Company Quick10K Filing
Quick10K
Eversource Energy
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$70.27 317 $22,270
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
8-K 2019-02-20 Earnings, Regulation FD, Exhibits
8-K 2019-02-08 Regulation FD, Exhibits
8-K 2019-02-06 Other Events, Exhibits
8-K 2018-12-18 Off-BS Arrangement, Exhibits
8-K 2018-11-09 Regulation FD, Exhibits
8-K 2018-11-01 Earnings, Regulation FD, Exhibits
8-K 2018-07-31 Earnings, Regulation FD, Exhibits
8-K 2018-05-01 Earnings, Other Events, Exhibits
8-K 2018-04-19 Regulation FD, Exhibits
8-K 2018-02-22 Earnings, Regulation FD, Exhibits
8-K 2018-02-07 Other Events, Exhibits
8-K 2018-02-01 Regulation FD
8-K 2018-01-25 Regulation FD, Exhibits
8-K 2018-01-11 Regulation FD
8-K 2018-01-10 M&A, Regulation FD, Exhibits
8-K 2018-01-08 Off-BS Arrangement, Exhibits
ETR Entergy
AGR Avangrid
CIG Energy Co of Minas Gerais
IDA Idacorp
PAM Pampa Energy
AY Atlantica Yield
KEN Kenon Holdings
AT Atlantic Power
SKYS SKY Solar Holdings
EAE Entergy Arkansas
ES 2018-09-30
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 6. Exhibits
EX-12 q3201810q-exhibit12xeverso.htm
EX-31 q3201810q-exhibit31xeverso.htm
EX-31.1 q3201810q-exhibit311xevers.htm
EX-32 q3201810q-exhibit32xeverso.htm
EX-12 q3201810q-exhibit12xclp.htm
EX-31 q3201810q-exhibit31xclp.htm
EX-31.1 q3201810q-exhibit311xclp.htm
EX-32 q3201810q-exhibit32xclp.htm
EX-12 q3201810q-exhibit12xnste.htm
EX-31 q3201810q-exhibit31xnste.htm
EX-31.1 q3201810q-exhibit311xnste.htm
EX-32 q3201810q-exhibit32xnste.htm
EX-12 q3201810q-exhibit12xpsnh.htm
EX-31 q3201810q-exhibit31xpsnh.htm
EX-31.1 q3201810q-exhibit311xpsnh.htm
EX-32 q3201810q-exhibit32xpsnh.htm

Eversource Energy Earnings 2018-09-30

ES 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 a2018q310-qxdocument.htm THIRD QUARTER 2018 FORM 10-Q Document



 
eversourcelogo.jpg
 

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

FORM 10-Q

x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
For the Quarterly Period Ended September 30, 2018
 
or
¨

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

For the transition period from ____________ to ____________


Commission
File Number
Registrant; State of Incorporation;
Address; and Telephone Number
I.R.S. Employer
Identification No.
 
 
 
1-5324
EVERSOURCE ENERGY
(a Massachusetts voluntary association)
300 Cadwell Drive
Springfield, Massachusetts 01104
Telephone:  (800) 286-5000
04-2147929
 
 
 
0-00404
THE CONNECTICUT LIGHT AND POWER COMPANY
(a Connecticut corporation)
107 Selden Street
Berlin, Connecticut 06037-1616
Telephone:  (800) 286-5000
06-0303850
 
 
 
1-02301
NSTAR ELECTRIC COMPANY
(a Massachusetts corporation)
800 Boylston Street
Boston, Massachusetts 02199
Telephone:  (800) 286-5000
04-1278810
 
 
 
1-6392
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
(a New Hampshire corporation)
Energy Park
780 North Commercial Street
Manchester, New Hampshire 03101-1134
Telephone:  (800) 286-5000
02-0181050
 
 
 


 
 

Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.
 
Yes
No
 
x
¨

Indicate by check mark whether the registrants have submitted electronically and posted on its corporate Web sites, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrants were required to submit and post such files).
 
Yes
No
 
x
¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 
Large
accelerated filer
 
Accelerated
filer
 
Non-accelerated
filer
 
Smaller reporting company
 
Emerging growth company
 
 
 
 
 
 
 
 
 
 
Eversource Energy
x
 
¨
 
¨
 
¨
 
¨
The Connecticut Light and Power Company
¨
 
¨
 
x
 
¨
 
¨
NSTAR Electric Company
¨
 
¨
 
x
 
¨
 
¨
Public Service Company of New Hampshire
¨
 
¨
 
x
 
¨
 
¨

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

Indicate by check mark whether the registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act):
 
Yes
No
 
 
 
Eversource Energy
¨
x
The Connecticut Light and Power Company
¨
x
NSTAR Electric Company
¨
x
Public Service Company of New Hampshire
¨
x

Indicate the number of shares outstanding of each of the issuers' classes of common stock, as of the latest practicable date:
Company - Class of Stock
Outstanding as of October 31, 2018
 
 
Eversource Energy Common Shares, $5.00 par value
316,885,808 shares
The Connecticut Light and Power Company Common Stock, $10.00 par value
6,035,205 shares
NSTAR Electric Company Common Stock, $1.00 par value
200 shares
Public Service Company of New Hampshire Common Stock, $1.00 par value
301 shares

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

NSTAR Electric Company and Public Service Company of New Hampshire each meet the conditions set forth in General Instructions H(1)(a) and (b) of Form 10-Q, and each is therefore filing this Form 10-Q with the reduced disclosure format specified in General Instruction H(2) of Form 10‑Q.

Eversource Energy, The Connecticut Light and Power Company, NSTAR Electric Company, and Public Service Company of New Hampshire each separately file this combined Form 10-Q.  Information contained herein relating to any individual registrant is filed by such registrant on its own behalf.  Each registrant makes no representation as to information relating to the other registrants.  




GLOSSARY OF TERMS

The following is a glossary of abbreviations and acronyms that are found in this report:
Current or former Eversource Energy companies, segments or investments:
Eversource, ES or the Company
Eversource Energy and subsidiaries
Eversource parent or ES parent
Eversource Energy, a public utility holding company
ES parent and other companies
ES parent and other companies are comprised of Eversource parent, Eversource Service and other subsidiaries, which primarily includes our unregulated businesses, HWP Company, The Rocky River Realty Company (a real estate subsidiary), and the consolidated operations of CYAPC and YAEC
CL&P
The Connecticut Light and Power Company
NSTAR Electric
NSTAR Electric Company
PSNH
Public Service Company of New Hampshire
NSTAR Gas
NSTAR Gas Company
Yankee Gas
Yankee Gas Services Company
Aquarion
Eversource Aquarion Holdings, Inc and its subsidiaries (formerly known as Macquarie Utilities Inc)
NPT
Northern Pass Transmission LLC
Northern Pass
The HVDC and associated alternating-current transmission line project from Canada into New Hampshire
Eversource Service
Eversource Energy Service Company
Bay State Wind
A project being developed jointly by Eversource and Denmark-based Ørsted (formerly known as DONG Energy) to construct an offshore wind farm off the coast of Massachusetts
CYAPC
Connecticut Yankee Atomic Power Company
MYAPC
Maine Yankee Atomic Power Company
YAEC
Yankee Atomic Electric Company
Yankee Companies
CYAPC, YAEC and MYAPC
Regulated companies
The Eversource regulated companies are comprised of the electric distribution and transmission businesses of CL&P, NSTAR Electric and PSNH, the natural gas distribution businesses of Yankee Gas and NSTAR Gas, NPT, Aquarion, the generation facilities of PSNH, and the solar power facilities of NSTAR Electric
Regulators:
 
DEEP
Connecticut Department of Energy and Environmental Protection
DOE
U.S. Department of Energy
DOER
Massachusetts Department of Energy Resources
DPU
Massachusetts Department of Public Utilities
EPA
U.S. Environmental Protection Agency
FERC
Federal Energy Regulatory Commission
ISO-NE
ISO New England, Inc., the New England Independent System Operator
MA DEP
Massachusetts Department of Environmental Protection
NHPUC
New Hampshire Public Utilities Commission
PURA
Connecticut Public Utilities Regulatory Authority
SEC
U.S. Securities and Exchange Commission
SJC
Supreme Judicial Court of Massachusetts
Other Terms and Abbreviations:
Access Northeast
A project being developed jointly by Eversource, Enbridge, Inc. ("Enbridge"), and National Grid plc ("National Grid") through Algonquin Gas Transmission, LLC ("AGT") to bring needed additional natural gas pipeline and storage capacity to New England.
ADIT
Accumulated Deferred Income Taxes
AFUDC
Allowance For Funds Used During Construction
AOCI
Accumulated Other Comprehensive Income
ARO
Asset Retirement Obligation
Bcf
Billion cubic feet
C&LM
Conservation and Load Management
CfD
Contract for Differences
CTA
Competitive Transition Assessment
CWIP
Construction Work in Progress
EDC
Electric distribution company
EPS
Earnings Per Share
ERISA
Employee Retirement Income Security Act of 1974

i



ESOP
Employee Stock Ownership Plan
Eversource 2017 Form 10-K
The Eversource Energy and Subsidiaries 2017 combined Annual Report on Form 10-K as filed with the SEC
Fitch
Fitch Ratings
FMCC
Federally Mandated Congestion Charge
FTR
Financial Transmission Rights
GAAP
Accounting principles generally accepted in the United States of America
GSC
Generation Service Charge
GSRP
Greater Springfield Reliability Project
GWh
Gigawatt-Hours
HQ
Hydro-Québec, a corporation wholly-owned by the Québec government, including its divisions that produce, transmit and distribute electricity in Québec, Canada
HVDC
High-voltage direct current
Hydro Renewable Energy
Hydro Renewable Energy, Inc., a wholly-owned subsidiary of Hydro-Québec
IPP
Independent Power Producers
ISO-NE Tariff
ISO-NE FERC Transmission, Markets and Services Tariff
kV
Kilovolt
kVa
Kilovolt-ampere
kW
Kilowatt (equal to one thousand watts)
kWh
Kilowatt-Hours (the basic unit of electricity energy equal to one kilowatt of power supplied for one hour)
LBR
Lost Base Revenue
LNG
Liquefied natural gas
LRS
Supplier of last resort service
MG
Million gallons
MGP
Manufactured Gas Plant
MMBtu
One million British thermal units
MMcf
Million cubic feet
Moody's
Moody's Investors Services, Inc.
MW
Megawatt
MWh
Megawatt-Hours
NEEWS
New England East-West Solution
NETOs
New England Transmission Owners (including Eversource, National Grid and Avangrid)
OCI
Other Comprehensive Income/(Loss)
PAM
Pension and PBOP Rate Adjustment Mechanism
PBOP
Postretirement Benefits Other Than Pension
PBOP Plan
Postretirement Benefits Other Than Pension Plan that provides certain retiree benefits, primarily medical, dental and life insurance
PCRBs
Pollution Control Revenue Bonds
Pension Plan
Single uniform noncontributory defined benefit retirement plan
PPA
Pension Protection Act
RRBs
Rate Reduction Bonds
RECs
Renewable Energy Certificates
Regulatory ROE
The average cost of capital method for calculating the return on equity related to the distribution and generation business segment excluding the wholesale transmission segment
RNS
Regional Network Service
ROE
Return on Equity
RRB
Rate Reduction Bond or Rate Reduction Certificate
RSUs
Restricted share units
S&P
Standard & Poor's Financial Services LLC
SBC
Systems Benefits Charge
SCRC
Stranded Cost Recovery Charge
SERP
Supplemental Executive Retirement Plans and non-qualified defined benefit retirement plans
SS
Standard service
TCAM
Transmission Cost Adjustment Mechanism
TSA
Transmission Service Agreement
UI
The United Illuminating Company


ii



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

TABLE OF CONTENTS
 
Page
PART I – FINANCIAL INFORMATION
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Public Service Company of New Hampshire and Subsidiaries (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PART II – OTHER INFORMATION
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

iii




EVERSOURCE ENERGY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Thousands of Dollars)
As of September 30, 2018

As of December 31, 2017





ASSETS
 


 
Current Assets:
 


 
Cash and Cash Equivalents
$
59,092


$
38,165

Receivables, Net
1,091,589


925,083

Unbilled Revenues
170,044


201,361

Fuel, Materials, Supplies and Inventory
192,508

 
223,063

Regulatory Assets
436,704


741,868

Prepayments and Other Current Assets
203,434


138,009

Assets Held for Sale

 
219,550

Total Current Assets
2,153,371


2,487,099







Property, Plant and Equipment, Net
24,967,702


23,617,463







Deferred Debits and Other Assets:
 


 

Regulatory Assets
4,716,631


4,497,447

Goodwill
4,427,266


4,427,266

Marketable Securities
585,960


585,419

Other Long-Term Assets
664,739


605,692

Total Deferred Debits and Other Assets
10,394,596


10,115,824







Total Assets
$
37,515,669


$
36,220,386





LIABILITIES AND CAPITALIZATION
 

 
Current Liabilities:
 

 
Notes Payable
$
1,067,200


$
1,088,087

Long-Term Debt – Current Portion
387,310


549,631

Rate Reduction Bonds – Current Portion
52,332

 

Accounts Payable
962,298


1,085,034

Obligations to Third Party Suppliers
199,762

 
144,046

Regulatory Liabilities
344,708


128,071

Other Current Liabilities
616,662


594,176

Total Current Liabilities
3,630,272


3,589,045





Deferred Credits and Other Liabilities:
 

 
Accumulated Deferred Income Taxes
3,386,324


3,297,518

Regulatory Liabilities
3,706,792


3,637,273

Derivative Liabilities
385,865


377,257

Accrued Pension, SERP and PBOP
1,013,182


1,228,091

Other Long-Term Liabilities
1,094,019


1,073,501

Total Deferred Credits and Other Liabilities
9,586,182


9,613,640







Long-Term Debt
12,151,536


11,775,889

 
 
 
 
Rate Reduction Bonds
583,331

 

 
 
 
 
Noncontrolling Interest – Preferred Stock of Subsidiaries
155,570


155,570







Common Shareholders' Equity:


 
Common Shares
1,669,392


1,669,392

Capital Surplus, Paid In
6,234,044


6,239,940

Retained Earnings
3,882,695


3,561,084

Accumulated Other Comprehensive Loss
(59,582
)

(66,403
)
Treasury Stock
(317,771
)

(317,771
)
Common Shareholders' Equity
11,408,778


11,086,242







Total Liabilities and Capitalization
$
37,515,669


$
36,220,386


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

1



EVERSOURCE ENERGY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
For the Three Months Ended September 30,
 
For the Nine Months Ended September 30,
(Thousands of Dollars, Except Share Information)
2018
 
2017
 
2018
 
2017
 
 
 
 
 
 
 
 
Operating Revenues
$
2,271,425

 
$
1,988,512

 
$
6,413,243

 
$
5,856,458

 
 
 
 
 
 
 
 
Operating Expenses:
 
 
 
 
 
 
 
Purchased Power, Fuel and Transmission
842,291

 
651,776

 
2,442,953

 
1,955,129

Operations and Maintenance
344,475

 
307,773

 
970,881

 
956,274

Depreciation
208,671

 
194,466

 
612,077

 
571,152

Amortization
92,711

 
41,848

 
174,108

 
58,058

Energy Efficiency Programs
129,965

 
129,205

 
366,162

 
391,761

Taxes Other Than Income Taxes
187,291

 
168,193

 
547,155

 
479,648

Total Operating Expenses
1,805,404

 
1,493,261

 
5,113,336

 
4,412,022

Operating Income
466,021

 
495,251

 
1,299,907

 
1,444,436

Interest Expense
125,201

 
108,719

 
372,734

 
319,477

Other Income, Net
16,718

 
28,536

 
100,656

 
79,178

Income Before Income Tax Expense
357,538

 
415,068

 
1,027,829

 
1,204,137

Income Tax Expense
66,278

 
152,818

 
220,497

 
447,921

Net Income
291,260

 
262,250

 
807,332

 
756,216

Net Income Attributable to Noncontrolling Interests
1,880

 
1,880

 
5,639

 
5,639

Net Income Attributable to Common Shareholders
$
289,380

 
$
260,370

 
$
801,693

 
$
750,577

 
 
 
 
 
 
 
 
Basic Earnings Per Common Share
$
0.91

 
$
0.82

 
$
2.53

 
$
2.36

 
 
 
 
 
 
 
 
Diluted Earnings Per Common Share
$
0.91

 
$
0.82

 
$
2.52

 
$
2.36

 
 
 
 
 
 
 
 
Dividends Declared Per Common Share
$
0.51

 
$
0.48

 
$
1.52

 
$
1.43

 
 
 
 
 
 
 
 
Weighted Average Common Shares Outstanding:
 
 
 
 
 
 
 
Basic
317,360,110

 
317,393,029

 
317,367,252

 
317,415,848

Diluted
317,967,311

 
317,949,396

 
317,948,498

 
318,007,042


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


CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 
For the Three Months Ended September 30,
 
For the Nine Months Ended September 30,
(Thousands of Dollars)
2018
 
2017
 
2018
 
2017
 
 
 
 
 
 
 
 
Net Income
$
291,260

 
$
262,250

 
$
807,332

 
$
756,216

Other Comprehensive Income/(Loss), Net of Tax:
 
 
 
 
 
 
 
Qualified Cash Flow Hedging Instruments
432

 
519

 
1,627

 
1,567

Changes in Unrealized (Losses)/Gains on
  Marketable Securities
(136
)
 
(1,872
)
 
(724
)
 
733

Changes in Funded Status of Pension, SERP and
   PBOP Benefit Plans
1,110

 
673

 
5,918

 
(633
)
Other Comprehensive Income/(Loss), Net of Tax
1,406

 
(680
)
 
6,821

 
1,667

Comprehensive Income Attributable to
  Noncontrolling Interests
(1,880
)
 
(1,880
)
 
(5,639
)
 
(5,639
)
Comprehensive Income Attributable to
  Common Shareholders
$
290,786

 
$
259,690

 
$
808,514

 
$
752,244


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

2



EVERSOURCE ENERGY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
For the Nine Months Ended September 30,
(Thousands of Dollars)
2018
 
2017




Operating Activities:
 

 
Net Income
$
807,332


$
756,216

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

 
Depreciation
612,077


571,152

Deferred Income Taxes
70,402


374,863

Uncollectible Expense
50,720

 
30,111

Pension, SERP and PBOP Expense, Net
5,192


16,891

Pension and PBOP Contributions
(188,874
)

(197,900
)
Regulatory Overrecoveries, Net
189,932


185,952

Amortization
174,108


58,058

Other
(129,039
)

(197,876
)
Changes in Current Assets and Liabilities:
 

 
Receivables and Unbilled Revenues, Net
(212,326
)

(107,473
)
Fuel, Materials, Supplies and Inventory
44,702


23,686

Taxes Receivable/Accrued, Net
70,885


88,856

Accounts Payable
(72,591
)

(96,551
)
Other Current Assets and Liabilities, Net
(14,858
)

(30,138
)
Net Cash Flows Provided by Operating Activities
1,407,662


1,475,847





Investing Activities:
 

 
Investments in Property, Plant and Equipment
(1,885,081
)

(1,642,280
)
Proceeds from Sales of Marketable Securities
405,276


520,664

Purchases of Marketable Securities
(396,277
)

(506,302
)
Proceeds from the Sale of PSNH Generation Assets
193,924

 

Other Investing Activities
(23,405
)

(24,173
)
Net Cash Flows Used in Investing Activities
(1,705,563
)

(1,652,091
)




Financing Activities:
 

 
Cash Dividends on Common Shares
(480,082
)

(451,562
)
Cash Dividends on Preferred Stock
(5,639
)

(5,639
)
Decrease in Notes Payable
(222,110
)

(231,500
)
Issuance of Rate Reduction Bonds
635,663

 

Issuance of Long-Term Debt
1,300,000


1,250,000

Retirement of Long-Term Debt
(860,855
)

(320,000
)
Other Financing Activities
(20,361
)

171

Net Cash Flows Provided by Financing Activities
346,616


241,470

Net Increase in Cash, Cash Equivalents and Restricted Cash
48,715


65,226

Cash, Cash Equivalents and Restricted Cash - Beginning of Period
85,890


106,750

Cash, Cash Equivalents and Restricted Cash - End of Period
$
134,605


$
171,976


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



3




THE CONNECTICUT LIGHT AND POWER COMPANY
CONDENSED BALANCE SHEETS
(Unaudited)
(Thousands of Dollars)
As of September 30, 2018
 
As of December 31, 2017
 
 
 
 
ASSETS
 
 
 
Current Assets:
 
 
 
Cash
$
977

 
$
6,028

Receivables, Net
466,768

 
370,676

Accounts Receivable from Affiliated Companies
32,074

 
28,181

Unbilled Revenues
53,690

 
54,154

Materials, Supplies and Inventory
45,757

 
48,438

Regulatory Assets
128,793

 
200,281

Prepaid Property Taxes
60,532

 
17,884

Prepayments and Other Current Assets
15,470

 
29,042

Total Current Assets
804,061

 
754,684

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

 
8,271,030

 
 
 
 
Deferred Debits and Other Assets:
 
 
 
Regulatory Assets
1,545,012

 
1,444,935

Other Long-Term Assets
175,488

 
159,597

Total Deferred Debits and Other Assets
1,720,500

 
1,604,532

 
 
 
 
Total Assets
$
11,278,305

 
$
10,630,246

 
 
 
 
LIABILITIES AND CAPITALIZATION
 
 
 
Current Liabilities:
 
 
 
Notes Payable to Eversource Parent
$
45,900

 
$
69,500

Long-Term Debt – Current Portion
250,000

 
300,000

Accounts Payable
347,443

 
367,605

Accounts Payable to Affiliated Companies
86,772

 
82,201

Obligations to Third Party Suppliers
64,283

 
52,860

Accrued Taxes
78,507

 
21,665

Regulatory Liabilities
126,574

 
38,967

Other Current Liabilities
152,147

 
159,961

Total Current Liabilities
1,151,626

 
1,092,759

 
 
 
 
Deferred Credits and Other Liabilities:
 
 
 
Accumulated Deferred Income Taxes
1,136,221

 
1,103,367

Regulatory Liabilities
1,131,234

 
1,112,136

Derivative Liabilities
385,779

 
376,918

Accrued Pension, SERP and PBOP
301,946

 
354,469

Other Long-Term Liabilities
130,069

 
128,135

Total Deferred Credits and Other Liabilities
3,085,249

 
3,075,025

 
 
 
 
Long-Term Debt
3,003,625

 
2,759,135

 
 
 
 
Preferred Stock Not Subject to Mandatory Redemption
116,200

 
116,200

 
 
 
 
Common Stockholder's Equity:
 
 
 
Common Stock
60,352

 
60,352

Capital Surplus, Paid In
2,210,765

 
2,110,765

Retained Earnings
1,650,182

 
1,415,741

Accumulated Other Comprehensive Income
306

 
269

Common Stockholder's Equity
3,921,605

 
3,587,127

 
 
 
 
Total Liabilities and Capitalization
$
11,278,305

 
$
10,630,246


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

4



THE CONNECTICUT LIGHT AND POWER COMPANY
CONDENSED STATEMENTS OF INCOME
(Unaudited)
 
For the Three Months Ended September 30,
 
For the Nine Months Ended September 30,
(Thousands of Dollars)
2018
 
2017
 
2018
 
2017
 
 
 
 
 
 
 
 
Operating Revenues
$
865,028

 
$
774,762

 
$
2,344,903

 
$
2,173,629

 
 
 
 
 
 
 
 
Operating Expenses:
 
 
 
 
 
 
 
Purchased Power and Transmission
314,571

 
259,005

 
850,794

 
711,154

Operations and Maintenance
128,523

 
123,511

 
355,500

 
361,166

Depreciation
72,017

 
63,727

 
208,899

 
184,275

Amortization of Regulatory Assets, Net
54,031

 
34,574

 
97,437

 
58,799

Energy Efficiency Programs
30,240

 
37,739

 
71,606

 
106,483

Taxes Other Than Income Taxes
92,987

 
79,067

 
267,662

 
223,482

Total Operating Expenses
692,369

 
597,623

 
1,851,898

 
1,645,359

Operating Income
172,659

 
177,139

 
493,005

 
528,270

Interest Expense
37,609

 
36,313

 
113,107

 
106,577

Other Income, Net
7,098

 
7,913

 
20,722

 
15,402

Income Before Income Tax Expense
142,148

 
148,739

 
400,620

 
437,095

Income Tax Expense
41,818

 
52,595

 
102,010

 
159,450

Net Income
$
100,330

 
$
96,144

 
$
298,610

 
$
277,645


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


CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 
For the Three Months Ended September 30,
 
For the Nine Months Ended September 30,
(Thousands of Dollars)
2018
 
2017
 
2018
 
2017
 
 
 
 
 
 
 
 
Net Income
$
100,330

 
$
96,144

 
$
298,610

 
$
277,645

Other Comprehensive (Loss)/Income, Net of Tax:
 
 
 
 
 
 
 
Qualified Cash Flow Hedging Instruments
(7
)
 
96

 
58

 
298

Changes in Unrealized (Losses)/Gains on
  Marketable Securities
(5
)
 
(64
)
 
(21
)
 
25

Other Comprehensive (Loss)/Income, Net of Tax
(12
)
 
32

 
37

 
323

Comprehensive Income
$
100,318

 
$
96,176

 
$
298,647

 
$
277,968


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


5



THE CONNECTICUT LIGHT AND POWER COMPANY
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
 
For the Nine Months Ended September 30,
(Thousands of Dollars)
2018
 
2017
 
 
 
 
Operating Activities:
 
 
 
Net Income
$
298,610

 
$
277,645

Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
 
 
 
Depreciation
208,899

 
184,275

Deferred Income Taxes
28,637

 
90,132

Uncollectible Expense
12,135

 
1,755

Pension, SERP, and PBOP Expense, Net
6,594

 
6,421

Pension Contributions
(41,150
)
 
(1,875
)
Regulatory (Under)/Over Recoveries, Net
(1,136
)
 
71,413

Amortization of Regulatory Assets, Net
97,437

 
58,799

Other
(55,827
)
 
(23,911
)
Changes in Current Assets and Liabilities:
 
 
 
Receivables and Unbilled Revenues, Net
(126,513
)
 
(70,936
)
Taxes Receivable/Accrued, Net
72,702

 
69,335

Accounts Payable
(15,303
)
 
(1,649
)
Other Current Assets and Liabilities, Net
(33,965
)
 
(36,340
)
Net Cash Flows Provided by Operating Activities
451,120

 
625,064

 
 
 
 
Investing Activities:
 
 
 
Investments in Property, Plant and Equipment
(660,673
)
 
(621,882
)
Other Investing Activities
167

 
185

Net Cash Flows Used in Investing Activities
(660,506
)
 
(621,697
)
 
 
 
 
Financing Activities:
 
 
 
Cash Dividends on Common Stock
(60,000
)
 
(205,200
)
Cash Dividends on Preferred Stock
(4,169
)
 
(4,169
)
Capital Contributions from Eversource Parent
100,000

 

Issuance of Long-Term Debt
500,000

 
525,000

Retirement of Long-Term Debt
(300,000
)
 
(250,000
)
Decrease in Notes Payable to Eversource Parent
(23,600
)
 
(80,100
)
Premium on Issuance of Long-Term Debt

 
21,937

Other Financing Activities
(7,584
)
 
(6,322
)
Net Cash Flows Provided by Financing Activities
204,647

 
1,146

Net (Decrease)/Increase in Cash and Restricted Cash
(4,739
)
 
4,513

Cash and Restricted Cash - Beginning of Period
9,619

 
8,403

Cash and Restricted Cash - End of Period
$
4,880

 
$
12,916


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




6




NSTAR ELECTRIC COMPANY AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Thousands of Dollars)
As of September 30, 2018
 
As of December 31, 2017
 
 
 
 
ASSETS
 

 
 

Current Assets:
 
 
 
Cash and Cash Equivalents
$
2,367

 
$
1,763

Receivables, Net
457,695

 
341,341

Accounts Receivable from Affiliated Companies
43,767

 
40,723

Unbilled Revenues
55,046

 
49,865

Materials, Supplies and Inventory
66,361

 
95,517

Regulatory Assets
193,541

 
333,882

Prepayments and Other Current Assets
18,128

 
24,499

Total Current Assets
836,905

 
887,590

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

 
8,246,494

 
 
 
 
Deferred Debits and Other Assets:
 
 
 
Regulatory Assets
1,226,811

 
1,190,575

Prepaid PBOP
153,142

 
126,948

Other Long-Term Assets
107,208

 
84,766

Total Deferred Debits and Other Assets
1,487,161

 
1,402,289

 
 
 
 
Total Assets
$
10,900,162

 
$
10,536,373

 
 
 
 
LIABILITIES AND CAPITALIZATION
 
 
 
Current Liabilities:
 
 
 
Notes Payable
$
240,500

 
$
234,000

Notes Payable to Eversource Parent
16,000

 

Accounts Payable
296,208

 
340,115

Accounts Payable to Affiliated Companies
77,329

 
91,260

Obligations to Third Party Suppliers
133,865

 
88,721

Renewable Portfolio Standards Compliance Obligations
100,782

 
111,524

Regulatory Liabilities
168,225

 
79,562

Other Current Liabilities
113,728

 
79,916

Total Current Liabilities
1,146,637

 
1,025,098

 
 
 
 
Deferred Credits and Other Liabilities:
 
 
 
Accumulated Deferred Income Taxes
1,279,302

 
1,275,814

Regulatory Liabilities
1,566,285

 
1,514,451

Accrued Pension and SERP
6,171

 
89,995

Other Long-Term Liabilities
219,050

 
198,176

Total Deferred Credits and Other Liabilities
3,070,808

 
3,078,436

 
 
 
 
Long-Term Debt
2,944,616

 
2,943,759

 
 
 
 
Preferred Stock Not Subject to Mandatory Redemption
43,000

 
43,000

 
 
 
 
Common Stockholder's Equity:
 
 
 
Common Stock

 

Capital Surplus, Paid In
1,608,442

 
1,502,942

Retained Earnings
2,088,157

 
1,944,961

Accumulated Other Comprehensive Loss
(1,498
)
 
(1,823
)
Common Stockholder's Equity
3,695,101

 
3,446,080

 
 
 
 
Total Liabilities and Capitalization
$
10,900,162


$
10,536,373


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

7



NSTAR ELECTRIC COMPANY AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
For the Three Months Ended September 30,
 
For the Nine Months Ended September 30,
(Thousands of Dollars)
2018
 
2017
 
2018
 
2017
 
 
 
 
 
 
 
 
Operating Revenues
$
939,460

 
$
851,922

 
$
2,400,324

 
$
2,290,432

 
 
 
 
 
 
 
 
Operating Expenses:
 

 
 

 
 

 
 

Purchased Power and Transmission
383,208

 
294,115

 
981,895

 
799,007

Operations and Maintenance
123,634

 
118,777

 
344,478

 
346,469

Depreciation
70,616

 
68,746

 
205,210

 
204,442

Amortization of Regulatory Assets, Net
17,149

 
10,131

 
35,467

 
17,243

Energy Efficiency Programs
89,430

 
82,611

 
229,408

 
228,543

Taxes Other Than Income Taxes
49,927

 
47,830

 
145,740

 
130,492

Total Operating Expenses
733,964

 
622,210

 
1,942,198

 
1,726,196

Operating Income
205,496

 
229,712

 
458,126

 
564,236

Interest Expense
26,958

 
30,810

 
80,780

 
88,715

Other Income, Net
13,697

 
9,165

 
40,567

 
24,610

Income Before Income Tax Expense
192,235

 
208,067

 
417,913

 
500,131

Income Tax Expense
51,640

 
82,301

 
112,247

 
196,001

Net Income
$
140,595

 
$
125,766

 
$
305,666

 
$
304,130


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


CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 
For the Three Months Ended September 30,
 
For the Nine Months Ended September 30,
(Thousands of Dollars)
2018
 
2017
 
2018
 
2017
 
 
 
 
 
 
 
 
Net Income
$
140,595

 
$
125,766

 
$
305,666

 
$
304,130

Other Comprehensive Income, Net of Tax:
 
 
 
 
 
 
 
  Changes in Funded Status of SERP Benefit Plan
1

 
(4
)
 
3

 
(12
)
  Qualified Cash Flow Hedging Instruments
110

 
109

 
328

 
328

  Changes in Unrealized (Losses)/Gains on
     Marketable Securities
(1
)
 
(18
)
 
(6
)
 
7

Other Comprehensive Income, Net of Tax
110

 
87

 
325

 
323

Comprehensive Income
$
140,705

 
$
125,853

 
$
305,991

 
$
304,453


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


8



NSTAR ELECTRIC COMPANY AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
For the Nine Months Ended September 30,
(Thousands of Dollars)
2018
 
2017
 
 
 
 
Operating Activities:
 

 
 

Net Income
$
305,666

 
$
304,130

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

 
 

Depreciation
205,210

 
204,442

Deferred Income Taxes
16,203

 
100,335

Uncollectible Expense
20,433

 
14,937

Pension, SERP and PBOP Income, Net
(15,855
)
 
(7,586
)
Pension and PBOP Contributions
(60,454
)
 
(83,040
)
Regulatory Overrecoveries, Net
180,797

 
71,647

Amortization of Regulatory Assets, Net
35,467

 
17,243

Other
(49,178
)
 
(47,972
)
Changes in Current Assets and Liabilities:
 

 
 

Receivables and Unbilled Revenues, Net
(155,669
)
 
(113,960
)
Materials, Supplies and Inventory
29,156

 
11,483

Taxes Receivable/Accrued, Net
42,148

 
71,705

Accounts Payable
(13,178
)
 
(42,519
)
Other Current Assets and Liabilities, Net
33,543

 
4,982

Net Cash Flows Provided by Operating Activities
574,289

 
505,827

 
 
 
 
Investing Activities:
 

 
 

Investments in Property, Plant and Equipment
(538,973
)
 
(467,275
)
Other Investing Activities
46

 
(3,565
)
Net Cash Flows Used in Investing Activities
(538,927
)
 
(470,840
)
 
 
 
 
Financing Activities:
 

 
 

Cash Dividends on Common Stock
(161,000
)
 
(214,500
)
Cash Dividends on Preferred Stock
(1,470
)
 
(1,470
)
Capital Contributions from Eversource Parent
105,500

 
2,300

Increase in Notes Payable to Eversource Parent
16,000

 

Increase/(Decrease) in Notes Payable
6,500

 
(80,600
)
Issuance of Long-Term Debt

 
350,000

Other Financing Activities
(239
)
 
(3,410
)
Net Cash Flows (Used in)/Provided by Financing Activities
(34,709
)
 
52,320

Increase in Cash, Cash Equivalents and Restricted Cash
653

 
87,307

Cash, Cash Equivalents and Restricted Cash - Beginning of Period
14,708

 
15,506

Cash, Cash Equivalents and Restricted Cash - End of Period
$
15,361

 
$
102,813


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


9




PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Thousands of Dollars)
As of September 30, 2018
 
As of December 31, 2017
 
 
 
 
ASSETS
 
 
 
Current Assets:
 
 
 
Cash
$
7,462

 
$
900

Receivables, Net
115,706

 
92,774

Accounts Receivable from Affiliated Companies
20,007

 
5,297

Unbilled Revenues
39,760

 
49,448

Materials, Supplies and Inventory
39,877

 
40,285

Regulatory Assets
61,379

 
130,134

Special Deposits
26,863

 
728

Prepayments and Other Current Assets
7,600

 
28,203

Assets Held for Sale

 
219,550

Total Current Assets
318,654

 
567,319

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

 
2,642,274

 
 
 
 
Deferred Debits and Other Assets:
 
 
 
Regulatory Assets
892,075

 
810,677

Other Long-Term Assets
19,252

 
42,391

Total Deferred Debits and Other Assets
911,327

 
853,068

 
 
 
 
Total Assets
$
4,056,522

 
$
4,062,661

 
 
 
 
LIABILITIES AND CAPITALIZATION
 
 
 
Current Liabilities:
 
 
 
Notes Payable to Eversource Parent
$
46,600

 
$
262,900

Long-Term Debt – Current Portion

 
110,000

Rate Reduction Bonds – Current Portion
52,332

 

Accounts Payable
118,523

 
128,685

Accounts Payable to Affiliated Companies
35,699

 
24,676

Dividends Payable to Eversource Parent

 
150,000

Accrued Interest
19,615

 
6,722

Renewable Portfolio Standards Compliance Obligations
29,867

 
27,765

Regulatory Liabilities
39,661

 
6,251

Other Current Liabilities
34,790

 
33,437

Total Current Liabilities
377,087

 
750,436

 
 
 
 
Deferred Credits and Other Liabilities:
 
 
 
Accumulated Deferred Income Taxes
457,512

 
443,468

Regulatory Liabilities
433,822

 
444,397

Accrued Pension, SERP and PBOP
126,839

 
124,639

Other Long-Term Liabilities
35,901

 
56,689

Total Deferred Credits and Other Liabilities
1,054,074

 
1,069,193

 
 
 
 
Long-Term Debt
894,100

 
892,438

 
 
 
 
Rate Reduction Bonds
583,331

 

 
 
 
 
Common Stockholder's Equity:
 
 
 
Common Stock

 

Capital Surplus, Paid In
538,134

 
843,134

Retained Earnings
612,919

 
511,382

Accumulated Other Comprehensive Loss
(3,123
)
 
(3,922
)
Common Stockholder's Equity
1,147,930

 
1,350,594

 
 
 
 
Total Liabilities and Capitalization
$
4,056,522

 
$
4,062,661


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


10



PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
For the Three Months Ended September 30,
 
For the Nine Months Ended September 30,
(Thousands of Dollars)
2018
 
2017
 
2018
 
2017
 
 
 
 
 
 
 
 
Operating Revenues
$
290,203

 
$
250,032

 
$
792,700

 
$
733,572

 
 
 
 
 
 
 
 
Operating Expenses:
 
 
 
 
 
 
 
Purchased Power, Fuel and Transmission
100,763

 
57,099

 
293,975

 
179,289

Operations and Maintenance
55,429

 
65,104

 
153,296

 
195,637

Depreciation
23,223

 
32,084

 
69,524

 
95,266

Amortization of Regulatory Assets/(Liabilities),
Net
27,357

 
2,835

 
41,318

 
(10,658
)
Energy Efficiency Programs
5,863

 
4,007

 
15,694

 
11,040

Taxes Other Than Income Taxes
21,095

 
22,936

 
59,775

 
66,935

Total Operating Expenses
233,730

 
184,065

 
633,582

 
537,509

Operating Income
56,473

 
65,967

 
159,118

 
196,063

Interest Expense
16,593

 
12,896

 
43,977

 
38,676

Other Income, Net
16,095

 
2,664

 
24,253

 
7,367

Income Before Income Tax Expense
55,975

 
55,735

 
139,394

 
164,754

Income Tax Expense
15,309

 
22,012

 
37,857

 
65,128

Net Income
$
40,666

 
$
33,723

 
$
101,537

 
$
99,626


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


CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 
For the Three Months Ended September 30,
 
For the Nine Months Ended September 30,
(Thousands of Dollars)
2018
 
2017
 
2018
 
2017
 
 
 
 
 
 
 
 
Net Income
$
40,666

 
$
33,723

 
$
101,537

 
$
99,626

Other Comprehensive Income, Net of Tax:
 
 
 
 
 
 
 
Qualified Cash Flow Hedging Instruments
268

 
291

 
835

 
872

Changes in Unrealized (Losses)/Gains on
   Marketable Securities
(7
)
 
(112
)
 
(36
)
 
43

Other Comprehensive Income, Net of Tax
261

 
179

 
799

 
915

Comprehensive Income
$
40,927

 
$
33,902

 
$
102,336

 
$
100,541


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


11



PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
For the Nine Months Ended September 30,
(Thousands of Dollars)
2018
 
2017
 
 
 
 
Operating Activities:
 
 
 
Net Income
$
101,537

 
$
99,626

Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
 
 
 
Depreciation
69,524

 
95,266

Deferred Income Taxes
11,473

 
43,217

Regulatory (Under)/Over Recoveries, Net
(19,764
)
 
8,910

Amortization of Regulatory Assets/(Liabilities), Net
41,318

 
(10,658
)
Other
(3,104
)
 
(7,866
)
Changes in Current Assets and Liabilities:
 
 
 
Receivables and Unbilled Revenues, Net
(32,819
)
 
(30,276
)
Fuel, Materials, Supplies and Inventory
14,555

 
4,263

Taxes Receivable/Accrued, Net
10,929

 
10,749

Accounts Payable
(3,828
)
 
18,394

Other Current Assets and Liabilities, Net
27,844

 
32,300

Net Cash Flows Provided by Operating Activities
217,665

 
263,925

 
 
 
 
Investing Activities:
 
 
 
Investments in Property, Plant and Equipment
(236,206
)
 
(215,470
)
Proceeds from the Sale of Generation Assets
193,924

 

Proceeds from the Sale of Property
4,782

 

Other Investing Activities
367

 
113

Net Cash Flows Used in Investing Activities
(37,133
)
 
(215,357
)
 
 
 
 
Financing Activities:
 
 
 
Cash Dividends on Common Stock
(150,000
)
 
(23,900
)
Capital Contribution from Eversource Parent
225,000

 

Return of Capital
(530,000
)
 

Issuance of Rate Reduction Bonds
635,663

 

Retirement of Long-Term Debt
(110,000
)
 
(70,000
)
(Decrease)/Increase in Notes Payable to Eversource Parent
(216,300
)
 
41,400

Other Financing Activities
1,080

 
(187
)
Net Cash Flows Used in Financing Activities
(144,557
)
 
(52,687
)
Net Increase/(Decrease) in Cash and Restricted Cash
35,975

 
(4,119
)
Cash and Restricted Cash - Beginning of Period
2,191

 
5,953

Cash and Restricted Cash - End of Period
$
38,166

 
$
1,834


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


12




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

COMBINED NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited)

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

1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A.    Basis of Presentation
Eversource Energy is a public utility holding company primarily engaged, through its wholly-owned regulated utility subsidiaries, in the energy delivery business.  Eversource Energy's wholly-owned regulated utility subsidiaries consist of CL&P, NSTAR Electric and PSNH (electric utilities), Yankee Gas and NSTAR Gas (natural gas utilities) and Aquarion (water utilities).  Eversource provides energy delivery and/or water service to approximately four million electric, natural gas and water customers through eight regulated utilities in Connecticut, Massachusetts and New Hampshire.

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

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

The combined notes to the financial statements have been prepared pursuant to the rules and regulations of the SEC.  Certain information and footnote disclosures included in annual financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations.  The accompanying financial statements should be read in conjunction with the Combined Notes to Financial Statements included in Item 8, "Financial Statements and Supplementary Data," of the Eversource 2017 Form 10-K, which was filed with the SEC on February 26, 2018. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

The financial statements contain, in the opinion of management, all adjustments (including normal, recurring adjustments) necessary to present fairly Eversource's, CL&P's, NSTAR Electric's and PSNH's financial position as of September 30, 2018 and December 31, 2017, the results of operations and comprehensive income for the three and nine months ended September 30, 2018 and 2017, and the cash flows for the nine months ended September 30, 2018 and 2017.  The results of operations and comprehensive income for the three and nine months ended September 30, 2018 and 2017 and the cash flows for the nine months ended September 30, 2018 and 2017 are not necessarily indicative of the results expected for a full year.  

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

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

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

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

Accounting Standards Recently Adopted: On January 1, 2018, Eversource, CL&P, NST