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

FORM 10-Q


x

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

 

 

 

For the Quarterly Period Ended June 30, 2015     

 

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:  (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

 

 

 

 

x

¨


Indicate by check mark whether the registrants have submitted electronically and posted on its corporate Web sites, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrants were required to submit and post such files).


 

Yes

No

 

 

 

 

x

¨


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


 

Large
Accelerated Filer

 

Accelerated
Filer

 

Non-accelerated
Filer

 

 

 

 

 

 

Eversource Energy

x

 

¨

 

¨

The Connecticut Light and Power Company

¨

 

¨

 

x

NSTAR Electric Company

¨

 

¨

 

x

Public Service Company of New Hampshire

¨

 

¨

 

x

Western Massachusetts Electric Company

¨

 

¨

 

x


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


 

Yes

No

 

 

 

Eversource Energy

¨

x

The Connecticut Light and Power Company

¨

x

NSTAR Electric Company

¨

x

Public Service Company of New Hampshire

¨

x

Western Massachusetts Electric Company

¨

x


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


Company - Class of Stock

Outstanding as of July 31, 2015

Eversource Energy
Common shares, $5.00 par value

317,173,164 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:

ES, Eversource or the Company

Eversource Energy and subsidiaries

ES parent or Eversource parent

Eversource Energy, a public utility holding company

ES parent and other companies

ES parent and other companies is comprised of ES 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

ESTV

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

NPT

Northern Pass Transmission LLC

Eversource Service

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

NSTAR Electric & Gas

NSTAR Electric & Gas Corporation, a former Eversource Energy service company (effective January 1, 2014 merged into 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 ES 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

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:

 

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 2014 Form 10-K

The Eversource Energy and Subsidiaries 2014 combined Annual Report on Form 10-K as filed with the SEC

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



i





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)

LBR

Lost Base Revenue

LNG

Liquefied natural gas

LRS

Supplier of last resort service

MGP

Manufactured Gas Plant

MMBtu

One million British thermal units

Moody's

Moody's Investors Services, Inc.

MW

Megawatt

MWh

Megawatt-Hours

NEEWS

New England East-West Solution

Northern Pass

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

NOx

Nitrogen oxides

PAM

Pension and PBOP Rate Adjustment Mechanism

PBOP

Postretirement Benefits Other Than Pension

PBOP Plan

Postretirement Benefits Other Than Pension Plan that provides certain retiree 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

SIP

Simplified Incentive Plan

SO2

Sulfur dioxide

SS

Standard service

TCAM

Transmission Cost Adjustment Mechanism

TSA

Transmission Service Agreement

UI

The United Illuminating Company




ii


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

TABLE OF CONTENTS

 

Page

PART I - FINANCIAL INFORMATION

 

 

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

 


Eversource Energy and Subsidiaries (Unaudited)

 

Condensed Consolidated Balance Sheets

1

Condensed Consolidated Statements of Income

2

Condensed Consolidated Statements of Comprehensive Income

2

Condensed Consolidated Statements of Cash Flows

3

 

The Connecticut Light and Power Company (Unaudited)

 

Condensed Balance Sheets

4

Condensed Statements of Income

5

Condensed Statements of Comprehensive Income

5

Condensed Statements of Cash Flows

6

 

NSTAR Electric Company and Subsidiary (Unaudited)

 

Condensed Consolidated Balance Sheets

7

Condensed Consolidated Statements of Income

8

Condensed Consolidated Statements of Comprehensive Income

8

Condensed Consolidated Statements of Cash Flows

9

 

 

Public Service Company of New Hampshire and Subsidiary (Unaudited)

 

Condensed Consolidated Balance Sheets

10

Condensed Consolidated Statements of Income

11

Condensed Consolidated Statements of Comprehensive Income

11

Condensed Consolidated Statements of Cash Flows

12

 

Western Massachusetts Electric Company (Unaudited)

 

Condensed Balance Sheets

13

Condensed Statements of Income

14

Condensed Statements of Comprehensive Income

14

Condensed Statements of Cash Flows

15

 

 

Combined Notes to Condensed Consolidated Financial Statements (Unaudited)

16


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


Eversource Energy and Subsidiaries


31

The Connecticut Light and Power Company

45

NSTAR Electric Company and Subsidiary

48

Public Service Company of New Hampshire and Subsidiary

50

Western Massachusetts Electric Company

52

 

 

ITEM 3 – Quantitative and Qualitative Disclosures About Market Risk

54

 

 

ITEM 4 – Controls and Procedures

54

 

 

PART II – OTHER INFORMATION

 

 

 

ITEM 1 – Legal Proceedings

55

 

 

ITEM 1A – Risk Factors

55

 

 

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

55

 

 

ITEM 6 – Exhibits

56

 

 

SIGNATURES

58



iii





EVERSOURCE ENERGY AND SUBSIDIARIES

 

 

 

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

(Thousands of Dollars)

2015 

 

2014 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

Cash and Cash Equivalents

$

 36,469 

 

$

 38,703 

 

 

Receivables, Net

 

 903,578 

 

 

 856,346 

 

 

Unbilled Revenues

 

 205,155 

 

 

 211,758 

 

 

Taxes Receivable

 

 117,792 

 

 

 337,307 

 

 

Fuel, Materials and Supplies

 

 289,561 

 

 

 349,664 

 

 

Regulatory Assets

 

 709,660 

 

 

 672,493 

 

 

Marketable Securities

 

 124,830 

 

 

 124,173 

 

 

Prepayments and Other Current Assets

 

 62,884 

 

 

 102,021 

Total Current Assets

 

 2,449,929 

 

 

 2,692,465 

 

 

 

 

 

 

 

 

Property, Plant and Equipment, Net

 

 19,079,189 

 

 

 18,647,041 

 

 

 

 

 

 

 

 

Deferred Debits and Other Assets:

 

 

 

 

 

 

 

Regulatory Assets

 

 4,016,684 

 

 

 4,054,086 

 

 

Goodwill

 

 3,519,401 

 

 

 3,519,401 

 

 

Marketable Securities

 

 497,919 

 

 

 515,025 

 

 

Other Long-Term Assets

 

 316,817 

 

 

 349,957 

Total Deferred Debits and Other Assets

 

 8,350,821 

 

 

 8,438,469 

 

 

 

 

 

 

 

 

Total Assets

$

 29,879,939 

 

$

 29,777,975 

 

 

 

 

 

 

 

 

LIABILITIES AND CAPITALIZATION

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Notes Payable

$

 953,700 

 

$

 956,825 

 

Long-Term Debt - Current Portion

 

 278,883 

 

 

 245,583 

 

Accounts Payable

 

 598,716 

 

 

 868,231 

 

Regulatory Liabilities

 

 208,510 

 

 

 235,022 

 

Accumulated Deferred Income Taxes

 

 203,375 

 

 

 160,288 

 

Other Current Liabilities

 

 595,801 

 

 

 668,432 

Total Current Liabilities

 

 2,838,985 

 

 

 3,134,381 

 

 

 

 

 

 

 

 

Deferred Credits and Other Liabilities:

 

 

 

 

 

  

Accumulated Deferred Income Taxes

 

 4,606,159 

 

 

 4,467,473 

 

Regulatory Liabilities

 

 510,807 

 

 

 515,144 

 

Derivative Liabilities

 

 380,966 

 

 

 409,632 

 

Accrued Pension, SERP and PBOP

 

 1,636,769 

 

 

 1,638,558 

 

Other Long-Term Liabilities

 

 875,985 

 

 

 874,387 

Total Deferred Credits and Other Liabilities

 

 8,010,686 

 

 

 7,905,194 

 

 

 

 

 

 

 

 

Capitalization:

 

 

 

 

 

 

Long-Term Debt

 

 8,689,647 

 

 

 8,606,017 

 

 

 

 

 

 

 

 

 

Noncontrolling Interest - Preferred Stock of Subsidiaries

 

 155,568 

 

 

 155,568 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

  Common Shareholders' Equity:

 

 

 

 

 

 

 

Common Shares

 

 1,669,167 

 

 

 1,666,796 

 

  

Capital Surplus, Paid In

 

 6,253,411 

 

 

 6,235,834 

 

 

Retained Earnings

 

 2,644,485 

 

 

 2,448,661 

 

 

Accumulated Other Comprehensive Loss

 

 (72,033)

 

 

 (74,009)

 

 

Treasury Stock

 

 (309,977)

 

 

 (300,467)

 

Common Shareholders' Equity

 

 10,185,053 

 

 

 9,976,815 

Total Capitalization

 

 19,030,268 

 

 

 18,738,400 

 

 

 

 

 

 

 

 

Total Liabilities and Capitalization

$

 29,879,939 

 

$

 29,777,975 

 

 

 

 

 

 

 

 

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

 

 

 



























































































1



EVERSOURCE ENERGY AND SUBSIDIARIES

 

 

 

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended June 30,

 

For the Six Months Ended June 30,

(Thousands of Dollars, Except Share Information)

2015 

 

2014 

 

2015 

 

2014 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Revenues

$

 1,817,061 

 

$

 1,677,614 

 

$

 4,330,491 

 

$

 3,968,204 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Purchased Power, Fuel and Transmission

 

 685,118 

 

 

 624,211 

 

 

 1,847,167 

 

 

 1,602,362 

 

Operations and Maintenance

 

 316,641 

 

 

 373,234 

 

 

 650,024 

 

 

 724,922 

 

Depreciation

 

 163,668 

 

 

 152,207 

 

 

 327,505 

 

 

 303,014 

 

Amortization of Regulatory (Liabilities)/Assets, Net

 

 (1,166)

 

 

 (3,542)

 

 

 59,438 

 

 

 54,356 

 

Energy Efficiency Programs

 

 101,850 

 

 

 102,711 

 

 

 248,452 

 

 

 241,536 

 

Taxes Other Than Income Taxes

 

 138,935 

 

 

 134,803 

 

 

 288,415 

 

 

 280,335 

 

 

 

Total Operating Expenses

 

 1,405,046 

 

 

 1,383,624 

 

 

 3,421,001 

 

 

 3,206,525 

Operating Income

 

 412,015 

 

 

 293,990 

 

 

 909,490 

 

 

 761,679 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest on Long-Term Debt

 

 88,021 

 

 

 87,491 

 

 

 175,735 

 

 

 174,868 

 

Other Interest

 

 4,238 

 

 

 5,004 

 

 

 11,367 

 

 

 7,603 

 

 

Interest Expense

 

 92,259 

 

 

 92,495 

 

 

 187,102 

 

 

 182,471 

Other Income, Net

 

 12,899 

 

 

 5,526 

 

 

 18,626 

 

 

 7,194 

Income Before Income Tax Expense

 

 332,655 

 

 

 207,021 

 

 

 741,014 

 

 

 586,402 

Income Tax Expense

 

 123,268 

 

 

 77,774 

 

 

 276,494 

 

 

 219,319 

Net Income

 

 209,387 

 

 

 129,247 

 

 

 464,520 

 

 

 367,083 

Net Income Attributable to Noncontrolling Interests

 

 1,880 

 

 

 1,880 

 

 

 3,759 

 

 

 3,759 

Net Income Attributable to Controlling Interest

$

 207,507 

 

$

 127,367 

 

$

 460,761 

 

$

 363,324 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted Earnings Per Common Share

$

 0.65 

 

$

 0.40 

 

$

 1.45 

 

$

 1.15 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends Declared Per Common Share

$

 0.42 

 

$

 0.39 

 

$

 0.84 

 

$

 0.79 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Common Shares Outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 317,613,166 

 

 

 315,950,510 

 

 

 317,352,004 

 

 

 315,742,511 

 

Diluted

 

 318,559,568 

 

 

 317,112,801 

 

 

 318,525,378 

 

 

 317,002,461 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

$

 209,387 

 

$

 129,247 

 

$

 464,520 

 

$

 367,083 

Other Comprehensive Income, Net of Tax:

 

 

 

 

 

 

 

 

 

 

 

 

Qualified Cash Flow Hedging Instruments

 

 509 

 

 

 510 

 

 

 1,018 

 

 

 1,019 

 

Changes in Unrealized (Losses)/Gains on Other Securities

 

 (1,248)

 

 

 218 

 

 

 (1,116)

 

 

 458 

 

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

 

 1,120 

 

 

 2,086 

 

 

 2,074 

 

 

 3,047 

Other Comprehensive Income, Net of Tax

 

 381 

 

 

 2,814 

 

 

 1,976 

 

 

 4,524 

Comprehensive Income Attributable to Noncontrolling Interests

 

 (1,880)

 

 

 (1,880)

 

 

 (3,759)

 

 

 (3,759)

Comprehensive Income Attributable to Controlling Interest

$

 207,888 

 

$

 130,181 

 

$

 462,737 

 

$

 367,848 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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



























































































2



EVERSOURCE ENERGY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Six Months Ended June 30,

(Thousands of Dollars)

2015 

 

2014 

 

 

 

 

 

 

 

 

Operating Activities:

 

 

 

 

 

 

Net Income

$

 464,520 

 

$

 367,083 

 

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

 

 

 

 

 

 

 

 Depreciation

 

 327,505 

 

 

 303,014 

 

 

 Deferred Income Taxes

 

 176,800 

 

 

 133,149 

 

 

 Pension, SERP and PBOP Expense

 

 48,432 

 

 

 47,558 

 

 

 Pension and PBOP Contributions

 

 (31,032)

 

 

 (40,640)

 

 

 Regulatory (Under)/Over Recoveries, Net

 

 (73,547)

 

 

 164,388 

 

 

 Amortization of Regulatory Assets, Net

 

 59,438 

 

 

 54,356 

 

 

 Proceeds from DOE Damages Claim, Net

 

 - 

 

 

 125,658 

 

 

 Other

 

 (48,247)

 

 

 (9,359)

 

Changes in Current Assets and Liabilities:

 

 

 

 

 

 

 

 Receivables and Unbilled Revenues, Net

 

 (123,984)

 

 

 (57,570)

 

 

 Fuel, Materials and Supplies

 

 60,044 

 

 

 26,633 

 

 

 Taxes Receivable/Accrued, Net

 

 214,577 

 

 

 (62,900)

 

 

 Accounts Payable

 

 (228,176)

 

 

 (112,954)

 

 

 Other Current Assets and Liabilities, Net

 

 9,226 

 

 

 (41,753)

Net Cash Flows Provided by Operating Activities

 

 855,556 

 

 

 896,663 

 

 

 

 

 

 

 

 

Investing Activities:

 

 

 

 

 

 

Investments in Property, Plant and Equipment

 

 (740,379)

 

 

 (724,043)

 

Proceeds from Sales of Marketable Securities

 

 427,990 

 

 

 256,309 

 

Purchases of Marketable Securities

 

 (408,242)

 

 

 (257,168)

 

Other Investing Activities

 

 4,821 

 

 

 3,473 

Net Cash Flows Used in Investing Activities

 

 (715,810)

 

 

 (721,429)

 

 

 

 

 

 

 

 

Financing Activities:

 

 

 

 

 

 

Cash Dividends on Common Shares

 

 (264,936)

 

 

 (237,161)

 

Cash Dividends on Preferred Stock

 

 (3,759)

 

 

 (3,759)

 

Decrease in Notes Payable

 

 (449,375)

 

 

 (213,000)

 

Issuance of Long-Term Debt

 

 750,000 

 

 

 650,000 

 

Retirements of Long-Term Debt

 

 (166,577)

 

 

 (376,650)

 

Other Financing Activities

 

 (7,333)

 

 

 (3,932)

Net Cash Flows Used in Financing Activities

 

 (141,980)

 

 

 (184,502)

Net Decrease in Cash and Cash Equivalents

 

 (2,234)

 

 

 (9,268)

Cash and Cash Equivalents - Beginning of Period

 

 38,703 

 

 

 43,364 

Cash and Cash Equivalents - End of Period

$

 36,469 

 

$

 34,096 

 

 

 

 

 

 

 

 

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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

(Thousands of Dollars)

2015 

 

2014 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

Cash

$

 9,227 

 

$

 2,356 

 

 

Receivables, Net

 

 395,863 

 

 

 355,140 

 

 

Accounts Receivable from Affiliated Companies

 

 22,981 

 

 

 16,757 

 

 

Unbilled Revenues

 

 103,767 

 

 

 102,137 

 

 

Taxes Receivable

 

 - 

 

 

 116,148 

 

 

Regulatory Assets

 

 263,713 

 

 

 220,344 

 

 

Materials and Supplies

 

 50,357 

 

 

 46,664 

 

 

Prepayments and Other Current Assets

 

 15,043 

 

 

 37,822 

Total Current Assets

 

 860,951 

 

 

 897,368 

 

 

 

 

 

 

 

 

Property, Plant and Equipment, Net

 

 6,934,618 

 

 

 6,809,664 

 

 

 

 

 

 

 

 

Deferred Debits and Other Assets:

 

 

 

 

 

 

 

Regulatory Assets

 

 1,461,483 

 

 

 1,475,508 

 

 

Other Long-Term Assets

 

 146,299 

 

 

 177,568 

Total Deferred Debits and Other Assets

 

 1,607,782 

 

 

 1,653,076 

 

 

 

 

 

 

 

 

Total Assets

$

 9,403,351 

 

$

 9,360,108 

 

 

 

 

 

 

 

 

LIABILITIES AND CAPITALIZATION

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Notes Payable to Eversource Parent

$

 85,600 

 

$

 133,400 

 

Long-Term Debt - Current Portion

 

 - 

 

 

 162,000 

 

Accounts Payable

 

 208,860 

 

 

 272,971 

 

Accounts Payable to Affiliated Companies

 

 58,227 

 

 

 65,594 

 

Obligations to Third Party Suppliers

 

 67,844 

 

 

 73,624 

 

Regulatory Liabilities

 

 122,617 

 

 

 124,722 

 

Derivative Liabilities

 

 90,933 

 

 

 88,459 

 

Accumulated Deferred Income Taxes

 

 46,811 

 

 

 34,073 

 

Other Current Liabilities

 

 97,062 

 

 

 119,347 

Total Current Liabilities

 

 777,954 

 

 

 1,074,190 

 

 

 

 

 

 

 

 

Deferred Credits and Other Liabilities:

 

 

 

 

 

 

Accumulated Deferred Income Taxes

 

 1,666,607 

 

 

 1,642,805 

 

Regulatory Liabilities

 

 71,245 

 

 

 81,298 

 

Derivative Liabilities

 

 380,196 

 

 

 406,199 

 

Accrued Pension, SERP and PBOP

 

 286,131 

 

 

 273,854 

 

Other Long-Term Liabilities

 

 144,983 

 

 

 148,844 

Total Deferred Credits and Other Liabilities

 

 2,549,162 

 

 

 2,553,000 

 

 

 

 

 

 

 

 

Capitalization:

 

 

 

 

 

 

Long-Term Debt

 

 2,975,091 

 

 

 2,679,951 

 

 

 

 

 

 

 

 

 

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

 

 1,805,638 

 

 

 1,804,869 

 

 

Retained Earnings

 

 1,119,702 

 

 

 1,072,477 

 

 

Accumulated Other Comprehensive Loss

 

 (748)

 

 

 (931)

 

Common Stockholder's Equity

 

 2,984,944 

 

 

 2,936,767 

Total Capitalization

 

 6,076,235 

 

 

 5,732,918 

 

 

 

 

 

 

 

 

Total Liabilities and Capitalization

$

 9,403,351 

 

$

 9,360,108 

 

 

 

 

 

 

 

 

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

 

 

 



























































































4



THE CONNECTICUT LIGHT AND POWER COMPANY

 

 

 

 

 

 

 

 

 

CONDENSED STATEMENTS OF INCOME

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended June 30,

 

For the Six Months Ended June 30,

(Thousands of Dollars)

2015 

 

2014 

 

2015 

 

2014 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Revenues

$

 666,554 

 

$

 587,324 

 

$

 1,471,471 

 

$

 1,321,938 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Purchased Power and Transmission

 

 253,180 

 

 

 199,785 

 

 

 586,799 

 

 

 481,165 

 

Operations and Maintenance

 

 118,687 

 

 

 131,762 

 

 

 236,044 

 

 

 241,276 

 

Depreciation

 

 52,191 

 

 

 46,581 

 

 

 105,094 

 

 

 92,712 

 

Amortization of Regulatory (Liabilities)/Assets, Net

 

 (7,530)

 

 

 19,615 

 

 

 40,776 

 

 

 49,546 

 

Energy Efficiency Programs

 

 33,963 

 

 

 35,296 

 

 

 76,770 

 

 

 77,991 

 

Taxes Other Than Income Taxes

 

 62,102 

 

 

 62,159 

 

 

 130,181 

 

 

 129,111 

 

 

Total Operating Expenses

 

 512,593 

 

 

 495,198 

 

 

 1,175,664 

 

 

 1,071,801 

Operating Income

 

 153,961 

 

 

 92,126 

 

 

 295,807 

 

 

 250,137 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest on Long-Term Debt

 

 33,423 

 

 

 34,639 

 

 

 66,904 

 

 

 67,548 

 

Other Interest

 

 2,701 

 

 

 2,831 

 

 

 5,844 

 

 

 4,165 

 

 

Interest Expense

 

 36,124 

 

 

 37,470 

 

 

 72,748 

 

 

 71,713 

Other Income, Net

 

 4,062 

 

 

 3,130 

 

 

 6,221 

 

 

 4,202 

Income Before Income Tax Expense

 

 121,899 

 

 

 57,786 

 

 

 229,280 

 

 

 182,626 

Income Tax Expense

 

 43,129 

 

 

 20,401 

 

 

 81,276 

 

 

 65,942 

Net Income

$

 78,770 

 

$

 37,385 

 

$

 148,004 

 

$

 116,684 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

$

 78,770 

 

$

 37,385 

 

$

 148,004 

 

$

 116,684 

Other Comprehensive Income, Net of Tax:

 

 

 

 

 

 

 

 

 

 

 

 

Qualified Cash Flow Hedging Instruments

 

 111 

 

 

 111 

 

 

 222 

 

 

 222 

 

Changes in Unrealized (Losses)/Gains on Other Securities

 

 (43)

 

 

 7 

 

 

 (39)

 

 

 15 

Other Comprehensive Income, Net of Tax

 

 68 

 

 

 118 

 

 

 183 

 

 

 237 

Comprehensive Income

$

 78,838 

 

$

 37,503 

 

$

 148,187 

 

$

 116,921 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 



























































































5



THE CONNECTICUT LIGHT AND POWER COMPANY

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Six Months Ended June 30,

(Thousands of Dollars)

2015 

 

2014 

 

 

 

 

 

 

 

 

Operating Activities:

 

 

 

 

 

 

Net Income

$

 148,004 

 

$

 116,684 

 

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

 

 

 

 

 

 

   Depreciation

 

 105,094 

 

 

 92,712 

 

 

Deferred Income Taxes

 

 30,145 

 

 

 43,253 

 

 

Pension, SERP and PBOP Expense, Net of PBOP Contributions

 

 7,079 

 

 

 5,973 

 

 

Regulatory (Under)/Over Recoveries, Net

 

 (55,302)

 

 

 18,156 

 

 

Amortization of Regulatory Assets, Net

 

 40,776 

 

 

 49,546 

 

 

Proceeds from DOE Damages Claim

 

 - 

 

 

 65,370 

 

 

Other

 

 (2,432)

 

 

 (3,428)

 

Changes in Current Assets and Liabilities:

 

 

 

 

 

 

 

Receivables and Unbilled Revenues, Net

 

 (73,279)

 

 

 (129,209)

 

 

Taxes Receivable/Accrued, Net

 

 123,051 

 

 

 27,679 

 

 

Accounts Payable

 

 (55,192)

 

 

 (26,995)

 

 

Other Current Assets and Liabilities, Net

 

 2,085 

 

 

 15,705 

Net Cash Flows Provided by Operating Activities

 

 270,029 

 

 

 275,446 

 

 

 

 

 

 

 

 

Investing Activities:

 

 

 

 

 

 

Investments in Property, Plant and Equipment

 

 (242,346)

 

 

 (221,365)

 

Other Investing Activities

 

 (1,362)

 

 

 1,575 

Net Cash Flows Used in Investing Activities

 

 (243,708)

 

 

 (219,790)

 

 

 

 

 

 

 

 

Financing Activities:

 

 

 

 

 

 

Cash Dividends on Common Stock

 

 (98,000)

 

 

 (85,600)

 

Cash Dividends on Preferred Stock

 

 (2,779)

 

 

 (2,779)

 

Issuance of Long-Term Debt

 

 300,000 

 

 

 250,000 

 

Retirements of Long-Term Debt

 

 (162,000)

 

 

 - 

 

Decrease in Notes Payable to Eversource Parent

 

 (47,800)

 

 

 (280,900)

 

Capital Contribution from Eversource Parent

 

 - 

 

 

 70,000 

 

Other Financing Activities

 

 (8,871)

 

 

 (3,128)

Net Cash Flows Used in Financing Activities

 

 (19,450)

 

 

 (52,407)

Net Increase in Cash

 

 6,871 

 

 

 3,249 

Cash - Beginning of Period

 

 2,356 

 

 

 7,237 

Cash - End of Period

$

 9,227 

 

$

 10,486 

 

 

 

 

 

 

 

 

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




6





NSTAR ELECTRIC COMPANY AND SUBSIDIARY

 

 

 

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

(Thousands of Dollars)

2015 

 

2014 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

Cash and Cash Equivalents

$

 2,848 

 

$

 12,773 

 

 

Receivables, Net

 

 288,581 

 

 

 234,481 

 

 

Accounts Receivable from Affiliated Companies

 

 50,582 

 

 

 40,353 

 

 

Unbilled Revenues

 

 41,294 

 

 

 29,741 

 

 

Taxes Receivable

 

 43,940 

 

 

 144,601 

 

 

Materials and Supplies

 

 56,584 

 

 

 74,179 

 

 

Regulatory Assets

 

 258,489 

 

 

 198,710 

 

 

Prepayments and Other Current Assets

 

 3,870 

 

 

 10,815 

Total Current Assets

 

 746,188 

 

 

 745,653 

 

 

 

 

 

 

 

 

Property, Plant and Equipment, Net

 

 5,451,668 

 

 

 5,335,436 

 

 

 

 

 

 

 

 

Deferred Debits and Other Assets:

 

 

 

 

 

 

 

Regulatory Assets

 

 1,198,167 

 

 

 1,179,100 

 

 

Other Long-Term Assets

 

 58,936 

 

 

 73,051 

Total Deferred Debits and Other Assets

 

 1,257,103 

 

 

 1,252,151 

 

 

 

 

 

 

 

 

Total Assets

$

 7,454,959 

 

$

 7,333,240 

 

 

 

 

 

 

 

 

LIABILITIES AND CAPITALIZATION

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Notes Payable

$

 377,200 

 

$

302,000 

 

Long-Term Debt - Current Portion

 

 200,000 

 

 

4,700 

 

Accounts Payable

 

 173,863 

 

 

217,311 

 

Accounts Payable to Affiliated Companies

 

 71,066 

 

 

63,517 

 

Obligations to Third Party Suppliers

 

 57,069 

 

 

34,824 

 

Renewable Portfolio Standards Compliance Obligations

 

 61,200 

 

 

35,698 

 

Accumulated Deferred Income Taxes

 

 107,995 

 

 

 55,136 

 

Regulatory Liabilities

 

 5,007 

 

 

 49,611 

 

Other Current Liabilities

 

 86,718 

 

 

 115,991 

Total Current Liabilities

 

 1,140,118 

 

 

 878,788 

 

 

 

 

 

 

 

 

Deferred Credits and Other Liabilities:

 

 

 

 

 

 

Accumulated Deferred Income Taxes

 

 1,538,988 

 

 

 1,527,667 

 

Regulatory Liabilities

 

 266,572 

 

 

 262,738 

 

Accrued Pension, SERP and PBOP

 

 220,000 

 

 

 235,529 

 

Other Long-Term Liabilities

 

 123,421 

 

 

 129,279 

Total Deferred Credits and Other Liabilities

 

 2,148,981 

 

 

 2,155,213 

 

 

 

 

 

 

 

 

Capitalization:

 

 

 

 

 

 

Long-Term Debt

 

 1,592,722 

 

 

 1,792,712 

 

 

 

 

 

 

 

 

 

Preferred Stock Not Subject to Mandatory Redemption

 

 43,000 

 

 

 43,000 

 

 

 

 

 

 

 

 

 

Common Stockholder's Equity:

 

 

 

 

 

 

 

Common Stock

 

 - 

 

 

 - 

 

 

Capital Surplus, Paid In

 

 995,378 

 

 

 994,130 

 

 

Retained Earnings

 

 1,534,500 

 

 

 1,468,955 

 

 

Accumulated Other Comprehensive Income

 

 260 

 

 

 442 

 

Common Stockholder's Equity

 

 2,530,138 

 

 

 2,463,527 

Total Capitalization

 

 4,165,860 

 

 

 4,299,239 

 

 

 

 

 

 

 

 

Total Liabilities and Capitalization

$

 7,454,959 

 

$

 7,333,240 

 

 

 

 

 

 

 

 

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

 

 

 



























































































7



NSTAR ELECTRIC COMPANY AND SUBSIDIARY

 

 

 

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended June 30,

 

For the Six Months Ended June 30,

(Thousands of Dollars)

2015 

 

2014 

 

2015 

 

2014 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Revenues

$

 617,196 

 

$

 561,513 

 

$

 1,384,004 

 

$

 1,227,701 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Purchased Power and Transmission

 

 283,129 

 

 

 242,907 

 

 

 684,995 

 

 

 561,989 

 

Operations and Maintenance

 

 69,430 

 

 

 78,981 

 

 

 145,254 

 

 

 164,905 

 

Depreciation

 

 48,949 

 

 

 46,915 

 

 

 97,716 

 

 

 93,540 

 

Amortization of Regulatory (Liabilities)/Assets, Net

 

 (7,336)

 

 

 (1,517)

 

 

 (12,901)

 

 

 14,147 

 

Energy Efficiency Programs

 

 41,733 

 

 

 40,255 

 

 

 97,150 

 

 

 88,584 

 

Taxes Other Than Income Taxes

 

 29,876 

 

 

 32,458 

 

 

 60,841 

 

 

 64,610 

 

 

Total Operating Expenses

 

 465,781 

 

 

 439,999 

 

 

 1,073,055 

 

 

 987,775 

Operating Income

 

 151,415 

 

 

 121,514 

 

 

 310,949 

 

 

 239,926 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest on Long-Term Debt

 

 18,579 

 

 

 19,732 

 

 

 37,225 

 

 

 40,489 

 

Other Interest

 

 (798)

 

 

 960 

 

 

 1,002 

 

 

 1,263 

 

 

Interest Expense

 

 17,781 

 

 

 20,692 

 

 

 38,227 

 

 

 41,752 

Other Income/(Loss), Net

 

 2,533 

 

 

 (246)

 

 

 3,136 

 

 

 (277)

Income Before Income Tax Expense

 

 136,167 

 

 

 100,576 

 

 

 275,858 

 

 

 197,897 

Income Tax Expense

 

 54,204 

 

 

 40,447 

 

 

 110,335 

 

 

 79,681 

Net Income

$

 81,963 

 

$

 60,129 

 

$

 165,523 

 

$

 118,216 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

$

 81,963 

 

$

 60,129 

 

$

 165,523 

 

$

 118,216 

Other Comprehensive Loss, Net of Tax:

 

 

 

 

 

 

 

 

 

 

 

 

Changes in Funded Status of SERP Benefit Plan

 

 (2)

 

 

 - 

 

 

 (182)

 

 

 - 

Other Comprehensive Loss, Net of Tax

 

 (2)

 

 

 - 

 

 

 (182)

 

 

 - 

Comprehensive Income

$

 81,961 

 

$

 60,129 

 

$

 165,341 

 

$

 118,216 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 



























































































8



NSTAR ELECTRIC COMPANY AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Six Months Ended June 30,

(Thousands of Dollars)

2015 

 

2014 

 

 

 

 

 

 

 

 

Operating Activities:

 

 

 

 

 

 

Net Income

$

 165,523 

 

$

 118,216 

 

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

 

 

 

 

 

 

 

 Depreciation

 

 97,716 

 

 

 93,540 

 

 

 Deferred Income Taxes

 

 61,734 

 

 

 (21,724)

 

 

 PBOP Contributions, Net of Pension, SERP and PBOP Expense

 

 (264)

 

 

 (8,281)

 

 

 Regulatory (Under)/Over Recoveries, Net

 

 (96,290)

 

 

 63,955 

 

 

 Amortization of Regulatory (Liabilities)/Assets, Net

 

 (12,901)

 

 

 14,147 

 

 

 Proceeds from DOE Damages Claim  

 

 - 

 

 

 29,113 

 

 

 Other

 

 (28,653)

 

 

 (16,870)

 

Changes in Current Assets and Liabilities:

 

 

 

 

 

 

 

 Receivables and Unbilled Revenues, Net

 

 (81,524)

 

 

 (31,746)

 

 

 Materials and Supplies

 

 17,595 

 

 

 (7,399)

 

 

 Taxes Receivable/Accrued, Net

 

 100,661 

 

 

 65,692 

 

 

 Accounts Payable

 

 (38,388)

 

 

 (21,511)

 

 

 Accounts Receivable from/Payable to Affiliates, Net

 

 (2,680)

 

 

 107,363 

 

 

 Other Current Assets and Liabilities, Net

 

 25,076 

 

 

 3,158 

Net Cash Flows Provided by Operating Activities

 

 207,605 

 

 

 387,653 

 

 

 

 

 

 

 

 

Investing Activities:

 

 

 

 

 

 

Investments in Property, Plant and Equipment

 

 (188,103)

 

 

 (213,508)

 

Other Investing Activities

 

 53 

 

 

 576 

Net Cash Flows Used in Investing Activities

 

 (188,050)

 

 

 (212,932)

 

 

 

 

 

 

 

 

Financing Activities:

 

 

 

 

 

 

Cash Dividends on Common Stock

 

 (99,000)

 

 

 (253,000)

 

Cash Dividends on Preferred Stock

 

 (980)

 

 

 (980)

 

Increase in Notes Payable

 

 75,200 

 

 

 91,000 

 

Issuance of Long-Term Debt

 

 - 

 

 

 300,000 

 

Retirements of Long-Term Debt

 

 (4,700)

 

 

 (301,650)

 

Other Financing Activities

 

 - 

 

 

 (5,137)

Net Cash Flows Used in Financing Activities

 

 (29,480)

 

 

 (169,767)

Net (Decrease)/Increase in Cash and Cash Equivalents

 

 (9,925)

 

 

 4,954 

Cash and Cash Equivalents - Beginning of Period

 

 12,773 

 

 

 8,021 

Cash and Cash Equivalents - End of Period

$

 2,848 

 

$

 12,975 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

(Thousands of Dollars)

2015 

 

2014 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

Cash

$

 818 

 

$

 489 

 

 

Receivables, Net

 

 84,607 

 

 

 80,151 

 

 

Accounts Receivable from Affiliated Companies

 

 4,290 

 

 

 3,194 

 

 

Unbilled Revenues

 

 36,472 

 

 

 40,181 

 

 

Taxes Receivable

 

 34,985 

 

 

 14,571 

 

 

Fuel, Materials and Supplies

 

 137,119 

 

 

 148,139 

 

 

Regulatory Assets

 

 88,773 

 

 

 111,705 

 

 

Prepayments and Other Current Assets

 

 23,538 

 

 

 27,821 

Total Current Assets

 

 410,602 

 

 

 426,251 

 

 

 

 

 

 

 

 

Property, Plant and Equipment, Net

 

 2,714,915 

 

 

 2,635,844 

 

 

 

 

 

 

 

 

Deferred Debits and Other Assets:

 

 

 

 

 

 

 

Regulatory Assets

 

 282,215 

 

 

 293,115 

 

 

Other Long-Term Assets

 

 34,083 

 

 

 39,228 

Total Deferred Debits and Other Assets

 

 316,298 

 

 

 332,343 

 

 

 

 

 

 

 

 

Total Assets

 $

 3,441,815 

 

 $

 3,394,438 

 

 

 

 

 

 

 

 

LIABILITIES AND CAPITALIZATION

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Notes Payable to Eversource Parent

$

 133,500 

 

$

 90,500 

 

Accounts Payable

 

 69,884 

 

 

 93,349 

 

Accounts Payable to Affiliated Companies

 

 22,201 

 

 

 33,734 

 

Regulatory Liabilities

 

 5,602 

 

 

 16,044 

 

Accumulated Deferred Income Taxes

 

 35,963 

 

 

 36,164 

 

Other Current Liabilities

 

 30,605 

 

 

 38,969 

Total Current Liabilities

 

 297,755 

 

 

 308,760 

 

 

 

 

 

 

 

 

Deferred Credits and Other Liabilities:

 

 

 

 

 

 

Accumulated Deferred Income Taxes

 

 632,890 

 

 

 587,292 

 

Regulatory Liabilities

 

 50,250 

 

 

 51,372 

 

Accrued Pension, SERP and PBOP

 

 99,318 

 

 

 93,243 

 

Other Long-Term Liabilities

 

 50,054 

 

 

 50,155 

Total Deferred Credits and Other Liabilities

 

 832,512 

 

 

 782,062 

 

 

 

 

 

 

 

 

Capitalization:

 

 

 

 

 

 

Long-Term Debt

 

 1,076,319 

 

 

 1,076,286 

 

 

 

 

 

 

 

 

 

Common Stockholder's Equity:

 

 

 

 

 

 

 

Common Stock

 

 - 

 

 

 - 

 

 

Capital Surplus, Paid In

 

 748,635 

 

 

 748,240 

 

 

Retained Earnings

 

 493,449 

 

 

 486,459 

 

 

Accumulated Other Comprehensive Loss

 

 (6,855)

 

 

 (7,369)

 

Common Stockholder's Equity

 

 1,235,229 

 

 

 1,227,330 

Total Capitalization

 

 2,311,548 

 

 

 2,303,616 

 

 

 

 

 

 

 

 

Total Liabilities and Capitalization

$

 3,441,815 

 

$

 3,394,438 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 



























































































10



PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARY

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended June 30,

 

For the Six Months Ended June 30,

(Thousands of Dollars)

2015 

 

2014 

 

2015 

 

2014 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Revenues

$

 241,875 

 

$

 211,626 

 

$

 526,722 

 

$

 511,458 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Purchased Power, Fuel and Transmission

 

 47,938 

 

 

 68,349 

 

 

 147,516 

 

 

 183,595 

 

Operations and Maintenance

 

 76,468 

 

 

 70,249 

 

 

 134,895 

 

 

 132,462 

 

Depreciation

 

 25,751 

 

 

 24,464 

 

 

 51,397 

 

 

 48,679 

 

Amortization of Regulatory Assets/(Liabilities), Net

 

 12,050 

 

 

 (20,393)

 

 

 27,181 

 

 

 (7,831)

 

Energy Efficiency Programs

 

 3,356 

 

 

 3,292 

 

 

 7,128 

 

 

 7,131 

 

Taxes Other Than Income Taxes

 

 22,249 

 

 

 16,635 

 

 

 41,331 

 

 

 34,348 

 

 

Total Operating Expenses

 

 187,812 

 

 

 162,596 

 

 

 409,448 

 

 

 398,384 

Operating Income

 

 54,063 

 

 

 49,030 

 

 

 117,274 

 

 

 113,074 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest on Long-Term Debt

 

 11,359 

 

 

 11,390 

 

 

 22,758 

 

 

 22,916 

 

Other Interest

 

 303 

 

 

 (391)

 

 

 177 

 

 

 55 

 

 

Interest Expense

 

 11,662 

 

 

 10,999 

 

 

 22,935 

 

 

 22,971 

Other Income, Net

 

 1,245 

 

 

 946 

 

 

 1,628 

 

 

 1,212 

Income Before Income Tax Expense

 

 43,646 

 

 

 38,977 

 

 

 95,967 

 

 

 91,315 

Income Tax Expense

 

 15,701 

 

 

 14,897 

 

 

 35,977 

 

 

 34,597 

Net Income

$

 27,945 

 

$

 24,080 

 

$

 59,990 

 

$

 56,718 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

$

 27,945 

 

$

 24,080 

 

$

 59,990 

 

$

 56,718 

Other Comprehensive Income, Net of Tax:

 

 

 

 

 

 

 

 

 

 

 

 

Qualified Cash Flow Hedging Instruments

 

 290 

 

 

291 

 

 

 581 

 

 

581 

 

Changes in Unrealized (Losses)/Gains on Other Securities

 

 (75)

 

 

 12 

 

 

 (67)

 

 

 26 

Other Comprehensive Income, Net of Tax

 

 215 

 

 

303 

 

 

 514 

 

 

607 

Comprehensive Income

$

 28,160 

 

$

 24,383 

 

$

 60,504 

 

$

 57,325 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 



























































































11



PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Six Months Ended June 30,

(Thousands of Dollars)

2015 

 

2014 

 

 

 

 

 

 

 

 

Operating Activities:

 

 

 

 

 

 

Net Income

$

 59,990 

 

$

 56,718 

 

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

 

 

 

 

 

 

 

Depreciation

 

 51,397 

 

 

 48,679 

 

 

Deferred Income Taxes

 

 47,454 

 

 

 61,093 

 

 

Pension, SERP and PBOP Expense, Net of PBOP Contributions

 

 2,359 

 

 

 2,416 

 

 

Regulatory (Under)/Over Recoveries, Net

 

 (3,089)

 

 

 18,849 

 

 

Amortization of Regulatory Assets/(Liabilities), Net

 

 27,181 

 

 

 (7,831)

 

 

Proceeds from DOE Damages Claim

 

 - 

 

 

 13,103 

 

 

Other

 

 6,367 

 

 

 4,386 

 

Changes in Current Assets and Liabilities:

 

 

 

 

 

 

 

 Receivables and Unbilled Revenues, Net

 

 (6,597)

 

 

 3,500 

 

 

 Fuel, Materials and Supplies

 

 11,019 

 

 

 8,013 

 

 

 Taxes Receivable/Accrued, Net

 

 (20,414)

 

 

 (55,243)

 

 

 Accounts Payable

 

 (21,362)

 

 

 (7,146)

 

 

 Other Current Assets and Liabilities, Net

 

 (3,792)

 

 

 (4,166)

Net Cash Flows Provided by Operating Activities

 

 150,513 

 

 

 142,371 

 

 

 

 

 

 

 

 

Investing Activities:

 

 

 

 

 

 

Investments in Property, Plant and Equipment

 

 (140,171)

 

 

 (117,387)

 

Other Investing Activities

 

 169 

 

 

 (101)

Net Cash Flows Used in Investing Activities

 

 (140,002)

 

 

 (117,488)

 

 

 

 

 

 

 

 

Financing Activities:

 

 

 

 

 

 

Cash Dividends on Common Stock

 

 (53,000)

 

 

 (33,000)

 

Increase in Notes Payable to Eversource Parent

 

 43,000 

 

 

 8,500 

 

Other Financing Activities

 

 (182)

 

 

 (176)

Net Cash Flows Used in Financing Activities

 

 (10,182)

 

 

 (24,676)

Net Increase in Cash

 

 329 

 

 

 207 

Cash - Beginning of Period

 

 489 

 

 

 130 

Cash - End of Period

$

 818 

 

$

 337 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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




12





WESTERN MASSACHUSETTS ELECTRIC COMPANY

 

 

 

 

 

CONDENSED BALANCE SHEETS

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

(Thousands of Dollars)

2015 

 

2014 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

Cash

$

 1,143 

 

$

 - 

 

 

Receivables, Net

 

 61,491 

 

 

 51,066 

 

 

Accounts Receivable from Affiliated Companies

 

 5,507 

 

 

 7,851 

 

 

Unbilled Revenues

 

 15,912 

 

 

 15,146 

 

 

Taxes Receivable

 

 1,148 

 

 

 18,126 

 

 

Regulatory Assets

 

 54,926 

 

 

 51,923 

 

 

Marketable Securities

 

 38,441 

 

 

 28,658 

 

 

Prepayments and Other Current Assets

 

 5,496 

 

 

 7,607 

Total Current Assets

 

 184,064 

 

 

 180,377 

 

 

 

 

 

 

 

 

Property, Plant and Equipment, Net

 

 1,508,207 

 

 

 1,461,321 

 

 

 

 

 

 

 

 

Deferred Debits and Other Assets:

 

 

 

 

 

 

 

Regulatory Assets

 

 138,138 

 

 

 146,307 

 

 

Marketable Securities

 

 19,809 

 

 

 29,452 

 

 

Other Long-Term Assets

 

 27,147 

 

 

 22,018 

Total Deferred Debits and Other Assets

 

 185,094 

 

 

 197,777 

 

 

 

 

 

 

 

 

Total Assets

$

 1,877,365 

 

$

 1,839,475 

 

 

 

 

 

 

 

 

LIABILITIES AND CAPITALIZATION

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Notes Payable to Eversource Parent

$

 60,600 

 

$

 21,400 

 

Long-Term Debt - Current Portion

 

 50,000 

 

 

 50,000 

 

Accounts Payable

 

 36,327 

 

 

 53,732 

 

Accounts Payable to Affiliated Companies

 

 10,217 

 

 

 14,328 

 

Regulatory Liabilities

 

 16,847 

 

 

 22,486 

 

Accumulated Deferred Income Taxes

 

 20,822 

 

 

 18,089 

 

Other Current Liabilities

 

 24,608 

 

 

 24,080 

Total Current Liabilities

 

 219,421 

 

 

 204,115 

 

 

 

 

 

 

 

 

Deferred Credits and Other Liabilities:

 

 

 

 

 

 

Accumulated Deferred Income Taxes

 

 422,502 

 

 

 416,822 

 

Regulatory Liabilities

 

 12,921 

 

 

 10,835 

 

Accrued Pension, SERP and PBOP

 

 19,530 

 

 

 17,705 

 

Other Long-Term Liabilities

 

 38,065 

 

 

 33,747 

Total Deferred Credits and Other Liabilities

 

 493,018 

 

 

 479,109 

 

 

 

 

 

 

 

 

Capitalization:

 

 

 

 

 

 

Long-Term Debt

 

 578,007 

 

 

 578,471 

 

 

 

 

 

 

 

 

 

Common Stockholder's Equity:

 

 

 

 

 

 

 

Common Stock

 

 10,866 

 

 

 10,866 

 

 

Capital Surplus, Paid In

 

 391,398 

 

 

 391,256 

 

 

Retained Earnings

 

 187,673 

 

 

 178,834 

 

 

Accumulated Other Comprehensive Loss

 

 (3,018)

 

 

 (3,176)

 

Common Stockholder's Equity

 

 586,919 

 

 

 577,780 

Total Capitalization

 

 1,164,926 

 

 

 1,156,251 

 

 

 

 

 

 

 

 

Total Liabilities and Capitalization

$

 1,877,365 

 

$

 1,839,475 

 

 

 

 

 

 

 

 

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 June 30,

 

For the Six Months Ended June 30,

(Thousands of Dollars)

2015 

 

2014 

 

2015 

 

2014 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Revenues

$

 125,194 

 

$

 108,289 

 

$

 278,058 

 

$

 245,698 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Purchased Power and Transmission

 

 43,055 

 

 

 37,619 

 

 

 112,716 

 

 

 87,050 

 

Operations and Maintenance

 

 20,104 

 

 

 23,686 

 

 

 39,889 

 

 

 46,265 

 

Depreciation

 

 10,848 

 

 

 10,317 

 

 

 21,223 

 

 

 20,638 

 

Amortization of Regulatory Assets, Net

 

 3,336 

 

 

 343 

 

 

 7,264 

 

 

 741 

 

Energy Efficiency Programs

 

 9,519 

 

 

 10,249 

 

 

 20,594 

 

 

 22,114 

 

Taxes Other Than Income Taxes

 

 9,398 

 

 

 8,396 

 

 

 18,833 

 

 

 16,479 

 

 

Total Operating Expenses

 

 96,260 

 

 

 90,610 

 

 

 220,519 

 

 

 193,287 

Operating Income

 

 28,934 

 

 

 17,679 

 

 

 57,539 

 

 

 52,411 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest on Long-Term Debt

 

 6,015 

 

 

 6,104 

 

 

 12,060 

 

 

 12,165 

 

Other Interest

 

 276 

 

 

 603 

 

 

 1,052 

 

 

 188 

 

 

Interest Expense

 

 6,291 

 

 

 6,707 

 

 

 13,112 

 

 

 12,353 

Other Income, Net

 

 1,245 

 

 

 594 

 

 

 1,819 

 

 

 1,168 

Income Before Income Tax Expense

 

 23,888 

 

 

 11,566 

 

 

 46,246 

 

 

 41,226 

Income Tax Expense

 

 9,693 

 

 

 4,548 

 

 

 18,807 

 

 

 16,106 

Net Income

$

 14,195 

 

$

 7,018 

 

$

 27,439 

 

$

 25,120 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

$

 14,195 

 

$

 7,018 

 

$

 27,439 

 

$

 25,120 

Other Comprehensive Income, Net of Tax:

 

 

 

 

 

 

 

 

 

 

 

 

Qualified Cash Flow Hedging Instruments

 

 84 

 

 

84 

 

 

 169 

 

 

169 

 

Changes in Unrealized (Losses)/Gains on Other Securities

 

 (12)

 

 

 2 

 

 

 (11)

 

 

 4 

Other Comprehensive Income, Net of Tax

 

 72 

 

 

 86 

 

 

 158 

 

 

 173 

Comprehensive Income

$

 14,267 

 

$

 7,104 

 

$

 27,597 

 

$

 25,293 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 Six Months Ended June 30,

(Thousands of Dollars)

2015 

 

2014 

 

 

 

 

 

 

 

 

Operating Activities:

 

 

 

 

 

 

Net Income

$

 27,439 

 

$

 25,120 

 

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

 

 

 

 

 

 

 

 Depreciation

 

 21,223 

 

 

 20,638 

 

 

 Deferred Income Taxes

 

 12,503 

 

 

 15,234 

 

 

 Regulatory (Under)/Over Recoveries, Net

 

 (7,911)

 

 

 28,115 

 

 

 Amortization of Regulatory Assets, Net

 

 7,264 

 

 

 741 

 

 

 Proceeds from DOE Damages Claim

 

 - 

 

 

 18,073 

 

 

 Other

 

 (3,598)

 

 

 1,462 

 

Changes in Current Assets and Liabilities:

 

 

 

 

 

 

 

 Receivables and Unbilled Revenues, Net

 

 (11,593)

 

 

 44,859 

 

 

 Taxes Receivable/Accrued, Net

 

 18,774 

 

 

 (19,555)

 

 

 Accounts Payable

 

 (21,056)

 

 

 (26,494)

 

 

 Other Current Assets and Liabilities, Net

 

 859 

 

 

 (11,587)

Net Cash Flows Provided by Operating Activities

 

 43,904 

 

 

 96,606 

 

 

 

 

 

 

 

 

Investing Activities:

 

 

 

 

 

 

Investments in Property, Plant and Equipment

 

 (62,966)

 

 

 (61,470)

 

Proceeds from Sales of Marketable Securities

 

 49,739 

 

 

 44,449 

 

Purchases of Marketable Securities

 

 (50,118)

 

 

 (44,754)

Net Cash Flows Used in Investing Activities

 

 (63,345)

 

 

 (61,775)

 

 

 

 

 

 

 

 

Financing Activities:

 

 

 

 

 

 

Cash Dividends on Common Stock

 

 (18,600)

 

 

 (49,000)

 

Increase in Notes Payable to Eversource Parent

 

 39,200 

 

 

 15,900 

 

Other Financing Activities

 

 (16)

 

 

 (22)

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

 

 20,584 

 

 

 (33,122)

Net Increase in Cash

 

 1,143 

 

 

 1,709 

Cash - Beginning of Period

 

 - 

 

 

 - 

Cash - End of Period

$

 1,143 

 

$

 1,709 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 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

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 3.6 million electric and natural gas customers through these six regulated utilities in Connecticut, Massachusetts and New Hampshire.  


On April 30, 2015, the Company's legal name was changed from Northeast Utilities to Eversource Energy.  CL&P, NSTAR Electric, PSNH and WMECO are each doing business as Eversource Energy.  


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 entirety of this combined Quarterly Report on Form 10-Q, the first quarter 2015 combined Quarterly Report on Form 10-Q and the 2014 combined Annual Report on Form 10-K of Eversource, 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 Eversource's, CL&P's, NSTAR Electric's, PSNH's and WMECO's financial position as of June 30, 2015 and December 31, 2014, the results of operations and comprehensive income for the three and six months ended June 30, 2015 and 2014, and the cash flows for the six months ended June 30, 2015 and 2014.  The results of operations and comprehensive income for the three and six months ended June 30, 2015 and 2014 and the cash flows for the six months ended June 30, 2015 and 2014 are not necessarily indicative of the results expected for a full year.  


Eversource consolidates CYAPC and YAEC because 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 Eversource financial statements.  


Eversource's utility subsidiaries' distribution (including generation) and transmission businesses and NPT are subject to rate-regulation that is based on cost recovery and meets the criteria for application of accounting guidance for entities with rate-regulated operations, which considers the effect of regulation on the differences in the timing of the recognition of certain revenues and expenses from those of other businesses and industries.  See Note 2, "Regulatory Accounting," for further information.


Certain reclassifications of prior period data were made in the accompanying financial statements to conform to the current period presentation.


B.

Accounting Standards

Accounting Standards Issued but not Yet Effective:  In May 2014, the Financial Accounting Standards Board (FASB) issued ASU 2014-09, Revenue from Contracts with Customers, 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).  On July 9, 2015, the FASB deferred the effective date of the new revenue standard by one year.  The Company will implement the standard beginning in the first quarter of 2018.  Management is reviewing the requirements of the ASU.  The ASU is not expected to have a material impact on the financial statements of Eversource, CL&P, NSTAR Electric, PSNH and WMECO.


In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, that changes the balance sheet presentation of debt issuance costs.  Under the new standard, issuance costs related to debt will be presented on the balance sheet as a direct deduction from the carrying amount of the debt liability rather than as a deferred cost as required by current guidance.  The new accounting guidance is effective for interim and annual periods beginning in the first quarter of 2016 with early adoption permitted.  Upon adoption, an entity must apply the new guidance retrospectively to all prior periods presented in the financial statements.  Management does not expect the adoption of this standard to have a material effect on the financial statements of Eversource, CL&P, NSTAR Electric, PSNH and WMECO.




16


C.

Provision for Uncollectible Accounts

Eversource, 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 judgments and factors, including the application of an estimated uncollectible percentage to each receivable aging category.  The estimate is based upon historical collection and write-off experience and management's assessment of collectability from customers.  Management continuously assesses the collectability of receivables and adjusts collectability estimates based on actual experience.  Receivable balances are written off against the provision for uncollectible accounts when the accounts are terminated and these balances are deemed to be uncollectible.


The PURA allows CL&P and Yankee Gas to accelerate the recovery of accounts receivable balances attributable to qualified customers under financial or medical duress (uncollectible hardship accounts receivable) outstanding for greater than 90 days.  The DPU allows WMECO to also recover in rates amounts associated with certain uncollectible hardship accounts receivable.  Uncollectible customer account balances, which are expected to be recovered in rates, are included in Regulatory Assets or Other Long-Term Assets.


The total provision for uncollectible accounts and for uncollectible hardship accounts, which is included in the total provision, are included in Receivables, Net on the balance sheets, and were as follows:


 

 

 

Total Provision for Uncollectible Accounts

 

Uncollectible Hardship

(Millions of Dollars)

 

As of June 30, 2015

 

As of December 31, 2014

 

As of June 30, 2015

 

As of December 31, 2014

Eversource

 

$

209.8 

 

$

175.3 

 

$

106.2 

 

$

91.5 

CL&P

 

 

100.5 

 

 

84.3 

 

 

84.7 

 

 

74.0 

NSTAR Electric

 

 

46.3 

 

 

40.7 

 

 

 - 

 

 

 - 

PSNH

 

 

9.5 

 

 

7.7 

 

 

 - 

 

 

 - 

WMECO

 

 

12.1 

 

 

9.9 

 

 

7.2 

 

 

6.2 


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 valuations of the investments used to calculate the funded status of pension and PBOP plans and nonrecurring fair value measurements of nonfinancial assets such as goodwill and AROs, and is also used to estimate the fair value of preferred stock and long-term debt.


Fair Value Hierarchy:  In measuring fair value, Eversource uses observable market data when available in order to minimize 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.  Eversource evaluates the classification of assets and liabilities measured at fair value on a quarterly basis, and Eversource'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 prices of energy and energy-related products.  


Determination of Fair Value:  The valuation techniques and inputs used in Eversource's fair value measurements are described in Note 4, "Derivative Instruments," Note 5, "Marketable Securities," and Note 9, "Fair Value of Financial Instruments," to the financial statements.


E.

Other Income, Net

Items included within Other Income, Net on the statements of income primarily consist of investment income/(loss), interest income, AFUDC related to equity funds, and equity in earnings.  Investment income/(loss) primarily relates to debt and equity securities held in trust.  For further information, see Note 5, "Marketable Securities," to the financial statements.  


F.

Other Taxes

Gross receipts taxes levied by the state of Connecticut are collected by CL&P and Yankee Gas from their respective customers.  These gross receipts taxes are shown separately with collections in Operating Revenues and payments in Taxes Other Than Income Taxes on the statements of income as follows:


 

For the Three Months Ended

 

For the Six Months Ended

(Millions of Dollars)

June 30, 2015

 

June 30, 2014

 

June 30, 2015

 

June 30, 2014

Eversource

$

33.2 

 

$

 35.2 

 

$

75.1 

 

$

 79.6 

CL&P

 

29.5 

 

 

 30.9 

 

 

62.5 

 

 

 66.5 


Certain sales taxes are collected by Eversource's companies that serve customers in Connecticut and Massachusetts as agents for state and local governments and are recorded on a net basis with no impact on the statements of income.   



17



G.

Supplemental Cash Flow Information

Non-cash investing activities include plant additions included in Accounts Payable as follows:

 

 

 

 

 

 

 

 

 

(Millions of Dollars)

As of June 30, 2015

 

As of June 30, 2014

Eversource

$

142.3 

 

$

125.5 

CL&P

 

47.2 

 

 

54.0 

NSTAR Electric

 

29.5 

 

 

21.6 

PSNH

 

25.6 

 

 

14.8 

WMECO

 

13.7 

 

 

9.9 


H.

Severance Benefits

Eversource recorded severance benefit expense of $1.2 million and $1.4 million for the three months ended June 30, 2015 and 2014, respectively, and $1.6 million and $5.7 million for the six months ended June 30, 2015 and 2014, respectively, in connection with reorganizational and cost saving initiatives, and, in 2014, the partial outsourcing of information technology functions.  As of June 30, 2015 and December 31, 2014, the severance accrual totaled $7.8 million and $10.4 million, respectively, and was included in Other Current Liabilities on the balance sheets.  


2.

REGULATORY ACCOUNTING


Eversource's Regulated companies are subject to rate-regulation that is based on cost recovery and meets the criteria for application of accounting guidance for rate-regulated operations, which consider the effect of regulation on the timing of the recognition of certain revenues and expenses.  The Regulated companies' financial statements reflect the effects of the rate-making process.  The rates charged to the customers of Eversource's Regulated companies are designed to collect each company's costs to provide service, including a return on investment.  


Management believes it is probable that each of the Regulated companies will recover their respective investments in long-lived assets, including regulatory assets.  If management were to determine that it could no longer apply the accounting guidance applicable to rate-regulated enterprises to any of the Regulated companies' operations, or that management could not conclude it is probable that costs would be recovered from customers in future rates, the costs would be charged to net income in the period in which the determination is made.


Regulatory Assets:  The components of regulatory assets are as follows:


 

As of June 30, 2015

 

As of December 31, 2014

(Millions of Dollars)

Eversource

 

Eversource

Benefit Costs

$

 1,980.0 

 

$

 2,016.0 

Derivative Liabilities

 

 423.7 

 

 

 425.5 

Income Taxes, Net

</