

 

 

 99,045 

 

 

 Pension, SERP and PBOP Expense, Net of PBOP Contributions

 

 5,973 

 

 

 13,826 

 

 

 Regulatory Over/(Under) Recoveries, Net

 

 18,156 

 

 

 (36,902)

 

 

 Amortization of Regulatory Assets, Net

 

 49,546 

 

 

 11,249 

 

 

 Proceeds from DOE Damages Claim

 

 65,370 

 

 

 - 

 

 

 Other

 

 (3,428)

 

 

 (13,476)

 

Changes in Current Assets and Liabilities:

 

 

 

 

 

 

 

 Receivables and Unbilled Revenues, Net

 

 (129,209)

 

 

 (33,976)

 

 

 Taxes Receivable/Accrued, Net

 

 27,679 

 

 

 (14,081)

 

 

 Accounts Payable

 

 (26,995)

 

 

 (95,487)

 

 

 Other Current Assets and Liabilities, Net

 

 15,705 

 

 

 7,548 

Net Cash Flows Provided by Operating Activities

 

 275,446 

 

 

 178,181 

 

 

 

 

 

 

 

 

Investing Activities:

 

 

 

 

 

 

Investments in Property, Plant and Equipment

 

 (221,365)

 

 

 (184,875)

 

Other Investing Activities

 

 1,575 

 

 

 884 

Net Cash Flows Used in Investing Activities

 

 (219,790)

 

 

 (183,991)

 

 

 

 

 

 

 

 

Financing Activities:

 

 

 

 

 

 

Cash Dividends on Common Stock

 

 (85,600)

 

 

 (76,000)

 

Cash Dividends on Preferred Stock

 

 (2,779)

 

 

 (2,779)

 

Issuance of Long Term Debt

 

 250,000 

 

 

 400,000 

 

Decrease in Notes Payable to NU Parent

 

 (280,900)

 

 

 (215,800)

 

Capital Contribution from NU Parent

 

 70,000 

 

 

 - 

 

Decrease in Short-Term Debt

 

 - 

 

 

 (89,000)

 

Other Financing Activities

 

 (3,128)

 

 

 (6,345)

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

 

 (52,407)

 

 

 10,076 

Net Increase in Cash

 

 3,249 

 

 

 4,266 

Cash - Beginning of Period

 

 7,237 

 

 

 1 

Cash - End of Period

$

 10,486 

 

$

 4,267 

 

 

 

 

 

 

 

 

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




8



NSTAR ELECTRIC COMPANY AND SUBSIDIARY

 

 

 

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

(Thousands of Dollars)

2014 

 

2013 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash and Cash Equivalents

$

 12,975 

 

$

 8,021 

 

Receivables, Net

 

 230,039 

 

 

 209,711 

 

Accounts Receivable from Affiliated Companies

 

 - 

 

 

 27,264 

 

Unbilled Revenues

 

 40,514 

 

 

 41,368 

 

Materials and Supplies

 

 51,635 

 

 

 44,236 

 

Regulatory Assets

 

 178,640 

 

 

 204,144 

 

Prepayments and Other Current Assets

 

 1,012 

 

 

 36,710 

Total Current Assets

 

 514,815 

 

 

 571,454 

 

 

 

 

 

 

 

Property, Plant and Equipment, Net

 

 5,147,239 

 

 

 5,043,887 

 

 

 

 

 

 

 

Deferred Debits and Other Assets:

 

 

 

 

 

 

Regulatory Assets

 

 1,020,990 

 

 

 1,235,156 

 

Other Long-Term Assets

 

 64,963 

 

 

 60,624 

Total Deferred Debits and Other Assets

 

 1,085,953 

 

 

 1,295,780 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

$

 6,748,007 

 

$

 6,911,121 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 




9



NSTAR ELECTRIC COMPANY AND SUBSIDIARY

 

 

 

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

(Thousands of Dollars)

2014 

 

2013 

 

 

 

 

 

 

 

 

LIABILITIES AND CAPITALIZATION

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Notes Payable

$

 194,500 

 

$

103,500 

 

Long-Term Debt - Current Portion

 

 4,700 

 

 

301,650 

 

Accounts Payable

 

 150,615 

 

 

207,559 

 

Accounts Payable to Affiliated Companies

 

 69,949 

 

 

75,707 

 

Accrued Taxes

 

 44,308 

 

 

7,946 

 

Accumulated Deferred Income Taxes

 

 54,434 

 

 

 50,128 

 

Regulatory Liabilities

 

 89,161 

 

 

 53,958 

 

Other Current Liabilities

 

 109,048 

 

 

 110,464 

Total Current Liabilities

 

 716,715 

 

 

 910,912 

 

 

 

 

 

 

 

 

Deferred Credits and Other Liabilities:

 

 

 

 

 

 

Accumulated Deferred Income Taxes

 

 1,377,432 

 

 

 1,466,835 

 

Regulatory Liabilities

 

 260,480 

 

 

 253,108 

 

Accrued Pension, SERP and PBOP

 

 150,151 

 

 

 118,010 

 

Payable to Affiliated Companies

 

 - 

 

 

 64,172 

 

Other Long-Term Liabilities

 

 129,837 

 

 

 142,214 

Total Deferred Credits and Other Liabilities

 

 1,917,900 

 

 

 2,044,339 

 

 

 

 

 

 

 

 

Capitalization:

 

 

 

 

 

 

Long-Term Debt

 

 1,792,702 

 

 

 1,499,417 

 

 

 

 

 

 

 

 

 

Preferred Stock Not Subject to Mandatory Redemption

 

 43,000 

 

 

 43,000 

 

 

 

 

 

 

 

 

 

Common Stockholder's Equity:

 

 

 

 

 

 

 

Common Stock

 

 - 

 

 

 - 

 

 

Capital Surplus, Paid In

 

 992,625 

 

 

 992,625 

 

 

Retained Earnings

 

 1,285,065 

 

 

 1,420,828 

 

Common Stockholder's Equity

 

 2,277,690 

 

 

 2,413,453 

Total Capitalization

 

 4,113,392 

 

 

 3,955,870 

 

 

 

 

 

 

 

 

Total Liabilities and Capitalization

$

 6,748,007 

 

$

 6,911,121 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 



10



NSTAR ELECTRIC COMPANY AND SUBSIDIARY

 

 

 

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended June 30,

 

For the Six Months Ended June 30,

(Thousands of Dollars)

2014 

 

2013 

 

 

2014 

 

 

2013 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Revenues

$

 561,513 

 

$

 570,420 

 

$

 1,227,701 

 

$

 1,162,677 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Purchased Power and Transmission

 

 242,907 

 

 

 189,843 

 

 

 561,989 

 

 

403,896 

 

Operations and Maintenance

 

 78,981 

 

 

 87,891 

 

 

 164,905 

 

 

180,192 

 

Depreciation

 

 46,915 

 

 

 45,441 

 

 

 93,540 

 

 

90,882 

 

Amortization of Regulatory Assets/(Liabilities), Net

 

 (1,517)

 

 

 53,554 

 

 

 14,147 

 

 

100,548 

 

Amortization of Rate Reduction Bonds

 

 - 

 

 

 - 

 

 

 - 

 

 

15,054 

 

Energy Efficiency Programs

 

 40,255 

 

 

 50,679 

 

 

 88,584 

 

 

102,382 

 

Taxes Other Than Income Taxes

 

 32,458 

 

 

 30,491 

 

 

 64,610 

 

 

62,665 

 

 

Total Operating Expenses

 

 439,999 

 

 

 457,899 

 

 

 987,775 

 

 

955,619 

Operating Income

 

 121,514 

 

 

 112,521 

 

 

 239,926 

 

 

207,058 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest on Long-Term Debt

 

 19,732 

 

 

 19,809 

 

 

 40,489 

 

 

39,401 

 

Other Interest

 

 960 

 

 

 (2,620)

 

 

 1,263 

 

 

(6,288)

 

 

Interest Expense

 

 20,692 

 

 

 17,189 

 

 

 41,752 

 

 

33,113 

Other Income/(Loss), Net

 

 (246)

 

 

 375 

 

 

 (277)

 

 

1,149 

Income Before Income Tax Expense

 

 100,576 

 

 

 95,707 

 

 

 197,897 

 

 

 175,094 

Income Tax Expense

 

 40,447 

 

 

 37,676 

 

 

 79,681 

 

 

68,941 

Net Income

$

 60,129 

 

$

 58,031 

 

$

 118,216 

 

$

 106,153 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 



11



NSTAR ELECTRIC COMPANY AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Six Months Ended June 30,

(Thousands of Dollars)

2014 

 

2013 

 

 

 

 

 

 

 

 


Operating Activities:

 

 

 

 

 

 

Net Income

$

 118,216 

 

$

 106,153 

 

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

 

 

 

 

 

 

 

 Depreciation

 

 93,540 

 

 

 90,882 

 

 

 Deferred Income Taxes

 

 (21,724)

 

 

 28,750 

 

 

 Pension and PBOP Expense, Net of Contributions

 

 (8,281)

 

 

 (5,139)

 

 

 Regulatory Over/(Under) Recoveries, Net

 

 63,955 

 

 

 (33,901)

 

 

 Amortization of Regulatory Assets, Net

 

 14,147 

 

 

 100,548 

 

 

 Amortization of Rate Reduction Bonds

 

 - 

 

 

 15,054 

 

 

 Proceeds from DOE Damages Claim

 

 29,113 

 

 

 - 

 

 

 Bad Debt Expense

 

 12,272 

 

 

 11,307 

 

 

 Other

 

 (29,142)

 

 

 (47,574)

 

Changes in Current Assets and Liabilities:

 

 

 

 

 

 

 

 Receivables and Unbilled Revenues, Net

 

 (31,746)

 

 

 (60,174)

 

 

 Materials and Supplies

 

 (7,399)

 

 

 3,294 

 

 

 Taxes Receivable/Accrued, Net

 

 65,692 

 

 

 (39,813)

 

 

 Accounts Payable

 

 (21,511)

 

 

 (8,686)

 

 

 Accounts Receivable from/Payable to Affiliates, Net

 

 107,363 

 

 

 (57,369)

 

 

 Other Current Assets and Liabilities, Net

 

 3,158 

 

 

 (11,702)

Net Cash Flows Provided by Operating Activities

 

 387,653 

 

 

 91,630 

 

 

 

 

 

 

 

 

Investing Activities:

 

 

 

 

 

 

Investments in Property, Plant and Equipment

 

 (213,508)

 

 

 (207,380)

 

Decrease in Special Deposits

 

 581 

 

 

 38,429 

 

Other Investing Activities

 

 (5)

 

 

 77 

Net Cash Flows Used in Investing Activities

 

 (212,932)

 

 

 (168,874)

 

 

 

 

 

 

 

 

Financing Activities:

 

 

 

 

 

 

Cash Dividends on Common Stock

 

 (253,000)

 

 

 (56,000)

 

Cash Dividends on Preferred Stock

 

 (980)

 

 

 (1,143)

 

Increase/(Decrease) in Notes Payable

 

 91,000 

 

 

 (23,000)

 

Issuance of Long-Term Debt

 

 300,000 

 

 

 200,000 

 

Retirements of Long-Term Debt

 

 (301,650)

 

 

 (1,650)

 

Retirements of Rate Reduction Bonds

 

 - 

 

 

 (43,493)

 

Other Financing Activities

 

 (5,137)

 

 

 - 

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

 

 (169,767)

 

 

 74,714 

Net Increase/(Decrease) in Cash and Cash Equivalents

 

 4,954 

 

 

 (2,530)

Cash and Cash Equivalents - Beginning of Period

 

 8,021 

 

 

 13,695 

Cash and Cash Equivalents - End of Period

$

 12,975 

 

$

 11,165 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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




12



PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARY

 

 

 

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

(Thousands of Dollars)

2014 

 

2013 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash

$

 337 

 

$

 130 

 

Receivables, Net

 

 69,646 

 

 

 76,331 

 

Accounts Receivable from Affiliated Companies

 

 54 

 

 

 90 

 

Unbilled Revenues

 

 36,971 

 

 

 38,344 

 

Taxes Receivable

 

 45,957 

 

 

 2,180 

 

Fuel, Materials and Supplies

 

 120,723 

 

 

 128,736 

 

Regulatory Assets

 

 95,270 

 

 

 92,194 

 

Prepayments and Other Current Assets

 

 21,770 

 

 

 21,920 

Total Current Assets

 

 390,728 

 

 

 359,925 

 

 

 

 

 

 

 

Property, Plant and Equipment, Net

 

 2,519,921 

 

 

 2,467,556 

 

 

 

 

 

 

 

Deferred Debits and Other Assets:

 

 

 

 

 

 

Regulatory Assets

 

 187,592 

 

 

 219,346 

 

Other Long-Term Assets

 

 53,779 

 

 

 39,891 

Total Deferred Debits and Other Assets

 

 241,371 

 

 

 259,237 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

 $

 3,152,020 

 

 $

 3,086,718 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 




13



PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARY

 

 

 

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

(Thousands of Dollars)

2014 

 

2013 

 

 

 

 

 

 

 

 

LIABILITIES AND CAPITALIZATION

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Notes Payable to NU Parent

$

 95,000 

 

$

 86,500 

 

Long-Term Debt - Current Portion

 

 50,000 

 

 

 50,000 

 

Accounts Payable

 

 58,910 

 

 

 82,920 

 

Accounts Payable to Affiliated Companies

 

 18,760 

 

 

 22,040 

 

Regulatory Liabilities

 

 36,627 

 

 

 20,643 

 

Accumulated Deferred Income Taxes

 

 25,397 

 

 

 28,596 

 

Other Current Liabilities

 

 35,440 

 

 

 51,729 

Total Current Liabilities

 

 320,134 

 

 

 342,428 

 

 

 

 

 

 

 

 

Deferred Credits and Other Liabilities:

 

 

 

 

 

 

Accumulated Deferred Income Taxes

 

 563,291 

 

 

 500,166 

 

Regulatory Liabilities

 

 50,843 

 

 

 51,723 

 

Accrued SERP and PBOP

 

 15,055 

 

 

 15,272 

 

Other Long-Term Liabilities

 

 46,598 

 

 

 46,247 

Total Deferred Credits and Other Liabilities

 

 675,787 

 

 

 613,408 

 

 

 

 

 

 

 

 

Capitalization:

 

 

 

 

 

 

Long-Term Debt

 

 999,157 

 

 

 999,006 

 

 

 

 

 

 

 

 

 

Common Stockholder's Equity:

 

 

 

 

 

 

 

Common Stock

 

 - 

 

 

 - 

 

 

Capital Surplus, Paid In

 

 702,652 

 

 

 701,911 

 

 

Retained Earnings

 

 462,233 

 

 

 438,515 

 

 

Accumulated Other Comprehensive Loss

 

 (7,943)

 

 

 (8,550)

 

Common Stockholder's Equity

 

 1,156,942 

 

 

 1,131,876 

Total Capitalization

 

 2,156,099 

 

 

 2,130,882 

 

 

 

 

 

 

 

 

Total Liabilities and Capitalization

$

 3,152,020 

 

$

 3,086,718 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 



14



PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARY

 

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended June 30,

 

For the Six Months Ended June 30,

(Thousands of Dollars)

2014 

 

2013 

 

2014 

 

 

2013 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Revenues

$

 211,626 

 

$

 216,113 

 

$

 511,458 

 

$

 489,942 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Purchased Power, Fuel and Transmission

 

 68,349 

 

 

 50,073 

 

 

 183,595 

 

 

 151,097 

 

Operations and Maintenance

 

 70,249 

 

 

 62,400 

 

 

 132,462 

 

 

 122,129 

 

Depreciation

 

 24,464 

 

 

 22,947 

 

 

 48,679 

 

 

 45,515 

 

Amortization of Regulatory Assets/(Liabilities), Net

 

 (20,393)

 

 

 1,081 

 

 

 (7,831)

 

 

 (1,969)

 

Amortization of Rate Reduction Bonds

 

 - 

 

 

 4,991 

 

 

 - 

 

 

 19,748 

 

Energy Efficiency Programs

 

 3,292 

 

 

 3,376 

 

 

 7,131 

 

 

 7,046 

 

Taxes Other Than Income Taxes

 

 16,635 

 

 

 16,918 

 

 

 34,348 

 

 

 33,932 

 

 

Total Operating Expenses

 

 162,596 

 

 

 161,786 

 

 

 398,384 

 

 

 377,498 

Operating Income

 

 49,030 

 

 

 54,327 

 

 

 113,074 

 

 

 112,444 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest on Long-Term Debt

 

 11,390 

 

 

 10,811 

 

 

 22,916 

 

 

 22,606 

 

Other Interest

 

 (391)

 

 

 337 

 

 

 55 

 

 

 709 

 

 

Interest Expense

 

 10,999 

 

 

 11,148 

 

 

 22,971 

 

 

 23,315 

Other Income, Net

 

 946 

 

 

 632 

 

 

 1,212 

 

 

 1,662 

Income Before Income Tax Expense

 

 38,977 

 

 

 43,811 

 

 

 91,315 

 

 

 90,791 

Income Tax Expense

 

 14,897 

 

 

 16,617 

 

 

 34,597 

 

 

 34,602 

Net Income

$

 24,080 

 

$

 27,194 

 

$

 56,718 

 

$

 56,189 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

$

 24,080 

 

$

 27,194 

 

$

 56,718 

 

$

 56,189 

Other Comprehensive Income, Net of Tax:

 

 

 

 

 

 

 

 

 

 

 

 

Qualified Cash Flow Hedging Instruments

 

 291 

 

 

291 

 

 

 581 

 

 

582 

 

Changes in Unrealized Gains/(Losses) on Other Securities

 

 12 

 

 

 (34)

 

 

 26 

 

 

 (45)

 

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

 

 - 

 

 

 - 

 

 

 - 

 

 

 (3)

Other Comprehensive Income, Net of Tax

 

 303 

 

 

257 

 

 

 607 

 

 

534 

Comprehensive Income

$

 24,383 

 

$

 27,451 

 

$

 57,325 

 

$

 56,723 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 



15



PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Six Months Ended June 30,

(Thousands of Dollars)

2014 

 

2013 

 

 

 

 

 

 

 

 

Operating Activities:

 

 

 

 

 

 

Net Income

$

 56,718 

 

$

 56,189 

 

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

 

 

 

 

 

 

 

 Depreciation

 

 48,679 

 

 

 45,515 

 

 

 Deferred Income Taxes

 

 61,093 

 

 

 25,450 

 

 

 Pension, SERP and PBOP Expense

 

 3,249 

 

 

 14,228 

 

 

 Pension and PBOP Contributions

 

 (833)

 

 

 (45,721)

 

 

 Regulatory Overrecoveries, Net

 

 18,849 

 

 

 4,844 

 

 

 Amortization of Regulatory Liabilities, Net

 

 (7,831)

 

 

 (1,969)

 

 

 Amortization of Rate Reduction Bonds

 

 - 

 

 

 19,748 

 

 

 Proceeds from DOE Damages Claim

 

 13,103 

 

 

 - 

 

 

 Other

 

 4,386 

 

 

 3,123 

 

Changes in Current Assets and Liabilities:

 

 

 

 

 

 

 

 Receivables and Unbilled Revenues, Net

 

 3,500 

 

 

 597 

 

 

 Fuel, Materials and Supplies

 

 8,013 

 

 

 (13,289)

 

 

 Taxes Receivable/Accrued, Net

 

 (55,243)

 

 

 21,584 

 

 

 Accounts Payable

 

 (7,146)

 

 

 26,159 

 

 

 Other Current Assets and Liabilities, Net

 

 (4,166)

 

 

 (17,743)

Net Cash Flows Provided by Operating Activities

 

 142,371 

 

 

 138,715 

 

 

 

 

 

 

 

 

Investing Activities:

 

 

 

 

 

 

Investments in Property, Plant and Equipment

 

 (117,387)

 

 

 (109,565)

 

(Increase)/Decrease in Special Deposits

 

 (45)

 

 

 22,039 

 

Other Investing Activities

 

 (56)

 

 

 (13)

Net Cash Flows Used in Investing Activities

 

 (117,488)

 

 

 (87,539)

 

 

 

 

 

 

 

 

Financing Activities:

 

 

 

 

 

 

Cash Dividends on Common Stock

 

 (33,000)

 

 

 (34,000)

 

Increase in Notes Payable to NU Parent

 

 8,500 

 

 

 118,900 

 

Retirements of Long-Term Debt

 

 - 

 

 

 (108,985)

 

Retirements of Rate Reduction Bonds

 

 - 

 

 

 (29,294)

 

Other Financing Activities

 

 (176)

 

 

 (225)

Net Cash Flows Used in Financing Activities

 

 (24,676)

 

 

 (53,604)

Net Increase/(Decrease) in Cash

 

 207 

 

 

 (2,428)

Cash - Beginning of Period

 

 130 

 

 

 2,493 

Cash - End of Period

$

 337 

 

$

 65 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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




16



WESTERN MASSACHUSETTS ELECTRIC COMPANY

 

 

 

 

 

CONDENSED BALANCE SHEETS

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

(Thousands of Dollars)

2014 

 

2013 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash

$

 1,709 

 

$

 - 

 

Receivables, Net

 

 49,404 

 

 

 49,018 

 

Accounts Receivable from Affiliated Companies

 

 4,445 

 

 

 47,607 

 

Unbilled Revenues

 

 15,617 

 

 

 16,562 

 

Taxes Receivable

 

 15,228 

 

 

 432 

 

Regulatory Assets

 

 36,251 

 

 

 43,024 

 

Marketable Securities

 

 19,408 

 

 

 26,628 

 

Prepayments and Other Current Assets

 

 10,730 

 

 

 10,479 

Total Current Assets

 

 152,792 

 

 

 193,750 

 

 

 

 

 

 

 

Property, Plant and Equipment, Net

 

 1,418,673 

 

 

 1,381,060 

 

 

 

 

 

 

 

Deferred Debits and Other Assets:

 

 

 

 

 

 

Regulatory Assets

 

 120,303 

 

 

 146,088 

 

Marketable Securities

 

 38,640 

 

 

 31,243 

 

Other Long-Term Assets

 

 50,438 

 

 

 40,679 

Total Deferred Debits and Other Assets

 

 209,381 

 

 

 218,010 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

$

 1,780,846 

 

$

 1,792,820 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 




17



WESTERN MASSACHUSETTS ELECTRIC COMPANY

CONDENSED BALANCE SHEETS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

(Thousands of Dollars)

2014 

 

2013 

 

 

 

 

 

 

 

 

LIABILITIES AND CAPITALIZATION

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Notes Payable to NU Parent

$

 15,900 

 

$

 - 

 

Accounts Payable

 

 28,502 

 

 

 62,961 

 

Accounts Payable to Affiliated Companies

 

 7,533 

 

 

 9,230 

 

Accrued Interest

 

 7,524 

 

 

 7,525 

 

Regulatory Liabilities

 

 44,745 

 

 

 19,858 

 

Accumulated Deferred Income Taxes

 

 57 

 

 

 13,098 

 

Counterparty Deposits

 

 188 

 

 

 7,688 

 

Other Current Liabilities

 

 16,518 

 

 

 20,629 

Total Current Liabilities

 

 120,967 

 

 

 140,989 

 

 

 

 

 

 

 

 

Deferred Credits and Other Liabilities:

 

 

 

 

 

 

Accumulated Deferred Income Taxes

 

 423,013 

 

 

 396,933 

 

Regulatory Liabilities

 

 10,317 

 

 

 13,873 

 

Accrued SERP and PBOP

 

 2,805 

 

 

 3,911 

 

Other Long-Term Liabilities

 

 39,121 

 

 

 28,619 

Total Deferred Credits and Other Liabilities

 

 475,256 

 

 

 443,336 

 

 

 

 

 

 

 

 

Capitalization:

 

 

 

 

 

 

Long-Term Debt

 

 628,932 

 

 

 629,389 

 

 

 

 

 

 

 

 

 

Common Stockholder's Equity:

 

 

 

 

 

 

 

Common Stock

 

 10,866 

 

 

 10,866 

 

 

Capital Surplus, Paid In

 

 391,035 

 

 

 390,743 

 

 

Retained Earnings

 

 157,134 

 

 

 181,014 

 

 

Accumulated Other Comprehensive Loss

 

 (3,344)

 

 

 (3,517)

 

Common Stockholder's Equity

 

 555,691 

 

 

 579,106 

Total Capitalization

 

 1,184,623 

 

 

 1,208,495 

 

 

 

 

 

 

 

 

Total Liabilities and Capitalization

$

 1,780,846 

 

$

 1,792,820 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 



18



WESTERN MASSACHUSETTS ELECTRIC COMPANY

 

 

 

 

 

 

 

 

 

CONDENSED STATEMENTS OF INCOME

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended June 30,

 

For the Six Months Ended June 30,

(Thousands of Dollars)

2014 

 

2013 

 

2014 

 

2013 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Revenues

$

 108,289 

 

$

 115,015 

 

$

 245,698 

 

$

 239,968 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Purchased Power and Transmission

 

 37,619 

 

 

 32,254 

 

 

 87,050 

 

 

 72,298 

 

Operations and Maintenance

 

 23,686 

 

 

 23,136 

 

 

 46,265 

 

 

 44,064 

 

Depreciation

 

 10,317 

 

 

 9,310 

 

 

 20,638 

 

 

 18,280 

 

Amortization of Regulatory Assets, Net

 

 343 

 

 

 685 

 

 

 741 

 

 

 814 

 

Amortization of Rate Reduction Bonds

 

 - 

 

 

 3,091 

 

 

 - 

 

 

 7,780 

 

Energy Efficiency Programs

 

 10,249 

 

 

 7,925 

 

 

 22,114 

 

 

 16,240 

 

Taxes Other Than Income Taxes

 

 8,396 

 

 

 6,206 

 

 

 16,479 

 

 

 12,494 

 

 

Total Operating Expenses

 

 90,610 

 

 

 82,607 

 

 

 193,287 

 

 

 171,970 

Operating Income

 

 17,679 

 

 

 32,408 

 

 

 52,411 

 

 

 67,998 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest on Long-Term Debt

 

 6,104 

 

 

 6,078 

 

 

 12,165 

 

 

 12,032 

 

Other Interest

 

 603 

 

 

 198 

 

 

 188 

 

 

 537 

 

 

Interest Expense

 

 6,707 

 

 

 6,276 

 

 

 12,353 

 

 

 12,569 

Other Income, Net

 

 594 

 

 

 419 

 

 

 1,168 

 

 

 1,423 

Income Before Income Tax Expense

 

 11,566 

 

 

 26,551 

 

 

 41,226 

 

 

 56,852 

Income Tax Expense

 

 4,548 

 

 

 10,137 

 

 

 16,106 

 

 

 21,836 

Net Income

$

 7,018 

 

$

 16,414 

 

$

 25,120 

 

$

 35,016 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

$

 7,018 

 

$

 16,414 

 

$

 25,120 

 

$

 35,016 

Other Comprehensive Income, Net of Tax:

 

 

 

 

 

 

 

 

 

 

 

 

Qualified Cash Flow Hedging Instruments

 

 84 

 

 

84 

 

 

 169 

 

 

169 

 

Changes in Unrealized Gains/(Losses) on Other Securities

 

 2 

 

 

 (6)

 

 

 4 

 

 

 (8)

Other Comprehensive Income, Net of Tax

 

 86 

 

 

 78 

 

 

 173 

 

 

 161 

Comprehensive Income

$

 7,104 

 

$

 16,492 

 

$

 25,293 

 

$

 35,177 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 



19



WESTERN MASSACHUSETTS ELECTRIC COMPANY

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Six Months Ended June 30,

(Thousands of Dollars)

2014 

 

2013 

 

 

 

 

 

 

 

 

Operating Activities:

 

 

 

 

 

 

Net Income

$

 25,120 

 

$

 35,016 

 

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

 

 

 

 

 

 

 

 Depreciation

 

 20,638 

 

 

 18,280 

 

 

 Deferred Income Taxes

 

 15,234 

 

 

 33,317 

 

 

 Regulatory Over/(Under) Recoveries, Net

 

 28,115 

 

 

 (5,094)

 

 

 Amortization of Regulatory Assets, Net

 

 741 

 

 

 814 

 

 

 Amortization of Rate Reduction Bonds

 

 - 

 

 

 7,780 

 

 

 Proceeds from DOE Damages Claim

 

 18,073 

 

 

 - 

 

 

 Other

 

 1,462 

 

 

 572 

 

Changes in Current Assets and Liabilities:

 

 

 

 

 

 

 

 Receivables and Unbilled Revenues, Net

 

 44,859 

 

 

 (8,681)

 

 

 Taxes Receivable/Accrued, Net

 

 (19,555)

 

 

 21,081 

 

 

 Accounts Payable

 

 (26,494)

 

 

 21,389 

 

 

 Other Current Assets and Liabilities, Net

 

 (11,587)

 

 

 (5,166)

Net Cash Flows Provided by Operating Activities

 

 96,606 

 

 

 119,308 

 

 

 

 

 

 

 

 

Investing Activities:

 

 

 

 

 

 

Investments in Property, Plant and Equipment

 

 (61,470)

 

 

 (96,051)

 

Proceeds from Sales of Marketable Securities

 

 44,449 

 

 

 41,604 

 

Purchases of Marketable Securities

 

 (44,754)

 

 

 (41,961)

 

Other Investing Activities

 

 - 

 

 

 4,601 

Net Cash Flows Used in Investing Activities

 

 (61,775)

 

 

 (91,807)

 

 

 

 

 

 

 

 

Financing Activities:

 

 

 

 

 

 

Cash Dividends on Common Stock

 

 (49,000)

 

 

 (20,000)

 

Increase in Notes Payable to NU Parent

 

 15,900 

 

 

 3,300 

 

Retirement of Rate Reduction Bonds

 

 - 

 

 

 (9,352)

 

Other Financing Activities

 

 (22)

 

 

 (31)

Net Cash Flows Used in Financing Activities

 

 (33,122)

 

 

 (26,083)

Net Increase in Cash

 

 1,709 

 

 

 1,418 

Cash - Beginning of Period

 

 - 

 

 

 1 

Cash - End of Period

$

 1,709 

 

$

 1,419 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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




20


NORTHEAST UTILITIES 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 CONSOLIDATED 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 consolidated financial statements.


1.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


A.

Basis of Presentation

NU is a public utility holding company primarily engaged through its wholly owned regulated utility subsidiaries in the energy delivery business.  NU's wholly owned regulated utility subsidiaries consist of CL&P, NSTAR Electric, PSNH, WMECO, Yankee Gas and NSTAR Gas.  NU provides energy delivery service to approximately 3.6 million electric and natural gas customers through these six regulated utilities in Connecticut, Massachusetts and New Hampshire.


The unaudited condensed consolidated financial statements of NU, 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 NU, 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 entirety of this combined Quarterly Report on Form 10-Q, the first quarter 2014 combined Quarterly Report on Form 10-Q and the 2013 combined Annual Report on Form 10-K of NU, CL&P, NSTAR Electric, PSNH and WMECO, which were 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 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 NU's, CL&P's, NSTAR Electric's, PSNH's and WMECO's financial position as of June 30, 2014 and December 31, 2013, the results of operations and comprehensive income for the three and six months ended June 30, 2014 and 2013, and the cash flows for the six months ended June 30, 2014 and 2013.  The results of operations and comprehensive income for the three and six months ended June 30, 2014 and 2013, and the cash flows for the six months ended June 30, 2014 and 2013 are not necessarily indicative of the results expected for a full year.  The demand for electricity and natural gas is affected by weather conditions, economic conditions, and consumer conservation (including company-sponsored energy efficiency programs).  Electric energy sales and revenues are typically higher in the winter and summer months than in the spring and fall months.  Natural gas sales and revenues are typically higher in the winter months than during other periods of the year.


NU consolidates CYAPC and YAEC as CL&P's, NSTAR Electric's, PSNH's and WMECO's combined ownership interest in each of these entities is greater than 50 percent.  Intercompany transactions between CL&P, NSTAR Electric, PSNH and WMECO and the CYAPC and YAEC companies have been eliminated in consolidation of the NU financial statements.  For CL&P, NSTAR Electric, PSNH and WMECO, the investments in CYAPC and YAEC continue to be accounted for under the equity method.


NU's utility subsidiaries are subject to the application of accounting guidance for entities with rate-regulated operations that considers the effect of regulation resulting from differences in the timing of the recognition of certain revenues and expenses from those of other businesses and industries.  NU's utility subsidiaries' energy delivery business is subject to rate-regulation that is based on cost recovery and meets the criteria for application of rate-regulated accounting.  See Note 2, "Regulatory Accounting," for further information.


Certain reclassifications of prior period data were made in the accompanying balance sheets for NU, CL&P, NSTAR Electric and PSNH, and in the statements of income for NU, NSTAR Electric, PSNH and WMECO.  These reclassifications were made to conform to the current period presentation.


B.

Accounting Standards

Recently Adopted Accounting Standards:  On January 1, 2014, as required, NU prospectively adopted the Financial Accounting Standards Board's (FASB) final Accounting Standards Updates (ASU) that required presentation of certain unrecognized tax benefits as reductions to deferred tax assets.  Implementation of this guidance had an immaterial impact on the balance sheets and no impact on the results of operations or cash flows of NU, CL&P, NSTAR Electric, PSNH and WMECO.


Accounting Standards Issued but not Yet Adopted:  In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, effective January 1, 2017, which amends existing revenue recognition guidance and is required to be applied retrospectively (either to each reporting period presented or cumulatively at the date of initial application).  Management is reviewing the requirements of the new ASU, however the ASU's impact is not expected to have a material impact on the financial statements of NU, CL&P, NSTAR Electric, PSNH and WMECO.




21


C.

Provision for Uncollectible Accounts

NU, including CL&P, NSTAR Electric, PSNH and WMECO, presents its receivables at estimated net realizable value by maintaining a provision for uncollectible accounts.  This provision is determined based upon a variety of 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 collectibility from individual customers.  Management continuously assesses the collectibility of receivables, and adjusts collectibility estimates based on actual experience.  Receivable balances are written off against the provision for uncollectible accounts when the accounts are terminated and these balances are deemed to be uncollectible.  The provision for uncollectible accounts, which is included in Receivables, Net on the balance sheets, was as follows:


(Millions of Dollars)

 

As of June 30, 2014

 

As of December 31, 2013

NU

 

$

197.4 

 

$

171.3 

CL&P

 

 

91.8 

 

 

82.0 

NSTAR Electric

 

 

44.4 

 

 

41.7 

PSNH

 

 

9.2 

 

 

7.4 

WMECO

 

 

12.9 

 

 

10.0 


D.

Fair Value Measurements

Fair value measurement guidance is applied to derivative contracts that are not elected or designated as "normal purchases or normal sales" (normal) and to the marketable securities held in trusts.  Fair value measurement guidance is also applied to investment valuations used to calculate the funded status of pension and PBOP plans and nonrecurring fair value measurements of nonfinancial assets such as goodwill and AROs.  


Fair Value Hierarchy:  In measuring fair value, NU uses observable market data when available and minimizes the use of unobservable inputs.  Inputs used in fair value measurements are categorized into three fair value hierarchy levels for disclosure purposes.  The entire fair value measurement is categorized based on the lowest level of input that is significant to the fair value measurement.  NU evaluates the classification of assets and liabilities measured at fair value on a quarterly basis, and NU's policy is to recognize transfers between levels of the fair value hierarchy as of the end of the reporting period.  The three levels of the fair value hierarchy are described below:


Level 1 - Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities as of the reporting date.  Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.  


Level 2 - Inputs are quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs are observable.


Level 3 - Quoted market prices are not available.  Fair value is derived from valuation techniques in which one or more significant inputs or assumptions are unobservable.  Where possible, valuation techniques incorporate observable market inputs that can be validated to external sources such as industry exchanges, including