0000072741 us-gaap:OperatingSegmentsMember es:ResidentialMember us-gaap:WaterDistributionMember 2018-01-01 2018-06-30




	UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ~~FORM 10-Q~~
x	FORM	10-Q
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the Quarterly Period Ended ~~September~~	June 30, ~~2018~~2019
	or
¨ ☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from ____________ to ____________

Registrant; State of Incorporation; Address; Telephone Number;

Commission File Number; and I.R.S. Employer Identification No.

EVERSOURCE ENERGY

(a Massachusetts voluntary association)

300 Cadwell Drive, Springfield, Massachusetts 01104

Telephone: (800) 286-5000

Commission File Number: 1-5324

I.R.S. Employer Identification No. 04-2147929

THE CONNECTICUT LIGHT AND POWER COMPANY

(a Connecticut corporation)

107 Selden Street, Berlin, Connecticut 06037-1616

Telephone: (800) 286-5000

Commission File Number: 0-00404

I.R.S. Employer Identification No. 06-0303850

NSTAR ELECTRIC COMPANY

(a Massachusetts corporation)

800 Boylston Street, Boston, Massachusetts 02199

Telephone: (800) 286-5000

Commission File Number: 1-02301

I.R.S. Employer Identification No. 04-1278810

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

Commission File Number: 1-6392

I.R.S. Employer Identification No. 02-0181050



~~Commission~~ ~~File Number~~			~~Registrant; State~~Securities registered pursuant to Section 12(b) of ~~Incorporation;~~ ~~Address; and Telephone Number~~	~~I.R.S. Employer~~ ~~Identification No.~~ the Act:

~~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~~
Title of each class
~~1-02301~~	~~NSTAR ELECTRIC COMPANY~~ ~~(a Massachusetts corporation)~~ ~~800 Boylston Street~~ ~~Boston, Massachusetts 02199~~ ~~Telephone: (800) 286-5000~~	~~04-1278810~~
Trading Symbol(s)		Name of each exchange on which registered
~~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~~
Common Shares, $5.00 par value per share
ES		New York Stock Exchange

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 (§232.405 of this chapter) 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, a 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.



Eversource Energy	Large accelerated filer	☒	Accelerated filer	☐	Non-accelerated filer	☐	Smaller reporting company	☐	Emerging growth company

~~Eversource Energy~~	x		¨		¨		¨		¨☐
The Connecticut Light and Power Company	¨Large accelerated filer	☐	¨ Accelerated filer	☐	xNon-accelerated filer	☒	¨Smaller reporting company	☐	¨Emerging growth company	☐
NSTAR Electric Company	¨Large accelerated filer	☐	¨ Accelerated filer	☐	xNon-accelerated filer	☒	¨Smaller reporting company	☐	¨Emerging growth company	☐
Public Service Company of New Hampshire	¨Large accelerated filer	☐	¨ Accelerated filer	☐	xNon-accelerated filer	☒	¨Smaller reporting company	☐	¨Emerging growth company	☐

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'~~registrant's classes of common stock, as of the latest practicable date:



Company - Class of Stock	Outstanding as of ~~October~~July 31, ~~2018~~2019

Eversource Energy Common Shares, $5.00 par value	~~316,885,808~~ 323,602,045	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, Eversource Water Ventures, Inc. (parent company of Aquarion), 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, and Eversource parent's equity ownership interests that are not consolidated
CL&P	The Connecticut Light and Power Company
NSTAR Electric	NSTAR Electric Company
PSNH	Public Service Company of New Hampshire
PSNH Funding	PSNH Funding LLC 3, a bankruptcy remote, special purpose, wholly-owned subsidiary of PSNH
NSTAR Gas	NSTAR Gas Company
Yankee Gas	Yankee Gas Services Company
Aquarion	Eversource Aquarion Holdings, ~~Inc~~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~~Bay State Wind LLC, an offshore wind business being developed jointly by Eversource and Denmark-based Ørsted, ~~(formerly known as DONG Energy) to construct~~which holds the Sunrise Wind project
North East Offshore	North East Offshore, LLC, an offshore wind ~~farm off~~business being developed jointly by Eversource and Denmark-based Ørsted, which holds the ~~coast of Massachusetts~~Revolution Wind and South Fork Wind projects
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
EDIT	Excess Deferred Income Taxes
EPS	Earnings Per Share
ERISA	Employee Retirement Income Security Act of 1974



ESOP	Employee Stock Ownership Plan
Eversource ~~2017~~2018 Form 10-K	The Eversource Energy and Subsidiaries ~~2017~~2018 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~~RRBs	Rate Reduction ~~Bond~~Bonds or Rate Reduction ~~Certificate~~Certificates
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
VIE	Variable Interest Entity

EVERSOURCE ENERGY AND SUBSIDIARIES

THE CONNECTICUT LIGHT AND POWER COMPANY

NSTAR ELECTRIC COMPANY AND SUBSIDIARY

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES

TABLE OF CONTENTS



		Page
PART I – FINANCIAL INFORMATION

ITEM 1.	Financial Statements (Unaudited)

	Eversource Energy and Subsidiaries (Unaudited)
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Income	2
	Condensed Consolidated Statements of Comprehensive Income	2
	Condensed Consolidated Statements of Common Shareholders' Equity	3
	Condensed Consolidated Statements of Cash Flows	34

	The Connecticut Light and Power Company (Unaudited)
	Condensed Balance Sheets	4
	~~Condensed Statements of Income~~	5
	Condensed Statements of ~~Comprehensive~~ Income	56
	Condensed Statements of Comprehensive Income	6
	Condensed Statements of Common Stockholder's Equity	7
	Condensed Statements of Cash Flows	68

	NSTAR Electric Company and Subsidiary (Unaudited)
	Condensed Consolidated Balance Sheets	79
	Condensed Consolidated Statements of Income	810
	Condensed Consolidated Statements of Comprehensive Income	810
	Condensed Consolidated Statements of Common Stockholder's Equity	11
	Condensed Consolidated Statements of Cash Flows	912

	Public Service Company of New Hampshire and Subsidiaries (Unaudited)
	Condensed Consolidated Balance Sheets	1013
	Condensed Consolidated Statements of Income	1114
	Condensed Consolidated Statements of Comprehensive Income	1114
	Condensed Consolidated Statements of Common Stockholder's Equity	15
	Condensed Consolidated Statements of Cash Flows	1216

	Combined Notes to Condensed Financial Statements (Unaudited)	1317

ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations
	Eversource Energy and Subsidiaries	3942
	The Connecticut Light and Power Company, NSTAR Electric Company and Subsidiary, and Public Service Company of New Hampshire and Subsidiaries	5758

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	6465

ITEM 4.	Controls and Procedures	6465

PART II – OTHER INFORMATION

ITEM 1.	Legal Proceedings	65

~~ITEM 1A.~~	~~Risk Factors~~	65

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

~~ITEM 6.~~	~~Exhibits~~	66

~~SIGNATURES~~ITEM 1A.	68Risk Factors	66

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	66

ITEM 6.	Exhibits	67

SIGNATURES		69

iii

EVERSOURCE ENERGY AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


(Thousands of Dollars)	As of September 30, 2018			As of December 31, 2017			As of June 30, 2019			As of December 31, 2018

ASSETS
Current Assets:
Cash and Cash Equivalents	$	59,092		$	38,165
Cash							$	20,578		$	108,068
Receivables, Net	1,091,589			925,083			964,314			994,055
Unbilled Revenues	170,044			201,361			154,920			176,285
Fuel, Materials, Supplies and Inventory	192,508			223,063			174,124			238,042
Regulatory Assets	436,704			741,868			515,265			514,779
Prepayments and Other Current Assets	203,434			138,009			302,496			260,995
Assets Held for Sale	—			219,550
Total Current Assets	2,153,371			2,487,099			2,131,697			2,292,224

Property, Plant and Equipment, Net	24,967,702			23,617,463			26,304,446			25,610,428

Deferred Debits and Other Assets:
Regulatory Assets	4,716,631			4,497,447			4,404,176			4,631,137
Goodwill	4,427,266			4,427,266			4,427,266			4,427,266
Investments in Unconsolidated Affiliates							748,705			464,286
Marketable Securities	585,960			585,419			401,231			417,508
Other Long-Term Assets	664,739			605,692			578,385			398,407
Total Deferred Debits and Other Assets	10,394,596			10,115,824			10,559,763			10,338,604

Total Assets	$	37,515,669		$	36,220,386		$	38,995,906		$	38,241,256

LIABILITIES AND CAPITALIZATION
Current Liabilities:
Notes Payable	$	1,067,200		$	1,088,087		$	729,000		$	910,000
Long-Term Debt – Current Portion	387,310			549,631			779,289			837,319
Rate Reduction Bonds – Current Portion	52,332			—			43,210			52,332
Accounts Payable	962,298			1,085,034			903,431			1,119,995
Obligations to Third Party Suppliers	199,762			144,046
Regulatory Liabilities	344,708			128,071			379,850			370,230
Other Current Liabilities	616,662			594,176			677,341			823,006
Total Current Liabilities	3,630,272			3,589,045			3,512,121			4,112,882

Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes	3,386,324			3,297,518			3,549,922			3,506,030
Regulatory Liabilities	3,706,792			3,637,273			3,639,792			3,609,475
Derivative Liabilities	385,865			377,257			363,848			379,562
Accrued Pension, SERP and PBOP	1,013,182			1,228,091			955,092			962,510
Other Long-Term Liabilities	1,094,019			1,073,501			1,264,061			1,196,336
Total Deferred Credits and Other Liabilities	9,586,182			9,613,640			9,772,715			9,653,913

Long-Term Debt	12,151,536			11,775,889			13,039,180			12,248,743

Rate Reduction Bonds	583,331			—			561,727			583,331

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

Common Shareholders' Equity:
Common Shares	1,669,392			1,669,392			1,699,292			1,669,392
Capital Surplus, Paid In	6,234,044			6,239,940			6,659,009			6,241,222
Retained Earnings	3,882,695			3,561,084			3,954,492			3,953,974
Accumulated Other Comprehensive Loss	(59,582		)	(66,403		)	(53,641		)	(60,000		)
Treasury Stock	(317,771		)	(317,771		)	(304,559		)	(317,771		)
Common Shareholders' Equity	11,408,778			11,086,242			11,954,593			11,486,817

Commitments and Contingencies (Note 9)

Total Liabilities and Capitalization	$	37,515,669		$	36,220,386		$	38,995,906		$	38,241,256

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

~~EVERSOURCE ENERGY AND SUBSIDIARIES~~

~~CONDENSED CONSOLIDATED STATEMENTS OF INCOME~~

~~(Unaudited)~~

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

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

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

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

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

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

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

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

EVERSOURCE ENERGY AND SUBSIDIARIES

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



	For the Three Months Ended June 30,				For the Six Months Ended June 30,
(Thousands of Dollars, Except Share Information)	2019		2018		2019		2018

Operating Revenues	$	1,884,495	$	1,853,856	$	4,300,287	$	4,141,818

Operating Expenses:
Purchased Power, Fuel and Transmission	620,904		653,915		1,595,786		1,600,662
Operations and Maintenance	328,010		293,858		663,606		626,406
Depreciation	219,084		199,140		434,032		403,406
Amortization	38,945		36,203		109,906		81,397
Energy Efficiency Programs	105,837		101,955		245,953		236,196
Taxes Other Than Income Taxes	181,083		177,431		365,672		359,865
Impairment of Northern Pass Transmission	239,644		—		239,644		—
Total Operating Expenses	1,733,507		1,462,502		3,654,599		3,307,932
Operating Income	150,988		391,354		645,688		833,886
Interest Expense	132,705		126,404		264,438		247,533
Other Income, Net	45,866		50,149		76,850		83,938
Income Before Income Tax Expense	64,149		315,099		458,100		670,291
Income Tax Expense	30,815		70,452		114,209		154,219
Net Income	33,334		244,647		343,891		516,072
Net Income Attributable to Noncontrolling Interests	1,880		1,880		3,759		3,759
Net Income Attributable to Common Shareholders	$	31,454	$	242,767	$	340,132	$	512,313

Basic and Diluted Earnings Per Common Share	$	0.10	$	0.76	$	1.07	$	1.61

Weighted Average Common Shares Outstanding:
Basic	319,664,998		317,344,596		318,644,796		317,370,825
Diluted	320,388,490		317,885,187		319,352,287		317,939,094

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 June 30,						For the Six Months Ended June 30,
(Thousands of Dollars)	2019			2018			2019			2018

Net Income	$	33,334		$	244,647		$	343,891		$	516,072
Other Comprehensive Income, Net of Tax:
Qualified Cash Flow Hedging Instruments	262			471			578			1,195
Changes in Unrealized Gains/(Losses) on Marketable Securities	444			(144		)	1,099			(588		)
Changes in Funded Status of Pension, SERP and PBOP Benefit Plans	3,457			1,815			4,682			4,808
Other Comprehensive Income, Net of Tax	4,163			2,142			6,359			5,415
Comprehensive Income Attributable to Noncontrolling Interests	(1,880		)	(1,880		)	(3,759		)	(3,759		)
Comprehensive Income Attributable to Common Shareholders	$	35,617		$	244,909		$	346,491		$	517,728

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

EVERSOURCE ENERGY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDERS' EQUITY

(Unaudited)



	For the Six Months Ended June 30, 2019
	Common Shares			Capital Surplus, Paid In			Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock			Total Common Shareholders' Equity
(Thousands of Dollars, Except Share Information)	Shares	Amount		Capital Surplus, Paid In			Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock			Total Common Shareholders' Equity
Balance as of January 1, 2019	316,885,808	$	1,669,392	$	6,241,222		$	3,953,974		$	(60,000	)	$	(317,771	)	$	11,486,817
Net Income							310,558									310,558
Dividends on Common Shares - $0.535 Per Share							(169,757		)							(169,757		)
Dividends on Preferred Stock							(1,880		)							(1,880		)
Long-Term Incentive Plan Activity				(16,609		)										(16,609		)
Issuance of Treasury Shares	461,662			17,476									8,633			26,109
Other Comprehensive Income										2,196						2,196
Balance as of March 31, 2019	317,347,470	1,669,392		6,242,089			4,092,895			(57,804		)	(309,138		)	11,637,434
Net Income							33,334									33,334
Dividends on Common Shares - $0.535 Per Share							(169,857		)							(169,857		)
Dividends on Preferred Stock							(1,880		)							(1,880		)
Issuance of Common Shares - $5 par value	5,980,000	29,900		403,650												433,550
Long-Term Incentive Plan Activity				6,470												6,470
Issuance of Treasury Shares	246,969			13,448									4,579			18,027
Capital Stock Expense				(6,648		)										(6,648		)
Other Comprehensive Income										4,163						4,163
Balance as of June 30, 2019	323,574,439	$	1,699,292	$	6,659,009		$	3,954,492		$	(53,641	)	$	(304,559	)	$	11,954,593



	For the Six Months Ended June 30, 2018
	Common Shares			Capital Surplus, Paid In			Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock			Total Common Shareholders' Equity
(Thousands of Dollars, Except Share Information)	Shares	Amount		Capital Surplus, Paid In			Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock			Total Common Shareholders' Equity
Balance as of January 1, 2018	316,885,808	$	1,669,392	$	6,239,940		$	3,561,084		$	(66,403	)	$	(317,771	)	$	11,086,242
Net Income							271,426									271,426
Dividends on Common Shares - $0.505 Per Share							(160,027		)							(160,027		)
Dividends on Preferred Stock							(1,880		)							(1,880		)
Long-Term Incentive Plan Activity				(15,320		)										(15,320		)
Other Comprehensive Income										3,273						3,273
Balance as of March 31, 2018	316,885,808	1,669,392		6,224,620			3,670,603			(63,130		)	(317,771		)	11,183,714
Net Income							244,647									244,647
Dividends on Common Shares - $0.505 Per Share							(160,027		)							(160,027		)
Dividends on Preferred Stock							(1,880		)							(1,880		)
Long-Term Incentive Plan Activity				4,627												4,627
Other Comprehensive Income										2,142						2,142
Balance as of June 30, 2018	316,885,808	$	1,669,392	$	6,229,247		$	3,753,343		$	(60,988	)	$	(317,771	)	$	11,273,223

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

EVERSOURCE ENERGY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	For the Nine Months Ended September 30,						For the Six Months Ended June 30,
(Thousands of Dollars)	2018			2017			2019			2018

Operating Activities:
Net Income	$	807,332		$	756,216		$	343,891		$	516,072
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
Depreciation	612,077			571,152			434,032			403,406
Deferred Income Taxes	70,402			374,863			36,535			161,883
Uncollectible Expense	50,720			30,111			31,546			29,250
Pension, SERP and PBOP Expense, Net	5,192			16,891			13,227			3,317
Pension and PBOP Contributions	(188,874		)	(197,900		)	(6,648		)	(179,002		)
Regulatory Overrecoveries, Net	189,932			185,952			23,830			36,669
Amortization	174,108			58,058			109,906			81,397
Proceeds from DOE Spent Nuclear Fuel Litigation							68,840			—
Impairment of Northern Pass Transmission							239,644			—
Other	(129,039		)	(197,876		)	(137,428		)	(103,256		)
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net	(212,326		)	(107,473		)	6,357			(52,923		)
Fuel, Materials, Supplies and Inventory	44,702			23,686			63,918			65,609
Taxes Receivable/Accrued, Net	70,885			88,856			(6,883		)	(132,999		)
Accounts Payable	(72,591		)	(96,551		)	(156,077		)	(80,059		)
Other Current Assets and Liabilities, Net	(14,858		)	(30,138		)	(140,103		)	(51,229		)
Net Cash Flows Provided by Operating Activities	1,407,662			1,475,847			924,587			698,135

Investing Activities:
Investments in Property, Plant and Equipment	(1,885,081		)	(1,642,280		)	(1,377,753		)	(1,251,678		)
Proceeds from Sales of Marketable Securities	405,276			520,664			348,904			316,252
Purchases of Marketable Securities	(396,277		)	(506,302		)	(302,950		)	(314,406		)
Proceeds from the Sale of PSNH Generation Assets	193,924			—			—			116,809
Investments in Unconsolidated Affiliates							(265,955		)	(13,220		)
Other Investing Activities	(23,405		)	(24,173		)	4,055			(902		)
Net Cash Flows Used in Investing Activities	(1,705,563		)	(1,652,091		)	(1,593,699		)	(1,147,145		)

Financing Activities:
Issuance of Common Shares, Net of Issuance Costs							426,902			—
Cash Dividends on Common Shares	(480,082		)	(451,562		)	(323,346		)	(320,055		)
Cash Dividends on Preferred Stock	(5,639		)	(5,639		)	(3,759		)	(3,759		)
Decrease in Notes Payable	(222,110		)	(231,500		)	(181,000		)	(98,500		)
Issuance of Rate Reduction Bonds	635,663			—			—			635,663
Repayment of Rate Reduction Bonds							(30,727		)	—
Issuance of Long-Term Debt	1,300,000			1,250,000			1,000,000			1,150,000
Retirement of Long-Term Debt	(860,855		)	(320,000		)	(250,437		)	(860,421		)
Other Financing Activities	(20,361		)	171			(10,682		)	(17,958		)
Net Cash Flows Provided by Financing Activities	346,616			241,470			626,951			484,970
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
Net (Decrease)/Increase in Cash and Restricted Cash							(42,161		)	35,960
Cash and Restricted Cash - Beginning of Period							209,324			85,890
Cash and Restricted Cash - End of Period							$	167,163		$	121,850

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

THE CONNECTICUT LIGHT AND POWER COMPANY

CONDENSED BALANCE SHEETS

(Unaudited)


(Thousands of Dollars)	As of September 30, 2018		As of December 31, 2017		As of June 30, 2019		As of December 31, 2018

ASSETS
Current Assets:
Cash	$	977	$	6,028	$	2,191	$	87,721
Receivables, Net	466,768		370,676		415,542		397,026
Accounts Receivable from Affiliated Companies	32,074		28,181		33,519		23,082
Unbilled Revenues	53,690		54,154		53,670		56,971
Materials, Supplies and Inventory	45,757		48,438
Materials and Supplies					55,243		44,529
Regulatory Assets	128,793		200,281		175,706		125,155
Prepaid Property Taxes	60,532		17,884
Prepayments and Other Current Assets	15,470		29,042		23,390		60,279
Total Current Assets	804,061		754,684		759,261		794,763

Property, Plant and Equipment, Net	8,753,744		8,271,030		9,285,633		8,909,701

Deferred Debits and Other Assets:
Regulatory Assets	1,545,012		1,444,935		1,432,827		1,505,488
Other Long-Term Assets	175,488		159,597		221,860		199,767
Total Deferred Debits and Other Assets	1,720,500		1,604,532		1,654,687		1,705,255

Total Assets	$	11,278,305	$	10,630,246	$	11,699,581	$	11,409,719

LIABILITIES AND CAPITALIZATION
Current Liabilities:
Notes Payable to Eversource Parent	$	45,900	$	69,500	$	259,400	$	—
Long-Term Debt – Current Portion	250,000		300,000		—		250,000
Accounts Payable	347,443		367,605		287,984		324,983
Accounts Payable to Affiliated Companies	86,772		82,201		76,792		26,452
Obligations to Third Party Suppliers	64,283		52,860		52,100		56,248
Accrued Taxes	78,507		21,665
Regulatory Liabilities	126,574		38,967		112,414		109,614
Derivative Liabilities					62,075		55,058
Other Current Liabilities	152,147		159,961		147,764		161,088
Total Current Liabilities	1,151,626		1,092,759		998,529		983,443

Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes	1,136,221		1,103,367		1,192,646		1,166,784
Regulatory Liabilities	1,131,234		1,112,136		1,153,360		1,122,157
Derivative Liabilities	385,779		376,918		363,717		379,536
Accrued Pension, SERP and PBOP	301,946		354,469		275,358		282,771
Other Long-Term Liabilities	130,069		128,135		153,878		155,495
Total Deferred Credits and Other Liabilities	3,085,249		3,075,025		3,138,959		3,106,743

Long-Term Debt	3,003,625		2,759,135		3,309,455		3,004,016

Preferred Stock Not Subject to Mandatory Redemption	116,200		116,200		116,200		116,200

Common Stockholder's Equity:
Common Stock	60,352		60,352		60,352		60,352
Capital Surplus, Paid In	2,210,765		2,110,765		2,410,765		2,410,765
Retained Earnings	1,650,182		1,415,741		1,664,995		1,727,899
Accumulated Other Comprehensive Income	306		269		326		301
Common Stockholder's Equity	3,921,605		3,587,127		4,136,438		4,199,317

Commitments and Contingencies (Note 9)

Total Liabilities and Capitalization	$	11,278,305	$	10,630,246	$	11,699,581	$	11,409,719

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

~~THE CONNECTICUT LIGHT AND POWER COMPANY~~

~~CONDENSED STATEMENTS OF INCOME~~

~~(Unaudited)~~

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

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

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

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

THE CONNECTICUT LIGHT AND POWER COMPANY

CONDENSED STATEMENTS OF ~~COMPREHENSIVE~~ INCOME

(Unaudited)



	For the Three Months Ended June 30,				For the Six Months Ended June 30,
(Thousands of Dollars)	2019		2018		2019		2018

Operating Revenues	$	740,846	$	694,892	$	1,590,092	$	1,479,875

Operating Expenses:
Purchased Power and Transmission	246,540		234,335		566,373		536,223
Operations and Maintenance	133,351		109,685		263,989		226,977
Depreciation	74,555		69,383		147,844		136,881
Amortization of Regulatory Assets, Net	12,376		15,400		48,047		43,405
Energy Efficiency Programs	20,780		18,606		46,768		41,366
Taxes Other Than Income Taxes	86,465		84,375		178,463		174,676
Total Operating Expenses	574,067		531,784		1,251,484		1,159,528
Operating Income	166,779		163,108		338,608		320,347
Interest Expense	36,972		38,674		72,754		75,498
Other Income, Net	2,853		7,063		6,733		13,623
Income Before Income Tax Expense	132,660		131,497		272,587		258,472
Income Tax Expense	27,856		31,785		57,312		60,192
Net Income	$	104,804	$	99,712	$	215,275	$	198,280

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.

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)



	For the Three Months Ended June 30,						For the Six Months Ended June 30,
(Thousands of Dollars)	2019			2018			2019			2018

Net Income	$	104,804		$	99,712		$	215,275		$	198,280
Other Comprehensive Income, Net of Tax:
Qualified Cash Flow Hedging Instruments	(7		)	13			(13		)	65
Changes in Unrealized Gains/(Losses) on Marketable Securities	15			(4		)	38			(16		)
Other Comprehensive Income, Net of Tax	8			9			25			49
Comprehensive Income	$	104,812		$	99,721		$	215,300		$	198,329

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

THE CONNECTICUT LIGHT AND POWER COMPANY

CONDENSED STATEMENTS OF COMMON STOCKHOLDER'S EQUITY

(Unaudited)



	For the Six Months Ended June 30, 2019
	Common Stock			Capital Surplus, Paid In		Retained Earnings			Accumulated Other Comprehensive Income		Total Common Stockholder's Equity
(Thousands of Dollars, Except Stock Information)	Stock	Amount		Capital Surplus, Paid In		Retained Earnings			Accumulated Other Comprehensive Income		Total Common Stockholder's Equity
Balance as of January 1, 2019	6,035,205	$	60,352	$	2,410,765	$	1,727,899		$	301	$	4,199,317
Net Income						110,471					110,471
Dividends on Preferred Stock						(1,390		)			(1,390		)
Dividends on Common Stock						(99,000		)			(99,000		)
Other Comprehensive Income									17		17
Balance as of March 31, 2019	6,035,205	60,352		2,410,765		1,737,980			318		4,209,415
Net Income						104,804					104,804
Dividends on Preferred Stock						(1,390		)			(1,390		)
Dividends on Common Stock						(176,400		)			(176,400		)
Other						1					1
Other Comprehensive Income									8		8
Balance as of June 30, 2019	6,035,205	$	60,352	$	2,410,765	$	1,664,995		$	326	$	4,136,438



	For the Six Months Ended June 30, 2018
	Common Stock			Capital Surplus, Paid In		Retained Earnings			Accumulated Other Comprehensive Income		Total Common Stockholder's Equity
(Thousands of Dollars, Except Stock Information)	Stock	Amount		Capital Surplus, Paid In		Retained Earnings			Accumulated Other Comprehensive Income		Total Common Stockholder's Equity
Balance as of January 1, 2018	6,035,205	$	60,352	$	2,110,765	$	1,415,741		$	269	$	3,587,127
Net Income						98,568					98,568
Dividends on Preferred Stock						(1,390		)			(1,390		)
Dividends on Common Stock						(60,000		)			(60,000		)
Capital Contributions from Eversource Parent				9,000							9,000
Other Comprehensive Income									40		40
Balance as of March 31, 2018	6,035,205	60,352		2,119,765		1,452,919			309		3,633,345
Net Income						99,712					99,712
Dividends on Preferred Stock						(1,390		)			(1,390		)
Capital Contributions from Eversource Parent				91,000							91,000
Other Comprehensive Income									9		9
Balance as of June 30, 2018	6,035,205	$	60,352	$	2,210,765	$	1,551,241		$	318	$	3,822,676

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

THE CONNECTICUT LIGHT AND POWER COMPANY

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)


	For the Nine Months Ended September 30,						For the Six Months Ended June 30,
(Thousands of Dollars)	2018			2017			2019			2018

Operating Activities:
Net Income	$	298,610		$	277,645		$	215,275		$	198,280
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
Depreciation	208,899			184,275			147,844			136,881
Deferred Income Taxes	28,637			90,132			16,513			50,915
Uncollectible Expense	12,135			1,755			7,627			7,747
Pension, SERP, and PBOP Expense, Net	6,594			6,421			6,926			3,861
Pension Contributions	(41,150		)	(1,875		)	—			(41,150		)
Regulatory (Under)/Over Recoveries, Net	(1,136		)	71,413
Regulatory Underrecoveries, Net							(40,460		)	(39,908		)
Amortization of Regulatory Assets, Net	97,437			58,799			48,047			43,405
Other	(55,827		)	(23,911		)	(40,290		)	(40,825		)
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net	(126,513		)	(70,936		)	(37,101		)	(34,772		)
Taxes Receivable/Accrued, Net	72,702			69,335			19,701			105
Accounts Payable	(15,303		)	(1,649		)	5,443			(30,805		)
Other Current Assets and Liabilities, Net	(33,965		)	(36,340		)	(3,941		)	14,377
Net Cash Flows Provided by Operating Activities	451,120			625,064			345,584			268,111

Investing Activities:
Investments in Property, Plant and Equipment	(660,673		)	(621,882		)	(466,112		)	(457,677		)
Other Investing Activities	167			185			551			110
Net Cash Flows Used in Investing Activities	(660,506		)	(621,697		)	(465,561		)	(457,567		)

Financing Activities:
Cash Dividends on Common Stock	(60,000		)	(205,200		)	(275,400		)	(60,000		)
Cash Dividends on Preferred Stock	(4,169		)	(4,169		)	(2,779		)	(2,779		)
Capital Contributions from Eversource Parent	100,000			—			—			100,000
Issuance of Long-Term Debt	500,000			525,000			300,000			500,000
Retirement of Long-Term Debt	(300,000		)	(250,000		)	(250,000		)	(300,000		)
Decrease in Notes Payable to Eversource Parent	(23,600		)	(80,100		)
Premium on Issuance of Long-Term Debt	—			21,937
Increase/(Decrease) in Notes Payable to Eversource Parent							259,400			(45,500		)
Other Financing Activities	(7,584		)	(6,322		)	4,237			(6,189		)
Net Cash Flows Provided by Financing Activities	204,647			1,146			35,458			185,532
Net (Decrease)/Increase in Cash and Restricted Cash	(4,739		)	4,513
Net Decrease in Cash and Restricted Cash							(84,519		)	(3,924		)
Cash and Restricted Cash - Beginning of Period	9,619			8,403			91,613			9,619
Cash and Restricted Cash - End of Period	$	4,880		$	12,916		$	7,094		$	5,695

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

NSTAR ELECTRIC COMPANY AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


(Thousands of Dollars)	As of September 30, 2018			As of December 31, 2017			As of June 30, 2019			As of December 31, 2018

ASSETS
Current Assets:
Cash and Cash Equivalents	$	2,367		$	1,763
Cash							$	177		$	1,606
Receivables, Net	457,695			341,341			346,428			361,296
Accounts Receivable from Affiliated Companies	43,767			40,723			25,071			31,344
Unbilled Revenues	55,046			49,865			42,144			34,518
Materials, Supplies and Inventory	66,361			95,517			64,513			114,202
Regulatory Assets	193,541			333,882			210,032			241,747
Prepayments and Other Current Assets	18,128			24,499			21,289			51,960
Total Current Assets	836,905			887,590			709,654			836,673

Property, Plant and Equipment, Net	8,576,096			8,246,494			9,075,789			8,794,700

Deferred Debits and Other Assets:
Regulatory Assets	1,226,811			1,190,575			1,178,974			1,196,512
Prepaid PBOP	153,142			126,948			146,717			132,810
Other Long-Term Assets	107,208			84,766			142,573			109,764
Total Deferred Debits and Other Assets	1,487,161			1,402,289			1,468,264			1,439,086

Total Assets	$	10,900,162		$	10,536,373		$	11,253,707		$	11,070,459

LIABILITIES AND CAPITALIZATION
Current Liabilities:
Notes Payable	$	240,500		$	234,000		$	163,000		$	278,500
Notes Payable to Eversource Parent	16,000			—			40,300			—
Long-Term Debt – Current Portion							95,000			—
Accounts Payable	296,208			340,115			288,153			384,398
Accounts Payable to Affiliated Companies	77,329			91,260			72,174			89,636
Obligations to Third Party Suppliers	133,865			88,721			95,360			109,547
Renewable Portfolio Standards Compliance Obligations	100,782			111,524			66,370			139,898
Regulatory Liabilities	168,225			79,562			170,970			190,620
Other Current Liabilities	113,728			79,916			61,710			74,872
Total Current Liabilities	1,146,637			1,025,098			1,053,037			1,267,471

Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes	1,279,302			1,275,814			1,318,267			1,294,467
Regulatory Liabilities	1,566,285			1,514,451			1,514,845			1,513,279
Accrued Pension and SERP	6,171			89,995			29,323			14,145
Other Long-Term Liabilities	219,050			198,176			297,346			263,096
Total Deferred Credits and Other Liabilities	3,070,808			3,078,436			3,159,781			3,084,987

Long-Term Debt	2,944,616			2,943,759			3,246,535			2,944,846

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

Common Stockholder's Equity:	��
Common Stock	—			—			—			—
Capital Surplus, Paid In	1,608,442			1,502,942			1,653,442			1,633,442
Retained Earnings	2,088,157			1,944,961			2,099,059			2,098,091
Accumulated Other Comprehensive Loss	(1,498		)	(1,823		)	(1,147		)	(1,378		)
Common Stockholder's Equity	3,695,101			3,446,080			3,751,354			3,730,155

Commitments and Contingencies (Note 9)

Total Liabilities and Capitalization	$	10,900,162		$	10,536,373		$	11,253,707		$	11,070,459

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

NSTAR ELECTRIC COMPANY AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,				For the Three Months Ended June 30,				For the Six Months Ended June 30,
(Thousands of Dollars)	2018		2017		2018		2017		2019		2018		2019		2018

Operating Revenues	$	939,460	$	851,922	$	2,400,324	$	2,290,432	$	681,893	$	690,737	$	1,479,505	$	1,460,865

Operating Expenses:
Purchased Power and Transmission	383,208		294,115		981,895		799,007		228,397		266,108		558,501		598,687
Operations and Maintenance	123,634		118,777		344,478		346,469		108,924		102,163		221,887		220,844
Depreciation	70,616		68,746		205,210		204,442		73,055		64,051		145,639		134,593
Amortization of Regulatory Assets, Net	17,149		10,131		35,467		17,243		23,184		11,954		45,768		18,318
Energy Efficiency Programs	89,430		82,611		229,408		228,543		65,904		65,184		142,633		139,978
Taxes Other Than Income Taxes	49,927		47,830		145,740		130,492		48,226		47,627		93,047		95,815
Total Operating Expenses	733,964		622,210		1,942,198		1,726,196		547,690		557,087		1,207,475		1,208,235
Operating Income	205,496		229,712		458,126		564,236		134,203		133,650		272,030		252,630
Interest Expense	26,958		30,810		80,780		88,715		28,238		27,359		56,120		53,822
Other Income, Net	13,697		9,165		40,567		24,610		10,657		14,269		21,743		26,870
Income Before Income Tax Expense	192,235		208,067		417,913		500,131		116,622		120,560		237,653		225,678
Income Tax Expense	51,640		82,301		112,247		196,001		26,888		32,639		53,906		60,607
Net Income	$	140,595	$	125,766	$	305,666	$	304,130	$	89,734	$	87,921	$	183,747	$	165,071

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,						For the Three Months Ended June 30,					For the Six Months Ended June 30,
(Thousands of Dollars)	2018			2017			2018			2017			2019		2018			2019		2018

Net Income	$	140,595		$	125,766		$	305,666		$	304,130		$	89,734	$	87,921		$	183,747	$	165,071
Other Comprehensive Income, Net of Tax:
Changes in Funded Status of SERP Benefit Plan	1			(4		)	3			(12		)	1		1			2		2
Qualified Cash Flow Hedging Instruments	110			109			328			328			109		109			219		218
Changes in Unrealized (Losses)/Gains on Marketable Securities	(1		)	(18		)	(6		)	7
Changes in Unrealized Gains/(Losses) on Marketable Securities													4		(1		)	10		(5		)
Other Comprehensive Income, Net of Tax	110			87			325			323			114		109			231		215
Comprehensive Income	$	140,705		$	125,853		$	305,991		$	304,453		$	89,848	$	88,030		$	183,978	$	165,286

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

NSTAR ELECTRIC COMPANY AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDER'S EQUITY

(Unaudited)



	For the Six Months Ended June 30, 2019
	Common Stock			Capital Surplus, Paid In		Retained Earnings			Accumulated Other Comprehensive Loss			Total Common Stockholder's Equity
(Thousands of Dollars, Except Stock Information)	Stock	Amount		Capital Surplus, Paid In		Retained Earnings			Accumulated Other Comprehensive Loss			Total Common Stockholder's Equity
Balance as of January 1, 2019	200	$	—	$	1,633,442	$	2,098,091		$	(1,378	)	$	3,730,155
Net Income						94,014						94,014
Dividends on Preferred Stock						(490		)				(490		)
Dividends on Common Stock						(60,600		)				(60,600		)
Capital Contributions from Eversource Parent				20,000								20,000
Other Comprehensive Income									117			117
Balance as of March 31, 2019	200	—		1,653,442		2,131,015			(1,261		)	3,783,196
Net Income						89,734						89,734
Dividends on Preferred Stock						(490		)				(490		)
Dividends on Common Stock						(121,200		)				(121,200		)
Other Comprehensive Income									114			114
Balance as of June 30, 2019	200	$	—	$	1,653,442	$	2,099,059		$	(1,147	)	$	3,751,354



	For the Six Months Ended June 30, 2018
	Common Stock			Capital Surplus, Paid In		Retained Earnings			Accumulated Other Comprehensive Loss			Total Common Stockholder's Equity
(Thousands of Dollars, Except Stock Information)	Stock	Amount		Capital Surplus, Paid In		Retained Earnings			Accumulated Other Comprehensive Loss			Total Common Stockholder's Equity
Balance as of January 1, 2018	200	$	—	$	1,502,942	$	1,944,961		$	(1,823	)	$	3,446,080
Net Income						77,149						77,149
Dividends on Preferred Stock						(490		)				(490		)
Dividends on Common Stock						(161,000		)				(161,000		)
Capital Contributions from Eversource Parent				92,500								92,500
Other						1						1
Other Comprehensive Income									106			106
Balance as of March 31, 2018	200	—		1,595,442		1,860,621			(1,717		)	3,454,346
Net Income						87,921						87,921
Dividends on Preferred Stock						(490		)				(490		)
Capital Contributions from Eversource Parent				8,000								8,000
Other Comprehensive Income									109			109
Balance as of June 30, 2018	200	$	—	$	1,603,442	$	1,948,052		$	(1,608	)	$	3,549,886

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

NSTAR ELECTRIC COMPANY AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	For the Nine Months Ended September 30,						For the Six Months Ended June 30,
(Thousands of Dollars)	2018			2017			2019			2018

Operating Activities:
Net Income	$	305,666		$	304,130		$	183,747		$	165,071
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
Depreciation	205,210			204,442			145,639			134,593
Deferred Income Taxes	16,203			100,335			11,603			29,238
Uncollectible Expense	20,433			14,937			11,605			11,301
Pension, SERP and PBOP Income, Net	(15,855		)	(7,586		)	(7,052		)	(19,785		)
Pension and PBOP Contributions	(60,454		)	(83,040		)	(3,007		)	(59,156		)
Regulatory Overrecoveries, Net	180,797			71,647			17,063			34,090
Amortization of Regulatory Assets, Net	35,467			17,243			45,768			18,318
Other	(49,178		)	(47,972		)	(36,973		)	(14,646		)
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net	(155,669		)	(113,960		)	(6,769		)	(40,073		)
Materials, Supplies and Inventory	29,156			11,483			49,688			45,058
Taxes Receivable/Accrued, Net	42,148			71,705			25,572			(37,268		)
Accounts Payable	(13,178		)	(42,519		)	(82,326		)	(17,194		)
Other Current Assets and Liabilities, Net	33,543			4,982			(103,054		)	(46,861		)
Net Cash Flows Provided by Operating Activities	574,289			505,827			251,504			202,686

Investing Activities:
Investments in Property, Plant and Equipment	(538,973		)	(467,275		)	(418,571		)	(356,497		)
Other Investing Activities	46			(3,565		)	41			31
Net Cash Flows Used in Investing Activities	(538,927		)	(470,840		)	(418,530		)	(356,466		)

Financing Activities:
Cash Dividends on Common Stock	(161,000		)	(214,500		)	(181,800		)	(161,000		)
Cash Dividends on Preferred Stock	(1,470		)	(1,470		)	(980		)	(980		)
Issuance of Long-Term Debt							400,000			—
Capital Contributions from Eversource Parent	105,500			2,300			20,000			100,500
Increase in Notes Payable to Eversource Parent	16,000			—			40,300			—
Increase/(Decrease) in Notes Payable	6,500			(80,600		)
Issuance of Long-Term Debt	—			350,000
(Decrease)/Increase in Notes Payable							(115,500		)	213,810
Other Financing Activities	(239		)	(3,410		)	(3,287		)	(158		)
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
Net Cash Flows Provided by Financing Activities							158,733			152,172
Net Decrease in Cash and Restricted Cash							(8,293		)	(1,608		)
Cash and Restricted Cash - Beginning of Period							14,659			14,708
Cash and Restricted Cash - End of Period							$	6,366		$	13,100

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

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


(Thousands of Dollars)	As of September 30, 2018			As of December 31, 2017			As of June 30, 2019			As of December 31, 2018

ASSETS
Current Assets:
Cash	$	7,462		$	900		$	343		$	1,439
Receivables, Net	115,706			92,774			99,416			104,854
Accounts Receivable from Affiliated Companies	20,007			5,297			11,476			8,444
Unbilled Revenues	39,760			49,448			39,665			47,145
Taxes Receivable							6,985			25,913
Materials, Supplies and Inventory	39,877			40,285			23,280			37,504
Regulatory Assets	61,379			130,134			77,854			67,228
Special Deposits	26,863			728			35,017			47,498
Prepayments and Other Current Assets	7,600			28,203			17,293			17,564
Assets Held for Sale	—			219,550
Total Current Assets	318,654			567,319			311,329			357,589

Property, Plant and Equipment, Net	2,826,541			2,642,274			2,969,347			2,880,073

Deferred Debits and Other Assets:
Regulatory Assets	892,075			810,677			827,898			862,288
Other Long-Term Assets	19,252			42,391			32,428			27,406
Total Deferred Debits and Other Assets	911,327			853,068			860,326			889,694

Total Assets	$	4,056,522		$	4,062,661		$	4,141,002		$	4,127,356

LIABILITIES AND CAPITALIZATION
Current Liabilities:
Notes Payable to Eversource Parent	$	46,600		$	262,900		$	20,100		$	57,000
Long-Term Debt – Current Portion	—			110,000			150,000			150,000
Rate Reduction Bonds – Current Portion	52,332			—			43,210			52,332
Accounts Payable	118,523			128,685			103,749			111,292
Accounts Payable to Affiliated Companies	35,699			24,676			27,195			26,029
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			54,183			55,526
Other Current Liabilities	34,790			33,437			45,414			64,046
Total Current Liabilities	377,087			750,436			443,851			516,225

Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes	457,512			443,468			496,223			481,221
Regulatory Liabilities	433,822			444,397			416,999			428,069
Accrued Pension, SERP and PBOP	126,839			124,639			107,007			124,457
Other Long-Term Liabilities	35,901			56,689			33,584			36,339
Total Deferred Credits and Other Liabilities	1,054,074			1,069,193			1,053,813			1,070,086

Long-Term Debt	894,100			892,438			951,834			655,173

Rate Reduction Bonds	583,331			—			561,727			583,331

Common Stockholder's Equity:
Common Stock	—			—			—			—
Capital Surplus, Paid In	538,134			843,134			678,134			678,134
Retained Earnings	612,919			511,382			453,891			627,258
Accumulated Other Comprehensive Loss	(3,123		)	(3,922		)	(2,248		)	(2,851		)
Common Stockholder's Equity	1,147,930			1,350,594			1,129,777			1,302,541

Commitments and Contingencies (Note 9)

Total Liabilities and Capitalization	$	4,056,522		$	4,062,661		$	4,141,002		$	4,127,356

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

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,					For the Three Months Ended June 30,				For the Six Months Ended June 30,
(Thousands of Dollars)	2018		2017		2018		2017			2019		2018		2019		2018

Operating Revenues	$	290,203	$	250,032	$	792,700	$	733,572		$	240,900	$	235,146	$	517,335	$	502,497

Operating Expenses:
Purchased Power, Fuel and Transmission	100,763		57,099		293,975		179,289			85,768		83,494		199,299		193,212
Operations and Maintenance	55,429		65,104		153,296		195,637			52,729		46,487		105,359		97,867
Depreciation	23,223		32,084		69,524		95,266			23,261		22,808		46,180		46,301
Amortization of Regulatory Assets/(Liabilities), Net	27,357		2,835		41,318		(10,658		)
Amortization of Regulatory Assets, Net										5,857		8,926		19,523		13,961
Energy Efficiency Programs	5,863		4,007		15,694		11,040			6,215		4,674		12,929		9,831
Taxes Other Than Income Taxes	21,095		22,936		59,775		66,935			20,725		21,879		38,037		38,680
Total Operating Expenses	233,730		184,065		633,582		537,509			194,555		188,268		421,327		399,852
Operating Income	56,473		65,967		159,118		196,063			46,345		46,878		96,008		102,645
Interest Expense	16,593		12,896		43,977		38,676			13,909		14,612		28,276		27,386
Other Income, Net	16,095		2,664		24,253		7,367			2,984		3,409		10,006		8,159
Income Before Income Tax Expense	55,975		55,735		139,394		164,754			35,420		35,675		77,738		83,418
Income Tax Expense	15,309		22,012		37,857		65,128			8,568		9,896		18,104		22,547
Net Income	$	40,666	$	33,723	$	101,537	$	99,626		$	26,852	$	25,779	$	59,634	$	60,871

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,					For the Three Months Ended June 30,					For the Six Months Ended June 30,
(Thousands of Dollars)	2018			2017			2018			2017		2019		2018			2019		2018

Net Income	$	40,666		$	33,723		$	101,537		$	99,626	$	26,852	$	25,779		$	59,634	$	60,871
Other Comprehensive Income, Net of Tax:
Qualified Cash Flow Hedging Instruments	268			291			835			872		269		277			538		567
Changes in Unrealized (Losses)/Gains on Marketable Securities	(7		)	(112		)	(36		)	43
Changes in Unrealized Gains/(Losses) on Marketable Securities												27		(8		)	65		(29		)
Other Comprehensive Income, Net of Tax	261			179			799			915		296		269			603		538
Comprehensive Income	$	40,927		$	33,902		$	102,336		$	100,541	$	27,148	$	26,048		$	60,237	$	61,409

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

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDER'S EQUITY

(Unaudited)



	For the Six Months Ended June 30, 2019
	Common Stock			Capital Surplus, Paid In		Retained Earnings			Accumulated Other Comprehensive Loss			Total Common Stockholder's Equity
(Thousands of Dollars, Except Stock Information)	Stock	Amount		Capital Surplus, Paid In		Retained Earnings			Accumulated Other Comprehensive Loss			Total Common Stockholder's Equity
Balance as of January 1, 2019	301	$	—	$	678,134	$	627,258		$	(2,851	)	$	1,302,541
Net Income						32,781						32,781
Dividends on Common Stock						(19,000		)				(19,000		)
Other Comprehensive Income									307			307
Balance as of March 31, 2019	301	—		678,134		641,039			(2,544		)	1,316,629
Net Income						26,852						26,852
Dividends on Common Stock						(214,000		)				(214,000		)
Other Comprehensive Income									296			296
Balance as of June 30, 2019	301	$	—	$	678,134	$	453,891		$	(2,248	)	$	1,129,777



	For the Six Months Ended June 30, 2018
	Common Stock			Capital Surplus, Paid In			Retained Earnings			Accumulated Other Comprehensive Loss			Total Common Stockholder's Equity
(Thousands of Dollars, Except Stock Information)	Stock	Amount		Capital Surplus, Paid In			Retained Earnings			Accumulated Other Comprehensive Loss			Total Common Stockholder's Equity
Balance as of January 1, 2018	301	$	—	$	843,134		$	511,382		$	(3,922	)	$	1,350,594
Net Income							35,093						35,093
Other Comprehensive Income										269			269
Balance as of March 31, 2018	301	—		843,134			546,475			(3,653		)	1,385,956
Net Income							25,779						25,779
Capital Contributions from Eversource Parent				225,000									225,000
Return of Capital				(530,000		)							(530,000		)
Other							(1		)				(1		)
Other Comprehensive Income										269			269
Balance as of June 30, 2018	301	$	—	$	538,134		$	572,253		$	(3,384	)	$	1,107,003

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

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	For the Nine Months Ended September 30,						For the Six Months Ended June 30,
(Thousands of Dollars)	2018			2017			2019			2018

Operating Activities:
Net Income	$	101,537		$	99,626		$	59,634		$	60,871
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
Depreciation	69,524			95,266			46,180			46,301
Deferred Income Taxes	11,473			43,217			12,030			41,981
Regulatory (Under)/Over Recoveries, Net	(19,764		)	8,910
Amortization of Regulatory Assets/(Liabilities), Net	41,318			(10,658		)
Regulatory Underrecoveries, Net							(29,377		)	(29,816		)
Amortization of Regulatory Assets, Net							19,523			13,961
Other	(3,104		)	(7,866		)	(7,381		)	(3,428		)
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net	(32,819		)	(30,276		)	7,658			(10,510		)
Fuel, Materials, Supplies and Inventory	14,555			4,263
Materials, Supplies and Inventory							14,225			21,803
Taxes Receivable/Accrued, Net	10,929			10,749			18,029			(15,475		)
Accounts Payable	(3,828		)	18,394			(1,159		)	(4,843		)
Other Current Assets and Liabilities, Net	27,844			32,300			(17,620		)	(8,050		)
Net Cash Flows Provided by Operating Activities	217,665			263,925			121,742			112,795

Investing Activities:
Investments in Property, Plant and Equipment	(236,206		)	(215,470		)	(132,791		)	(149,925		)
Proceeds from the Sale of Generation Assets	193,924			—			—			116,809
Proceeds from the Sale of Property	4,782			—
Other Investing Activities	367			113			743			243
Net Cash Flows Used in Investing Activities	(37,133		)	(215,357		)	(132,048		)	(32,873		)

Financing Activities:
Cash Dividends on Common Stock	(150,000		)	(23,900		)	(233,000		)	(150,000		)
Capital Contribution from Eversource Parent	225,000			—
Capital Contributions from Eversource Parent							—			225,000
Return of Capital	(530,000		)	—			—			(530,000		)
Issuance of Long-Term Debt							300,000			—
Retirement of Long-Term Debt							—			(110,000		)
Issuance of Rate Reduction Bonds	635,663			—			—			635,663
Retirement of Long-Term Debt	(110,000		)	(70,000		)
(Decrease)/Increase in Notes Payable to Eversource Parent	(216,300		)	41,400
Repayment of Rate Reduction Bonds							(30,727		)	—
Decrease in Notes Payable to Eversource Parent							(36,900		)	(144,200		)
Other Financing Activities	1,080			(187		)	(2,703		)	(75		)
Net Cash Flows Used in Financing Activities	(144,557		)	(52,687		)	(3,330		)	(73,612		)
Net Increase/(Decrease) in Cash and Restricted Cash	35,975			(4,119		)
Net (Decrease)/Increase in Cash and Restricted Cash							(13,636		)	6,310
Cash and Restricted Cash - Beginning of Period	2,191			5,953			52,723			2,191
Cash and Restricted Cash - End of Period	$	38,166		$	1,834		$	39,087		$	8,501

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

EVERSOURCE ENERGY AND SUBSIDIARIES

THE CONNECTICUT LIGHT AND POWER COMPANY

NSTAR ELECTRIC COMPANY AND SUBSIDIARY

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES

COMBINED NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited)

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

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Basis of Presentation

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

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

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

The combined notes to the financial statements have been prepared pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures included in annual financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations. The accompanying financial statements should be read in conjunction with the Combined Notes to Financial Statements included in Item 8, "Financial Statements and Supplementary Data," of the Eversource ~~2017~~2018 Form 10-K, which was filed with the SEC on February 26, ~~2018.~~2019. 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~~June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, and the results of operations, ~~and~~ comprehensive income and common shareholders' equity for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, and the cash flows for the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017.~~2018. The results of operations and comprehensive income for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018 and the cash flows for the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018 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~~and voting interests 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 and water distribution and transmission businesses ~~and water distribution business,~~ are subject to rate-regulation that is based on cost recovery and meets the criteria for application of accounting guidance for entities with rate-regulated operations, which considers the effect of regulation on the differences in the timing of the recognition of certain revenues and expenses from those of other businesses and industries. See Note 2, "Regulatory Accounting," for further information.

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

B. Accounting Standards

Accounting Standards Issued but Not Yet Effective: In ~~February~~June 2016, the FASB issued Accounting Standards Update ~~("ASU"~~(“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326), which provides a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. Under the new guidance, immediate recognition of all credit losses expected over the life of a financial instrument is required. The new standard also revises the other-than-temporary impairment model for available-for-sale debt securities. The standard is effective January 1, 2020, and requires a modified retrospective transition approach through a cumulative-effect adjustment to retained earnings. The Company is assessing the impacts of this standard on the accounting for credit losses on its financial instruments, including accounts receivable.

Accounting Standards Recently Adopted: On January 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842), which ~~changes~~amended existing lease accounting ~~guidance~~guidance. The Company applied the Topic 842 lease criteria to new leases and islease renewals entered into effective on or after January 1, 2019. The ASU required balance sheet recognition of leases deemed to be ~~applied~~operating leases as well as additional disclosure requirements. The recognition, measurement and presentation of expenses and cash flows were not significantly changed.

The Company also adopted the modified retrospective transition method allowed 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~~which allowed the Company 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,~~January 1, 2019, with ~~comparative~~prior 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~~Implementation of ASU 2018-11 had no effect on retained earnings, and 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~~lease standard ~~include balance sheet recognition of leases previously deemed to be operating leases,~~(Topic 842) are reflected in the 2019 financial statements and ~~additional disclosure requirements.~~ footnotes.

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 electelected the practical expedient package whereby it did not need ~~not~~to reassess whether aor not an existing contract is or contains a lease or whether a lease is an operating or capital lease, and it did not need ~~not~~to reassess initial direct costs for leases. AsElection of ~~December 31, 2017, Eversource’s total future undiscounted minimum rental payments, excluding executory costs, under long-term noncancelable operating and capital leases~~this practical expedient allowed us to carry forward our historical lease classifications. The Company elected the practical expedient to not reevaluate land easements existing at adoption if they were ~~less than $100 million.~~

~~Accounting Standards Recently Adopted:~~ Onnot previously accounted for as leases. The Company also elected to use the discount rate as of the January 1, ~~2018, Eversource, CL&P, NSTAR Electric~~2019 implementation date to discount its operating lease liabilities. The Company did not elect the hindsight practical expedient to determine the lease term for existing leases.

The Company determined the impact the ASUs had on its financial statements by reviewing its lease population and ~~PSNH adopted ASU 2014-09,~~ ~~Revenue from Contracts~~identifying lease data needed for the disclosure requirements. The Company implemented a new lease accounting system in 2019 to ensure ongoing compliance with ~~Customers, which amended existing revenue recognition guidance, using~~ the ~~modified retrospective method (cumulatively at~~ASU’s requirements. Adoption of the ~~date~~new standard resulted in the recording of ~~initial application) applying it only to contracts that were not complete~~operating lease liabilities and right-of-use assets on the balance sheet upon transition at January 1, ~~2018. Under this method~~2019 of adoption, prior year reported results were not restated. Implementation of the ASU did not have a material effect on the results of operations, financial position or cash flows of Eversource, CL&P, NSTAR Electric or PSNH. See Note 16, "Revenues,"~~for further information~~.

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

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

~~On January 1, 2018, Eversource, CL&P, NSTAR Electric and PSNH adopted ASU 2017-07,~~ ~~Compensation – Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost~~. The ASU required separate presentation of service cost from other components of net pension, SERP and PBOP costs, with the other components presented as non-operating income and not subject to capitalization. The ASU has been applied retrospectively for the separate presentation in the income statement of service costs and other components and prospectively in the balance sheet for the capitalization of only the service cost component. As of September 30, 2018, the non-service cost components of net pension, SERP and PBOP costs that were not capitalized in plant were recorded as an increase to regulatory liabilities of approximately $30 million, as these amounts continue to be included in rates. See Note 1G, "Summary of Significant Accounting Policies - Other Income, Net," to the financial statements for the portion of pension, SERP and PBOP costs that are presented as non-operating income for the three and nine months ended September 30, 2018 and 2017. For the three months ended September 30, 2017, the amounts, which were previously presented within Operations and Maintenance expense on the statements of income, totaled $7.3$58.0 million at Eversource, ~~$0.4 million at CL&P, $4.7~~$25.3 million at NSTAR Electric, ~~and $1.5 million at PSNH, and have been retrospectively presented within Other Income, Net. For the nine months ended September 30, 2017, these amounts were $22.9 million at Eversource, $1.3~~$0.6 million at CL&P, ~~$14.5~~and $0.6 million at ~~NSTAR Electric and $4.5 million at~~ PSNH.

~~On January 1, 2018, Eversource, CL&P, NSTAR Electric and PSNH adopted two accounting standards relating to~~ Implementation of the ~~statement of cash flows; ASU 2016-15,~~ ~~Classification of Certain Cash Receipts and Cash Payments,~~ ~~and ASU 2016-18,~~ ~~Restricted Cash.~~ As a result of implementing ASU 2016-15, dividends from equity method investments of $16.4 million and $14.0 million for the nine months ended September 30, 2018 and 2017, respectively, are presented in operating activities at Eversource, for which the 2017 amounts were previously classified in investing activities. ASU 2016-18 required that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash and restricted cash equivalents. Both standards were applied retrospectively, as required, and neither had a materialnew guidance did not have an impact on ~~Eversource's, CL&P's, NSTAR Electric's~~each company’s results of operations or ~~PSNH's statements~~cash flows.

C. Impairment of cash flows. See Note 1I, "Summary of Significant Accounting Policies - Supplemental Cash Flow Information," to the financial statements for a reconciliation of cash and cash equivalents as reported on the balance sheet to the statement of cash flows, which includes amounts described as restricted cash and restricted cash equivalents.

C. Northern Pass Transmission

Northern Pass is Eversource's planned 1,090 MW HVDC transmission line that ~~will~~would interconnect from the Québec-New Hampshire border to Franklin, New Hampshire and an associated alternating current radial transmission line between Franklin and Deerfield, New Hampshire. ~~As of September~~

On March 30, ~~2018, our capitalized Northern Pass project costs were approximately $302 million.~~

~~In March~~ 2018, the New Hampshire Site Evaluation Committee ~~("NHSEC"~~(“NHSEC”), one of the state regulatory agencies from which Northern Pass was required to obtain a siting permit, issued a written decision denying Northern Pass’ siting ~~application and~~application. In the ~~Massachusetts EDCs terminated~~first quarter of 2018, Eversource conducted an impairment review of the ~~selection of, and subsequent contract negotiations with,~~ Northern Pass ~~under~~project and concluded, at that time, that the ~~Massachusetts Clean Energy RFP.~~recorded amount of project costs was recoverable. On ~~April 27, 2018, NPT filed a motion for rehearing with the NHSEC and on~~ July 12, 2018, the NHSEC issued ~~its~~a written decision denying Northern Pass’ April 2018 motion for ~~rehearing. On August 10,~~rehearing, and on October 12, 2018, ~~NPT filed an appeal to~~ the New Hampshire Supreme Court ~~based on~~accepted an appeal filed by Northern Pass that alleged that the ~~NHSEC’s failure~~NHSEC failed to follow applicable law in its review of the project. On ~~October 12, 2018,~~July 19, 2019, the New Hampshire Supreme Court ~~accepted this~~issued a decision denying Northern Pass’ appeal and ~~directed~~affirming the ~~NHSEC to transmit~~NHSEC’s evaluation and decision that denied Northern Pass’ siting application.

Eversource evaluated the ~~record~~impact of ~~its proceedings to~~ the ~~Court by December 11, 2018. The~~New Hampshire Supreme Court ~~has not yet issued~~decision on the probability of construction and operation of Northern Pass. Eversource concluded that construction of the project was no longer probable and that substantially all of the capitalized project costs, which totaled $318 million, certain of which are subject to cost reimbursement agreements, were impaired. Eversource concluded that the New Hampshire Supreme Court decision is a ~~schedule~~subsequent event that required recognition in the financial statements as of and for the ~~balance~~three and six months ended June 30, 2019.

Based on the conclusion that the construction of Northern Pass was not probable, Eversource recorded an impairment charge for all of the ~~appeal process. In parallel, NPT intends to continue to pursue all available options to secure NHSEC approval~~project costs associated with Northern Pass, which were primarily engineering design, siting, permitting and legal costs, along with appropriate allowances for funds used during construction, and recognized a receivable for certain cost reimbursement agreements. Additionally, Eversource recorded an impairment charge associated with the land acquired to construct ~~the project.~~

~~The March 2018 NHSEC denial of Northern Pass' siting application caused us to review the recoverability of our~~ Northern Pass ~~project costs~~in order to recognize the land at its estimated fair value based on assessed values and transaction costs. In total, this resulted in a pre-tax impairment charge of $239.6 million within Operating Income on the statement of income for the three and six months ended June 30, 2019, and was reflected in the first quarter of 2018. In this recoverability review, we estimated undiscounted expected project cash flows and compared the result to our estimated project costs to determine whether the recorded amount was recoverable. Our undiscounted cash flows were substantially in excess of our estimated project costs. We completed this analysis and concluded that our project costs were recoverable as of March 31, 2018, based on our expectation that the Northern Pass project remains probable of being placed in service.Electric Transmission segment. The ~~events that occurred subsequent to March 31, 2018 did not require an additional review~~after-tax impact of the ~~recoverability of the Northern Pass project costs as of September 30, 2018.~~

Consistent with Eversource’s and HQ’s long-term relationship to bring clean energy into New England, Eversource and HQ remain committed to Northern Pass and the many benefits this project will bring to our customers and the region. If as a result of future events and changes in circumstances a new recoverability review were to conclude that our project costs are not recoverable, then we would reduce Northern Pass' project costsimpairment charge was $204.4 million, or $0.64 per share, after giving effect to the estimated fair value ~~which could result in most of our $302 million of capitalized project costs being impaired. Such an impairment could have a material adverse effect on our financial position and results of operations.~~

~~D. Impairment of Access Northeast~~

Access Northeast is a natural gas pipeline and storage project being developed jointly by Eversource, Enbridge, Inc. ("Enbridge") and National Grid plc ("National Grid"), through Algonquin Gas Transmission, LLC ("AGT"). Eversource's investments include a 40 percent ownership interest in Access Northeast, which is accounted for as an equity method investment. Equity method investments are assessed for impairment when conditions exist that indicate that the fair value of the ~~investment is less than book value. If~~related land, reimbursement agreements, and the ~~decline in value is considered to be other-than-temporary,~~impact of expected income tax benefits associated with the ~~investment is written down to its~~impairment charge. Eversource does not expect any significant estimated fair value, which establishes a new cost basis in the investment. Impairment evaluations involve a significant degree of judgment and estimation, including identifying circumstances that indicate an impairment may exist and developing undiscounted future cash ~~flows.~~expenditures associated with this impairment charge.

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

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

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

E.D. Provision for Uncollectible Accounts

Eversource, including CL&P, NSTAR Electric and PSNH, presents its receivables at estimated net realizable value by maintaining a provision for uncollectible accounts. This provision is determined based upon a variety of judgments and factors, including the application of an estimated uncollectible percentage to each receivable aging category. The estimate is based upon historical collection and write-off experience and management's assessment of collectability from customers. Management continuously assesses the collectability of receivables and adjusts collectability estimates based on actual experience. Receivable balances are written off against the provision for uncollectible accounts when the customer accounts are terminated and these balances are deemed to be uncollectible.

The PURA allows CL&P and Yankee Gas to accelerate the recovery of accounts receivable balances attributable to qualified customers under financial or medical duress (uncollectible hardship accounts receivable) outstanding for greater than 180 days and 90 days, respectively. The DPU allows NSTAR Electric and NSTAR Gas to recover in rates amounts associated with certain uncollectible hardship accounts receivable. These uncollectible hardship customer account balances are included in Regulatory Assets or Other Long-Term Assets on the balance sheets.

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



	Total Provision for Uncollectible Accounts				Provision for Uncollectible Hardship Accounts
(Millions of Dollars)	As of June 30, 2019		As of December 31, 2018		As of June 30, 2019		As of December 31, 2018
Eversource	$	226.4	$	212.7	$	137.9	$	131.5
CL&P	88.7		88.0		70.9		71.9
NSTAR Electric	81.8		74.5		47.7		42.5
PSNH	11.2		11.1		—		—

Total Provision for Uncollectible Accounts Uncollectible Hardship
(Millions of Dollars) As of September 30, 2018 As of December 31, 2017 As of September 30, 2018 As of December 31, 2017
Eversource $ 218.1
$ 195.7
$ 132.6
$ 122.5
CL&P 84.6
78.9
68.3
65.5
NSTAR Electric 82.0
69.7
46.5
40.3
PSNH 11.3
10.5
—
—

~~In accordance with new revenue accounting guidance, uncollectible~~Uncollectible expense associated with customers' accounts receivable included in Operations and Maintenance expense on the statements of income is as follows:



	For the Three Months Ended				For the Six Months Ended
(Millions of Dollars)	June 30, 2019		June 30, 2018		June 30, 2019		June 30, 2018
Eversource	$	13.0	$	9.5	$	31.5	$	29.3
CL&P	3.5		3.8		7.6		7.7
NSTAR Electric	5.7		3.8		11.6		11.3
PSNH	1.4		1.5		3.1		3.2

For the Three Months Ended For the Nine Months Ended
(Millions of Dollars) September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017
Eversource $ 21.5
$ 14.4
$ 50.7
$ 30.1
CL&P 4.4
3.6
12.1
1.8
NSTAR Electric 9.1
8.1
20.4
14.9
PSNH 1.6
1.5
4.9
5.2

F.E. 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, the nonrecurring fair value measurements of nonfinancial assets such as goodwill and AROs, and the estimated fair value of preferred stock, long-term debt and RRBs.

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.

Uncategorized - Investments that are measured at net asset value are not categorized within the fair value hierarchy.

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 11, "Fair Value of Financial Instruments," to the financial statements.

F. Investments in Unconsolidated Affiliates

Investments in Offshore Wind Business: Eversource's offshore wind business includes ownership interests in North East Offshore and Bay State Wind, which collectively hold power purchase agreements for the Revolution Wind and South Fork Wind projects and are in process of negotiating a power purchase agreement for the Sunrise Wind project. Eversource's offshore wind projects are being developed in partnership with Ørsted.

On February 8, 2019, Eversource and Ørsted entered into a 50-50 partnership for key offshore wind assets in the Northeast. Eversource's initial payment and contribution under the terms of the partnership agreements totaled approximately $225 million for a 50 percent interest in North East Offshore, which holds the Revolution Wind and South Fork Wind power projects, as well as a 257 square-mile lease off the coasts of Massachusetts and Rhode Island. Eversource also has a 50 percent ownership in Bay State Wind, which holds the Sunrise Wind power project. These equity investments are included in long-term assets on the balance sheet and earnings impacts are included in Other Income, Net on the statement of income. As of June 30, 2019, Eversource's total equity investment balance in its offshore wind business was $499.5 million. In July 2019, Eversource made an additional capital contribution of $54.9 million.

G. Other Income, Net

The components of Other Income, Net on the statements of income were as follows:

For the Three Months Ended
September 30, 2018 September 30, 2017
(Millions of Dollars) Eversource CL&P NSTAR Electric PSNH Eversource CL&P NSTAR Electric PSNH
Pension, SERP and PBOP Non-Service
Income Components ⁽¹⁾
$ 14.8
$ 2.0
$ 9.0
$ 2.0
$ 7.3
$ 0.4
$ 4.7
$ 1.5
AFUDC Equity 12.0
3.3
4.2
—
9.2
3.3
2.7
—
Equity in Earnings/(Loss) and Impairment
of Unconsolidated Affiliates ⁽²⁾
(27.9 ) —
0.2
—
5.1
—
0.3
—
Investment Income/(Loss) 1.8
0.7
(0.4 ) 0.1
4.6
3.1
0.9
0.7
Interest Income ⁽³⁾
10.8
0.9
0.2
9.6
2.3
1.1
0.6
0.5
Gain on Sale of Property 5.0
—
0.5
4.4
—
—
—
—
Other 0.2
0.2
—
—
—
—
—
—
Total Other Income, Net ⁽¹⁾
$ 16.7
$ 7.1
$ 13.7
$ 16.1
$ 28.5
$ 7.9
$ 9.2
$ 2.7

For the Nine Months Ended
September 30, 2018 September 30, 2017
(Millions of Dollars) Eversource CL&P NSTAR Electric PSNH Eversource CL&P NSTAR Electric PSNH
Pension, SERP and PBOP Non-Service
Income Components ⁽¹⁾
$ 44.6
$ 7.3
$ 26.8
$ 6.4
$ 22.9
$ 1.3
$ 14.5
$ 4.5
AFUDC Equity 32.6
9.4
11.5
—
23.8
8.2
6.7
—
Equity in Earnings/(Loss) and Impairment
of Unconsolidated Affiliates ⁽²⁾
(0.4 ) —
0.6
—
23.0
—
0.2
—
Investment Income 2.2
0.9
0.6
0.2
3.7
2.4
2.1
1.2
Interest Income ⁽³⁾
16.2
2.9
0.6
13.3
5.8
3.5
1.1
1.6
Gain on Sale of Property 5.0
—
0.5
4.4
—
—
—
—
Other 0.5
0.2
—
—
—
—
—
0.1
Total Other Income, Net ⁽¹⁾
$ 100.7
$ 20.7
$ 40.6
$ 24.3
$ 79.2
$ 15.4
$ 24.6
$ 7.4

⁽¹⁾

As a result of the adoption of new accounting guidance, the non-service related components of pension, SERP and PBOP benefit costs are presented as non-operating income and recorded in Other Income, Net on the statements of income. The 2017 amounts, which were previously presented within Operations and Maintenance expense on the statements of income, have been retrospectively presented within Other Income, Net for the three and nine months ended September 30, 2017. Eversource elected the practical expedient in the accounting guidance that allows the Company to use the amounts disclosed in its Pension Benefits and Postretirement Benefits Other Than Pension footnote for the prior period presentations as the estimation basis for applying the retrospective presentation requirements.



	For the Three Months Ended
	June 30, 2019												June 30, 2018
(Millions of Dollars)	Eversource			CL&P			NSTAR Electric			PSNH			Eversource			CL&P		NSTAR Electric		PSNH
Pension, SERP and PBOP Non-Service Income/(Expense) Components	$	5.8		$	(0.9	)	$	5.4		$	1.5		$	14.6		$	2.4	$	9.5	$	2.1
AFUDC Equity	13.1			3.2			5.1			0.9			10.9			3.3		3.9		—
Equity in Earnings ⁽¹⁾	25.9			0.1			0.2			—			22.9			—		0.4		—
Investment Income/(Loss)	(0.6		)	(0.1		)	(0.3		)	(0.1		)	(0.3		)	0.4		0.3		—
Interest Income	1.3			0.5			0.2			0.7			1.9			1.0		0.2		1.3
Other	0.4			0.1			0.1			—			0.1			—		—		—
Total Other Income, Net	$	45.9		$	2.9		$	10.7		$	3.0		$	50.1		$	7.1	$	14.3	$	3.4


	For the Six Months Ended
	June 30, 2019												June 30, 2018
(Millions of Dollars)	Eversource			CL&P			NSTAR Electric			PSNH			Eversource			CL&P		NSTAR Electric		PSNH
Pension, SERP and PBOP Non-Service Income/(Expense) Components	$	13.1		$	(1.6	)	$	12.4		$	2.0		$	29.8		$	5.3	$	17.9	$	4.4
AFUDC Equity	24.1			5.8			9.1			1.1			20.6			6.1		7.3		—
Equity in Earnings ⁽¹⁾	30.9			0.1			0.4			—			27.5			—		0.4		—
Investment Income/(Loss)	0.6			1.7			(0.6		)	0.2			0.4			0.2		0.9		0.1
Interest Income ⁽²⁾	7.8			0.8			0.4			6.6			5.4			2.0		0.4		3.7
Other	0.4			(0.1		)	—			0.1			0.2			—		—		—
Total Other Income, Net	$	76.9		$	6.7		$	21.7		$	10.0		$	83.9		$	13.6	$	26.9	$	8.2

⁽²⁾⁽¹⁾For the three months ended September 30, 2018, equity in earnings/(loss) and impairment of unconsolidated affiliates includes an other-than-temporary impairment of $32.9 million in the Access Northeast project investment. See Note 1D, "Summary of Significant Accounting Policies - Impairment of Access Northeast," for further information. For the nine months ended September 30, 2018 and 2017, equityEquity in earnings includes ~~$17.6 million and $9.7~~$20.4 million of unrealized gains associated with an investment in a renewable energy fund ~~respectively.~~for both the three and six months ended June 30, 2019. For both the three and six months ended June 30, 2018, unrealized gains on this investment totaled $17.6 million.

⁽³⁾⁽²⁾See Note 2, "Regulatory ~~Accounting,"~~Accounting" for interest income recognized in ~~the third quarter of 2018~~2019 for the equity return component of carrying charges on storm costs at PSNH.

H. Other Taxes

Eversource's companies that serve customers in Connecticut collect gross receipts taxes levied by the state of Connecticut from their customers. These gross receipts taxes are ~~shown~~recorded separately with collections in Operating Revenues and with 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, 2019		June 30, 2018		June 30, 2019		June 30, 2018
Eversource	$	36.4	$	35.6	$	81.4	$	79.0
CL&P	31.8		31.5		68.0		67.1

For the Three Months Ended For the Nine Months Ended
(Millions of Dollars) September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017
Eversource $ 43.5
$ 40.3
$ 122.5
$ 118.2
CL&P 40.6
37.8
107.7
103.5

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

Separate from ~~the amounts~~ above are ~~$10.7 million and $36.1 million of~~ amounts recorded as Taxes Other than Income Taxes ~~for the three and nine months ended September 30, 2018, respectively,~~ related to the future remittance to the State of Connecticut of energy efficiency funds collected from customers in Operating Revenues. These amounts are ~~shown~~$10.7 million and $21.4 million for the three and six months ended June 30, 2019, respectively, and $12.7 million and $25.4 million for the three and six months ended June 30, 2018, respectively. These amounts are recorded separately, with collections in Operating Revenues and ~~expenses~~with payments in Taxes Other than Income Taxes on the Eversource and CL&P statements of income.

I. Supplemental Cash Flow Information

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



(Millions of Dollars)	As of June 30, 2019		As of June 30, 2018
Eversource	$	323.7	$	305.7
CL&P	114.0		110.9
NSTAR Electric	85.2		71.1
PSNH	29.9		46.6

(Millions of Dollars) As of September 30, 2018 As of September 30, 2017
Eversource $ 303.7
$ 307.7
CL&P 103.0
113.4
NSTAR Electric 62.5
92.5
PSNH 48.3
39.6

Beginning in 2019, Eversource began issuing treasury shares to satisfy awards under the Company's incentive plans, shares issued under the dividend reinvestment plan, and matching contributions under the Eversource 401k Plan. The issuance of treasury shares represents a non-cash transaction, as the treasury shares were used to fulfill Eversource's obligations that require the issuance of common shares.

The following table reconciles cash ~~and cash equivalents~~ as reported on the balance sheets to the cash ~~cash equivalents,~~ and restricted cash balance as reported on the statements of cash flows:



	As of June 30, 2019								As of December 31, 2018
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
Cash as reported on the Balance Sheets	$	20.6	$	2.2	$	0.2	$	0.3	$	108.1	$	87.7	$	1.6	$	1.4
Restricted cash included in:
Prepayments and Other Current Assets	54.1		4.6		6.1		35.0		72.1		3.5		13.0		47.5
Marketable Securities	20.5		0.3		0.1		0.6		25.9		0.4		0.1		0.6
Other Long-Term Assets	72.0		—		—		3.2		3.2		—		—		3.2
Cash and Restricted Cash reported on the Statements of Cash Flows	$	167.2	$	7.1	$	6.4	$	39.1	$	209.3	$	91.6	$	14.7	$	52.7

As of September 30, 2018 As of December 31, 2017
(Millions of Dollars) Eversource CL&P NSTAR Electric PSNH Eversource CL&P NSTAR Electric PSNH
Cash and Cash Equivalents as reported on the
Balance Sheets
$ 59.1
$ 1.0
$ 2.4
$ 7.5
$ 38.2
$ 6.0
$ 1.8
$ 0.9
Restricted cash included in:
Prepayments and Other Current Assets 51.4
3.5
12.9
26.8
24.4
3.1
12.8
0.5
Marketable Securities 20.9
0.4
0.1
0.7
23.3
0.5
0.1
0.8
Other Long-Term Assets 3.2
—
—
3.2
—
—
—
—
Cash, Cash Equivalents, and Restricted Cash
reported on the Statements of Cash Flows
$ 134.6
$ 4.9
$ 15.4
$ 38.2
$ 85.9
$ 9.6
$ 14.7
$ 2.2

Restricted cash included in Prepayments and Other Current Assets ~~and Other Long-Term Assets, shown above,~~ primarily represents ~~required ISO-NE cash deposits and~~ cash collections related to the PSNH RRB customer charges that are held in ~~trust.~~trust, and required ISO-NE cash deposits. Restricted cash included in Marketable Securities ~~shown above,~~ represents money market funds held in trusts to fund certain non-qualified executive benefits and restricted trusts to fund CYAPC and YAEC's spent nuclear fuel ~~removal obligations of their nuclear fuel~~ storage ~~facilities.~~

~~As a result of implementing new accounting guidance for the statement of~~facilities obligations. Restricted cash ~~flows, the reclassification of the change~~included in ~~restricted cash balances, which was previously classified as operating activities, resulted in a decrease of $30.2 million~~Other Long-Term Assets at Eversource primarily relates to DOE Phase IV damages proceeds received at CYAPC and YAEC in the ~~total cash and restricted cash change for the nine months ended September 30, 2017.~~

~~J. Income Taxes~~

On December 22, 2017, the Tax Cuts and Jobs Act became law, which amended existing federal tax rules to reduce U.S. federal corporate income tax rate from 35 percent to 21 percent effective January 1, 2018. Our regulated companies have established a liability to reflect the difference between the 35 percent federal corporate income tax rate included in rates charged to customers and the 21 percent federal income tax rate. Eversource, CL&P, NSTAR Electric and PSNH's effective tax rate has decreased, as compared to the prior period, as a resultsecond quarter of ~~incurring a lower federal income tax expense, which is reflected on the statements of income for the three and nine months ended September 30, 2018.~~2019. See Note ~~16, "Revenues,~~9D, "Commitments and Contingencies - Spent Nuclear Fuel Obligations - Yankee Companies," for further ~~information on the amounts deducted from revenues.~~information.

Eversource's annual return to provision process in the third quarter of 2018 resulted in significant benefits as a result of both tax reform and changes in Connecticut state tax legislation that resulted in the remeasurement of a tax reserve. These benefits from both federal tax reform and Connecticut tax law change reduced income tax expense by an aggregate $18 million for the three months ended September 30, 2018.

2. REGULATORY ACCOUNTING

Eversource's utility 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 considers 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 its 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 if 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 were as follows:



	As of June 30, 2019								As of December 31, 2018
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
Benefit Costs	$	1,870.5	$	407.4	$	554.8	$	151.1	$	1,914.8	$	424.7	$	544.4	$	169.6
Income Taxes, Net	702.6		456.5		104.1		10.1		728.6		454.4		105.9		8.3
Securitized Stranded Costs	586.9		—		—		586.9		608.4		—		—		608.4
Storm Restoration Costs, Net	536.7		279.6		191.2		65.9		576.0		302.6		212.9		60.5
Regulatory Tracker Mechanisms	289.0		60.3		138.2		70.6		316.0		33.2		169.1		67.3
Derivative Liabilities	347.9		345.4		—		—		356.5		356.5		—		—
Goodwill-related	340.0		—		291.9		—		348.4		—		299.1		—
Asset Retirement Obligations	97.1		33.3		48.3		3.5		89.2		32.3		42.2		3.3
Other Regulatory Assets	148.8		26.0		60.5		17.7		208.0		27.0		64.6		12.1
Total Regulatory Assets	4,919.5		1,608.5		1,389.0		905.8		5,145.9		1,630.7		1,438.2		929.5
Less: Current Portion	515.3		175.7		210.0		77.9		514.8		125.2		241.7		67.2
Total Long-Term Regulatory Assets	$	4,404.2	$	1,432.8	$	1,179.0	$	827.9	$	4,631.1	$	1,505.5	$	1,196.5	$	862.3

As of September 30, 2018 As of December 31, 2017
(Millions of Dollars) Eversource CL&P
NSTAR
Electric
PSNH Eversource CL&P
NSTAR
Electric
PSNH
Benefit Costs $ 1,988.4
$ 447.4
$ 541.2
$ 172.0
$ 2,068.8
$ 469.2
$ 560.7
$ 212.3
Income Taxes, Net 720.7
448.1
112.9
15.6
768.9
453.8
113.2
21.7
Securitized Stranded Costs 618.6
—
—
618.6
—
—
—
—
Deferred Costs from Generation Asset Sale —
—
—
—
516.1
—
—
516.1
Storm Restoration Costs, Net 598.5
319.7
222.1
56.7
404.8
216.7
146.6
41.5
Regulatory Tracker Mechanisms 257.8
39.5
128.4
74.9
509.9
85.3
273.0
116.4
Derivative Liabilities 360.0
359.9
—
—
367.2
362.3
—
—
Goodwill-related 352.6
—
302.7
—
365.2
—
313.6
—
Asset Retirement Obligations 87.5
31.8
41.3
3.3
101.0
30.3
39.0
17.0
Other Regulatory Assets 169.2
27.4
71.7
12.4
137.4
27.6
78.4
15.8
Total Regulatory Assets 5,153.3
1,673.8

1,420.3

953.5

5,239.3
1,645.2

1,524.5

940.8
Less: Current Portion 436.7
128.8
193.5
61.4
741.9
200.3
333.9
130.1
Total Long-Term Regulatory Assets $ 4,716.6
$ 1,545.0

$ 1,226.8

$ 892.1

$ 4,497.4
$ 1,444.9

$ 1,190.6

$ 810.7

~~Securitized Stranded Costs:~~

Storm Filings: On ~~May 8,~~November 16, 2018, ~~a subsidiary~~CL&P filed for recovery of ~~PSNH issued $635.7~~$153 million of ~~securitized RRBs~~storm costs incurred from October 2017 through May 2018, with recovery over six years to ~~finance PSNH's unrecovered stranded costs associated with~~begin May 1, 2019. Through the ~~divestiture of its generation assets. Securitized regulatory assets, which are not earning an equity return, are being recovered over the amortization period~~course of the ~~associated RRBs. The PSNH RRBs are expected~~proceeding, CL&P updated its request to $145.5 million to reflect final invoicing and capitalization amounts. On April 17, 2019, PURA authorized recovery of $141.0 million as part of storm cost recovery and the remainder to be ~~repaid by February 1, 2033. The stranded costs related~~recorded to the difference between the carrying value and the fair value less costs to sell the thermal generation assets were reflected as a deferred cost in the table above as of December 31, 2017, and are reflected in the securitized stranded costsplant or other balance ~~as of September 30, 2018.~~sheet accounts. All approved amounts will be fully recoverable through specific mechanisms or through future rate cases.

~~Storm Restoration Costs, Net:~~

2018 Storms: In 2018, several significant storms caused extensive damage to our electric distribution systems and significant customer outages across all three states. A storm must meet certain criteria to qualify for deferral and recovery with the criteria specific to each state jurisdiction and utility company. Once a storm qualifies for recovery, all qualifying expenses incurred during storm restoration efforts are deferred and recovered from customers. Costs for storms that do not meet the specific criteria are expensed as incurred. The 2018 storms resulted in deferred storm restoration costs of approximately $266 million ($149 million for CL&P, $101 million for NSTAR Electric, and $16 million for PSNH), which were reflected in Storm Restoration Costs, Net in the table above as of September 30, 2018. Management believes the storm restoration costs were prudent and meet the criteria for specific cost recovery in Connecticut, Massachusetts and New Hampshire, and that recovery from customers is probable through the applicable regulatory recovery processes.

On ~~September 17, 2018,~~March 26, 2019, the NHPUC approved the recovery of ~~$49~~$38.1 million, plus carrying charges, inof storm costs incurred from ~~August 2011~~December 2013 through ~~March 2013~~April 2016 and the transfer of funding from PSNH’s major storm ~~funding~~ reserve to ~~offset~~recover those costs. The costs of these storms (excluding the equity return component of the carrying charges) were deferred as regulatory assets, and the funding reserve collected from customers was accrued as a regulatory liability. ~~The storm cost deferral is separate from the major storm funding reserve that is being collected from customers.~~ As a result of the duration of time between incurring storm costs in December 2013 through April 2016 and final approval from the NHPUC in 2019, PSNH recognized ~~$8.7~~$5.2 million (pre-tax) ~~within Other Income, Net on our statement of income in the third quarter of 2018~~ for the equity return component of the carrying charges within Other Income, Net on the statement of income in the first quarter of 2019, which ~~have~~has been ~~billed and collected. Storm costs incurred~~collected from customers. Also included in the March ~~2013 through 2016 are currently being audited by~~26, 2019 NHPUC approval is a prospective requirement for PSNH to annually net its storm funding reserve collected from customers against deferred storm costs.

In addition, on June 27, 2019, the NHPUC ~~staff.~~approved a temporary rate settlement that permits PSNH to recover approximately $68.5 million in unrecovered storm costs over a five-year period beginning August 1, 2019, with debt carrying charges.

Regulatory Costs in Long-Term Assets: Eversource's regulated companies had ~~$104.6~~$142.0 million (including ~~$27.6~~$43.6 million for CL&P, ~~$53.3~~$61.4 million for NSTAR Electric and ~~$3.9~~$15.3 million for PSNH) and ~~$105.8~~$122.9 million (including ~~$18.2~~$42.1 million for CL&P, ~~$42.7~~$49.3 million for NSTAR Electric and ~~$27.2~~$12.2 million for PSNH) of additional regulatory costs as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, respectively, that were included in long-term assets on the balance sheets. These amounts represent incurred costs for which recovery has not yet been specifically approved by the applicable regulatory agency. However, based on regulatory policies or past precedent on similar costs, management believes it is probable that these costs will ultimately be approved and recovered from customers in rates.

Regulatory Liabilities: The components of regulatory liabilities were as follows:



	As of June 30, 2019								As of December 31, 2018
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
EDIT due to Tax Cuts and Jobs Act	$	2,860.7	$	1,028.7	$	1,090.0	$	395.4	$	2,883.0	$	1,031.0	$	1,103.7	$	396.4
Cost of Removal	544.9		51.0		319.4		21.4		521.0		39.9		307.1		22.1
Benefit Costs	83.8		—		70.9		—		91.2		—		76.9		—
Regulatory Tracker Mechanisms	333.3		110.0		141.9		31.2		309.0		89.5		163.7		48.3
AFUDC - Transmission	71.7		46.7		25.0		—		70.7		47.4		23.3		—
Revenue Subject to Refund due to Tax Cuts and Jobs Act	29.2		—		—		19.1		24.6		—		—		12.6
Other Regulatory Liabilities	96.1		29.4		38.6		4.1		80.2		24.0		29.2		4.2
Total Regulatory Liabilities	4,019.7		1,265.8		1,685.8		471.2		3,979.7		1,231.8		1,703.9		483.6
Less: Current Portion	379.9		112.4		171.0		54.2		370.2		109.6		190.6		55.5
Total Long-Term Regulatory Liabilities	$	3,639.8	$	1,153.4	$	1,514.8	$	417.0	$	3,609.5	$	1,122.2	$	1,513.3	$	428.1

As of September 30, 2018 As of December 31, 2017
(Millions of Dollars) Eversource CL&P
NSTAR
Electric
PSNH Eversource CL&P
NSTAR
Electric
PSNH
Excess ADIT due to Tax Cuts and Jobs Act $ 2,876.9
$ 1,026.3
$ 1,100.5
$ 397.4
$ 2,882.0
$ 1,031.6
$ 1,087.9
$ 405.1
Cost of Removal 516.4
37.8
305.7
24.9
502.1
23.2
293.8
37.9
Benefit Costs 127.1
—
107.2
0.5
132.3
—
112.6
—
Regulatory Tracker Mechanisms 345.6
111.9
168.3
38.5
136.7
34.6
77.8
5.0
AFUDC - Transmission 68.6
47.8
20.8
—
67.1
48.8
18.3
—
Revenue Subject to Refund 36.2
8.3
3.7
9.4
—
—
—
—
Other Regulatory Liabilities 80.7
25.7
28.3
2.8
45.2
12.9
3.7
2.7
Total Regulatory Liabilities 4,051.5
1,257.8

1,734.5

473.5

3,765.4
1,151.1

1,594.1

450.7
Less: Current Portion 344.7
126.6
168.2
39.7
128.1
39.0
79.6
6.3
Total Long-Term Regulatory Liabilities $ 3,706.8
$ 1,131.2

$ 1,566.3

$ 433.8

$ 3,637.3
$ 1,112.1

$ 1,514.5

$ 444.4

~~Revenue Subject to Refund:~~ The regulatory liability balance represents the difference between the 35 percent federal corporate income tax rate included in rates charged to customers and the 21 percent federal income tax rate, effective January 1, 2018 as a result of the Tax Cuts and Jobs Act. Effective February 1, 2018 for NSTAR Electric, May 1, 2018 for CL&P and July 1, 2018 for NSTAR Gas, base rates charged to customers have been adjusted to reflect the new federal income tax rate. As part of CL&P's 2018 rate case settlement, a new capital tracker regulatory mechanism was established, which includes the refund of the reserve for the higher federal corporate income tax rate to customers between January 1, 2018 through April 30, 2018 in rates, from July 1, 2018 through December 31, 2018.

3. PROPERTY, PLANT AND EQUIPMENT AND ACCUMULATED DEPRECIATION

The following tables summarize property, plant and equipment by asset category:



Eversource	As of June 30, 2019			As of December 31, 2018
(Millions of Dollars)	As of June 30, 2019			As of December 31, 2018
Distribution - Electric	$	15,472.1		$	15,071.1
Distribution - Natural Gas	3,632.9			3,546.2
Transmission - Electric	10,449.5			10,153.9
Distribution - Water	1,664.1			1,639.8
Solar	196.9			164.1
Utility	31,415.5			30,575.1
Other ⁽¹⁾	882.4			778.6
Property, Plant and Equipment, Gross	32,297.9			31,353.7
Less: Accumulated Depreciation
Utility	(7,357.9		)	(7,126.2		)
Other	(363.1		)	(336.7		)
Total Accumulated Depreciation	(7,721.0		)	(7,462.9		)
Property, Plant and Equipment, Net	24,576.9			23,890.8
Construction Work in Progress	1,727.5			1,719.6
Total Property, Plant and Equipment, Net	$	26,304.4		$	25,610.4

Eversource As of September 30, 2018 As of December 31, 2017
(Millions of Dollars)
Distribution - Electric $ 14,794.9
$ 14,410.5
Distribution - Natural Gas 3,371.2
3,244.2
Transmission - Electric 9,733.6
9,270.9
Distribution - Water 1,594.3
1,558.4
Solar 109.3
36.2
Utility 29,603.3
28,520.2
Other ⁽¹⁾
759.0
693.7
Property, Plant and Equipment, Gross 30,362.3
29,213.9
Less: Accumulated Depreciation
Utility (7,065.4 ) (6,846.9 )
Other (325.4 ) (286.9 )
Total Accumulated Depreciation (7,390.8 ) (7,133.8 )
Property, Plant and Equipment, Net 22,971.5
22,080.1
Construction Work in Progress 1,996.2
1,537.4
Total Property, Plant and Equipment, Net $ 24,967.7
$ 23,617.5



	As of June 30, 2019									As of December 31, 2018
(Millions of Dollars)	CL&P			NSTAR Electric			PSNH			CL&P			NSTAR Electric			PSNH
Distribution - Electric	$	6,352.8		$	6,921.3		$	2,238.3		$	6,176.4		$	6,756.4		$	2,178.6
Transmission - Electric	4,880.6			4,148.8			1,415.2			4,700.5			4,065.9			1,338.7
Solar	—			196.9			—			—			164.1			—
Property, Plant and Equipment, Gross	11,233.4			11,267.0			3,653.5			10,876.9			10,986.4			3,517.3
Less: Accumulated Depreciation	(2,352.2		)	(2,814.9		)	(806.4		)	(2,302.6		)	(2,702.0		)	(772.9		)
Property, Plant and Equipment, Net	8,881.2			8,452.1			2,847.1			8,574.3			8,284.4			2,744.4
Construction Work in Progress	404.4			623.7			122.2			335.4			510.3			135.7
Total Property, Plant and Equipment, Net	$	9,285.6		$	9,075.8		$	2,969.3		$	8,909.7		$	8,794.7		$	2,880.1

As of September 30, 2018 As of December 31, 2017
(Millions of Dollars) CL&P
NSTAR
Electric
PSNH CL&P
NSTAR
Electric
PSNH
Distribution $ 6,027.1
$ 6,651.1
$ 2,157.0
$ 5,888.3
$ 6,479.0
$ 2,083.4
Transmission 4,513.7
3,915.5
1,255.6
4,239.9
3,821.2
1,161.3
Solar —
109.3
—
—
36.2
—
Property, Plant and Equipment, Gross 10,540.8
10,675.9
3,412.6
10,128.2
10,336.4
3,244.7
Less: Accumulated Depreciation (2,297.4 ) (2,673.0 ) (762.1 ) (2,239.0 ) (2,550.2 ) (751.8 )
Property, Plant and Equipment, Net 8,243.4
8,002.9
2,650.5
7,889.2
7,786.2
2,492.9
Construction Work in Progress 510.3
573.2
176.0
381.8
460.3
149.4
Total Property, Plant and Equipment, Net $ 8,753.7
$ 8,576.1
$ 2,826.5
$ 8,271.0
$ 8,246.5
$ 2,642.3


⁽¹⁾	These assets are primarily comprised of building improvements, computer software, hardware and equipment at Eversource Service.

In the second quarter of 2019, Eversource recorded an impairment charge for the NPT project costs, which had been recorded within Construction Work in Progress and also the Transmission - Electric asset category. For further information regarding the impairment of NPT, see Note 1C, "Summary of Significant Accounting Policies - Impairment of Northern Pass Transmission," to the financial statements.

4. DERIVATIVE INSTRUMENTS

The electric and natural gas companies purchase and procure energy and energy-related products, which are subject to price volatility, for their customers. The costs associated with supplying energy to customers are recoverable from customers in future rates. These regulated companies manage the risks associated with the price volatility of energy and energy-related products through the use of derivative and non-derivative contracts.

Many of the derivative contracts meet the definition of, and are designated as, normal and qualify for accrual accounting under the applicable accounting guidance. The costs and benefits of derivative contracts that meet the definition of normal are recognized in Operating Expenses on the statements of income, as applicable, as electricity or natural gas is delivered.

Derivative contracts that are not designated as normal are recorded at fair value as current or long-term Derivative Assets or Derivative Liabilities on the balance sheets. For the electric and natural gas companies, regulatory assets or regulatory liabilities are recorded to offset the fair values of derivatives, as contract settlement amounts are recovered from, or refunded to, customers in their respective energy supply rates.

The gross fair values of derivative assets and liabilities with the same counterparty are offset and reported as net Derivative Assets or Derivative Liabilities, with current and long-term portions, on the balance sheets. The following table presents the gross fair values of contracts, categorized by risk type, and the net amounts recorded as current or long-term derivative assets or liabilities:


		As of September 30, 2018									As of December 31, 2017										As of June 30, 2019									As of December 31, 2018
(Millions of Dollars)	Fair Value Hierarchy	Commodity Supply and Price Risk Management			Netting ⁽¹⁾			Net Amount Recorded as a Derivative			Commodity Supply and Price Risk Management			Netting ⁽¹⁾			Net Amount Recorded as a Derivative			Fair Value Hierarchy	Commodity Supply and Price Risk Management			Netting ⁽¹⁾			Net Amount Recorded as a Derivative			Commodity Supply and Price Risk Management			Netting ⁽¹⁾			Net Amount Recorded as a Derivative
Current Derivative Assets:
Eversource	Level 2	$	0.8		$	(0.5	)	$	0.3		$	—		$	—		$	—
CL&P	Level 3	8.8			(4.8		)	4.0			9.5			(7.1		)	2.4			Level 3	$	11.1		$	(0.3	)	$	10.8		$	9.6		$	(3.4	)	$	6.2
Other																				Level 2	—			—			—			1.5			(0.9		)	0.6
Long-Term Derivative Assets:
CL&P	Level 3	75.0			(2.3		)	72.7			71.9			(5.3		)	66.6			Level 3	71.8			(2.2		)	69.6			74.2			(2.3		)	71.9
Current Derivative Liabilities:
Eversource	Level 2	—			—			—			(4.5		)	—			(4.5		)
CL&P	Level 3	(50.8		)	—			(50.8		)	(54.4		)	—			(54.4		)	Level 3	(62.1		)	—			(62.1		)	(55.1		)	—			(55.1		)
Other																				Level 2	(2.4		)	—			(2.4		)	—			—			—
Long-Term Derivative Liabilities:
Eversource	Level 2	(0.1		)	—			(0.1		)	(0.4		)	—			(0.4		)
CL&P	Level 3	(385.8		)	—			(385.8		)	(376.9		)	—			(376.9		)	Level 3	(363.7		)	—			(363.7		)	(379.5		)	—			(379.5		)
Other																				Level 2	(0.1		)	—			(0.1		)	—			—			—


⁽¹⁾	Amounts represent derivative assets and liabilities that Eversource elected to record net on the balance sheets. These amounts are subject to master netting agreements or similar agreements for which the right of offset exists.

For further information on the fair value of derivative contracts, see Note ~~1F,~~1E, "Summary of Significant Accounting Policies - Fair Value Measurements," to the financial statements.

Derivative Contracts at Fair Value with Offsetting Regulatory Amounts

Commodity Supply and Price Risk Management: As required by regulation, CL&P, along with UI, has capacity-related contracts with generation facilities. CL&P has a sharing agreement with UI, with 80 percent of the costs or benefits of each contract borne by or allocated to CL&P and 20 percent borne by or allocated to UI. The combined ~~capacity~~capacities of these contracts isas of June 30, 2019 and December 31, 2018 are679 MW and 787 ~~MW.~~MW, respectively. The capacity contracts extend through 2026 and obligate both CL&P and UI to make or receive payments on a monthly basis to or from the generation facilities based on the difference between a set capacity price and the capacity market price received in the ISO-NE capacity markets. In addition, CL&P has a contract to purchase 0.1 million MWh of energy per year through 2020.

As of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, Eversource had New York Mercantile Exchange ("NYMEX") financial contracts for natural gas futures in order to reduce variability associated with the price of ~~10.6~~7.1 million and ~~9.5~~12.5 million MMBtu of natural gas, respectively.

For the three months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, there were losses of $5.1 million and gains of ~~$1.6 million and $0.6~~$8.6 million, respectively, deferred as regulatory costs, which reflect the change in fair value associated with Eversource's derivative contracts. For the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, there were losses of ~~$25.8~~$10.3 million and ~~$30.3~~$27.5 million, respectively.

Fair Value Measurements of Derivative Instruments

Derivative contracts classified as Level 2 in the fair value hierarchy relate to the financial contracts for natural gas futures. Prices are obtained from broker quotes and are based on actual market activity. The contracts are valued using NYMEX natural gas prices. Valuations of these contracts also incorporate discount rates using the yield curve approach.

The fair value of derivative contracts classified as Level 3 utilizes significant unobservable inputs. The fair value is modeled using income techniques, such as discounted cash flow valuations adjusted for assumptions related to exit price. Significant observable inputs for valuations of these contracts include energy and energy-related product prices in future years for which quoted prices in an active market exist. Fair value measurements categorized in Level 3 of the fair value hierarchy are prepared by individuals with expertise in valuation techniques, pricing of energy and energy-related products, and accounting requirements. The future power and capacity prices for periods that are not quoted in an active market or established at auction are based on available market data and are escalated based on estimates of inflation in order to address the full term of the contract.

Valuations of derivative contracts using a discounted cash flow methodology include assumptions regarding the timing and likelihood of scheduled payments and also reflect non-performance risk, including credit, using the default probability approach based on the counterparty's credit rating for assets and the Company's credit rating for liabilities. Valuations incorporate estimates of premiums or discounts that would be required by a market participant to arrive at an exit price, using historical market transactions adjusted for the terms of the contract.

The following is a summary of ~~CL&P's~~ Level 3 derivative contracts and the range of the significant unobservable inputs utilized in the valuations over the duration of the contracts:



	As of June 30, 2019						As of December 31, 2018
CL&P	Range					Period Covered	Range					Period Covered
Capacity Prices	$	4.30	—	7.34	per kW-Month	2023 - 2026	$	4.30	—	7.44	per kW-Month	2022 - 2026
Forward Reserve	0.75		—	1.78	per kW-Month	2019 - 2024	0.75		—	1.78	per kW-Month	2019 - 2024

As of September 30, 2018 As of December 31, 2017
CL&P Range Period Covered Range Period Covered
Capacity Prices $ 4.30
— 7.44
per kW-Month 2022-2026 $ 5.00
— 8.70
per kW-Month 2021 - 2026
Forward Reserve $ 0.95
— 2.00
per kW-Month 2019-2024 $ 1.00
— 2.00
per kW-Month 2018 - 2024

Exit price premiums of 13.1 percent through 1614.6 percent are also applied to these contracts and reflect the uncertainty and illiquidity premiums that would be required based on the most recent market activity available for similar type contracts.

Significant increases or decreases in future ~~energy,~~ capacity or forward reserve prices in isolation would decrease or increase, respectively, the fair value of the derivative liability. Any increases in risk premiums would increase the fair value of the derivative liability. Changes in these fair values are recorded as a regulatory asset or liability and do not impact net income.

Valuations using significant unobservable inputs: The following table presents changes in the Level 3 category of derivative assets and derivative liabilities measured at fair value on a recurring basis. The derivative assets and liabilities are presented on a net basis.



CL&P	For the Three Months Ended June 30,						For the Six Months Ended June 30,
(Millions of Dollars)	2019			2018			2019			2018
Derivatives, Net:
Fair Value as of Beginning of Period	$	(353.1	)	$	(386.5	)	$	(356.5	)	$	(362.3	)
Net Realized/Unrealized (Losses)/Gains Included in Regulatory Assets	(2.5		)	8.6			(7.8		)	(28.2		)
Settlements	10.2			8.6			18.9			21.2
Fair Value as of End of Period	$	(345.4	)	$	(369.3	)	$	(345.4	)	$	(369.3	)

CL&P For the Three Months Ended September 30, For the Nine Months Ended September 30,
(Millions of Dollars) 2018 2017 2018 2017
Derivatives, Net:
Fair Value as of Beginning of Period $ (369.3 ) $ (394.8 ) $ (362.3 ) $ (420.5 )
Net Realized/Unrealized Gains/(Losses) Included in Regulatory Assets and Liabilities 1.2
(0.7 ) (27.0 ) (15.9 )
Settlements 8.2
13.9
29.4
54.8
Fair Value as of End of Period $ (359.9 ) $ (381.6 ) $ (359.9 ) $ (381.6 )

5. MARKETABLE SECURITIES

Eversource holds marketable securities that are primarily used to fund certain non-qualified executive benefits. The trusts that hold marketable securities are not subject to regulatory oversight by state or federal agencies. CYAPC and YAEC maintain legally restricted trusts, each of which holds marketable securities, to fund the spent nuclear fuel removal obligations of their nuclear fuel storage facilities.

Equity Securities: ~~In accordance with new accounting guidance, unrealized~~ Unrealized gains and losses on equity securities held in Eversource's non-qualified executive benefit trust are recorded in Other Income, Net on the statements of income. The fair value of these equity securities ~~subject to this guidance~~ as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017~~2018 was ~~$54.5~~$45.2 million and ~~$50~~$44.0 million, respectively. For the three ~~and nine~~ months ended ~~September~~June 30, 2019 and 2018, there were unrealized gains of ~~$2.4~~$2.3 million and ~~$2.6~~$0.9 million, respectively, recorded in Other Income, Net related to these equity securities. For the six months ended June 30, 2019 and 2018, there were unrealized gains of $3.3 million and $0.2 million, respectively.

Eversource's equity securities also include CYAPC's and YAEC's marketable securities held in spent nuclear ~~decommissioning~~fuel trusts, which had fair values of ~~$258.0~~$158.5 million and ~~$263.8~~$200.0 million as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, respectively. Unrealized gains and losses for these spent nuclear ~~decommissioning~~fuel trusts are subject to regulatory accounting treatment and are recorded in Marketable Securities with the corresponding offset to Other Long-Term Liabilities on the balance sheets, with no impact on the statements of income.

Available-for-Sale Debt Securities: The following is a summary of the available-for-sale debt securities, which are recorded at fair value and are included in current and long-term Marketable Securities on the balance sheets.



	As of June 30, 2019									As of December 31, 2018
Eversource (Millions of Dollars)	Amortized Cost		Pre-Tax Unrealized Gains		Pre-Tax Unrealized Losses			Fair Value		Amortized Cost		Pre-Tax Unrealized Gains		Pre-Tax Unrealized Losses			Fair Value
Debt Securities	$	204.3	$	5.4	$	(0.1	)	$	209.6	$	190.0	$	0.4	$	(4.0	)	$	186.4

As of September 30, 2018 As of December 31, 2017
Eversource
(Millions of Dollars)
Amortized Cost
Pre-Tax
Unrealized Gains

Pre-Tax
Unrealized
Losses
Fair Value Amortized Cost
Pre-Tax
Unrealized Gains

Pre-Tax
Unrealized
Losses
Fair Value
Debt Securities $ 292.8
$ 0.8
$ (2.7 ) $ 290.9
$ 284.9
$ 3.2
$ (1.1 ) $ 287.0

Eversource's debt securities include CYAPC's and YAEC's marketable securities held in spent nuclear ~~decommissioning~~fuel trusts in the amounts of ~~$247.1~~$172.4 million and ~~$242.3~~$143.9 million as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, respectively.

Unrealized gains and losses on available-for-sale debt securities held in Eversource's non-qualified benefit trust are recorded in Accumulated Other Comprehensive Income. There have been no significant unrealized losses, other-than-temporary impairments, or credit losses for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017.~~ 2018. Factors considered in determining whether a credit loss exists include the duration and severity of the impairment, adverse conditions specifically affecting the issuer, and the payment history, ratings and rating changes of the security. For asset-backed debt securities, underlying collateral and expected future cash flows are also evaluated.

As of ~~September~~June 30, ~~2018,~~2019, the contractual maturities of available-for-sale debt securities were as follows:


Eversource (Millions of Dollars)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Less than one year⁽¹⁾	$	28.5	$	28.5	$	26.9	$	26.9
One to five years	48.7		48.3		48.8		49.6
Six to ten years	61.8		61.2		38.4		40.0
Greater than ten years	153.8		152.9		90.2		93.1
Total Debt Securities	$	292.8	$	290.9	$	204.3	$	209.6


⁽¹⁾	Amounts in the Less than one year category include securities in the CYAPC and YAEC spent nuclear ~~decommissioning~~fuel trusts, which are restricted and are classified in long-term Marketable Securities on the balance sheets.

Realized Gains and Losses: Realized gains and losses are recorded in Other Income, Net for Eversource's ~~non-qualified~~ benefit trust and are offset in Other Long-Term Liabilities for CYAPC and YAEC. Eversource utilizes the specific identification basis method for the Eversource non-qualified benefit trust, and the average cost basis method for the CYAPC and YAEC spent nuclear ~~decommissioning~~fuel trusts to compute the realized gains and losses on the sale of marketable securities.

Fair Value Measurements: The following table presents the marketable securities recorded at fair value on a recurring basis by the level in which they are classified within the fair value hierarchy:



Eversource (Millions of Dollars)	As of June 30, 2019		As of December 31, 2018
Level 1:
Mutual Funds and Equities	$	203.7	$	244.0
Money Market Funds	20.5		25.9
Total Level 1	$	224.2	$	269.9
Level 2:
U.S. Government Issued Debt Securities (Agency and Treasury)	$	107.0	$	79.6
Corporate Debt Securities	46.1		39.5
Asset-Backed Debt Securities	13.4		14.0
Municipal Bonds	12.8		19.2
Other Fixed Income Securities	9.8		8.2
Total Level 2	$	189.1	$	160.5
Total Marketable Securities	$	413.3	$	430.4

Eversource
(Millions of Dollars)
As of September 30, 2018 As of December 31, 2017
Level 1:
Mutual Funds and Equities $ 312.5
$ 313.8
Money Market Funds 20.9
23.3
Total Level 1 $ 333.4
$ 337.1
Level 2:
U.S. Government Issued Debt Securities (Agency and Treasury) $ 80.8
$ 70.2
Corporate Debt Securities 41.8
50.9
Asset-Backed Debt Securities 14.3
21.2
Municipal Bonds 121.2
110.7
Other Fixed Income Securities 11.9
10.7
Total Level 2 $ 270.0
$ 263.7
Total Marketable Securities $ 603.4
$ 600.8

U.S. government issued debt securities are valued using market approaches that incorporate transactions for the same or similar bonds and adjustments for yields and maturity dates. Corporate debt securities are valued using a market approach, utilizing recent trades of the same or similar instruments and also incorporating yield curves, credit spreads and specific bond terms and conditions. Asset-backed debt securities include collateralized mortgage obligations, commercial mortgage backed securities, and securities collateralized by auto loans, credit card loans or receivables. Asset-backed debt securities are valued using recent trades of similar instruments, prepayment assumptions, yield curves, issuance and maturity dates, and tranche information. Municipal bonds are valued using a market approach that incorporates reported trades and benchmark yields. Other fixed income securities are valued using pricing models, quoted prices of securities with similar characteristics, and discounted cash flows.

6. SHORT-TERM AND LONG-TERM DEBT

Short-Term Debt - Commercial Paper Programs and Credit Agreements: Eversource parent has a $1.45 billion commercial paper program allowing Eversource parent to issue commercial paper as a form of short-term debt. Eversource parent, CL&P, PSNH, NSTAR Gas and Yankee Gas are also parties to a five-year $1.45 billion revolving credit ~~facility.~~facility, which terminates on December 8, 2023. The revolving credit facility ~~terminates on December 8, 2022 and~~ serves to backstop Eversource parent's $1.45 billion commercial paper program.

NSTAR Electric has a $650 million commercial paper program allowing NSTAR Electric to issue commercial paper as a form of short-term debt. NSTAR Electric is also a party to a five-year $650 million revolving credit ~~facility.~~facility, which terminates on December 8, 2023. The revolving credit facility ~~terminates on December 8, 2022 and~~ serves to backstop NSTAR Electric's $650 million commercial paper program.

The amount of borrowings outstanding and available under the commercial paper programs were as follows:



	Borrowings Outstanding as of				Available Borrowing Capacity as of				Weighted-Average Interest Rate as of
	June 30, 2019		December 31, 2018		June 30, 2019		December 31, 2018		June 30, 2019		December 31, 2018
(Millions of Dollars)	June 30, 2019		December 31, 2018		June 30, 2019		December 31, 2018		June 30, 2019		December 31, 2018
Eversource Parent Commercial Paper Program	$	566.0	$	631.5	$	884.0	$	818.5	2.55	%	2.77	%
NSTAR Electric Commercial Paper Program	163.0		278.5		487.0		371.5		2.42	%	2.50	%

There were no borrowings outstanding on either the Eversource parent or NSTAR Electric revolving credit facilities as of ~~September~~June 30, ~~2018~~2019 or December 31, ~~2017.~~2018. Eversource's water distribution segment has a $100 million revolving credit facility, which expires on August 19, 2019, and there were no ~~amounts~~borrowings outstanding as of ~~September~~June 30, ~~2018 and $76.0 million outstanding as of~~2019 or December 31, ~~2017.~~2018.

~~The amount of borrowings outstanding and available under the commercial paper programs were as follows:~~

Borrowings Outstanding as of Available Borrowing Capacity as of Weighted-Average Interest Rate as of
September 30, 2018 December 31, 2017 September 30, 2018 December 31, 2017 September 30, 2018 December 31, 2017
(Millions of Dollars)
Eversource Parent Commercial Paper Program $ 826.7
$ 979.3
$ 623.3
$ 470.7
2.34 % 1.86 %
NSTAR Electric Commercial Paper Program 240.5
234.0
409.5
416.0
2.17 % 1.55 %

Amounts outstanding under the commercial paper programs and revolving credit facility are included in Notes Payable ~~for Eversource and NSTAR Electric~~ and are classified in current liabilities on the Eversource and NSTAR Electric balance sheets as all borrowings are outstanding for no more than 364 days at one time. ~~As a result~~

We expect the future operating cash flows of ~~the~~Eversource, CL&P, NSTAR Electric and PSNH, along with our existing borrowing availability and access to both debt and equity markets, will be sufficient to meet any working capital and future operating requirements, and capital investment forecasted opportunities.

Intercompany Borrowings: Eversource parent ~~long-term debt issuances on January 8, 2018, the net proceeds of which were used~~uses its available capital resources to ~~repay~~provide loans to its subsidiaries to assist them in meeting their short-term ~~borrowings outstanding under its commercial paper program, $201.2 million of commercial paper borrowings under the~~borrowing needs. In addition, growth in Eversource's key business initiatives requires cash infusion to those subsidiaries. Eversource parent ~~commercial paper program were reclassified as Long-Term Debt as of December 31, 2017.~~

records intercompany interest income from its loans to subsidiaries, which is eliminated in consolidation. Intercompany loans from Eversource parent to its subsidiaries are eliminated in consolidation on Eversource's balance sheets. As of ~~September~~June 30, ~~2018,~~2019, there were intercompany loans from Eversource parent ~~of $45.9 million~~ to CL&P ~~$46.6~~of $259.4 million, to PSNH of $20.1 million, and ~~$16.0 million~~ to Harbor Electric Energy Company, a wholly-owned subsidiary of NSTAR Electric ("HEEC")~~. Intercompany loans from Eversource parent to other Eversource subsidiaries primarily included $196.9 million to Eversource Service, $108.0 million to Aquarion, and $117.2 million to NSTAR Gas as~~, of ~~September 30, 2018.~~$40.3 million. As of December 31, ~~2017,~~2018, there were intercompany loans from Eversource parent to PSNH of ~~$69.5 million to CL&P and $262.9 million to PSNH.~~$57.0 million. Intercompany ~~loans from Eversource parent to other Eversource subsidiaries primarily included $115.9 million to Eversource Service and $198.0 million to NSTAR Gas as of December 31, 2017. These intercompany~~ loans from Eversource parent are included in Notes Payable to Eversource Parent and are classified in current liabilities on the respective subsidiary's balance sheets. ~~Intercompany loans from Eversource parent are eliminated~~

Long-Term Debt Issuance Authorization: On April 26, 2019, the NHPUC approved PSNH’s request for authorization to issue up to $300 million in ~~consolidation on Eversource's balance sheets.~~

~~We believe the future operating cash flows of Eversource, CL&P, NSTAR Electric and PSNH, along with our existing borrowing availability and access to financial markets for the issuance of new~~ long-term debt ~~will be sufficient to meet any working capital and future operating requirements, and capital investment forecast opportunities.~~through December 31, 2019.

Long-Term Debt:The following table summarizes long-term debt issuances and repayments:

(Millions of Dollars) Issue Date Issuances/(Repayments) Maturity Date Use of Proceeds for Issuances/
Repayment Information
CL&P:
4.00% 2018 Series A First Mortgage Bonds March 2018 $ 500.0
April 2048 Repaid long-term debt that matured in 2018 and repaid short-term borrowings
5.65% 2008 Series A First Mortgage Bonds May 2008 (300.0 ) May 2018 Repaid at maturity on May 1, 2018
PSNH:
6.00% 2008 Series O First Mortgage Bonds May 2008 (110.0 ) May 2018 Repaid at maturity on May 1, 2018
Other:
Eversource Parent 2.50% Series I Senior Notes ⁽¹⁾
January 2018 200.0
March 2021 Repaid long-term debt that matured in 2018 and repaid short-term borrowings
Eversource Parent 3.30% Series M Senior Notes January 2018 450.0
January 2028 Repaid long-term debt that matured in 2018
Eversource Parent 1.60% Series G Senior Notes January 2015 (150.0 ) January 2018 Repaid at maturity on January 15, 2018
Eversource Parent 1.45% Series E Senior Notes May 2013 (300.0 ) May 2018 Repaid at maturity on May 1, 2018
Yankee Gas 4.13% Series O First Mortgage Bonds September 2018 50.0
October 2048 Repaid long-term debt that matured in 2018
NSTAR Gas 4.09% Series P First Mortgage Bonds September 2018 100.0
October 2048 Repaid short-term borrowings
Yankee Gas 6.90% Series J First Mortgage Bonds October 2018 (100.0 ) October 2018 Repaid at maturity on October 1, 2018



(Millions of Dollars)	Issue Date	Issuance/(Repayment)			Maturity Date	Use of Proceeds for Issuance/ Repayment Information
CL&P:
4.00% 2018 Series A First Mortgage Bonds ⁽¹⁾	April 2019	$	300.0		April 2048	Repaid short-term borrowings that were used to repay long-term debt that matured on February 1, 2019 and fund capital expenditures and working capital
5.50% 2009 Series A First Mortgage Bonds	February 2009	(250.0		)	February 2019	Repaid at maturity on February 1, 2019
NSTAR Electric:
3.25% 2019 Debentures	May 2019	400.0			May 2029	Repaid short-term borrowings that were used to fund investments in eligible green expenditures
PSNH:
3.60% 2019 Series T First Mortgage Bonds	June 2019	300.0			July 2049	Repay long-term debt due to mature in December 2019, repaid short-term borrowings and fund capital expenditures and working capital
Other:
NSTAR Gas 3.74% Series Q First Mortgage Bonds	July 2019	75.0			August 2049	Repaid short-term borrowings and fund capital expenditures and working capital


⁽¹⁾	These ~~notes~~bonds are part of the same series issued by ~~Eversource parent~~CL&P in March ~~2016.~~2018. The aggregate outstanding principal amount ~~for~~of these ~~notes~~bonds is now ~~$450~~$800 million.

On October 10, 2018, PSNH delivered a redemption notice for its $89.3 million adjustable rate 2001 Series A Pollution Control Revenue Bonds. The bonds, which are scheduled to mature on May 1, 2021, will be redeemed on November 28, 2018 at a redemption price of $89.3 million. The bonds are classified as Long-Term Debt on the balance sheet as of September 30, 2018.

As a result of the ~~Eversource parent~~NSTAR Gas debt ~~issuances~~issuance in ~~January 2018, $446.8~~July 2019, $75 million of current portion of long-term debt ~~related to two Eversource parent issuances maturing in 2018 and $201.2 million of commercial paper borrowings were~~was reclassified to Long-Term Debt on Eversource's consolidated balance sheet as of ~~December 31, 2017.~~June 30, 2019.

7. RATE REDUCTION BONDS AND VARIABLE INTEREST ENTITIES

Rate Reduction Bonds: PSNH Funding LLC 3 (PSNH Funding) is a bankruptcy remote, special purpose, wholly-owned subsidiary of PSNH. PSNH Funding was formed solely to issue rate reduction bonds (RRBs) to finance PSNH’s unrecovered stranded costs associated with the divestiture of its generation assets.

On May 8, 2018, PSNH Funding, a wholly-owned subsidiary of PSNH, issued $635.7 million of securitized RRBs in multiple tranches with a weighted average interest rate of 3.66 percent, and final maturity dates ranging from 2026 to 2035. The RRBs are expected to be repaid by February 1, 2033. RRB payments consist of principal and interest and will be paid semi-annually, beginning on February 1, 2019. The RRBs were issued pursuant to a finance orderissued by the NHPUC on January 30, 2018 to recover ~~stranded~~remaining costs resulting from the divestiture of PSNH’s generation assets.

The proceeds were used to purchase PSNH’s stranded cost asset-recovery property, including its vested property right to bill, collect and adjust a non-bypassable stranded cost recovery charge from PSNH’s retail customers. The collections will be used to pay principal, interest and other costs in connection with the RRBs. The RRBs are secured by the stranded cost asset-recovery property. Cash collections from the stranded cost recovery charges and funds on deposit in trust accounts are the sole source of funds to satisfy the debt obligation. PSNH is not the owner of the RRBs, and PSNH Funding’s assets and revenues are not available to pay PSNH’s creditors. The RRBs are non-recourse senior secured obligations of PSNH Funding and are not insured or guaranteed by PSNH or Eversource Energy.

PSNH Funding is considered a ~~variable interest entity (VIE)~~VIE primarily because the equity capitalization is insufficient to support its operations. PSNH has the power to direct the significant activities of the VIE and is most closely associated with the VIE as compared to other interest holders. Therefore, PSNH is considered the primary beneficiary and consolidates PSNH Funding in its consolidated financial statements. The following tables summarize the impact of PSNH Funding on PSNH's balance ~~sheet~~sheets and income ~~statement:~~statements:


(Millions of Dollars)
Balance Sheet:	As of September 30, 2018		As of June 30, 2019		As of December 31, 2018
Restricted Cash - Current Portion (included in Prepayments and Other Current Assets)	$	26.9	$	35.0	$	47.5
Restricted Cash - Long-Term Portion (included in Other Long-Term Assets)	3.2		3.2		3.2
Securitized Stranded Cost (included in Regulatory Assets)	618.6
Securitized Stranded Costs (included in Regulatory Assets)			586.9		608.4
Other Regulatory Liabilities (included in Regulatory Liabilities)	1.0		7.9		5.8
Accrued Interest (included in Other Current Liabilities)	8.8		8.9		14.4
Rate Reduction Bonds - Current Portion	52.3		43.2		52.3
Rate Reduction Bonds - Long-Term Portion	583.3		561.7		583.3



(Millions of Dollars)	For the Three Months Ended				For the Six Months Ended
Income Statement:	June 30, 2019		June 30, 2018		June 30, 2019		June 30, 2018
Amortization of RRB Principal (included in Amortization of Regulatory Assets, Net)	$	10.8	$	6.8	$	21.5	$	6.8
Interest Expense on RRB Principal (included in Interest Expense)	5.3		2.8		10.7		2.8

(Millions of Dollars)
Income Statement:
For the Three Months Ended September 30, 2018 For the Nine Months Ended September 30, 2018
Amortization of RRB Principal (included in Amortization of Regulatory Assets, Net) $ 10.2
$ 17.1
Interest Expense on RRB Principal (included in Interest Expense) 6.0
8.8

~~Variable Interest Entities - Other:~~ The Company's variable interests outside of the consolidated group include contracts that are required by regulation and provide for regulatory recovery of contract costs and benefits through customer rates. Eversource, CL&P and NSTAR Electric hold variable interests in VIEs through agreements with certain entities that own single renewable energy or peaking generation power plants, with other independent power producers and with transmission businesses. Eversource, CL&P and NSTAR Electric do not control the activities that are economically significant to these VIEs or provide financial or other support to these VIEs. Therefore, Eversource, CL&P and NSTAR Electric do not consolidate these VIEs.

8. PENSION BENEFITS AND POSTRETIREMENT BENEFITS OTHER THAN PENSION

Eversource provides defined benefit retirement plans ("Pension Plans") that cover eligible ~~employees, including, among others, employees of CL&P, NSTAR Electric and PSNH.~~employees. In addition to the Pension Plans, Eversource maintains non-qualified defined benefit retirement plans ("SERP Plans"), which provide benefits in excess of Internal Revenue Code limitations to eligible participants consisting of current and retired employees. Eversource also provides defined benefit postretirement plans ~~(the "PBOP~~("PBOP Plans") that provide life insurance and a health reimbursement arrangement created for the purpose of reimbursing retirees and dependents for health insurance premiums and certain medical expenses to eligible employees that ~~met~~meet certain age and service eligibility requirements.

The components of net periodic benefit ~~expense~~expense/(income) for the Pension, SERP and PBOP Plans, prior to amounts capitalized as Property, Plant and Equipment or deferred as regulatory assets for future recovery, are shown below. The service cost component of net periodic benefit expense, ~~and the intercompany allocations,~~ less the capitalized ~~portions, are~~portion, is included in Operations and Maintenance expense on the statements of income. The remaining components of net periodic benefit ~~costs for pension, SERP and PBOP~~expense/(income), less the deferred portion, are included in Other Income, Net on the statements of income. ~~Capitalized amounts relate to employees working on capital projects and are included in Property, Plant and Equipment, Net on the balance sheets.~~ Pension, SERP and PBOP expense reflected in the statements of cash flows for CL&P, NSTAR Electric and PSNH does not include the intercompany allocations or the corresponding capitalized and deferred portion, as these amounts are cash settled on a short-term basis.



	Pension and SERP
	For the Three Months Ended June 30, 2019												For the Three Months Ended June 30, 2018
(Millions of Dollars)	Eversource			CL&P			NSTAR Electric			PSNH			Eversource			CL&P			NSTAR Electric			PSNH
Service Cost	$	16.1		$	4.4		$	3.6		$	1.5		$	20.7		$	5.2		$	4.3		$	2.7
Interest Cost	54.8			11.4			12.3			6.0			49.1			10.5			10.9			5.5
Expected Return on Pension Plan Assets	(91.7		)	(18.1		)	(24.2		)	(10.1		)	(97.9		)	(19.4		)	(26.6		)	(10.8		)
Actuarial Loss	35.6			6.3			11.8			2.3			35.7			7.1			10.1			3.3
Prior Service Cost	0.3			—			—			—			2.1			0.2			0.1			0.1
Total Net Periodic Benefit Expense/(Income)	$	15.1		$	4.0		$	3.5		$	(0.3	)	$	9.7		$	3.6		$	(1.2	)	$	0.8
Intercompany Allocations	N/A			$	5.8		$	5.3		$	—		N/A			$	1.5		$	1.6		$	0.5

	Pension and SERP
	For the Six Months Ended June 30, 2019												For the Six Months Ended June 30, 2018
(Millions of Dollars)	Eversource			CL&P			NSTAR Electric			PSNH			Eversource			CL&P			NSTAR Electric			PSNH
Service Cost	$	35.4		$	9.2		$	7.5		$	4.1		$	43.1		$	11.0		$	9.0		$	5.7
Interest Cost	109.1			23.0			24.2			12.2			97.8			20.9			21.7			10.9
Expected Return on Pension Plan Assets	(183.8		)	(36.9		)	(48.6		)	(20.4		)	(195.8		)	(40.2		)	(51.8		)	(21.8		)
Actuarial Loss	72.1			14.3			21.2			5.9			71.8			14.8			20.7			6.5
Prior Service Cost	0.6			—			0.1			—			4.1			0.6			0.1			0.2
Total Net Periodic Benefit Expense/(Income)	$	33.4		$	9.6		$	4.4		$	1.8		$	21.0		$	7.1		$	(0.3	)	$	1.5
Intercompany Allocations	N/A			$	13.6		$	8.4		$	2.5		N/A			$	3.0		$	3.2		$	1.0

Pension and SERP
For the Three Months Ended September 30, 2018 For the Three Months Ended September 30, 2017
(Millions of Dollars) Eversource CL&P NSTAR Electric PSNH Eversource CL&P NSTAR Electric PSNH
Service Cost $ 20.9
$ 5.2
$ 4.3
$ 2.7
$ 17.4
$ 4.6
$ 3.8
$ 2.4
Interest Cost 49.2
10.5
10.9
5.5
47.2
10.5
10.7
5.3
Expected Return on Plan Assets (97.8 ) (19.4 ) (26.6 ) (10.8 ) (83.5 ) (17.8 ) (21.9 ) (10.0 )
Actuarial Loss 35.7
7.1
10.1
3.3
33.9
6.8
10.4
3.0
Prior Service Cost 2.0
0.2
0.1
0.1
1.2
0.4
0.2
0.1
Total Net Periodic Benefit Expense/(Income) $ 10.0
$ 3.6
$ (1.2 ) $ 0.8
$ 16.2
$ 4.5
$ 3.2
$ 0.8
Intercompany Allocations N/A
$ 1.5
$ 1.6
$ 0.5
N/A
$ 2.4
$ 2.3
$ 0.8
Capitalized Pension Expense $ 6.6
$ 2.0
$ 1.8
$ 0.8
$ 5.5
$ 2.4
$ 2.0
$ 0.4

Pension and SERP
For the Nine Months Ended September 30, 2018 For the Nine Months Ended September 30, 2017
(Millions of Dollars) Eversource CL&P NSTAR Electric PSNH Eversource CL&P NSTAR Electric PSNH
Service Cost $ 64.2
$ 16.2
$ 13.1
$ 8.4
$ 53.8
$ 13.9
$ 11.7
$ 7.3
Interest Cost 147.1
31.4
32.6
16.4
140.7
31.3
31.9
15.9
Expected Return on Plan Assets (293.8 ) (59.7 ) (78.3 ) (32.6 ) (250.5 ) (53.9 ) (65.8 ) (29.9 )
Actuarial Loss 107.6
21.9
31.0
9.8
101.3
20.7
30.9
8.7
Prior Service Cost 6.0
0.8
0.2
0.2
3.4
1.1
0.4
0.4
Total Net Periodic Benefit Expense/(Income) $ 31.1
$ 10.6
$ (1.4 ) $ 2.2
$ 48.7
$ 13.1
$ 9.1
$ 2.4
Intercompany Allocations N/A
$ 4.5
$ 4.8
$ 1.4
N/A
$ 7.4
$ 6.9
$ 2.5
Capitalized Pension Expense $ 20.2
$ 6.2
$ 5.8
$ 2.3
$ 16.5
$ 7.3
$ 5.7
$ 1.1

PBOP
For the Three Months Ended September 30, 2018 For the Three Months Ended September 30, 2017
(Millions of Dollars) Eversource CL&P
NSTAR
Electric
PSNH Eversource CL&P
NSTAR
Electric
PSNH
Service Cost $ 2.5
$ 0.4
$ 0.5
$ 0.3
$ 2.4
$ 0.5
$ 0.4
$ 0.3
Interest Cost 7.7
1.5
2.2
0.9
6.8
1.3
2.2
0.8
Expected Return on Plan Assets (18.2 ) (2.6 ) (8.1 ) (1.5 ) (16.0 ) (2.4 ) (7.2 ) (1.4 )
Actuarial Loss 2.6
0.4
0.5
0.2
2.2
0.2
0.9
0.1
Prior Service Cost/(Credit) (6.0 ) 0.3
(4.3 ) 0.1
(5.3 ) 0.3
(4.3 ) 0.2
Total Net Periodic Benefit Income $ (11.4 ) $ —
$ (9.2 ) $ —
$ (9.9 ) $ (0.1 ) $ (8.0 ) $ —
Intercompany Allocations N/A
$ (0.3 ) $ (0.3 ) $ (0.1 ) N/A
$ (0.2 ) $ (0.2 ) $ (0.1 )
Capitalized PBOP Expense/(Income) $ 0.7
$ 0.1
$ 0.2
$ 0.1
$ (4.8 ) $ (0.1 ) $ (4.1 ) $ —

PBOP
For the Nine Months Ended September 30, 2018 For the Nine Months Ended September 30, 2017
(Millions of Dollars) Eversource CL&P
NSTAR
Electric
PSNH Eversource CL&P
NSTAR
Electric
PSNH
Service Cost $ 7.5
$ 1.4
$ 1.6
$ 0.9
$ 7.1
$ 1.5
$ 1.4
$ 1.0
Interest Cost 23.0
4.4
6.5
2.5
20.3
4.0
6.5
2.3
Expected Return on Plan Assets (54.2 ) (7.8 ) (24.4 ) (4.5 ) (47.8 ) (7.3 ) (21.6 ) (4.1 )
Actuarial Loss 7.7
1.2
1.7
0.6
6.9
0.7
2.6
0.4
Prior Service Cost/(Credit) (17.6 ) 0.8
(12.7 ) 0.4
(16.1 ) 0.8
(12.8 ) 0.4
Total Net Periodic Benefit Income $ (33.6 ) $ —
$ (27.3 ) $ (0.1 ) $ (29.6 ) $ (0.3 ) $ (23.9 ) $ —
Intercompany Allocations N/A
$ (0.8 ) $ (1.0 ) $ (0.3 ) N/A
$ (0.5 ) $ (0.8 ) $ (0.3 )
Capitalized PBOP Expense/(Income) $ 2.3
$ 0.5
$ 0.7
$ 0.3
$ (14.3 ) $ (0.4 ) $ (12.1 ) $ —



	PBOP
	For the Three Months Ended June 30, 2019												For the Three Months Ended June 30, 2018
(Millions of Dollars)	Eversource			CL&P			NSTAR Electric			PSNH			Eversource			CL&P			NSTAR Electric			PSNH
Service Cost	$	1.8		$	0.3		$	0.4		$	0.1		$	2.5		$	0.4		$	0.5		$	0.3
Interest Cost	8.2			1.6			2.4			0.8			6.8			1.5			2.2			0.9
Expected Return on Plan Assets	(16.8		)	(2.3		)	(7.5		)	(1.3		)	(16.7		)	(2.6		)	(8.1		)	(1.5		)
Actuarial Loss	1.6			0.3			0.7			—			1.6			0.4			0.4			0.2
Prior Service Cost/(Credit)	(5.8		)	0.3			(4.2		)	0.1			(5.7		)	0.3			(4.3		)	0.1
Total Net Periodic Benefit Expense/(Income)	$	(11.0	)	$	0.2		$	(8.2	)	$	(0.3	)	$	(11.5	)	$	—		$	(9.3	)	$	—
Intercompany Allocations	N/A			$	(0.3	)	$	(0.4	)	$	(0.1	)	N/A			$	(0.2	)	$	(0.3	)	$	(0.1	)

	PBOP
	For the Six Months Ended June 30, 2019												For the Six Months Ended June 30, 2018
(Millions of Dollars)	Eversource			CL&P			NSTAR Electric			PSNH			Eversource			CL&P			NSTAR Electric			PSNH
Service Cost	$	3.9		$	0.7		$	0.9		$	0.4		$	5.0		$	0.9		$	1.0		$	0.6
Interest Cost	16.3			3.1			4.7			1.7			14.4			2.9			4.4			1.6
Expected Return on Plan Assets	(33.4		)	(4.5		)	(15.1		)	(2.8		)	(34.8		)	(5.2		)	(16.2		)	(3.0		)
Actuarial Loss	4.1			0.7			1.7			0.2			4.4			0.8			1.1			0.4
Prior Service Cost/(Credit)	(11.6		)	0.5			(8.5		)	0.2			(11.5		)	0.5			(8.5		)	0.3
Total Net Periodic Benefit Expense/(Income)	$	(20.7	)	$	0.5		$	(16.3	)	$	(0.3	)	$	(22.5	)	$	(0.1	)	$	(18.2	)	$	(0.1	)
Intercompany Allocations	N/A			$	(0.4	)	$	(0.6	)	$	(0.2	)	N/A			$	(0.5	)	$	(0.7	)	$	(0.2	)

9. COMMITMENTS AND CONTINGENCIES

A. Environmental Matters

Eversource, CL&P, NSTAR Electric and PSNH are subject to environmental laws and regulations intended to mitigate or remove the effect of past operations and improve or maintain the quality of the environment. These laws and regulations require the removal or the remedy of the effect on the environment of the disposal or release of certain specified hazardous substances at current and former operating sites. Eversource, CL&P, NSTAR Electric and PSNH have an active environmental auditing and training program and each believes it is substantially in compliance with all enacted laws and regulations.

The number of environmental sites and related reserves for which remediation or long-term monitoring, preliminary site work or site assessment is being performed are as follows:



	As of June 30, 2019			As of December 31, 2018
	Number of Sites	Reserve (in millions)		Number of Sites	Reserve (in millions)
Eversource	58	$	71.6	60	$	64.7
CL&P	15	5.8		15	5.4
NSTAR Electric	15	10.5		16	10.9
PSNH	9	5.4		9	5.4

As of September 30, 2018 As of December 31, 2017
Number of Sites
Reserve
(in millions)
Number of Sites
Reserve
(in millions)
Eversource 60
$ 66.6
59
$ 54.9
CL&P 14
5.0
14
4.7
NSTAR Electric 17
10.9
15
2.7
PSNH 9
5.5
10
5.7

The increase in the reserve balance was due primarily to the addition of an environmental site at NSTAR Electric and changes in cost estimates at certain MGP sites under investigation for which additional remediation will be required.

Included in the ~~Eversource~~ number of sites and reserve amounts above are former MGP sites that were operated several decades ago and manufactured gas from coal and other processes, which resulted in certain by-products remaining in the environment that may pose a potential risk to human health and the environment, for which Eversource may have potential liability. The reserve balances related to these former MGP sites were ~~$52.3~~$57.1 million and ~~$49.0~~$50.1 million as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, respectively, and related primarily to the natural gas business segment.

These reserve estimates are subjective in nature as they take into consideration several different remediation options at each specific site. The reliability and precision of these estimates can be affected by several factors, including new information concerning either the level of contamination at the site, the extent of Eversource's, CL&P's, NSTAR Electric's and PSNH's responsibility for remediation or the extent of remediation required, recently enacted laws and regulations or changes in cost estimates due to certain economic factors. It is possible that new information or future developments could require a reassessment of the potential exposure to required environmental remediation. As this information becomes available, management will continue to assess the potential exposure and adjust the reserves accordingly.

B. Long-Term Contractual Arrangements

On December 28, 2018, under Public Act 17-3, "An Act Concerning Zero Carbon Procurement," DEEP selected the Millstone Nuclear Power Station generation facility, along with smaller generation facilities, in DEEP’s zero-carbon request for proposal. CL&P and UI were directed by DEEP to enter into ten-year contracts to purchase a combined total of approximately 9 million MWh annually from the Millstone generation facility. On March 15, 2019, CL&P and UI each signed a ten-year contract with the owner of Millstone Nuclear Power Station in order to purchase a combined amount of approximately 50 percent of the facility's output (approximately 40 percent by CL&P). The Millstone Nuclear Power Station has a 2,112 MW nameplate capacity. The parties filed the contract with PURA on March 29, 2019 for review and approval. A decision from PURA is expected in the third quarter of 2019.

The significant output of the generation facility, the contract period, and the pricing will result in a significant multi-billion dollar contractual commitment. We plan to sell the energy purchased under this contract into the market and use the proceeds from these energy sales to offset the contract costs. As the net costs under this contract will be recovered from customers in future rates, the contract will not have an impact on the net income of CL&P.

C. Guarantees and Indemnifications

In the normal course of business, Eversource parent provides credit assurances on behalf of its subsidiaries, including CL&P, NSTAR Electric and PSNH, in the form of guarantees.

Eversource parent issued a guaranty on behalf of its subsidiary, NPT, under which, beginning at the time the Northern Pass Transmission line ~~goes~~would go into commercial operation, Eversource parent ~~will~~would guarantee the financial obligations of NPT under the TSA with HQ in an amount not to exceed $25 million. Eversource parent's obligations under the guaranty expire upon the full, final and indefeasible payment of the guaranteed obligations. Eversource parent ~~has~~ also entered into a guaranty on behalf of NPT under which Eversource parent ~~will~~would guarantee NPT's obligations under a facility with a financial institution pursuant to which NPT may request letters of credit in an aggregate amount of up to approximately $14 million.

In the second quarter of 2019, Eversource ~~parent has also guaranteed certain indemnification and other obligations as a result~~concluded that construction of the ~~sales~~NPT project was no longer probable. For further information regarding the impairment of ~~former unregulated subsidiaries and~~NPT, see Note 1C, "Summary of Significant Accounting Policies - Impairment of Northern Pass Transmission," to the ~~termination~~financial statements. While these guarantees are currently outstanding, it is expected that they will be extinguished pending the final dissolution of ~~an unregulated business, with maximum exposures either not specified or not material.~~ NPT.

Management does not anticipate a material impact to net income or cash flows as a result of these various guarantees and indemnifications. The following table summarizes Eversource parent's exposure to guarantees and indemnifications of its subsidiaries to external parties, as of ~~September~~June 30, ~~2018:~~2019:


Company	Description	Maximum Exposure (in millions)		Expiration Dates	Description	Maximum Exposure (in millions)		Expiration Dates
On behalf of subsidiaries:
Eversource Gas Transmission LLC	Access Northeast Project Capital Contributions Guaranty ⁽¹⁾	$	184.9	2021
Eversource Investment LLC					North East Offshore ⁽¹⁾	$	113.9	-
Various	Surety Bonds⁽²⁾	42.7		2018 - 2019	Surety Bonds⁽²⁾	34.0		2019 - 2021
Eversource Service and Rocky River Realty Company	Lease Payments for Vehicles and Real Estate	6.6		2019 - 2024
Rocky River Realty Company and Eversource Service					Lease Payments for Real Estate	7.1		2024
Bay State Wind					Real Estate Purchase	2.5		2020

⁽¹⁾

Eversource parent issued a declining balance guaranty on behalf of its subsidiary, Eversource ~~Gas Transmission~~Investment LLC, towhich holds an ownership interest in North East Offshore. Eversource parent will guarantee, as a primary obligor, the financial obligations, primarily all post-closing payment obligations of Eversource Investment LLC, under the Sale and Purchase Agreement and an Irrevocable Equity Commitment Letter with Ørsted. Eversource parent's obligations under the guaranty expire upon the full, final and indefeasible payment of the subsidiary's capital contributions for its investment in the Access Northeast project. The guaranty decreases as capital contributions are made. The guaranty will expire upon the earlier of the full performance of the guaranteed ~~obligations or December 31, 2021.~~obligations.


⁽²⁾	Surety bond expiration dates reflect termination dates, the majority of which will be renewed or extended. Certain surety bonds contain credit ratings triggers that would require Eversource parent to post collateral in the event that the unsecured debt credit ratings of Eversource parent are downgraded.

C.D. Spent Nuclear Fuel Obligations - Yankee Companies

CL&P, NSTAR Electric and PSNH have plant closure and fuel storage cost obligations to the Yankee Companies, which have each completed the physical decommissioning of their respective nuclear facilities and are now engaged in the long-term storage of their spent fuel. The Yankee Companies ~~collect~~fund these costs through litigation proceeds received from the DOE and, to the extent necessary, through wholesale, FERC-approved rates charged under power purchase agreements with several New England utilities, including CL&P, NSTAR Electric and PSNH. ~~These companies~~CL&P, NSTAR Electric and PSNH, in turn recover these costs from their customers through state regulatory commission-approved retail rates. The Yankee Companies ~~have collected or are currently collecting~~collect amounts that management believes are adequate to recover the remaining plant closure and fuel storage cost estimates for the respective plants. Management believes CL&P and NSTAR Electric will recover their shares of these obligations from their customers. PSNH has recovered its total share of these costs from its customers.

Spent Nuclear Fuel Litigation:

The Yankee Companies have filed complaints against the DOE in the Court of Federal Claims seeking monetary damages resulting from the DOE's failure to provide for a permanent facility to store spent nuclear fuel pursuant to the terms of the 1983 spent fuel and high level waste disposal contracts between the Yankee Companies and the DOE. The court had previously awarded the Yankee Companies damages for Phase I, II and III of litigation resulting from the DOE's failure to meet its contractual obligations. These Phases covered damages incurred in the years 1998 through 2012, and the awarded damages have been received by the Yankee Companies with certain amounts of the damages refunded to their customers.

DOE Phase IV Damages - On May 22, 2017, each of the Yankee Companies filed subsequent lawsuits against the DOE in the Court of Federal

~~Claims seeking~~Claims. The Yankee Companies sought monetary damages totaling ~~approximately $100~~$104.4 million for CYAPC, YAEC and MYAPC, resulting from the DOE's failure to begin accepting spent nuclear fuel for disposal covering the years from 2013 to 2016 (“DOE Phase IV”). On February 21, 2019, the Yankee Companies received a partial summary judgment and partial final judgment in their favor for the undisputed amount of monetary damages of $103.2 million. The court awarded CYAPC, YAEC and MYAPC damages of $40.7 million, $28.1 million and $34.4 million, respectively. The DOE did not appeal the court's judgment and the decision became final on April 23, 2019. On June 12, 2019, CYAPC and YAEC received damages of $40.7 million and $28.1 million, respectively, which were recorded as restricted cash within Other Long-Term Assets on the Eversource consolidated balance sheet as of June 30, 2019.

The Yankee Companies are in the process of preparing a required informational filing with FERC as to the use of proceeds. At this time, the damages are primarily expected to be used by the Yankee Companies to fund remaining fuel storage obligations, and management does not expect significant amounts to be refunded to Eversource utilities (CL&P, NSTAR Electric and PSNH). The utilities would then ultimately refund any amounts received to utility customers.

On June 12, 2019, the court accepted an offer of judgment in the amount of $0.5 million to settle the disputed amount of approximately $1 million in Phase IV ~~trial is now expected to begin~~contested damages. The Yankee Companies received the $0.5 million payment in ~~early~~July 2019.

D.E. FERC ROE Complaints

Four separate complaints have been filed at the FERC by combinations of New England state attorneys general, state regulatory commissions, consumer advocates, consumer groups, municipal parties and other parties (collectively the "Complainants"). In each of the first three complaints, filed on October 1, 2011, December 27, 2012, and July 31, 2014, respectively, the Complainants challenged the NETOs' base ROE of 11.14 percent that had been utilized since 2005 and sought an order to reduce it prospectively from the date of the final FERC order and for the separate 15-month complaint periods. In the fourth complaint, filed April 29, 2016, the Complainants challenged the NETOs' base ROE billed of 10.57 percent and the maximum ROE for transmission incentive ("incentive cap") of 11.74 percent, asserting that these ROEs were unjust and unreasonable.

~~A summary of the four separate complaints and the base ROEs pertinent to those complaints were as follows:~~

Complaint
15-Month Time Period
of Complaint
(Beginning as of Complaint Filing Date)

Original Base ROE Authorized by FERC at Time of Complaint
Filing Date ⁽¹⁾

Base ROE Subsequently Authorized by FERC for
First Complaint Period and also Effective from October 16, 2014 through April 14, 2017 ⁽¹⁾

Reserve
(Pre-Tax and
Excluding Interest)
as of September 30, 2018
(in millions)
First 10/1/2011 - 12/31/2012 11.14% 10.57% $—
⁽²⁾
Second 12/27/2012 - 3/26/2014 11.14% N/A 39.1
⁽³⁾
Third 7/31/2014 - 10/30/2015 11.14% 10.57% —
Fourth 4/29/2016 - 7/28/2017 10.57% 10.57% —

⁽¹⁾

The ROE originally billed during the period October 1, 2011 (beginning of the first complaint period) through October 15, 2014 consisted of a base ROE of 11.14 percent and incentives up to 13.1 percent. On October 16, 2014, the FERC set the base ROE at 10.57 percent and an incentive cap at 11.74 percent for the first complaint period. This was also effective for all prospective billings to customers beginning October 16, 2014. This FERC order was vacated on April 14, 2017.


⁽²⁾	All amounts associated with the first complaint period have been refunded, which totaled $38.9 million (pre-tax and excluding interest) at Eversource and reflected both the base ROE and incentive cap prescribed by the FERC order. The refund consisted of $22.4 million for CL&P, $13.7 million for NSTAR Electric and $2.8 million for PSNH.


⁽³⁾	The reserve represents the difference between the billed rates during the second complaint period and a 10.57 percent base ROE and 11.74 percent incentive cap. The reserve consisted of $21.4 million for CL&P, $14.6 million for NSTAR Electric and $3.1 million for PSNH as of September 30, 2018.

~~In response to appeals of the~~ October 16, 2014, the FERC ~~decision in~~set the base ROE at 10.57 percent and the incentive cap at 11.74 percent for the first complaint ~~filed~~period. This was also effective for all prospective billings to customers beginning October 16, 2014. This FERC order was vacated on April 14, 2017 by ~~the NETOs and the Complainants,~~ the U.S. Court of Appeals for the D.C. Circuit (the "Court") ~~issued a decision on April 14, 2017 vacating~~.

All amounts associated with the first complaint period have been refunded, which totaled $38.9 million (pre-tax and ~~remanding~~excluding interest) at Eversource and reflected both the ~~FERC's decision. The Court found that~~base ROE and incentive cap prescribed by the FERC ~~failed to make an explicit finding that~~order. The refund consisted of $22.4 million for CL&P, $13.7 million for NSTAR Electric and $2.8 million for PSNH.

Eversource has recorded a reserve of $39.1 million (pre-tax and excluding interest) for the ~~11.14~~second complaint period as of June 30, 2019. This reserve represents the difference between the billed rates during the second complaint period and a 10.57 percent base ROE ~~was unjust~~ and ~~unreasonable,~~11.74 percent incentive cap. The reserve consisted of $21.4 million for CL&P, $14.6 million for NSTAR Electric and $3.1 million for PSNH as ~~required under Section 206~~ of the Federal Power Act, before it set a new base ROE. The Court also found that the FERC did not provide a rational connection between the record evidence and its decision to select the midpoint of the upper half of the zone of reasonableness for the new base ROE.June 30, 2019.

On October 16, 2018, FERC issued an order on all four complaints describing how it intends to address the issues that were remanded by the Court. FERC proposed a new framework to determine (1) whether an existing ROE is unjust and unreasonable and, if so, (2) how to calculate a replacement ROE. The parties to these proceedings were directed to submit briefs on this new proposed framework and how they would apply ~~them~~the proposed framework in each of the four complaint proceedings. ~~Briefs~~Initial briefs were filed by the NETOs, Complainants and FERC Trial Staff on January 11, 2019 and reply briefs ~~will be~~were filed on March 8, 2019. The NETOs' brief was supportive of the overall ROE methodology determined in the ~~first quarter of 2019.~~October 16, 2018 order provided the FERC does not change the proposed methodology or alter its implementation in a manner that has a material impact on the results.

The FERC order included illustrative calculations for the first complaint using FERC's proposed frameworks with financial data from that complaint. Those preliminary calculations indicated that for the first complaint period, for the NETOs that FERC concludes are of average financial risk, (1) a preliminary range of presumptively just and reasonable base ROEs is 9.60 percent to 10.99 percent; (2) the pre-existing base ROE of 11.14 percent is therefore unjust and unreasonable; (3) the preliminary just and reasonable base ROE is 10.41 percent; and (4) the preliminary incentive cap on total ROE is 13.08 percent.

If the results of these illustrative calculations were included in a final FERC order for each of the complaint periods, then ~~the~~a 10.41 percent base ROE and a 13.08 percent incentive cap would not have a significant impact on our financial statements for all of the ~~first~~ complaint ~~period.~~periods.

Although the order provided illustrative calculations, FERC stated that these calculations are merely preliminary. The FERC’s preliminary calculations are not binding and do not represent what we believe to be the most likely outcome of a final FERC order, as ~~significant~~ changes to the methodology by FERC are possible as a result of the parties’ arguments and calculations in the briefing process. Until FERC issues a final decision on each of these four complaints, there is significant uncertainty, and at this time, the Company cannot reasonably estimate a range of gain or loss for any of the four complaint proceedings. The October 16, 2018 FERC order ~~does~~or the 2019 briefs did not provide a reasonable basis for a change to the reserve or recognized ROEs for any of the complaint periods.

Eversource, CL&P, NSTAR Electric and PSNH currently record revenues at the 10.57 percent base ROE and incentive cap at 11.74 percent established in the October 16, 2014 FERC order.

The average impact of a 10 basis point change to the base ROE for each of the 15-month complaint periods would affect Eversource's after-tax earnings by approximately $3 million.

E.F. Eversource and NSTAR Electric Boston Harbor Civil Action

On July 15, 2016, the United States Attorney on behalf of the United States Army Corps of Engineers filed a civil action in the United States District Court for the District of Massachusetts under provisions of the Rivers and Harbors Act of 1899 and the Clean Water Act against NSTAR Electric, HEEC, and the Massachusetts Water Resources Authority (together with NSTAR Electric and HEEC, the "Defendants"). The action alleged that the Defendants failed to comply with certain permitting requirements related to the placement of the HEEC-owned electric distribution cable beneath Boston Harbor. The action sought an order to compel HEEC to comply with cable depth requirements in the United States Army Corps of Engineers' permit or alternatively to remove the electric distribution cable and cease unauthorized work in U.S. waterways. The action also sought civil penalties and other costs.

The parties reached a settlement pursuant to which HEEC agreed to install a new 115kV distribution cable across Boston Harbor to Deer Island, utilizing a different route, and remove portions of the existing cable. Upon the installation and completion of the new cable and the removal of the portions of the existing cable, all issues surrounding the current permit from the United States Army Corps of Engineers are expected to be resolved, and such litigation is expected to be dismissed with prejudice.

In 2017, as a result of the settlement, NSTAR Electric expensed $4.9 million (pre-tax) of previously incurred capitalized costs associated with engineering work performed on the existing cable that will no longer be used. In addition, NSTAR Electric agreed to provide a rate base credit of $17.5 million to the Massachusetts Water Resources Authority for the new cable. This negotiated credit resulted in the initial $17.5 million of construction costs on the new cable being expensed as incurred, all of which ~~were~~was fully expensed ~~by June 30,~~in 2018. Construction of the new cable is underway and is expected to be completed in 2019.

10. ~~ASSETS HELD FOR SALE~~LEASES

~~In June 2015,~~ Eversource, including CL&P, NSTAR Electric and PSNH, has entered into lease agreements as a lessee for the use of land, office space, service centers, vehicles, information technology, and equipment. These lease agreements are classified as either finance or operating leases and the liability and right-of-use asset are recognized on the balance sheet at lease commencement. Leases with an initial term of 12 months or less are not recorded on the balance sheet and are recognized as lease expense on a straight-line basis over the lease term.

Eversource determines whether or not a contract contains a lease based on whether or not it provides Eversource with the use of a specifically identified asset for a period of time, as well as both the right to direct the use of that asset and receive the significant economic benefits of the asset. Eversource has elected the practical expedient to not separate non-lease components from lease components and instead to account for both as a single lease component, with the exception of the information technology asset class where the lease and non-lease components are separated.

The provisions of Eversource, CL&P, NSTAR Electric and PSNH lease agreements contain renewal options. The renewal options range from one year to twenty years. The renewal period is included in the measurement of the lease liability if it is reasonably certain that Eversource will exercise these renewal options.

For leases entered into or modified after the January 1, 2019 implementation date, the discount rate utilized for classification and measurement purposes as of the inception date of the lease is based on each company's collateralized incremental interest rate to borrow over a comparable term for an individual lease, as the rate implicit in the lease is not determinable.

CL&P and PSNH entered into certain contracts for the ~~2015 Public Service Company~~purchase of ~~New Hampshire Restructuring~~energy that qualify as leases. These contracts do not have minimum lease payments and ~~Rate Stabilization Agreement, pursuant to which PSNH agreed to divest its generation assets, subject to NHPUC approval. The NHPUC approved this agreement~~therefore are not recognized as ~~well as~~a lease liability on the ~~final divestiture plan~~balance sheet and ~~auction process~~are not reflected in the ~~second half of 2016. On October 11, 2017, PSNH entered into two Purchase and Sale Agreements with private investors, one~~future minimum lease payments table below. Expense related to sell its thermal generation assets at a purchase price of $175 million, subject to adjustment, (the “Thermal Agreement”) and a second to sell its hydroelectric generation assets at a purchase price of $83 million, subject to adjustment (the “Hydro Agreement”). The NHPUC approved these ~~agreements in late November 2017, at which time the Company classified these assets as held for sale.~~

On January 10, 2018, PSNH completed the sale of its thermal generation assets pursuant to the Thermal Agreement. In accordance with the Thermal Agreement, the original purchase price of $175 million was adjusted to reflect working capital adjustments, closing date adjustments and proration of taxes and fees prior to closing, totaling $40.9 million, resulting in net proceeds of $134.1 million. In the second quarter of 2018, the purchase price was further adjusted by $17.3 million relating to the valuation of certain allowances. As a result of these adjustments, net proceeds from the sale of the thermal assets totaled $116.8 million.

On July 16, 2018, FERC issued its order approving the transfer of PSNH's six hydroelectric licenses to private investors. On August 26, 2018, PSNH completed the sale of its hydroelectric generation assets pursuant to the Hydro Agreement. In accordance with the Hydro Agreement, the original purchase price of $83 million was adjusted to reflect contractual adjustments totaling $5.7 million, resulting in net proceeds of $77.3 million. The difference between the carrying value of the hydroelectric generation assets and the sale proceeds resulted in a gain of $17.2 million. An estimated gain from the sale of these assets wascontracts are included as ~~an offset to~~variable lease cost in the ~~total stranded costs associated with the sale of generation assets.~~

On May 8, 2018, PSNH Funding issued $635.7 million of securitized RRBs to finance PSNH's unrecovered stranded costs associated with the divestiture of its generation assets, which included the deferred costs resulting from the sale of the thermal generation assets. These bonds are secured by a non-bypassable charge billed to PSNH's customers. As of September 30, 2018, unamortized securitized stranded costs totaled $618.6 milliontable below. The expense and long-term obligation for these contracts are included in ~~Regulatory Assets~~the annually reported contractual obligations table in Note 12B, "Commitments and Contingencies - Long-Term Contractual Arrangements," of the Eversource 2018 Form 10-K.

The components of lease cost, prior to amounts capitalized, are as follows:



	For the Three Months Ended June 30, 2019								For the Six Months Ended June 30, 2019
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
Financing Lease Cost:
Amortization of Right-of-use-Assets	$	0.4	$	0.2	$	—	$	—	$	0.7	$	0.4	$	0.1	$	—
Interest on Lease Liabilities	0.3		0.1		0.2		—		0.7		0.3		0.3		—
Total Finance Lease Cost	0.7		0.3		0.2		—		1.4		0.7		0.4		—
Operating Lease Cost	2.9		0.1		0.5		—		5.9		0.1		0.9		—
Variable Lease Cost	15.7		3.1		—		12.6		31.1		6.5		—		24.6
Total Lease Cost	$	19.3	$	3.5	$	0.7	$	12.6	$	38.4	$	7.3	$	1.3	$	24.6

Operating lease cost, less the capitalized portion, is included in Operations and Maintenance (or Purchased Power, Fuel and Transmission expense for transmission segment leases) on the ~~Eversource and PSNH~~statements of income. Amortization of finance lease assets is included in Depreciation on the statements of income. Interest expense on finance leases is included in Interest Expense, Net on the statements of income.

Supplemental balance ~~sheets.~~sheet information related to leases is as follows:



		As of June 30, 2019
(Millions of Dollars)	Balance Sheet Classification	Eversource		CL&P		NSTAR Electric		PSNH
Operating Leases:
Operating Lease Right-of-use-Assets, Net	Other Long-Term Assets	$	54.6	$	0.6	$	24.4	$	0.8
Operating Lease Liabilities
Operating Lease Liabilities - Current Portion	Other Current Liabilities	$	8.8	$	0.2	$	0.5	$	0.2
Operating Lease Liabilities - Long-Term	Other Long-Term Liabilities	45.8		0.4		23.9		0.6
Total Operating Lease Liabilities		$	54.6	$	0.6	$	24.4	$	0.8
Finance Leases:
Finance Lease Right-of-use-Assets, Net	Property, Plant and Equipment, Net	$	9.4	$	2.6	$	3.4	$	0.9
Finance Lease Liabilities
Finance Lease Liabilities - Current Portion	Other Current Liabilities	$	2.3	$	1.5	$	—	$	0.1
Finance Lease Liabilities - Long-Term	Other Long-Term Liabilities	9.3		2.3		4.4		0.8
Total Finance Lease Liabilities		$	11.6	$	3.8	$	4.4	$	0.9

The finance lease payments that NSTAR Electric will make over the next twelve months are entirely interest-related, due to escalating payments. As such, none of the finance lease payments over the next twelve months will reduce the finance lease liability.

Other information related to leases is as follows (in millions of dollars, unless otherwise noted):



	Eversource			CL&P			NSTAR Electric			PSNH
As of June 30, 2019
Weighted-Average Remaining Lease Term (Years):
Operating Leases	12			4			21			8
Financing Leases	11			2			23			9
Weighted-Average Discount Rate (Percentage):
Operating Leases	3.9		%	2.7		%	4.1		%	3.6		%
Financing Leases	4.3		%	10.5		%	2.9		%	3.5		%

For the Three Months Ended June 30, 2019
Cash Paid for Amounts Included in the Measurement of Lease Liabilities:
Operating Cash Flows from Operating Leases	$	3.0		$	0.1		$	0.5		$	—
Operating Cash Flows from Finance Leases	0.3			0.1			0.1			—
Financing Cash Flows from Finance Leases	0.5			0.4			—			—
Supplemental Non-Cash Information on Lease Liabilities:
Right-of-use-Assets Obtained in Exchange for New Operating Lease Liabilities	0.4			0.2			—			0.2
Right-of-use-Assets Obtained in Exchange for New Finance Lease Liabilities	1.3			—			—			—



	Eversource		CL&P		NSTAR Electric		PSNH
For the Six Months Ended June 30, 2019
Cash Paid for Amounts Included in the Measurement of Lease Liabilities:
Operating Cash Flows from Operating Leases	$	5.9	$	0.1	$	0.8	$	—
Operating Cash Flows from Finance Leases	0.6		0.3		0.3		—
Financing Cash Flows from Finance Leases	0.9		0.7		—		—
Supplemental Non-Cash Information on Lease Liabilities:
Right-of-use-Assets Obtained in Exchange for New Operating Lease Liabilities	1.7		0.2		—		0.2
Right-of-use-Assets Obtained in Exchange for New Finance Lease Liabilities	1.3		—		—		—

Future minimum lease payments, excluding variable costs, under long-term leases, as of June 30, 2019 are as follows:



	Operating Leases								Finance Leases
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
July 1, 2019 through December 31, 2019	$	5.7	$	0.3	$	0.8	$	0.2	$	1.7	$	1.0	$	0.3	$	0.1
Year Ending December 31,
2020	10.3		0.2		1.6		0.2		3.4		2.0		0.5		0.1
2021	9.2		0.1		1.6		0.2		2.9		1.5		0.5		0.1
2022	7.5		—		1.6		0.1		1.5		—		0.6		0.1
2023	4.9		—		1.6		0.1		0.7		—		0.6		0.1
2024	2.9		—		1.7		—		0.7		—		0.6		0.1
Thereafter	29.2		0.1		28.9		0.2		13.2		—		12.8		0.4
Future lease payments	69.7		0.7		37.8		1.0		24.1		4.5		15.9		1.0
Less amount representing interest	15.1		0.1		13.4		0.2		12.5		0.7		11.5		0.1
Present value of future minimum lease payments	$	54.6	$	0.6	$	24.4	$	0.8	$	11.6	$	3.8	$	4.4	$	0.9

At December 31, ~~2017, the deferred~~2018, future minimum rental payments, excluding executory costs, ~~resulting from the thermal generation asset sale of $516.1 million represented the difference between the carrying value~~such as property taxes, state use taxes, insurance, and ~~the fair value less cost to sell the thermal generation assets. For further information on the securitized RRB issuance, see Note 7, "Rate Reduction Bonds and Variable Interest Entities."~~

For the three and nine months ended September 30, 2018, pre-tax income associated with the hydroelectric assets prior to the sale on August 26, 2018, was $0.7 million and $9.9 million, respectively. For the three and nine months ended September 30, 2017, pre-tax income associated with PSNH's generation assets was $14.6 million and $44.7 million, respectively.

As of September 30, 2018, all generation assets had been sold and as a result, no generation assets were classified as held for sale. As of December 31, 2017, PSNH's generation assets held for sale, which were included in current assets on the Eversource and PSNH balance sheets, and were part of the Electric Distribution reportable segment,maintenance were as follows:



Operating Leases (Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH
2019	$	11.5	$	1.5	$	7.2	$	0.5
2020	9.8		1.4		6.0		0.4
2021	8.7		1.2		5.3		0.4
2022	7.2		1.1		4.4		0.4
2023	4.7		0.5		3.1		0.2
Thereafter	32.7		0.2		29.5		0.3
Future minimum lease payments	$	74.6	$	5.9	$	55.5	$	2.2



Capital Leases (Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH
2019	$	3.4	$	2.0	$	0.5	$	0.1
2020	3.4		2.0		0.5		0.1
2021	2.9		1.5		0.5		0.1
2022	1.5		—		0.6		0.1
2023	0.7		—		0.6		0.1
Thereafter	13.9		—		13.4		0.5
Future minimum lease payments	25.8		5.5		16.1		1.0
Less amount representing interest	13.8		1.0		12.4		0.1
Present value of future minimum lease payments	$	12.0	$	4.5	$	3.7	$	0.9

(Millions of Dollars) As of December 31, 2017
Thermal Gross Plant $ 1,091.4
Hydroelectric Gross Plant 83.0
Accumulated Depreciation (575.4 )
Net Plant 599.0
Fuel and Inventory 87.7
Materials and Supplies 27.3
Emissions Allowances 19.1
Other Assets 2.6
Deferred Costs from Thermal Generation Asset Sale (516.1 )
Total Generation Assets Held for Sale $ 219.6

11. FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value of each of the following financial instruments:

Preferred Stock, Long-Term Debt and Rate Reduction Bonds: The fair value of CL&P's and NSTAR Electric's preferred stock is based upon pricing models that incorporate interest rates and other market factors, valuations or trades of similar securities and cash flow projections. The fair value of long-term debt and RRB debt securities is based upon pricing models that incorporate quoted market prices for those issues or similar issues adjusted for market conditions, credit ratings of the respective companies and treasury benchmark yields. The fair values provided in the table below are classified as Level 2 within the fair value hierarchy. Carrying amounts and estimated fair values are as follows:



	Eversource				CL&P				NSTAR Electric				PSNH
(Millions of Dollars)	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Carrying Amount		Fair Value		Carrying Amount		Fair Value
As of June 30, 2019:
Preferred Stock Not Subject to Mandatory Redemption	$	155.6	$	161.0	$	116.2	$	117.4	$	43.0	$	43.6	$	—	$	—
Long-Term Debt	13,818.5		14,639.4		3,309.5		3,724.9		3,341.5		3,599.6		1,101.8		1,145.3
Rate Reduction Bonds	604.9		642.2		—		—		—		—		604.9		642.2

As of December 31, 2018:
Preferred Stock Not Subject to Mandatory Redemption	$	155.6	$	156.8	$	116.2	$	113.8	$	43.0	$	43.0	$	—	$	—
Long-Term Debt	13,086.1		13,154.9		3,254.0		3,429.2		2,944.8		3,024.1		805.2		819.5
Rate Reduction Bonds	635.7		645.8		—		—		—		—		635.7		645.8

Eversource CL&P NSTAR Electric PSNH
(Millions of Dollars)
Carrying
Amount

Fair
Value

Carrying
Amount

Fair
Value

Carrying
Amount

Fair
Value

Carrying
Amount

Fair
Value
As of September 30, 2018:
Preferred Stock Not Subject to Mandatory Redemption $ 155.6
$ 163.0
$ 116.2
$ 120.2
$ 43.0
$ 42.8
$ —
$ —
Long-Term Debt 12,538.8
12,517.4
3,253.6
3,420.4
2,944.6
2,990.0
894.1
904.3
Rate Reduction Bonds 635.7
631.3
—
—
—
—
635.7
631.3

As of December 31, 2017:
Preferred Stock Not Subject to Mandatory Redemption $ 155.6
$ 160.8
$ 116.2
$ 116.5
$ 43.0
$ 44.3
$ —
$ —
Long-Term Debt 12,325.5
12,877.1
3,059.1
3,430.5
2,943.8
3,156.5
1,002.4
1,038.2

Derivative Instruments and Marketable Securities: Derivative instruments and investments in marketable securities are carried at fair value. For further information, see Note 4, "Derivative Instruments," and Note 5, "Marketable Securities," to the financial statements.

See Note ~~1F,~~1E, "Summary of Significant Accounting Policies - Fair Value Measurements," for the fair value measurement policy and the fair value hierarchy.

12. ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS)

The changes in accumulated other comprehensive income/(loss) by component, net of tax, isare as follows:



	For the Six Months Ended June 30, 2019												For the Six Months Ended June 30, 2018
Eversource (Millions of Dollars)	Qualified Cash Flow Hedging Instruments			Unrealized Gains/(Losses) on Marketable Securities			Defined Benefit Plans			Total			Qualified Cash Flow Hedging Instruments			Unrealized Losses on Marketable Securities			Defined Benefit Plans			Total
Balance as of January 1st	$	(4.4	)	$	(0.5	)	$	(55.1	)	$	(60.0	)	$	(6.2	)	$	—		$	(60.2	)	$	(66.4	)

OCI Before Reclassifications	—			1.1			2.6			3.7			—			(0.6		)	2.6			2.0
Amounts Reclassified from AOCI	0.6			—			2.1			2.7			1.2			—			2.2			3.4
Net OCI	0.6			1.1			4.7			6.4			1.2			(0.6		)	4.8			5.4
Balance as of June 30th	$	(3.8	)	$	0.6		$	(50.4	)	$	(53.6	)	$	(5.0	)	$	(0.6	)	$	(55.4	)	$	(61.0	)

For the Nine Months Ended September 30, 2018 For the Nine Months Ended September 30, 2017
Eversource
(Millions of Dollars)
Qualified
Cash Flow
Hedging
Instruments

Unrealized
Losses on
Marketable
Securities

Defined
Benefit Plans
Total
Qualified
Cash Flow
Hedging
Instruments

Unrealized
Gains on
Marketable
Securities

Defined
Benefit Plans
Total
Balance as of Beginning of Period $ (6.2 ) $ —
$ (60.2 ) $ (66.4 ) $ (8.2 ) $ 0.4
$ (57.5 ) $ (65.3 )

OCI Before Reclassifications —
(0.7 ) 2.6
1.9
—
0.7
(3.5 ) (2.8 )
Amounts Reclassified from AOCI 1.6
—
3.3
4.9
1.6
—
2.9
4.5
Net OCI 1.6
(0.7 ) 5.9
6.8
1.6
0.7
(0.6 ) 1.7
Balance as of End of Period $ (4.6 ) $ (0.7 ) $ (54.3 ) $ (59.6 ) $ (6.6 ) $ 1.1
$ (58.1 ) $ (63.6 )

Eversource's qualified cash flow hedging instruments represent interest rate swap agreements on debt issuances that were settled in prior years. The settlement amount was recorded in AOCI and is being amortized into Net Income over the term of the underlying debt instrument. CL&P, NSTAR Electric and PSNH continue to amortize interest rate swaps settled in prior years from AOCI into Interest Expense over the remaining life of the associated long-term debt. Such interest rate swaps are not material to their respective financial statements.

Defined benefit plan OCI amounts before reclassifications relate to actuarial gains and losses that arose during the year and were recognized in AOCI. The unamortized actuarial gains and losses and prior service costs on the defined benefit plans are amortized from AOCI into Other Income, Net over the average future employee service period, and are reflected in amounts reclassified from AOCI. ~~For further information, see Note 1G, "Summary~~

Eversource did not elect to reclassify the income tax effects of ~~Significant Accounting Policies - Other~~ the Tax Cuts and Jobs Act from AOCI to Retained Earnings as permitted by ASU 2018-02, Income ~~Net," and Note 8, "Pension Benefits and Postretirement Benefits Other Than Pension."~~Statement—Reporting Comprehensive Income (Topic 220).

13. COMMON SHARES

The following table sets forth the Eversource parent common shares and the shares of common stock of CL&P, NSTAR Electric and PSNH that were authorized and issued, as well as the respective per share par values:



	Shares
			Authorized as of June 30, 2019 and December 31, 2018	Issued as of
	Par Value		Authorized as of June 30, 2019 and December 31, 2018	June 30, 2019	December 31, 2018
Eversource	$	5	380,000,000	339,858,402	333,878,402
CL&P	$	10	24,500,000	6,035,205	6,035,205
NSTAR Electric	$	1	100,000,000	200	200
PSNH	$	1	100,000,000	301	301

Shares
Authorized as of September 30, 2018 and Issued as of
Par Value December 31, 2017 September 30, 2018 December 31, 2017
Eversource $ 5
380,000,000
333,878,402
333,878,402
CL&P $ 10
24,500,000
6,035,205
6,035,205
NSTAR Electric $ 1
100,000,000
200
200
PSNH $ 1
100,000,000
301
301

Common Share Issuance and Forward Sale Agreement: On June 4, 2019, Eversource completed an equity offering of 17,940,000 common shares, consisting of 5,980,000 common shares issued directly by the Company and 11,960,000 common shares issuable pursuant to a forward sale agreement with an investment bank. The issuance of 5,980,000 common shares resulted in proceeds of $426.9 million, net of issuance costs, and was reflected in shareholders’ equity and as a financing activity on the statement of cash flows.

Under the forward sale agreement, a total of 11,960,000 common shares were borrowed from third parties and sold to the underwriters. The forward sale agreement allows Eversource, at its election and prior to May 29, 2020, to physically settle the forward sale agreement by issuing common shares in exchange for net proceeds at the then-applicable forward sale price specified by the agreement (initially, $71.48 per share) or, alternatively, to settle the forward sale agreement in whole or in part through the delivery or receipt of shares or cash. The forward sale price is subject to adjustment daily based on a floating interest rate factor and will decrease in respect of certain fixed amounts specified in the agreement, such as dividends.

Eversource’s intent is to physically settle the forward sale agreement by issuing common shares. As of ~~both September~~June 30, ~~2018~~2019, if Eversource had elected to net settle the forward sale agreement, Eversource would have been required to pay $50.2 million under a cash settlement or would have been required to deliver 662,694 common shares under a net share settlement.

Issuances of shares under the forward sale agreement are classified as equity transactions. Accordingly, no amounts relating to the forward sale agreement have or will be recorded in the financial statements until settlements take place. Prior to any settlements, the only impact to the financial statements is the inclusion of incremental shares within the calculation of diluted EPS using the treasury stock method. See Note 15, "Earnings Per Share," for information on the forward sale agreement’s impact on the calculation of diluted EPS.

Treasury Shares: As of June 30, 2019 and December 31, ~~2017,~~2018, there were 16,283,963 and 16,992,594 Eversource common shares held as treasury ~~shares.~~shares, respectively. As of ~~both September~~June 30, ~~2018~~2019 and December 31, ~~2017, there were 316,885,808~~2018, Eversource common shares ~~outstanding.~~outstanding were 323,574,439 and 316,885,808, respectively.

14. COMMON SHAREHOLDERS' EQUITY AND NONCONTROLLING INTERESTS

Dividends on the preferred stock of CL&P and NSTAR Electric totaled $1.9 million for each of the three months ended ~~September~~June 30, 2019 and 2018 and ~~2017 and $5.6~~$3.8 million for each of the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017.~~2018. These dividends were presented as Net Income Attributable to Noncontrolling Interests on the Eversource statements of income. Noncontrolling Interest – Preferred Stock of Subsidiaries on the Eversource balance sheets totaled $155.6 million as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017.~~2018. On the Eversource balance sheets, Common Shareholders' Equity was fully attributable to Eversource parent and Noncontrolling Interest – Preferred Stock of Subsidiaries was fully attributable to the noncontrolling interest.

15. EARNINGS PER SHARE

Basic EPS is computed based upon the weighted average number of common shares outstanding during each period. Diluted EPS is computed on the basis of the weighted average number of common shares outstanding plus the potential dilutive effect of certain share-based compensation awards and the equity forward sale agreement, as if they were converted into outstanding common shares. The dilutive effect of unvested RSU and performance share awards, as well as the equity forward sale agreement, is calculated using the treasury stock method. RSU and performance share awards are included in basic weighted average common shares outstanding as of the date that all necessary vesting conditions have been satisfied.

As described in Note 13, "Common Shares," earnings per share dilution, if any, related to the forward sale agreement will be determined under the treasury stock method until settlement of the forward sale agreement. Under this method, the number of Eversource common shares used in calculating diluted EPS is deemed to be increased by the excess, if any, of the number of shares that would be issued upon physical settlement of the forward sale agreement less the number of shares that would be purchased by Eversource in the market (based on the average market price during the same reporting period) using the proceeds receivable upon settlement (based on the adjusted forward sale price at the end of that reporting period). Share dilution occurs when the average market price of Eversource's common shares is higher than the adjusted forward sale price.

The following table sets forth the components of basic and diluted EPS:



Eversource (Millions of Dollars, except share information)	For the Three Months Ended				For the Six Months Ended
Eversource (Millions of Dollars, except share information)	June 30, 2019		June 30, 2018		June 30, 2019		June 30, 2018
Net Income Attributable to Common Shareholders	$	31.5	$	242.8	$	340.1	$	512.3
Weighted Average Common Shares Outstanding:
Basic	319,664,998		317,344,596		318,644,796		317,370,825
Dilutive Effect of:
Share-Based Compensation Awards and Other	645,450		540,591		668,470		568,269
Equity Forward Sale Agreement	78,042		—		39,021		—
Total Dilutive Effect	723,492		540,591		707,491		568,269
Diluted	320,388,490		317,885,187		319,352,287		317,939,094
Basic and Diluted EPS	$	0.10	$	0.76	$	1.07	$	1.61

Eversource
(Millions of Dollars, except share information)
For the Three Months Ended For the Nine Months Ended
September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017
Net Income Attributable to Common Shareholders $ 289.4
$ 260.4
$ 801.7
$ 750.6
Weighted Average Common Shares Outstanding:
Basic 317,360,110
317,393,029
317,367,252
317,415,848
Dilutive Effect 607,201
556,367
581,246
591,194
Diluted 317,967,311
317,949,396
317,948,498
318,007,042
Basic EPS $ 0.91
$ 0.82
$ 2.53
$ 2.36
Diluted EPS $ 0.91
$ 0.82
$ 2.52
$ 2.36

16. REVENUES

~~On January 1, 2018, Eversource, including CL&P, NSTAR Electric and PSNH, adopted ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” using the modified retrospective approach.~~The core principle of this accounting guidance is that revenue is recognized when promised goods or services (referred to as performance obligations) are transferred to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The new standard uses a five-step model for recognizing and measuring revenue from contracts with customers, which includes identifying the contract with the customer, identifying the performance obligations promised within the contract, determining the transaction price (the amount of consideration to which the company expects to be entitled), allocating the transaction price to the performance obligations and recognizing revenue when (or as) the performance obligation is satisfied.

The following ~~table presents~~tables present operating revenues disaggregated by revenue source:



	For the Three Months Ended June 30, 2019
Eversource (Millions of Dollars)	Electric Distribution			Natural Gas Distribution			Electric Transmission		Water Distribution			Other		Eliminations			Total
Revenues from Contracts with Customers
Retail Tariff Sales
Residential	$	805.0		$	100.2		$	—	$	33.6		$	—	$	—		$	938.8
Commercial	612.8			69.5			—		16.0			—		(0.9		)	697.4
Industrial	81.3			23.5			—		1.1			—		(2.8		)	103.1
Total Retail Tariff Sales Revenues	1,499.1			193.2			—		50.7			—		(3.7		)	1,739.3
Wholesale Transmission Revenues	—			—			281.2		—			14.7		(239.8		)	56.1
Wholesale Market Sales Revenues	39.4			14.4			—		0.9			—		—			54.7
Other Revenues from Contracts with Customers	15.1			0.4			3.7		1.8			236.1		(236.8		)	20.3
Reserve for Revenues Subject to Refund	(3.1		)	1.5			—		(0.6		)	—		—			(2.2		)
Total Revenues from Contracts with Customers	1,550.5			209.5			284.9		52.8			250.8		(480.3		)	1,868.2
Alternative Revenue Programs	6.3			(2.7		)	64.6		0.7			—		(58.8		)	10.1
Other Revenues ⁽¹⁾	5.0			0.9			0.1		0.2			—		—			6.2
Total Operating Revenues	$	1,561.8		$	207.7		$	349.6	$	53.7		$	250.8	$	(539.1	)	$	1,884.5


	For the Six Months Ended June 30, 2019
Eversource (Millions of Dollars)	Electric Distribution			Natural Gas Distribution			Electric Transmission		Water Distribution			Other		Eliminations			Total
Revenues from Contracts with Customers
Retail Tariff Sales
Residential	$	1,838.3		$	359.1		$	—	$	60.5		$	—	$	—		$	2,257.9
Commercial	1,265.3			213.3			—		30.3			—		(2.0		)	1,506.9
Industrial	163.4			54.4			—		2.2			—		(5.5		)	214.5
Total Retail Tariff Sales Revenues	3,267.0			626.8			—		93.0			—		(7.5		)	3,979.3
Wholesale Transmission Revenues	—			—			606.1		—			28.3		(510.7		)	123.7
Wholesale Market Sales Revenues	90.8			36.1			—		1.9			—		—			128.8
Other Revenues from Contracts with Customers	27.7			1.4			6.9		3.5			480.7		(482.2		)	38.0
Reserve for Revenues Subject to Refund	(6.1		)	3.1			—		(1.2		)	—		—			(4.2		)
Total Revenues from Contracts with Customers	3,379.4			667.4			613.0		97.2			509.0		(1,000.4		)	4,265.6
Alternative Revenue Programs	8.4			7.7			77.0		1.5			—		(69.8		)	24.8
Other Revenues ⁽¹⁾	7.8			1.5			0.1		0.5			—		—			9.9
Total Operating Revenues	$	3,395.6		$	676.6		$	690.1	$	99.2		$	509.0	$	(1,070.2	)	$	4,300.3

For the Three Months Ended September 30, 2018
Eversource
(Millions of Dollars)
Electric
Distribution

Natural Gas
Distribution

Electric
Transmission
Water Distribution Other Eliminations Total
Revenue from Contracts with Customers
Retail Tariff Sales
Residential $ 1,111.7
$ 42.8
$ —
$ 41.2
$ —
$ —
$ 1,195.7
Commercial 789.6
40.8
—
17.9
—
(1.2 ) 847.1
Industrial 98.7
18.9
—
1.3
—
(2.6 ) 116.3
Total Retail Tariff Sales Revenue 2,000.0

102.5
—
60.4

—
(3.8 ) 2,159.1
Wholesale Transmission Revenue —
—
364.5
—
11.7
(300.2 ) 76.0
Wholesale Market Sales Revenue 48.8
11.4
—
1.3
—
—
61.5
Other Revenue from Contracts with Customers 20.2
(0.5 ) 3.1
1.9
212.9
(213.5 ) 24.1
Reserve for Revenue Subject to Refund 5.2
(3.5 ) —
(1.3 ) —
—
0.4
Total Revenue from Contracts with Customers 2,074.2

109.9
367.6
62.3

224.6
(517.5 ) 2,321.1
Alternative Revenue Programs (51.6 ) (1.5 ) (37.0 ) 1.1
—
33.8
(55.2 )
Other Revenue 4.8
0.6
—
0.1
—
—
5.5
Total Operating Revenues $ 2,027.4

$ 109.0
$ 330.6
$ 63.5

$ 224.6
$ (483.7 ) $ 2,271.4

For the Nine Months Ended September 30, 2018
Eversource
(Millions of Dollars)
Electric
Distribution

Natural Gas
Distribution

Electric
Transmission
Water Distribution Other Eliminations Total
Revenue from Contracts with Customers
Retail Tariff Sales
Residential $ 2,900.4
$ 395.9
$ —
$ 100.9
$ —
$ —
$ 3,397.2
Commercial 2,023.0
245.4
—
47.9
—
(3.4 ) 2,312.9
Industrial 268.6
71.9
—
3.4
—
(7.5 ) 336.4
Total Retail Tariff Sales Revenue 5,192.0
713.2
—
152.2
—
(10.9 ) 6,046.5
Wholesale Transmission Revenue —
—
988.9
—
34.4
(826.9 ) 196.4
Wholesale Market Sales Revenue 141.4
41.4
—
3.1
—
—
185.9
Other Revenue from Contracts with Customers 54.4
(1.4 ) 9.4
5.4
658.1
(659.8 ) 66.1
Reserve for Revenue Subject to Refund (21.2 ) (11.5 ) —
(3.3 ) —
—
(36.0 )
Total Revenue from Contracts with Customers 5,366.6
741.7
998.3
157.4
692.5
(1,497.6 ) 6,458.9
Alternative Revenue Programs (57.2 ) (3.2 ) (45.3 ) 3.7
—
41.5
(60.5 )
Other Revenue 12.4
2.0
—
0.4
—
—
14.8
Total Operating Revenues $ 5,321.8
$ 740.5
$ 953.0
$ 161.5
$ 692.5
$ (1,456.1 ) $ 6,413.2



	For the Three Months Ended June 30, 2018
Eversource (Millions of Dollars)	Electric Distribution			Natural Gas Distribution			Electric Transmission			Water Distribution			Other		Eliminations			Total
Revenues from Contracts with Customers
Retail Tariff Sales
Residential	$	794.4		$	104.1		$	—		$	32.3		$	—	$	—		$	930.8
Commercial	622.0			70.0			—			15.7			—		(2.0		)	705.7
Industrial	88.4			23.5			—			1.1			—		(2.4		)	110.6
Total Retail Tariff Sales Revenues	1,504.8			197.6			—			49.1			—		(4.4		)	1,747.1
Wholesale Transmission Revenues	—			—			310.8			—			12.6		(268.0		)	55.4
Wholesale Market Sales Revenues	34.2			12.1			—			0.9			—		—			47.2
Other Revenues from Contracts with Customers	18.4			(0.6		)	3.2			1.9			224.4		(225.1		)	22.2
Reserve for Revenues Subject to Refund	(7.3		)	(3.5		)	—			(0.5		)	—		—			(11.3		)
Total Revenues from Contracts with Customers	1,550.1			205.6			314.0			51.4			237.0		(497.5		)	1,860.6
Alternative Revenue Programs	(14.4		)	0.1			3.4			1.9			—		(2.9		)	(11.9		)
Other Revenues	4.2			0.8			—			0.2			—		—			5.2
Total Operating Revenues	$	1,539.9		$	206.5		$	317.4		$	53.5		$	237.0	$	(500.4	)	$	1,853.9


	For the Six Months Ended June 30, 2018
Eversource (Millions of Dollars)	Electric Distribution			Natural Gas Distribution			Electric Transmission			Water Distribution			Other		Eliminations			Total
Revenues from Contracts with Customers
Retail Tariff Sales
Residential	$	1,788.7		$	352.9		$	—		$	59.7		$	—	$	—		$	2,201.3
Commercial	1,233.4			204.7			—			30.0			—		(2.1		)	1,466.0
Industrial	169.9			53.1			—			2.1			—		(5.0		)	220.1
Total Retail Tariff Sales Revenues	3,192.0			610.7			—			91.8			—		(7.1		)	3,887.4
Wholesale Transmission Revenues	—			—			624.5			—			22.7		(526.7		)	120.5
Wholesale Market Sales Revenues	92.7			29.9			—			1.7			—		—			124.3
Other Revenues from Contracts with Customers	35.3			(0.9		)	6.2			3.7			445.2		(446.3		)	43.2
Reserve for Revenues Subject to Refund	(26.5		)	(8.0		)	—			(2.0		)	—		—			(36.5		)
Total Revenues from Contracts with Customers	3,293.5			631.7			630.7			95.2			467.9		(980.1		)	4,138.9
Alternative Revenue Programs	(5.7		)	(1.7		)	(8.3		)	2.6			—		7.7			(5.4		)
Other Revenues	6.7			1.4			—			0.2			—		—			8.3
Total Operating Revenues	$	3,294.5		$	631.4		$	622.4		$	98.0		$	467.9	$	(972.4	)	$	4,141.8


	For the Three Months Ended September 30, 2018									For the Nine Months Ended September 30, 2018									For the Three Months Ended June 30, 2019									For the Three Months Ended June 30, 2018
(Millions of Dollars)	CL&P			NSTAR Electric			PSNH			CL&P			NSTAR Electric			PSNH			CL&P			NSTAR Electric			PSNH			CL&P			NSTAR Electric			PSNH
Revenue from Contracts with Customers
Revenues from Contracts with Customers
Retail Tariff Sales																																		��
Residential	$	539.6		$	414.8		$	157.3		$	1,410.0		$	1,071.6		$	418.8		$	402.8		$	282.3		$	119.9		$	387.1		$	292.5		$	114.8
Commercial	259.0			443.8			87.3			702.2			1,083.8			238.4			224.7			315.8			72.7			220.7			325.5			76.2
Industrial	39.4			38.0			21.3			111.8			96.9			59.9			33.8			28.9			18.6			36.5			30.9			21.0
Total Retail Tariff Sales Revenue	838.0			896.6			265.9			2,224.0			2,252.3			717.1
Wholesale Transmission Revenue	179.1			128.3			57.1			469.8			367.7			151.4
Wholesale Market Sales Revenue	13.3			18.1			17.4			34.3			56.4			52.3
Other Revenue from Contracts with Customers	9.3			10.3			4.0			25.0			27.9			11.4
Reserve for Revenue Subject to Refund	8.3			—			(3.1		)	(8.3		)	(3.7		)	(9.2		)
Total Revenue from Contracts with Customers	1,048.0			1,053.3			341.3			2,744.8			2,700.6			923.0
Total Retail Tariff Sales Revenues																			661.3			627.0			211.2			644.3			648.9			212.0
Wholesale Transmission Revenues																			115.9			127.5			37.8			139.9			120.9			50.1
Wholesale Market Sales Revenues																			12.1			17.2			10.1			10.6			13.4			10.9
Other Revenues from Contracts with Customers																			9.1			6.1			4.2			8.3			9.3			3.9
Reserve for Revenues Subject to Refund																			—			—			(3.1		)	(4.2		)	—			(3.1		)
Total Revenues from Contracts with Customers																			798.4			777.8			260.2			798.9			792.5			273.8
Alternative Revenue Programs	(64.3		)	(15.4		)	(8.9		)	(68.4		)	(15.6		)	(18.5		)	55.1			2.1			13.7			1.0			(6.9		)	(5.0		)
Other Revenue	2.8			1.8			0.2			6.5			5.1			0.8
Other Revenues ⁽¹⁾																			2.7			1.9			0.5			2.4			1.6			0.2
Eliminations	(121.5		)	(100.2		)	(42.4		)	(338.0		)	(289.8		)	(112.6		)	(115.4		)	(99.9		)	(33.5		)	(107.4		)	(96.5		)	(33.9		)
Total Operating Revenues	$	865.0		$	939.5		$	290.2		$	2,344.9		$	2,400.3		$	792.7		$	740.8		$	681.9		$	240.9		$	694.9		$	690.7		$	235.1

																			For the Six Months Ended June 30, 2019									For the Six Months Ended June 30, 2018
(Millions of Dollars)																			CL&P			NSTAR Electric			PSNH			CL&P			NSTAR Electric			PSNH
Revenues from Contracts with Customers
Retail Tariff Sales
Residential																			$	913.4		$	653.2		$	271.7		$	870.4		$	656.7		$	261.6
Commercial																			461.3			652.3			152.6			443.2			640.0			151.1
Industrial																			68.4			57.8			37.2			72.3			59.0			38.6
Total Retail Tariff Sales Revenues																			1,443.1			1,363.3			461.5			1,385.9			1,355.7			451.3
Wholesale Transmission Revenues																			270.7			250.1			85.3			290.6			239.5			94.3
Wholesale Market Sales Revenues																			25.8			41.6			23.4			21.0			38.2			34.9
Other Revenues from Contracts with Customers																			18.0			10.1			7.8			16.2			18.3			7.5
Reserve for Revenues Subject to Refund																			—			—			(6.1		)	(16.6		)	(3.7		)	(6.2		)
Total Revenues from Contracts with Customers																			1,757.6			1,665.1			571.9			1,697.1			1,648.0			581.8
Alternative Revenue Programs																			60.9			9.3			15.2			(4.1		)	(0.2		)	(9.6		)
Other Revenues ⁽¹⁾																			3.7			3.4			0.8			3.3			2.7			0.6
Eliminations																			(232.1		)	(198.3		)	(70.6		)	(216.4		)	(189.6		)	(70.3		)
Total Operating Revenues																			$	1,590.1		$	1,479.5		$	517.3		$	1,479.9		$	1,460.9		$	502.5

⁽¹⁾

Other Revenues include certain fees charged to customers, which are not considered revenue from contracts with customers. Other revenues also includes lease revenues under lessor accounting guidance of $1.1 million at Eversource, $0.3 million at CL&P, and $0.7 million at NSTAR Electric for the three months ended June 30, 2019, and $2.2 million at Eversource, $0.5 million at CL&P, and $1.3 million at NSTAR Electric for the six months ended June 30, 2019, respectively.

~~Retail Tariff Sales:~~ Regulated utilities provide products and services to their regulated customers under rates, pricing, payment terms and conditions of service, regulated by each state regulatory agency. The arrangement whereby a utility provides commodity service to a customer for a price approved by the respective state regulatory commission is referred to as a tariff sale contract, and the tariff governs all aspects of the provision of regulated services by utilities. The majority of revenue for Eversource, CL&P, NSTAR Electric and PSNH is derived from regulated retail tariff sales for the sale and distribution of electricity, natural gas and water to residential, commercial and industrial retail customers.

~~The utility's performance obligation for the regulated tariff sales is to provide electricity, natural gas or water to the customer as demanded.~~

The promise to provide the commodity represents a single performance obligation, as it is a promise to transfer a series of distinct goods or services that are substantially the same and that have the same pattern of transfer to the customer. Revenue is recognized over time as the customer simultaneously receives and consumes the benefits provided by the utility, and the utility satisfies its performance obligation. Revenue is recognized based on the output method as there is a directly observable output to the customer (electricity, natural gas or water units delivered to the customer and immediately consumed). Each Eversource utility is entitled to be compensated for performance completed to date (service taken by the customer) until service is terminated.

In regulated tariff sales, the transaction prices are the rates approved by the respective state regulatory commissions. In general, rates can only be changed through formal proceedings with the state regulatory commissions. These rates are designed to recover the costs to provide service to customers and include a return on investment. Regulatory commission-approved tracking mechanisms are included in these rates and are also used to recover, on a fully-reconciling basis, certain costs, such as the procurement of energy supply, retail transmission charges, energy efficiency program costs, net metering for distributed generation, and restructuring and stranded costs. These tracking mechanisms result in rates being changed periodically to ensure recovery of actual costs incurred.

Customers may elect to purchase electricity from each Eversource electric utility or may contract separately with a competitive third party supplier. Revenue is not recorded for the sale of the electricity commodity to customers who have contracted separately with these suppliers, only the delivery to a customer, as the utility is acting as an agent on behalf of the third party supplier.

~~Wholesale Transmission Revenues:~~ The Eversource electric transmission-owning companies (CL&P, NSTAR Electric and PSNH) each own and maintain transmission facilities that are part of an interstate power transmission grid over which electricity is transmitted throughout New England. CL&P, NSTAR Electric and PSNH, as well as most other New England utilities, are parties to a series of agreements that provide for coordinated planning and operation of the region's transmission facilities and the rules by which they acquire transmission services. The Eversource electric transmission-owning companies have a combination of FERC-approved regional and local formula rates that work in tandem to recover all their transmission costs. These rates are part of the ISO-NE Tariff. Regional rates recover the costs of higher voltage transmission facilities that benefit the region and are collected from all New England transmission customers, including the Eversource distribution businesses. Eversource's local rates recover the companies' total transmission revenue requirements, less revenues received from regional rates and other sources, and are collected from Eversource's distribution businesses and other transmission customers. The distribution businesses of Eversource, in turn, recover the FERC approved charges from retail customers through annual or semiannual tracking mechanisms, which are retail tariff sales.

The utility's performance obligation for regulated wholesale transmission sales is to provide transmission services to the customer as demanded. The promise to provide transmission service represents a single performance obligation. The transaction prices are the transmission rate formulas as defined by the ISO-NE Tariff and are regulated and established by FERC. Wholesale transmission revenue is recognized over time as the performance obligation is completed, which occurs as transmission services are provided to customers. The revenue is recognized based on the output method. Each Eversource utility is entitled to be compensated for performance completed to date (e.g., use of the transmission system by the customer).

~~Wholesale Market Sales Revenues:~~ Wholesale market sales transactions include sales of energy and energy-related products into the ISO-NE wholesale electricity market, sales of natural gas to third party marketers, and also the sale of RECs to various counterparties. ISO-NE oversees the region's wholesale electricity market and administers the transactions and terms and conditions, including payment terms, which are established in the ISO-NE tariff, between the buyers and sellers in the market. Pricing is set by the wholesale market. The wholesale transactions in the ISO-NE market occur on a day-ahead basis or a real-time basis (daily) and are, therefore, short-term. Transactions are tracked and reported by ISO-NE net by the hour, which is the net hourly position of energy sales and purchases by each market participant. Beginning in the first quarter of 2018, the performance obligation for ISO-NE energy transactions is defined to be the net by hour transaction. Revenue is recognized when the performance obligation for these energy sales transactions is satisfied, when the sale occurs and the energy is transferred to the customer. For sales of natural gas, transportation, and natural gas pipeline capacity to third party marketers, revenue is recognized when the performance obligation is satisfied at the point in time the sale occurs and the natural gas or related product is transferred to the marketer. RECs are sold to various counterparties, and revenue is recognized when the performance obligation is satisfied upon transfer of title to the customer through the New England Power Pool Generation Information System.

~~Other Revenue from Contracts with Customers:~~ Other revenue from contracts with customers primarily includes property rentals that are not deemed leases. These revenues are generally recognized on a straight-line basis over time as the service is provided to the customer.

~~Reserve for Revenue Subject to Refund:~~ Current base rates include an estimate of income taxes, which was based on the U.S. federal corporate income tax rate in effect at the time of the rate proceeding. Eversource established a liability, recorded as a reduction to revenue, to reflect the difference between the 35 percent federal corporate income tax rate included in rates charged to customers and the 21 percent federal income tax rate, effective January 1, 2018 as a result of the Tax Cuts and Jobs Act, until rates billed to customers reflect the lower federal tax rate. Eversource expects to refund these amounts to customers through various rate mechanisms in the future, depending on regulatory outcomes, and CL&P began refunding these amounts in the third quarter of 2018.

NSTAR Electric (effective February 1, 2018), CL&P (effective May 1, 2018) and NSTAR Gas (effective July 1, 2018) lowered distribution rates charged to customers to reflect the new federal corporate income tax rate. PSNH will adjust distribution rates to reflect the lower federal income tax rate, effective July 1, 2019, or earlier if a rate case is filed for rates effective prior to July 1, 2019.~~As part of Yankee Gas' rate case settlement, if approved, distribution rates will be adjusted to reflect the lower federal income tax rate, effective November 15, 2018.~~

~~Alternative Revenue Programs:~~ In accordance with accounting guidance for rate-regulated operations, certain of Eversource's utilities' rate making mechanisms qualify as alternative revenue programs ("ARPs") if they meet specified criteria, in which case revenues may be recognized prior to billing based on allowed levels of collection in rates. Eversource's utility companies recognize revenue and record a regulatory asset or liability once the condition or event allowing for the automatic adjustment of future rates occurs. ARP revenues include both the recognition of the deferral adjustment to ARP revenues, when the regulator-specified condition or event allowing for additional billing or refund has occurred, and an equal and offsetting reversal of the ARP deferral to revenues as those amounts are reflected in the price of service in subsequent periods.

~~Eversource’s ARPs include the revenue decoupling mechanism and the annual reconciliation adjustment to transmission formula rates, described below.~~

Certain Eversource electric, natural gas and water companies, including CL&P and NSTAR Electric, have revenue decoupling mechanisms approved by a regulatory commission ("decoupled companies"). Decoupled companies’ distribution revenues are not directly based on sales volumes. The decoupled companies reconcile their annual base distribution rate recovery to pre-established levels of baseline distribution delivery service revenues, with any difference between the allowed level of distribution revenue and the actual amount realized adjusted through subsequent rates.

The transmission formula rates provide for the annual reconciliation and recovery or refund of estimated costs to actual costs. The financial impacts of differences between actual and estimated costs are deferred for future recovery from, or refund to, transmission customers. This transmission deferral reconciles billed transmission revenues to the revenue requirement for our transmission businesses.

~~Other Revenues:~~ ~~Other Revenues include certain fees charged to customers and lease revenue that are not considered revenue from contracts with customers.~~

~~Intercompany Eliminations:~~ Intercompany eliminations are primarily related to the Eversource electric transmission revenues that are derived from ISO-NE regional transmission charges to the distribution businesses of CL&P, NSTAR Electric and PSNH that recover the costs of the wholesale transmission business, and revenues from Eversource's service company. Intercompany revenues and expenses between the Eversource wholesale transmission businesses and the Eversource distribution businesses and from Eversource's service company are eliminated in consolidation and included in "Eliminations" in the table above.

~~Receivables:~~ Receivables, Net on the balance sheet include trade receivables from our retail customers and receivables arising from ISO-NE billing related to wholesale transmission contracts and wholesale market transactions, sales of natural gas and capacity to marketers, sales of RECs, and property rentals. In general, retail tariff customers and wholesale transmission customers are billed monthly and the payment terms are generally due and payable upon receipt of the bill.

Unbilled Revenues on the balance sheet represent estimated amounts due from retail customers for electricity, natural gas or water delivered to customers but not yet billed. The utility company has satisfied its performance obligation and the customer has received and consumed the commodity as of the balance sheet date, and therefore, the utility company records revenue for those services in the period the services were provided. Only the passage of time is required before the company is entitled to payment for the satisfaction of the performance obligation. Payment from customers is due monthly as services are rendered and amounts are billed. Actual amounts billed to customers when meter readings become available may vary from the estimated amount.

Unbilled revenues are recognized by allocating estimated unbilled sales volumes to the respective customer classes, and then applying an estimated rate by customer class to those sales volumes. Unbilled revenue estimates reflect seasonality, weather, customer usage patterns, customer rates in effect for customer classes, and the timing of customer billing. The companies that have a decoupling mechanism record a regulatory deferral to reflect the actual allowed amount of revenue associated with their respective decoupled distribution rate design.

~~Practical Expedients:~~ Eversource has elected practical expedients in the accounting guidance that allow the company to record revenue in the amount that the company has a right to invoice, if that amount corresponds directly with the value to the customer of the company's performance to date, and not to disclose related unsatisfied performance obligations. Retail and wholesale transmission tariff sales fall into this category, as these sales are recognized as revenue in the period the utility provides the service and completes the performance obligation, which is the same as the monthly amount billed to customers. There are no other material revenue streams for which Eversource has unsatisfied performance obligations.

17. SEGMENT INFORMATION

~~Presentation:~~Eversource is organized ~~among~~into the Electric Distribution, Electric Transmission, Natural Gas Distribution and Water Distribution reportable segments and Other based on a combination of factors, including the characteristics of each segments' services, the sources of operating revenues and expenses and the regulatory environment in which each segment operates. These reportable segments represent substantially all of Eversource's total consolidated revenues. Revenues from the sale of electricity, natural gas and water primarily are derived from residential, commercial and industrial customers and are not dependent on any single customer. The Electric Distribution reportable segment includes the results of PSNH's generation facilities prior to sales in January and August 2018, and NSTAR Electric's solar power facilities. Eversource's reportable segments are determined based upon the level at which Eversource's chief operating decision maker assesses performance and makes decisions about the allocation of company resources. On December 4, 2017, Eversource acquired Aquarion, which was considered to be a new operating segment, water distribution. Though the water distribution segment does not meet quantitative thresholds under the segment reporting accounting guidance, based on qualitative factors including the nature of the water distribution business, Water Distribution was deemed a reportable segment beginning in the first quarter of 2018.

The remainder of Eversource's operations is presented as Other in the tables below and primarily consists of 1) the equity in earnings of Eversource parent from its subsidiaries and intercompany interest income, both of which are eliminated in consolidation, and interest expense related to the debt of Eversource parent, 2) the revenues and expenses of Eversource Service, most of which are eliminated in consolidation, 3) the operations of CYAPC and YAEC, 4) Eversource Water Ventures, Inc., parent company of Aquarion, and 4)5) the results of other unregulated subsidiaries, which are not part of its core business. In addition, Other in the tables below includes Eversource parent's equity ownership interests ~~in certain~~that are not consolidated, which include anatural gas pipeline ~~projects~~project owned by Enbridge, Inc., the ~~Bay State Wind project,~~offshore wind business, a renewable energy investment fund, and two companies that transmit hydroelectricity imported from the Hydro-Quebec system in Canada. In the ordinary course of business, Yankee Gas and NSTAR Gas purchase natural gas transmission services from the Enbridge, Inc. natural gas pipeline ~~projects~~project described above. These affiliate transaction costs total approximately $62.5 million annually and are classified as Purchased Power, Fuel and Transmission on the Eversource statements of income.

Each of Eversource's subsidiaries, including CL&P, NSTAR Electric and PSNH, has one reportable segment.

Cash flows used for investments in plant included in the segment information below are cash capital expenditures that do not include amounts incurred but not paid, cost of removal, AFUDC related to equity funds, and the capitalized portions of pension and PBOP expense.

Eversource's segment information is as follows:


	For the Three Months Ended September 30, 2018 ⁽¹⁾																					For the Three Months Ended June 30, 2019
Eversource (Millions of Dollars)	Electric Distribution			Natural Gas Distribution			Electric Transmission			Water Distribution			Other			Eliminations			Total			Electric Distribution			Natural Gas Distribution			Electric Transmission			Water Distribution			Other			Eliminations			Total
Operating Revenues	$	2,027.4		$	109.0		$	330.6		$	63.5		$	224.6		$	(483.7	)	$	2,271.4		$	1,561.8		$	207.7		$	349.6		$	53.7		$	250.8		$	(539.1	)	$	1,884.5
Depreciation and Amortization	(206.1		)	(13.9		)	(58.3		)	(11.7		)	(12.0		)	0.6			(301.4		)	(150.1		)	(19.5		)	(62.3		)	(12.0		)	(14.7		)	0.6			(258.0		)
Impairment of Northern Pass Transmission																						—			—			(239.6		)	—			—			—			(239.6		)
Other Operating Expenses	(1,562.2		)	(102.4		)	(96.7		)	(25.5		)	(200.9		)	483.7			(1,504.0		)	(1,243.0		)	(179.8		)	(108.4		)	(25.0		)	(218.4		)	538.7			(1,235.9		)
Operating Income/(Loss)	$	259.1		$	(7.3	)	$	175.6		$	26.3		$	11.7		$	0.6		$	466.0		$	168.7		$	8.4		$	(60.7	)	$	16.7		$	17.7		$	0.2		$	151.0
Interest Expense	$	(52.4	)	$	(11.3	)	$	(30.3	)	$	(8.5	)	$	(30.5	)	$	7.8		$	(125.2	)	$	(50.8	)	$	(11.9	)	$	(30.5	)	$	(8.6	)	$	(44.5	)	$	13.6		$	(132.7	)
Other Income, Net	32.2			1.5			9.0			0.7			251.7			(278.4		)	16.7
Other Income/(Loss), Net																						12.2			0.7			8.7			0.1			(114.9		)	139.1			45.9
Net Income/(Loss) Attributable to Common Shareholders	173.8			(12.6		)	109.5			17.6			271.1			(270.0		)	289.4			105.4			(1.8		)	(87.4		)	8.0			(145.6		)	152.9			31.5


	For the Nine Months Ended September 30, 2018 ⁽¹⁾																					For the Six Months Ended June 30, 2019
Eversource (Millions of Dollars)	Electric Distribution			Natural Gas Distribution			Electric Transmission			Water Distribution			Other			Eliminations			Total			Electric Distribution			Natural Gas Distribution			Electric Transmission			Water Distribution			Other			Eliminations			Total
Operating Revenues	$	5,321.8		$	740.5		$	953.0		$	161.5		$	692.5		$	(1,456.1	)	$	6,413.2		$	3,395.6		$	676.6		$	690.1		$	99.2		$	509.0		$	(1,070.2	)	$	4,300.3
Depreciation and Amortization	(486.0		)	(59.6		)	(171.8		)	(34.6		)	(35.9		)	1.7			(786.2		)	(329.3		)	(39.9		)	(123.7		)	(23.9		)	(28.3		)	1.1			(544.0		)
Impairment of Northern Pass Transmission																						—			—			(239.6		)	—			—			—			(239.6		)
Other Operating Expenses	(4,238.6		)	(585.7		)	(268.7		)	(73.9		)	(617.2		)	1,457.0			(4,327.1		)	(2,718.6		)	(521.1		)	(207.2		)	(49.9		)	(444.0		)	1,069.8			(2,871.0		)
Operating Income	$	597.2		$	95.2		$	512.5		$	53.0		$	39.4		$	2.6		$	1,299.9		$	347.7		$	115.6		$	119.6		$	25.4		$	36.7		$	0.7		$	645.7
Interest Expense	$	(152.0	)	$	(33.7	)	$	(89.9	)	$	(25.5	)	$	(94.8	)	$	23.2		$	(372.7	)	$	(100.0	)	$	(23.7	)	$	(61.0	)	$	(17.2	)	$	(88.6	)	$	26.1		$	(264.4	)
Other Income/(Loss), Net	70.9			5.1			26.7			(0.4		)	913.8			(915.4		)	100.7
Other Income, Net																						30.4			1.0			16.8			0.4			316.8			(288.5		)	76.9
Net Income Attributable to Common Shareholders	379.3			50.2			329.6			26.3			905.9			(889.6		)	801.7			225.4			74.7			30.9			8.8			262.0			(261.7		)	340.1
Cash Flows Used for Investments in Plant	717.4			245.5			735.8			68.1			118.3			—			1,885.1			571.3			202.7			449.2			51.4			103.2			—			1,377.8


	For the Three Months Ended September 30, 2017
Eversource (Millions of Dollars)	Electric Distribution			Natural Gas Distribution			Electric Transmission			Water Distribution		Other			Eliminations			Total
Operating Revenues	$	1,547.1		$	109.2		$	328.5		$	—	$	224.2		$	(220.5	)	$	1,988.5
Depreciation and Amortization	(159.6		)	(15.2		)	(52.6		)	—		(9.5		)	0.6			(236.3		)
Other Operating Expenses	(1,095.2		)	(96.2		)	(95.5		)	—		(190.1		)	220.1			(1,256.9		)
Operating Income/(Loss)	$	292.3		$	(2.2	)	$	180.4		$	—	$	24.6		$	0.2		$	495.3
Interest Expense	$	(51.3	)	$	(10.8	)	$	(29.2	)	$	—	$	(21.8	)	$	4.4		$	(108.7	)
Other Income, Net	14.2			1.0			8.5			—		267.6			(262.8		)	28.5
Net Income/(Loss) Attributable to Common Shareholders	157.4			(6.2		)	99.0			—		268.4			(258.2		)	260.4

	For the Nine Months Ended September 30, 2017																				For the Three Months Ended June 30, 2018
Eversource (Millions of Dollars)	Electric Distribution			Natural Gas Distribution			Electric Transmission			Water Distribution		Other			Eliminations			Total			Electric Distribution			Natural Gas Distribution			Electric Transmission			Water Distribution			Other			Eliminations			Total
Operating Revenues	$	4,224.2		$	698.8		$	970.0		$	—	$	677.5		$	(714.0	)	$	5,856.5		$	1,539.9		$	206.5		$	317.4		$	53.5		$	237.0		$	(500.4	)	$	1,853.9
Depreciation and Amortization	(394.9		)	(54.8		)	(154.5		)	—		(26.7		)	1.7			(629.2		)	(135.5		)	(19.3		)	(57.0		)	(12.2		)	(11.9		)	0.6			(235.3		)
Other Operating Expenses	(3,076.1		)	(537.3		)	(280.6		)	—		(602.9		)	714.0			(3,782.9		)	(1,233.0		)	(170.6		)	(88.8		)	(24.5		)	(211.7		)	501.4			(1,227.2		)
Operating Income	$	753.2		$	106.7		$	534.9		$	—	$	47.9		$	1.7		$	1,444.4		$	171.4		$	16.6		$	171.6		$	16.8		$	13.4		$	1.6		$	391.4
Interest Expense	$	(149.0	)	$	(32.3	)	$	(86.1	)	$	—	$	(63.1	)	$	11.0		$	(319.5	)	$	(52.1	)	$	(11.4	)	$	(30.0	)	$	(8.6	)	$	(32.3	)	$	8.0		$	(126.4	)
Other Income, Net	35.3			2.9			20.3			—		854.4			(833.7		)	79.2
Other Income/(Loss), Net																					19.0			1.6			9.9			(0.6		)	302.0			(281.8		)	50.1
Net Income Attributable to Common Shareholders																					101.3			5.0			112.7			7.2			288.8			(272.2		)	242.8

																					For the Six Months Ended June 30, 2018
Eversource (Millions of Dollars)																					Electric Distribution			Natural Gas Distribution			Electric Transmission			Water Distribution			Other			Eliminations			Total
Operating Revenues																					$	3,294.5		$	631.4		$	622.4		$	98.0		$	467.9		$	(972.4	)	$	4,141.8
Depreciation and Amortization																					(279.9		)	(45.7		)	(113.5		)	(22.9		)	(23.9		)	1.1			(484.8		)
Other Operating Expenses																					(2,676.5		)	(483.2		)	(172.0		)	(48.4		)	(416.3		)	973.3			(2,823.1		)
Operating Income																					$	338.1		$	102.5		$	336.9		$	26.7		$	27.7		$	2.0		$	833.9
Interest Expense																					$	(99.5	)	$	(22.5	)	$	(59.7	)	$	(16.9	)	$	(64.3	)	$	15.4		$	(247.5	)
Other Income/(Loss), Net																					38.6			3.5			17.8			(1.1		)	662.1			(637.0		)	83.9
Net Income Attributable to Common Shareholders	393.4			49.1			289.6			—		839.5			(821.0		)	750.6			205.5			62.8			220.1			8.7			634.8			(619.6		)	512.3
Cash Flows Used for Investments in Plant	752.4			209.8			575.6			—		104.5			—			1,642.3			475.6			150.3			508.5			40.2			77.1			—			1,251.7

⁽¹⁾

Effective January 1, 2018, upon implementation of the new revenue accounting guidance, the electric distribution segment is presented gross and intercompany transmission billings are presented in the eliminations column, as Eversource believes that the electric distribution segment acts as a principal, rather than an agent, in its contracts with retail customers. Retail customers contract directly with the electric distribution utility and do not differentiate between distribution and transmission services. Therefore, the electric distribution segment revenues, which are derived from retail customer billings, are presented gross of the eliminations. Prior to 2018, the electric distribution segment presented intercompany electric transmission billings net, based on indicators of net presentation prior to the new revenue guidance. See Note 16, "Revenues," regarding accounting for revenues.

The following table summarizes Eversource's segmented total assets:

Eversource
(Millions of Dollars)
Electric
Distribution

Natural Gas
Distribution
Electric
Transmission Water Distribution Other Eliminations Total
As of September 30, 2018 $ 21,189.0
$ 3,747.4
$ 10,077.5
$ 2,240.3
$ 16,979.4
$ (16,717.9 ) $ 37,515.7
As of December 31, 2017 19,250.4
3,595.2
9,401.2
2,470.0
15,933.8
(14,430.2 ) 36,220.4



Eversource (Millions of Dollars)	Electric Distribution		Natural Gas Distribution		Electric Transmission		Water Distribution		Other		Eliminations			Total
As of June 30, 2019	$	21,628.8	$	4,031.3	$	10,499.7	$	2,290.5	$	18,550.4	$	(18,004.8	)	$	38,995.9
As of December 31, 2018	21,389.1		3,904.9		10,285.0		2,253.0		17,874.2		(17,464.9		)	38,241.3

For further information regarding the 2019 impairment of NPT, see Note 1C, "Summary of Significant Accounting Policies - Impairment of Northern Pass Transmission," to the financial statements.

~~18. ACQUISITION OF AQUARION~~

On December 4, 2017, Eversource acquired Aquarion for a purchase price of $1.675 billion, consisting of approximately $880 million in cash and $795 million of assumed Aquarion debt. Aquarion is a holding company that owns three separate regulated water utility subsidiaries engaged in the water collection, treatment and distribution business that operate in Connecticut, Massachusetts and New Hampshire. These regulated utilities collect, treat and distribute water to residential, commercial and industrial customers, to other utilities for resale, and for private and municipal fire protection. Aquarion and its subsidiaries became wholly-owned subsidiaries of Eversource, and Eversource's consolidated financial information includes Aquarion and its subsidiaries' activity beginning December 4, 2017. The approximate $880 million cash purchase price included the $745 million equity purchase price plus a $135 million shareholder loan that was repaid at closing.

~~Purchase Price Allocation~~: The purchase price allocation reflects a measurement period adjustment recorded in the first quarter of 2018 to revise the fair value of Aquarion's regulated debt. The $7.9 million increase to the fair value of Long-Term Debt (including the current portion) and corresponding increase to Regulatory Assets, included within Other Noncurrent Assets, excluding Goodwill in the table below, will be amortized over the life of the related debt. The allocation of the cash purchase price is as follows:

(Millions of Dollars)
Current Assets $ 41.2
PP&E 1,034.9
Goodwill 907.9
Other Noncurrent Assets, excluding Goodwill 215.5
Current Liabilities (121.9 )
Noncurrent Liabilities (421.6 )
Long-Term Debt (778.3 )
Total Cash Purchase Price $ 877.7

EVERSOURCE ENERGY AND SUBSIDIARIES

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements and related combined notes included in this combined Quarterly Report on Form 10-Q, the combined Quarterly Report on Form 10-Q for the ~~quarters~~quarter ended March 31, ~~2018 and June 30, 2018,~~2019, as well as the Eversource ~~2017~~2018 Form 10-K. References in this combined Quarterly Report on Form 10-Q to "Eversource," the "Company," "we," "us," and "our" refer to Eversource Energy and its consolidated subsidiaries. All per-share amounts are reported on a diluted basis. The 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."

Refer to the Glossary of Terms included in this combined Quarterly Report on Form 10-Q for abbreviations and acronyms used throughout this Management's Discussion and Analysis of Financial Condition and Results of Operations.

The only common equity securities that are publicly traded are common shares of Eversource. The earnings and EPS of each business discussed below do not represent a direct legal interest in the assets and liabilities of such business but rather represent a direct interest in our assets and liabilities as a whole. EPS by business is a financial measure not recognized under GAAP calculated by dividing the Net Income Attributable to Common Shareholders of each business by the weighted average diluted Eversource common shares outstanding for the period. ~~We use this~~Our earnings discussion also includes a non-GAAP financial measure referencing our 2019 earnings and EPS excluding the impairment charge for the NPT project.

We use these non-GAAP financial measures to evaluate and provide details of earnings results by ~~business.~~business and to more fully compare and explain our 2019 results without including the impact of the NPT impairment charge. We believe the NPT impairment charge is not indicative of our ongoing performance. Due to the nature and significance of the impairment charge on Net Income Attributable to Common Shareholders, we believe that the non-GAAP presentation is a more meaningful representation of our financial performance and provides additional and useful information to readers of this report in analyzing historical and future performance byof our business. ~~This~~These non-GAAP financial ~~measure~~measures should not be considered as an alternative to reported Net Income Attributable to Common Shareholders or EPS determined in accordance with GAAP as an indicator of operating performance.

From time to time, we make statements concerning our expectations, beliefs, plans, objectives, goals, strategies, assumptions of future events, future financial performance or growth and other statements that are not historical facts. These statements are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. You can generally identify our forward-looking statements through the use of words or phrases such as "estimate," "expect," "anticipate," "intend," "plan," "project," "believe," "forecast," "should," "could," and other similar expressions. Forward-looking statements are based on the current expectations, estimates, assumptions or projections of management and are not guarantees of future performance. These expectations, estimates, assumptions or projections may vary materially from actual results. Accordingly, any such statements are qualified in their entirety by reference to, and are accompanied by, the following important factors that could cause our actual results to differ materially from those contained in our forward-looking statements, including, but not limited to:

cyberattacks or breaches, including those resulting in the compromise of the confidentiality of our proprietary information and the personal information of our customers,

acts of war or terrorism, physical attacks or grid disturbances that may damage and disrupt our transmission and distribution systems,

ability or inability to commence and complete our major strategic development projects and opportunities,

actions or inaction of local, state and federal regulatory, public policy and taxing bodies,

substandard performance of third-party suppliers and service providers,

fluctuations in weather patterns, including extreme weather due to climate change,

changes in business conditions, which could include disruptive technology related to our current or future business model,

increased conservation measures of customers and development of alternative energy sources,

contamination of, or disruption in, our water supplies,

changes in economic conditions, including impact on interest rates, tax policies, and customer demand and payment ability,

changes in levels or timing of capital expenditures,

disruptions in the capital markets or other events that make our access to necessary capital more difficult or costly,

changes in laws, regulations or regulatory policy, including compliance with environmental laws and regulations,

changes in accounting standards and financial reporting regulations,

actions of rating agencies, and

other presently unknown or unforeseen factors.

Other risk factors are detailed in our reports filed with the SEC and updated as necessary, and we encourage you to consult such disclosures.

All such factors are difficult to predict and contain uncertainties that may materially affect our actual results, many of which are beyond our control. You should not place undue reliance on the forward-looking statements, as each speaks only as of the date on which such statement is made, and, except as required by federal securities laws, we undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time and it is not possible for us to predict all of such factors, nor can we assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. For more information, see Item 1A, Risk Factors, included in this combined Quarterly Report on Form 10-Q and in Eversource's ~~2017~~2018 combined Annual Report on Form 10-K. This combined Quarterly Report on Form 10-Q and Eversource's ~~2017~~2018 combined

Annual Report on Form 10-K also describe material contingencies and critical accounting policies in the accompanying Management's Discussion and Analysis of Financial Condition and Results of Operations and Combined Notes to Financial Statements. We encourage you to review these items.

Financial Condition and Business Analysis

Executive Summary

The following items in this executive summary are explained in more detail in this combined Quarterly Report on Form 10-Q:

Earnings ~~Overview:~~Overview and Future Outlook:

•

We earned $31.5 million, or $0.10 per share, in the second quarter of 2019, and $340.1 million, or $1.07 per share, in the first half of 2019, compared with $242.8 million, or $0.76 per share, in the second quarter of 2018, and $512.3 million, or $1.61 per share, in the first half of 2018. Results for the second quarter and first half of 2019 include an after-tax impairment charge of $204.4 million, or $0.64 per share, related to our investment in the NPT project. Excluding that impairment charge, we earned $235.9 million, or $0.74 per share, in the second quarter of 2019, and $544.5 million, or $1.71 per share, in the first half of 2019.

We earned $289.4 million, or $0.91 per share, in the third quarter of 2018, and $801.7 million, or $2.52 per share, in the first nine months of 2018, compared with $260.4 million, or $0.82 per share, in the third quarter of 2017, and $750.6 million, or $2.36 per share, in the first nine months of 2017.

Our electric distribution segment earned ~~$173.8~~$105.4 million, or ~~$0.55~~$0.33 per share, in the ~~third~~second quarter of ~~2018,~~2019, and ~~$379.3~~$225.4 million, or ~~$1.19~~$0.71 per share, in the first ~~nine months~~half of ~~2018,~~2019, compared with ~~$157.4~~$101.3 million, or ~~$0.50~~$0.32 per share, in the ~~third~~second quarter of ~~2017,~~2018, and ~~$393.4~~$205.5 million, or ~~$1.24~~$0.65 per share, in the first ~~nine months~~half of 2017. Our electric transmission segment earned $109.5 million, or $0.34 per share, in the third quarter of 2018, and $329.6 million, or $1.04 per share, in the first nine months of 2018, compared with $99.0 million, or $0.31 per share, in the third quarter of 2017, and $289.6 million, or $0.91 per share, in the first nine months of 2017.2018. Our natural gas distribution segment had a net loss of ~~$12.6~~$(1.8) million in the second quarter of 2019, and earnings of $74.7 million, or $0.23 per share, in the first half of 2019, compared with earnings of $5.0 million, or $0.02 per share, in the second quarter of 2018, and $62.8 million, or $0.20 per share, in the first half of 2018. Our water distribution segment earned $8.0 million, or $0.02 per share, in the second quarter of 2019, and $8.8 million, or $0.03 per share, in the first half of 2019, compared with $7.2 million, or $0.02 per share, in the second quarter of 2018, and $8.7 million, or $0.03 per share, in the first half of 2018.

•

Our electric transmission segment had a net loss of $(87.4) million, or $(0.27) per share, in the second quarter of 2019, and earnings of $30.9 million, or $0.10 per share, in the first half of 2019, compared with earnings of $112.7 million, or $0.35 per share, in the second quarter of 2018, and $220.1 million, or $0.69 per share, in the first half of 2018. Excluding the after-tax NPT impairment charge of $204.4 million, or $0.64 per share, our electric transmission segment earned $117.0 million, or $0.37 per share, in the second quarter of 2019, and $235.3 million, or $0.74 per share, in the first half of 2019.

Eversource parent and other companies earned $7.3 million, or $0.02 per share, in the second quarter of 2019, and $0.3 million in the first half of 2019, compared with $16.6 million, or $0.05 per share, in the second quarter of 2018, and $15.2 million, or $0.04 per share, in the ~~third quarter~~first half of ~~2018, and~~2018.

Excluding the NPT impairment charge, we continue to project non-GAAP 2019 earnings of ~~$50.2 million, or $0.16~~between $3.40 per share ~~in the first nine months of 2018, compared with a net loss of $6.2 million, or $0.02~~and $3.50 per share, in the third quarter of 2017, and earnings of $49.1 million, or $0.15 per share, in the first nine months of 2017. Our water distribution segment earned $17.6 million, or $0.06 per share in the third quarter of 2018, and $26.3 million, or $0.08 per share, in the first nine months of 2018.share.

Eversource parent and other companies earned $1.1 million in the third quarter of 2018 and $16.3 million, or $0.05 per share, in the first nine months of 2018, compared with $10.2 million, or $0.03 per share, in the third quarter of 2017 and $18.5 million, or $0.06 per share, in the first nine months of 2017.

Liquidity:

Cash flows provided by operating activities totaled ~~$1.41 billion~~$924.6 million in the first ~~nine months~~half of ~~2018,~~2019, compared with ~~$1.48 billion~~$698.1 million in the first ~~nine months~~half of ~~2017.~~2018. Investments in property, plant and equipment totaled ~~$1.89~~$1.38 billion in the first ~~nine months~~half of ~~2018,~~2019, compared with ~~$1.64~~$1.25 billion in the first ~~nine months~~half of ~~2017.~~2018. Cash ~~and cash equivalents~~ totaled ~~$59.1~~$20.6 million as of ~~September~~June 30, ~~2018,~~2019, compared with ~~$38.2~~$108.1 million as of December 31, ~~2017.~~2018.

On June 4, 2019, we completed an equity offering of 17,940,000 common shares, consisting of 5,980,000 common shares issued directly by us and 11,960,000 common shares issuable pursuant to a forward sale agreement with an investment bank. The issuance of 5,980,000 common shares resulted in proceeds of $426.9 million, net of issuance costs, and was reflected in shareholders’ equity and as a financing activity on the statement of cash flows.

In the ~~third~~second quarter of ~~2018,~~2019, we issued ~~$150 million~~$1.0 billion of new long-term debt, consisting of ~~$50~~$300 million by ~~Yankee Gas and $100~~CL&P, $400 million by NSTAR ~~Gas.~~Electric and $300 million by PSNH. Proceeds from these new issuances were used primarily to repay short-term borrowings and to repay long-term debt at maturity.

~~Strategic, Legislative, Regulatory, Policy and Other Items:~~Strategic:

On ~~October 16,~~July 19, 2019, the New Hampshire Supreme Court issued a decision denying Northern Pass’ appeal and affirming the NHSEC’s evaluation and decision in March 2018 ~~FERC issued an order on all four complaints describing how it intends to address the issues~~ that were remanded by the U.S. Court of Appeals for the D.C. Circuit. FERC proposed a new framework to determine (1) whether an existing ROE is unjust and unreasonable and, if so, (2) how to calculate a replacement ROE. The parties to these proceedings were directed to submit briefs on this new proposed framework and how they would apply them in each of the four complaint proceedings. Briefs and reply briefs will be filed in the first quarter of 2019.

In the third quarter of 2018, we recorded an other-than-temporary impairment charge to our investment in the Access Northeast project of $32.9 million pre-tax ($26 million after-tax), representing the full carrying value of our equity method investment.denied Northern Pass’ siting application. As a result of ~~certain non-Eversource natural gas related events in eastern Massachusetts in September 2018~~the New Hampshire Supreme Court decision, Eversource concluded that resulted in widespread damage, compounded by the failure to secure Massachusetts legislation to date, we believe there is significant uncertainty around the future timing of, and ability to secure, needed legislative changes affecting the natural gas industry and pipeline expansion, which may significantly delay the completionconstruction of the ~~Access Northeast project.~~project was no longer probable and that substantially all of the capitalized project costs, which totaled $318 million, certain of which are subject to cost reimbursement agreements, were impaired. Eversource recorded a pre-tax impairment charge of $239.6 million (after-tax charge of $204.4 million, or $0.64 per share) for the three and six months ended June 30, 2019, which was reflected in the Electric Transmission segment.

On ~~August 26, 2018, PSNH completed~~July 18, 2019, NYSERDA announced that Sunrise Wind, a joint project between Eversource and Ørsted, was selected to negotiate a 25-year power purchase agreement for an 880 MW offshore wind facility. Sunrise Wind will be developed 30 miles east of Montauk Point, Long Island. Subject to contract signing and Eversource’s and Ørsted's final investment decisions, the ~~sale of its hydroelectric generation assets. In accordance with the Purchase and Sale Agreement dated October 11, 2017, the original purchase price of $83 million was adjusted~~project is expected to ~~reflect contractual adjustments totaling $5.7 million, resulting~~be operational in ~~net proceeds of $77.3 million. As of August 26, 2018, PSNH no longer owns any generation facilities.~~2024.

Earnings Overview

Consolidated: Below is a summary of our earnings by business, which also reconciles the non-GAAP financial ~~measure~~measures of consolidated non-GAAP earnings and EPS, as well as EPS by business, to the most directly comparable GAAP ~~measure~~measures of consolidated Net Income Attributable to Common Shareholders and diluted ~~EPS, for the third quarter and the first nine months of 2018 and 2017.~~ EPS.


	For the Three Months Ended September 30,								For the Nine Months Ended September 30,								For the Three Months Ended June 30,										For the Six Months Ended June 30,
	2018				2017				2018				2017				2019						2018				2019						2018
(Millions of Dollars, Except Per Share Amounts)	Amount		Per Share		Amount		Per Share		Amount		Per Share		Amount		Per Share		Amount			Per Share			Amount		Per Share		Amount			Per Share			Amount		Per Share
Net Income Attributable to Common Shareholders (GAAP)	$	289.4	$	0.91	$	260.4	$	0.82	$	801.7	$	2.52	$	750.6	$	2.36	$	31.5		$	0.10		$	242.8	$	0.76	$	340.1		$	1.07		$	512.3	$	1.61

Regulated Companies	$	288.3	$	0.91	$	250.2	$	0.79	$	785.4	$	2.47	$	732.1	$	2.30	$	228.6		$	0.72		$	226.2	$	0.71	$	544.2		$	1.71		$	497.1	$	1.57
Eversource Parent and Other Companies	1.1		—		10.2		0.03		16.3		0.05		18.5		0.06		7.3			0.02			16.6		0.05		0.3			—			15.2		0.04
Non-GAAP Earnings																	$	235.9		$	0.74		$	242.8	$	0.76	$	544.5		$	1.71		$	512.3	$	1.61
Impairment of Northern Pass Transmission (after-tax)																	(204.4		)	(0.64		)	—		—		(204.4		)	(0.64		)	—		—
Net Income Attributable to Common Shareholders (GAAP)	$	289.4	$	0.91	$	260.4	$	0.82	$	801.7	$	2.52	$	750.6	$	2.36	$	31.5		$	0.10		$	242.8	$	0.76	$	340.1		$	1.07		$	512.3	$	1.61

Regulated Companies: Our regulated companies comprise the electric distribution, ~~(including NSTAR Electric's solar power facilities and PSNH's generation facilities prior to sale),~~ electric transmission, natural gas distribution and water distribution segments. A summary of our segment earnings and EPS is as follows:


	For the Three Months Ended September 30,												For the Nine Months Ended September 30,								For the Three Months Ended June 30,										For the Six Months Ended June 30,
	2018						2017						2018				2017				2019						2018				2019						2018
(Millions of Dollars, Except Per Share Amounts)	Amount			Per Share			Amount			Per Share			Amount		Per Share		Amount		Per Share		Amount			Per Share			Amount		Per Share		Amount			Per Share			Amount		Per Share
Net Income - Regulated Companies (GAAP)																					$	24.2		$	0.08		$	226.2	$	0.71	$	339.8		$	1.07		$	497.1	$	1.57

Electric Distribution	$	173.8		$	0.55		$	157.4		$	0.50		$	379.3	$	1.19	$	393.4	$	1.24	$	105.4		$	0.33		$	101.3	$	0.32	$	225.4		$	0.71		$	205.5	$	0.65
Electric Transmission	109.5			0.34			99.0			0.31			329.6		1.04		289.6		0.91
Electric Transmission, excluding Northern Pass Transmission impairment (Non-GAAP)																					117.0			0.37			112.7		0.35		235.3			0.74			220.1		0.69
Natural Gas Distribution	(12.6		)	(0.04		)	(6.2		)	(0.02		)	50.2		0.16		49.1		0.15		(1.8		)	—			5.0		0.02		74.7			0.23			62.8		0.20
Water Distribution	17.6			0.06			N/A			N/A			26.3		0.08		N/A		N/A		8.0			0.02			7.2		0.02		8.8			0.03			8.7		0.03
Net Income - Regulated Companies	$	288.3		$	0.91		$	250.2		$	0.79		$	785.4	$	2.47	$	732.1	$	2.30
Net Income - Regulated Companies (Non-GAAP)																					$	228.6		$	0.72		$	226.2	$	0.71	$	544.2		$	1.71		$	497.1	$	1.57
Impairment of Northern Pass Transmission (after-tax)																					(204.4		)	(0.64		)	—		—		(204.4		)	(0.64		)	—		—
Net Income - Regulated Companies (GAAP)																					$	24.2		$	0.08		$	226.2	$	0.71	$	339.8		$	1.07		$	497.1	$	1.57

Our electric distribution segment earnings increased ~~$16.4~~$4.1 million in the ~~third~~second quarter of ~~2018,~~2019, as compared to the ~~third~~second quarter of ~~2017,~~2018, due primarily to ~~the impact of the~~ CL&P base distribution rate increases effective May 1, 2019 and May 1, 2018, an NSTAR Electric base distribution rate increase effective ~~May~~January 1, 2019, and higher earnings from CL&P's capital tracker mechanism effective July 1, 2018 the recognition of carrying charges on PSNH storm costs approved for recovery, higher sales volumes at PSNH, higher non-service income from our benefit plans, and a gain on the sale of property at PSNH. Earnings were also favorably impacted by lower income tax expense, net of lower distribution revenues resulting from the Tax Cuts and Jobs Act. The earnings increase wasdue to increased electric system improvements, partially offset by higher operations and maintenance expense, higher depreciation expense, lower non-service income from our benefit plans and the absence in 2019 of generation earnings at PSNH due to the sale of its ~~thermal and hydroelectric~~ generation assets in ~~2018, higher depreciation expense and higher property and other tax expense.~~2018.

Our electric distribution segment earnings ~~decreased $14.1~~increased $19.9 million in the first ~~nine months~~half of ~~2018,~~2019, as compared to the first ~~nine months~~half of ~~2017,~~2018, due primarily to ~~lower generation earnings at PSNH due to the sales of its thermal~~CL&P and hydroelectric generation assets in 2018, higher operations and maintenance expense, higher depreciation expense and higher property and other tax expense. The earnings decrease was partially offset by higher non-service income from our benefit plans, the impact of the CL&PNSTAR Electric base distribution rate ~~increase~~increases, higher earnings from CL&P's capital tracker mechanism effective ~~May~~July 1, 2018 due to increased electric system improvements, and the recognition in the first quarter of 2019 of carrying charges on PSNH storm costs approved for ~~recovery,~~recovery. The earnings increase was partially offset by higher depreciation expense, higher operations and ~~a gain on~~maintenance expense, lower non-service income from our benefit plans, and the absence in 2019 of generation earnings at PSNH due to the sale of ~~property at PSNH. Earnings were also favorably impacted by lower income tax expense, net of lower distribution revenues resulting from the Tax Cuts and Jobs Act.~~its generation assets in 2018.

Our electric transmission segment earnings ~~increased $10.5~~decreased $200.1 million and ~~$40.0~~$189.2 million in the ~~third~~second quarter and first ~~nine months~~half of ~~2018,~~2019, respectively, as compared to the ~~third~~second quarter and first ~~nine months~~half of ~~2017,~~2018, due primarily to the impairment of NPT, which resulted in an after-tax charge of $204.4 million, or $0.64 per share. Excluding the NPT impairment charge, earnings increased $4.3 million and $15.2 million in the second quarter and first half of 2019, respectively, as compared to the second quarter and first half of 2018, due primarily to a higher transmission rate base as a result of our continued investment in our transmission ~~infrastructure.~~infrastructure, partially offset by a lower benefit from the annual billing and cost reconciliation filing with FERC. For further information on the impairment of NPT, see "Business Development and Capital Expenditures - Electric Transmission Business - Northern Pass" in this Management's Discussion and Analysis of Financial Condition and Results of Operations.

Our natural gas distribution segment earnings decreased ~~$6.4~~$6.8 million in the ~~third~~second quarter of ~~2018,~~2019, as compared to the ~~third~~second quarter of ~~2017,~~2018, due primarily to higher operations and maintenance expense, lower revenues due to the seasonality of the decoupled rate structure arising from the Yankee Gas base distribution rate case, which provides lower earnings in non-heating months, and higher depreciation and property tax expense.

Our natural gas distribution segment earnings increased ~~$1.1~~$11.9 million in the first ~~nine months~~half of ~~2018,~~2019, as compared to the first ~~nine months~~half of ~~2017,~~2018, due primarily to anthe impact of the Yankee Gas base distribution rate increase effective November 15, 2018 and higher earnings from capital tracker mechanisms due to continued investment in ~~sales volumes~~infrastructure. Yankee Gas' decoupled rate structure is seasonally structured and ~~demand revenues driven by colder January and April weather~~provides greater earnings in ~~Connecticut in 2018, as compared to~~ the ~~same periods in 2017, as well as growth in new customer base,~~winter heating months. The earnings increase was partially offset by higher operations and maintenance expense, higher property and other taxes expense, and higher depreciation expense.

Our ~~third~~water distribution segment earnings increased $0.8 million and $0.1 million in the second quarter and first ~~nine months~~half of ~~2018 water distribution segment results reflect~~2019, respectively, as compared to the ~~earnings~~second quarter and first half of ~~the Aquarion~~2018. Our water distribution business ~~which was acquired on December 4, 2017.~~is seasonal, with lower earnings occurring during the winter months and higher earnings occurring during the summer months.

Eversource Parent and Other Companies: Eversource parent and other companies had earnings of ~~$1.1~~$7.3 million in the ~~third~~second quarter of 2019 and $0.3 million in the first half of 2019, compared with $16.6 million in the second quarter of 2018 and ~~$16.3~~$15.2 million in the first ~~nine months~~half of ~~2018, compared with $10.2 million in the third quarter of 2017 and $18.5 million in the first nine months of 2017.~~2018. The decrease in earnings in both periods was due primarily to ~~a pre-tax $32.9 million ($26 million after-tax) other-than-temporary impairment to our equity method investment~~the absence in the Access Northeast project and higher interest expense, partially offset by a lower effective tax rate due primarily to an $18 million aggregate after-tax benefit resulting from both federal and Connecticut tax law changes. Earnings in the first nine months were also favorably impacted by increased unrealized gains on our investment in a renewable energy fund and2019 of an income tax benefit associated with our ~~investments. For further information on~~investments in the ~~impairment~~second quarter of ~~our Access Northeast project, see "Business Development~~2018, higher interest expense, and ~~Capital Expenditures - Natural Gas Transmission Business"~~a higher effective tax rate, partially offset by higher return at Eversource Service as a result of increased investments in ~~this~~ ~~Management's Discussion~~property, plant and ~~Analysis of Financial Condition and Results of Operations.~~equipment.

Electric, Natural Gas and Water Sales Volumes: Weather, fluctuations in energy supply costs, conservation measures (including utility-sponsored energy efficiency programs), and economic conditions affect customer energy usage and water consumption. Industrial sales volumes are less sensitive to temperature variations than residential and commercial sales volumes. In our service territories, weather impacts both electric and water sales volumes during the summer and both electric and natural gas sales volumes during the winter; however, natural gas sales volumes are more sensitive to temperature variations than ~~are~~ electric sales volumes. Customer heating or cooling usage may not directly correlate with historical levels or with the level of degree-days that occur.

Fluctuations in retail electric sales volumes at PSNH ~~and natural gas sales volumes at Yankee Gas~~ impact earnings ("Traditional" in the table below). For CL&P, NSTAR Electric, ~~(effective February 1, 2018, as a result of the DPU-approved rate case decision)~~Yankee Gas, and NSTAR Gas, fluctuations in retail sales volumes do not impact earnings due to their respective regulatory commission-approved distribution revenue decoupling mechanisms ("Decoupled" in the table below). These distribution revenues are decoupled from their customer sales volumes, which breaks the relationship between sales volumes and revenues recognized. Fluctuations in water sales volumes largely do not impact earnings as our Connecticut water distribution business is also decoupled.

A 2016 DPU-approved energy efficiency plan at NSTAR Electric authorized recovery of LBR in its eastern Massachusetts service territory until LBR was covered under a decoupled rate structure, which occurred on February 1, 2018. NSTAR Electric recognized LBR of $7.0 million in the first nine months of 2018, compared to $18.8 million and $54.7 million in the third quarter and first nine months of 2017, and no longer has an LBR mechanism effective February 1, 2018.

A summary of our retail electric GWh sales volumes, our firm natural gas MMcf sales volumes, and our water MG sales volumes, and percentage changes, ~~for the three and nine months ended September 30, 2018, as compared to 2017,~~ is as follows:

Electric Firm Natural Gas Water
Sales Volumes (GWh) Percentage
Increase Sales Volumes (MMcf) Percentage
Increase/
(Decrease) Sales Volumes (MG) Percentage
Increase/
(Decrease)
2018
2017 ⁽¹⁾
2018 2017 2018
2017 ⁽²⁾

Three Months Ended September 30:
Traditional 2,206
2,020
9.2 % 5,984
5,550
7.8 % �� 732
706
3.7 %
Decoupled 13,110
12,076
8.6 % 4,674
4,828
(3.2 )% 7,118
7,257
(1.9 )%
Special Contracts ⁽³⁾
N/A
N/A
N/A
684
1,147
(40.4 )% N/A
N/A
N/A
Total - Decoupled and
Special Contracts 13,110
12,076
8.6 % 5,358
5,975
(10.3 )% 7,118
7,257
(1.9 )%
Total Sales Volumes 15,316
14,096
8.7 % 11,342
11,525
(1.6 )% 7,850
7,963
(1.4 )%



	Electric				Firm Natural Gas				Water
	Sales Volumes (GWh)		Percentage Decrease		Sales Volumes (MMcf)		Percentage Increase/ (Decrease)		Sales Volumes (MG)		Percentage Decrease
Three Months Ended June 30:	2019	2018 ⁽¹⁾	Percentage Decrease		2019	2018 ⁽²⁾	Percentage Increase/ (Decrease)		2019	2018	Percentage Decrease
Traditional	1,757	1,803	(2.6	)%	—	—	—	%	459	485	(5.4	)%
Decoupled and Special Contracts ⁽³⁾	9,853	10,330	(4.6	)%	18,191	18,932	(3.9	)%	4,834	5,016	(3.6	)%
Total Sales Volumes	11,610	12,133	(4.3	)%	18,191	18,932	(3.9	)%	5,293	5,501	(3.8	)%

Six Months Ended June 30:
Traditional	3,724	3,775	(1.4	)%	—	—	—	%	910	953	(4.5	)%
Decoupled and Special Contracts ⁽³⁾	21,037	21,579	(2.5	)%	63,358	61,983	2.2	%	9,212	9,373	(1.7	)%
Total Sales Volumes	24,761	25,354	(2.3	)%	63,358	61,983	2.2	%	10,122	10,326	(2.0	)%

Nine Months Ended September 30:
Traditional 7,857
7,542
4.2 % 35,745
32,233
10.9 % 1,684
1,608
4.7 %
Decoupled 32,814
31,889
2.9 % 35,358
33,958
4.1 % 16,491
17,084
(3.5 )%
Special Contracts ⁽³⁾
N/A
N/A
N/A
2,222
3,495
(36.4 )% N/A
N/A
N/A
Total - Decoupled and
Special Contracts 32,814
31,889
2.9 % 37,580
37,453
0.3 % 16,491
17,084
(3.5 )%
Total Sales Volumes 40,671
39,431
3.1 % 73,325
69,686
5.2 % 18,175
18,692
(2.8 )%
⁽¹⁾ Effective February 1, 2018, NSTAR Electric operated entirely under a decoupled rate structure. The 2018 sales volumes for NSTAR Electric have been recast to present January 2018 as decoupled to conform to the current year presentation.

⁽¹⁾

In 2017 and in the month of January 2018, NSTAR Electric operated under two different rate structures (traditional and decoupled) based on its service territory geography. Effective February 1, 2018, NSTAR Electric operated entirely under a decoupled rate structure. The 2017 sales volumes for NSTAR Electric have been recast to present February through September 2017 as decoupled, to conform to the 2018 presentation for comparative purposes.

⁽²⁾ Effective November 15, 2018, Yankee Gas operated under a decoupled rate structure. The 2018 sales volumes for Yankee Gas have been recast to present 2018 as decoupled to conform to the current year presentation.


⁽²⁾	~~Eversource acquired its water distribution business on December 4, 2017. Prior year sales volumes have been presented for comparative purposes.~~


⁽³⁾	⁽³⁾Special contracts are unique to Yankee Gas ~~natural gas distribution customers who take service under such an arrangement and generally specify the amount of distribution revenue to be paid to Yankee Gas regardless of the customers' usage.~~

Traditional retail electric sales volumes were higher in the third quarter of 2018, as compared to the third quarter of 2017, due primarily to warmer summer weather in 2018. Traditional retail electric sales volumes were higher in the first nine months of 2018, as compared to the first nine months of 2017, due primarily to warmer summer weather in 2018 and colder weather in January 2018 at NSTAR Electric (prior to its decoupled rate structure). Cooling degree days in the third quarter and first nine months of 2018 were 50.3 percent and 28.3 percent higher in New Hampshire, respectively, as compared to the same periods in 2017. Heating degree days in January of 2018 were 21.7 percent higher in the Boston metropolitan, as compared to January 2017.

~~Our firm natural gas sales volumes are subject to many of the same influences as our retail electric sales volumes. In addition, they have benefited from customer growth in our~~ natural gas distribution ~~segment. Traditional firm natural gas sales volumes were higher in~~customers who take service under such an arrangement and generally specify the ~~first nine months~~amount of ~~2018, as compared~~distribution revenue to be paid to Yankee Gas regardless of the first nine months of 2017, due primarily to colder January and April weather in 2018. Heating degree days in the first nine months of 2018 were 4.1 percent higher in Connecticut, as compared to the first nine months of 2017.customers' usage.

Liquidity

Cash ~~and cash equivalents~~ totaled ~~$59.1~~$20.6 million as of ~~September~~June 30, ~~2018,~~2019, compared with ~~$38.2~~$108.1 million as of December 31, ~~2017.~~2018.

The amount of borrowings outstanding and available under the commercial paper programs were as follows:



	Borrowings Outstanding as of				Available Borrowing Capacity as of				Weighted-Average Interest Rate as of
	June 30, 2019		December 31, 2018		June 30, 2019		December 31, 2018		June 30, 2019		December 31, 2018
(Millions of Dollars)	June 30, 2019		December 31, 2018		June 30, 2019		December 31, 2018		June 30, 2019		December 31, 2018
Eversource Parent Commercial Paper Program	$	566.0	$	631.5	$	884.0	$	818.5	2.55	%	2.77	%
NSTAR Electric Commercial Paper Program	163.0		278.5		487.0		371.5		2.42	%	2.50	%

~~The amount of borrowings outstanding and available under the commercial paper programs were as follows:~~

records intercompany interest income from its loans to subsidiaries, which is eliminated in consolidation. Intercompany loans from Eversource parent to its subsidiaries are eliminated in consolidation on Eversource's balance sheets. As of ~~September~~June 30, ~~2018,~~2019, there were intercompany loans from Eversource parent ~~of $45.9 million~~ to CL&P ~~$46.6~~of $259.4 million, to PSNH of $20.1 million, and ~~$16.0 million~~ to Harbor Electric Energy Company, a wholly-owned subsidiary of NSTAR Electric. Intercompany loans from Eversource parent to other Eversource subsidiaries primarily included $196.9 million to Eversource Service, $108.0 million to Aquarion, and $117.2 million to NSTAR Gas asElectric ("HEEC"), of ~~September 30, 2018.~~$40.3 million. As of December 31, ~~2017,~~2018, there were intercompany loans from Eversource parent to PSNH of ~~$69.5 million to CL&P and $262.9 million to PSNH.~~$57.0 million. Intercompany ~~loans from Eversource parent to other Eversource subsidiaries primarily included $115.9 million to Eversource Service and $198.0 million to NSTAR Gas as of December 31, 2017. These intercompany~~ loans from Eversource parent are included in Notes Payable to Eversource Parent and are classified in current liabilities on the respective subsidiary's balance sheets. ~~Intercompany loans from Eversource parent are eliminated in consolidation on Eversource's balance sheets.~~

Long-Term Debt:The following table summarizes long-term debt issuances and repayments:



(Millions of Dollars)	Issue Date	Issuance/(Repayment)			Maturity Date	Use of Proceeds for Issuance/ Repayment Information
CL&P:
4.00% 2018 Series A First Mortgage Bonds ⁽¹⁾	April 2019	$	300.0		April 2048	Repaid short-term borrowings that were used to repay long-term debt that matured on February 1, 2019 and fund capital expenditures and working capital
5.50% 2009 Series A First Mortgage Bonds	February 2009	(250.0		)	February 2019	Repaid at maturity on February 1, 2019
NSTAR Electric:
3.25% 2019 Debentures	May 2019	400.0			May 2029	Repaid short-term borrowings that were used to fund investments in eligible green expenditures
PSNH:
3.60% 2019 Series T First Mortgage Bonds	June 2019	300.0			July 2049	Repay long-term debt due to mature in December 2019, repaid short-term borrowings and fund capital expenditures and working capital
Other:
NSTAR Gas 3.74% Series Q First Mortgage Bonds	July 2019	75.0			August 2049	Repaid short-term borrowings and fund capital expenditures and working capital


⁽¹⁾	These ~~notes~~bonds are part of the same series issued by ~~Eversource parent~~CL&P in March ~~2016.~~2018. The aggregate outstanding principal amount ~~for~~of these ~~notes~~bonds is now ~~$450~~$800 million.

~~On October 10, 2018, PSNH delivered~~As a ~~redemption notice for its $89.3~~result of the NSTAR Gas debt issuance in July 2019, $75 million ~~adjustable rate 2001 Series A Pollution Control Revenue Bonds. The bonds, which are scheduled~~of current portion of long-term debt was reclassified to ~~mature on May 1, 2021, will be redeemed on November 28, 2018 at a redemption price of $89.3 million. The bonds are classified as~~ Long-Term Debt on ~~the~~Eversource's consolidated balance sheet as of ~~September~~June 30, ~~2018.~~2019.

Rate Reduction Bonds: PSNH Funding LLC 3 (PSNH Funding) is a bankruptcy remote, special purpose, wholly-owned subsidiary of PSNH. PSNH Funding was formed solely to issue RRBs to finance PSNH’s unrecovered stranded costs associated with the divestiture of its generation assets.

On May 8, 2018, PSNH Funding issued $635.7 million of securitized RRBs in multiple tranches with a weighted average interest rate of 3.66 percent, and final maturity dates ranging from 2026 to 2035. The RRBs are expected to be repaid by February 1, 2033.PSNH's RRB payments consist of principal and interest and ~~will be~~are paid semi-annually, beginning on February 1, 2019. ~~The RRBs were~~PSNH paid $30.7 million of RRB principal payments and $16.2 million of interest payments in the first half of 2019.

Common Share Issuance and Forward Sale Agreement: On June 4, 2019, Eversource completed an equity offering of 17,940,000 common shares, consisting of 5,980,000 common shares issued directly by us and 11,960,000 common shares issuable pursuant to a ~~finance orderissued~~forward sale agreement with an investment bank. The issuance of 5,980,000 common shares resulted in proceeds of $426.9 million, net of issuance costs, and was reflected in shareholders’ equity and as a financing activity on the statement of cash flows.

Under the forward sale agreement, a total of 11,960,000 common shares were borrowed from third parties and sold to the underwriters. The forward sale agreement allows Eversource, at its election and prior to May 29, 2020, to physically settle the forward sale agreement by issuing common shares in exchange for net proceeds at the then-applicable forward sale price specified by the ~~NHPUC~~agreement (initially, $71.48 per share) or, alternatively, to settle the forward sale agreement in whole or in part through the delivery or receipt of shares or cash. The forward sale price is subject to adjustment daily based on ~~January~~a floating interest rate factor and will decrease in respect of certain fixed amounts specified in the agreement, such as dividends.

Eversource’s intent is to physically settle the forward sale agreement by issuing common shares. As of June 30, ~~2018~~2019, if Eversource had elected to ~~recover stranded costs resulting from~~net settle the ~~divestiture~~forward sale agreement, Eversource would have been required to pay $50.2 million under a cash settlement or would have been required to deliver 662,694 common shares under a net share settlement.

Issuances of ~~PSNH’s generation assets.~~

~~The proceeds were used~~shares under the forward sale agreement are classified as equity transactions. Accordingly, no amounts relating to purchase PSNH’s stranded cost asset-recovery property, including its vested property right to bill, collect and adjust a non-bypassable stranded cost recovery charge from PSNH’s retail customers. The collectionsthe forward sale agreement have or will be ~~used~~recorded in the financial statements until settlements take place. Prior to ~~pay principal, interest~~any settlements, the only impact to the financial statements is the inclusion of incremental shares within the calculation of diluted EPS using the treasury stock method. See Note 15, "Earnings Per Share," for information on the forward sale agreement’s impact on the calculation of diluted EPS.

Eversource intends to use the net proceeds received upon the direct issuance of common shares and ~~other costs in connection with~~ the ~~RRBs. The RRBs are secured by the stranded cost asset-recovery property. Cash collections from the stranded cost recovery charges and funds on deposit in trust accounts are the sole source of funds~~net proceeds expected to ~~satisfy the debt obligation. PSNH is not the owner~~be received upon settlement of the ~~RRBs,~~forward sale agreement to repay short-term debt under the commercial paper program, to fund capital spending to enhance reliability and ~~PSNH Funding’s assets~~fund clean energy initiatives, and ~~revenues are not available to pay PSNH’s creditors. The RRBs are non-recourse senior secured obligations of PSNH Funding and are not insured or guaranteed by PSNH or Eversource Energy.~~for general corporate purposes.

Cash Flows: Cash flows provided by operating activities totaled ~~$1.41 billion~~$924.6 million in the first ~~nine months~~half of ~~2018,~~2019, compared with ~~$1.48 billion~~$698.1 million in the first ~~nine months~~half of ~~2017.~~2018. The ~~decrease~~increase in operating cash flows was due primarily to a $172.4 million decrease in pension and PBOP cash contributions made in the first half of 2019 compared to the first half of 2018, approximately $172 million of storm restoration cost payments made in the first half of 2018, ~~for storm restoration costs~~and the timing of ~~approximately $228 million, an~~cash collections on our accounts receivable. Also contributing to the increase ~~of $67.4 million in~~were lower income tax payments made in the first ~~nine months~~half of ~~2018, as compared to 2017,~~2019 of $59.2 million and $68.8 million in DOE Phase IV proceeds received by CYAPC and YAEC in the ~~unfavorable impacts related to the timing~~second quarter of ~~payments of our working capital items, including accounts receivable.~~2019. Partially offsetting these ~~unfavorable~~favorable impacts were the timing of ~~cash collected~~collections for regulatory tracking mechanisms, and ~~a decrease~~the timing of ~~$9.0 million in 2018 of pension~~accounts payable cash payments and ~~PBOP contributions.~~

We believe the future operating cash flows of Eversource, CL&P, NSTAR Electric and PSNH, along with our existing borrowing availability and access to financial markets for the issuance of new long-term debt, will be sufficient to meet anyother working capital ~~and future operating requirements, and capital investment forecast opportunities.~~items.

On ~~September 10, 2018,~~May 1, 2019, our Board of Trustees approved a common share dividend payment of ~~$0.505~~$0.535 per share, which was paid on ~~September~~June 28, ~~2018,~~2019 to shareholders of record as of ~~September 21, 2018.~~May 23, 2019. In the first ~~nine months~~half of ~~2018,~~2019, we paid cash dividends of ~~$480.1~~$323.3 million, compared with ~~$451.6~~$320.1 million paid in the first ~~nine months~~half of ~~2017.~~2018.

In the first ~~nine months~~half of ~~2018,~~2019, CL&P, NSTAR Electric and PSNH paid ~~$60.0~~$275.4 million, ~~$161.0~~$181.8 million, and ~~$150.0~~$233.0 million, respectively, in common stock dividends to Eversource parent. In

Beginning in 2019, Eversource began issuing treasury shares to satisfy awards under the ~~first nine months of 2018, PSNH returned $530 million of capital to~~Company's incentive plans, shares issued under the dividend reinvestment plan, and matching contributions under the Eversource ~~parent.~~401k Plan.

Investments in Property, Plant and Equipment on the statements of cash flows do not include amounts incurred on capital projects but not yet paid, cost of removal, AFUDC related to equity funds, and the capitalized and deferred portions of pension and PBOP expense. In the first ~~nine months~~half of ~~2018,~~2019, investments for Eversource, CL&P, NSTAR Electric, and PSNH were ~~$1.89~~$1.38 billion, ~~$660.7~~$466.1 million, ~~$539.0~~$418.6 million, and ~~$236.2~~$132.8 million, respectively.

We expect the future operating cash flows of Eversource, CL&P, NSTAR Electric and PSNH, along with our existing borrowing availability and access to both debt and equity markets, will be sufficient to meet any working capital and future operating requirements, and capital investment forecasted opportunities.

Credit Ratings: On June 5, 2019, Moody’s raised the credit ratings of NSTAR Electric from A2 positive to A1 stable. On July 25, 2019, S&P downgraded the ratings on Eversource and all of it's subsidiaries and revised the outlooks from negative to stable.

A summary of our corporate credit ratings and outlooks by Moody's, S&P and Fitch is as follows:



	Moody's		S&P		Fitch
	Current	Outlook	Current	Outlook	Current	Outlook
Eversource Parent	Baa1	Stable	A-	Stable	BBB+	Stable
CL&P	A3	Stable	A	Stable	A-	Stable
NSTAR Electric	A1	Stable	A	Stable	A	Stable
PSNH	A3	Stable	A	Stable	A-	Stable

A summary of the current credit ratings and outlooks by Moody's, S&P and Fitch for senior unsecured debt of Eversource parent and NSTAR Electric, and senior secured debt of CL&P and PSNH is as follows:



	Moody's		S&P		Fitch
	Current	Outlook	Current	Outlook	Current	Outlook
Eversource Parent	Baa1	Stable	BBB+	Stable	BBB+	Stable
CL&P	A1	Stable	A+	Stable	A+	Stable
NSTAR Electric	A1	Stable	A	Stable	A+	Stable
PSNH	A1	Stable	A+	Stable	A+	Stable

Business Development and Capital Expenditures

Our consolidated capital expenditures, including amounts incurred but not paid, cost of removal, AFUDC, and the capitalized and deferred portions of pension and PBOP expense (all of which are non-cash factors), totaled ~~$1.96~~$1.41 billion in the first ~~nine months~~half of ~~2018,~~2019, compared to ~~$1.69~~$1.18 billion in the first ~~nine months~~half of ~~2017.~~2018. These amounts included ~~$113.9~~$97.6 million and ~~$97.8~~$69.8 million in the first ~~nine months~~half of ~~2018~~2019 and ~~2017,~~2018, respectively, related to information technology and facilities upgrades and enhancements, primarily at Eversource Service and The Rocky River Realty Company.

~~Offshore Wind Projects:~~ Bay State Wind is a proposed offshore wind project being jointly developed by Eversource and Denmark-based Ørsted. Bay State Wind will be located in a 300-square-mile area of the Atlantic Ocean approximately 25 miles off the coast of Massachusetts that has the ultimate potential to generate at least 2,000 MW of clean, renewable energy. Eversource and Ørsted each hold a 50 percent ownership interest in Bay State Wind.

Based on current clean energy requirements in New England and New York, future solicitations for offshore wind are expected to occur in late 2018 and early 2019. Bay State Wind expects to participate, or has submitted proposals, in some or all of the following opportunities:

Connecticut issued an RFP for zero carbon resources for up to 12 terawatt hours, in which nuclear and clean energy resources, including offshore wind, are eligible to participate. Bay State Wind submitted its bid in September 2018. We currently expect a decision in late 2018 or early 2019.

~~Massachusetts’ second offshore wind RFP for 400 MW to 800 MW is expected to be issued no later than mid-2019.~~

~~New York has a goal to procure 2,400 MW of offshore wind by 2030.~~ ~~The New York State Energy Research and Development Authority ("~~NYSERDA") issued a draft RFP for 800 MW in September 2018, and the final RFP is expected to be issued in the fourth quarter of 2018. NYSERDA has the authority to award more than 800 MW in the first solicitation if sufficient attractive offers are received. Contracts are expected to be awarded in 2019.

~~Bay State Wind had previously participated in certain other New England RFPs earlier this year and was not selected.~~

~~Natural Gas Transmission Business:~~ Access Northeast is a natural gas pipeline and storage project being developed jointly by Eversource, Enbridge, Inc. ("Enbridge") and National Grid plc ("National Grid"), through Algonquin Gas Transmission, LLC ("AGT"). Eversource owns a 40 percent interest in the project, which is accounted for as an equity method investment.

Electric Transmission Business: Our consolidated electric transmission business capital expenditures ~~increased~~decreased by ~~$124.4~~$30.8 million in the first ~~nine months~~half of ~~2018,~~2019, as compared to the first ~~nine months~~half of ~~2017.~~2018. A summary of electric transmission capital expenditures by company is as follows:


	For the Nine Months Ended September 30,				For the Six Months Ended June 30,
(Millions of Dollars)	2018		2017		2019		2018
CL&P	$	346.7	$	300.7	$	220.6	$	240.4
NSTAR Electric	210.8		179.4		166.4		138.6
PSNH	142.1		87.4		59.6		88.7
NPT	24.4		32.1		9.7		19.4
Total Electric Transmission Segment	$	724.0	$	599.6	$	456.3	$	487.1

Northern Pass: Northern Pass is Eversource's planned 1,090 MW HVDC transmission line that ~~will~~would interconnect from the Québec-New Hampshire border to Franklin, New Hampshire and an associated alternating current radial transmission line between Franklin and Deerfield, New Hampshire.

~~Northern Pass has achieved several key milestones, including receiving the following major permits:~~

~~NHPUC approval on February 12, 2018 for the proposed lease of certain land and easement rights from PSNH to NPT, concluding that the lease is in the public interest;~~

U.S. Forest Service Record of Decision on January 5, 2018, which allows NPT to install approximately 11 miles of underground transmission lines along existing roads through the White Mountain National Forest;

~~Province of Québec permit granted to HQ on December 21, 2017 to construct the hydroelectric transmission line that will connect at the border of New Hampshire;~~

~~DOE Record of Decision and Presidential Permit on November 16, 2017, which will allow construction of transmission facilities at the Québec-New Hampshire border; and~~

DOE final Environmental Impact Statement issued on August 10, 2017, which concluded that the proposed Northern Pass route is the preferred alternative, providing substantial benefits with only minimal impacts.

On January 25, 2018, Northern Pass was selected from the 46 proposal packages submitted as the winning bidder in the Massachusetts clean energy request for proposal ("RFP"), which successfully positioned Northern Pass to provide a firm delivery of hydropower to Massachusetts. On February 1, 2018, the NHSEC voted to deny Northern Pass’ siting application. On March 28, 2018, the Massachusetts EDCs, in coordination with the DOER and an independent evaluator, notified Northern Pass that the EDCs had terminated its selection and all contract negotiations.

On March 30, 2018, the ~~NHSEC released its~~New Hampshire Site Evaluation Committee (“NHSEC”), one of the state regulatory agencies from which Northern Pass was required to obtain a siting permit, issued a written decision ~~confirming its denial.~~denying Northern Pass’ siting application. In the first quarter of 2018, Eversource conducted an impairment review of the Northern Pass project and concluded, at that time, that the recorded amount of project costs was recoverable. On ~~April 27, 2018, NPT filed a motion for rehearing with the NHSEC and on~~ July 12, 2018, the NHSEC issued ~~its~~a written decision denying Northern Pass’ April 2018 motion for ~~rehearing. On August 10,~~rehearing, and on October 12, 2018, ~~NPT filed an appeal to~~ the New Hampshire Supreme Court ~~based on~~accepted an appeal filed by Northern Pass that alleged that the ~~NHSEC’s failure~~NHSEC failed to follow applicable law in its review of the project. On ~~October 12, 2018,~~July 19, 2019, the New Hampshire Supreme Court ~~accepted this appeal and directed the NHSEC to transmit the record of its proceedings to the Court by December 11, 2018. The Supreme Court has not yet~~ issued a ~~schedule for the balance of the appeal process. In parallel, NPT intends to continue to pursue all available options to secure NHSEC approval and to construct the project.~~

~~The March 2018 NHSEC~~ decision denying Northern ~~Pass'~~Pass’ appeal and affirming the NHSEC’s evaluation and decision that denied Northern Pass’ siting ~~application caused us~~application.

Eversource evaluated the impact of the New Hampshire Supreme Court decision on the probability of construction and operation of Northern Pass. Eversource concluded that construction of the project was no longer probable and that substantially all of the capitalized project costs, which totaled $318 million, certain of which are subject to ~~review~~cost reimbursement agreements, were impaired. Eversource concluded that the ~~recoverability~~New Hampshire Supreme Court decision is a subsequent event that required recognition in the financial statements as of ~~our~~and for the three and six months ended June 30, 2019.

Based on the conclusion that the construction of Northern Pass was not probable, Eversource recorded an impairment charge for all of the project costs associated with Northern Pass, which were primarily engineering design, siting, permitting and legal costs, along with appropriate allowances for funds used during construction, and recognized a receivable for certain cost reimbursement agreements. Additionally, Eversource recorded an impairment charge associated with the land acquired to construct Northern Pass in order to recognize the land at its estimated fair value based on assessed values and transaction costs. In total, this resulted in a pre-tax impairment charge of $239.6 million within Operating Income on the statement of income for the three and six months ended June 30, 2019, and was reflected in the first quarter of 2018. In this recoverability review, we estimated undiscounted expected project cash flows and compared the result to our estimated project costs to determine whether the recorded amount was recoverable. Our undiscounted cash flows were substantially in excess of our estimated project costs. We completed this analysis and concluded that our project costs were recoverable as of March 31, 2018, based on our expectation that the Northern Pass project remains probable of being placed in service.Electric Transmission segment. The ~~events that occurred subsequent to March 31, 2018 did not require an additional review of recoverability~~after-tax impact of the ~~Northern Pass project costs as of September 30, 2018, which were approximately $302 million.~~

Consistent with Eversource’s and HQ’s long-term relationship to bring clean energy into New England, Eversource and HQ remain committed to Northern Pass and the many benefits this project will bring to our customers and the region. If, as a result of future events and changes in circumstances, a new recoverability review were to conclude that our project costs are not recoverable, then we would reduce Northern Pass' project costsimpairment charge was $204.4 million, or $0.64 per share, after giving effect to the estimated fair value ~~which could result in most~~ of ~~our $302 million~~the related land, reimbursement agreements, and the impact of ~~capitalized project costs being impaired. Such an~~expected income tax benefits associated with the impairment ~~could have a material adverse effect on our financial position and results of operations.~~charge. Eversource does not expect any significant estimated future cash expenditures associated with this impairment charge.

Greater Boston Reliability ~~Solution: In February 2015, ISO-NE selected the~~Solution: The Greater Boston and New Hampshire ~~Solution (the "Solution"), proposed by Eversource and National Grid, to satisfy the requirements identified in the Greater Boston study. The~~ Solution consists of a portfolio of electric transmission upgrades in southern New Hampshire and northern Massachusetts and continuing into the greater Boston metropolitan area, of which 28 upgrades are in Eversource's service ~~territory. The NHSEC issued its written order approving the~~territory (two in New Hampshire ~~upgrades on October 4, 2016. All the~~and 26 in Massachusetts). The two New Hampshire upgrades, including the Merrimack Valley Reliability Project, have been ~~completed~~placed in service and 17 Massachusetts upgrades have been placed in service. Seven upgrades are under construction and one upgrade is expected to enter construction in the fourth quarter of 2019. We ~~are currently pursuing the necessary regulatory and siting application approvals in Massachusetts. To date, we have received~~anticipate approval ~~for five of these projects~~ from the Massachusetts Energy Facilities Siting ~~Board. Construction has also begun~~Board on ~~multiple projects, several of which have been placed~~the remaining project in ~~service.~~2019. Most upgrades are expected to be completed by the end of 2019. ~~One project is now~~Four projects are expected to be in service by the end of 2020 and another project by mid-2021. We estimate our portion of the investment in the Solution will be approximately $560 million, of which ~~$311.4~~$396.7 million has been spent and capitalized through ~~September~~June 30, ~~2018.~~2019.

GHCC: The Greater Hartford Central Connecticut ("GHCC") projects, which have been approved by ISO-NE, consist of 27 projects with an expected investment of approximately $350 ~~million that~~million. As of June 30, 2019, 24 projects have been placed in service, and three projects are ~~scheduled~~in active construction and are expected to be placed in service through 2019. As of ~~September~~June 30, ~~2018, 21 projects have been placed in service, and six projects are in active construction. As of September 30, 2018,~~2019, CL&P had spent and capitalized ~~$226.5~~$253.1 million in costs associated with GHCC.

Seacoast Reliability Project: ~~On April 12, 2016, PSNH filed a siting application with the NHSEC for the~~The Seacoast Reliability Project consists of a 13-mile, 115kV transmission line within several New Hampshire communities, ~~which proposes to use~~using a combination of overhead, underground and underwater line ~~design~~designs to help meet the growing demand for electricity in the Seacoast region. ~~In June 2016,~~On December 10, 2018, the NHSEC ~~accepted~~indicated its unanimous approval of the ~~application as complete.~~project, and subsequently issued its written decision on January 31, 2019. On ~~February 28, 2018,~~April 11, 2019, the NHSEC issued its written decision denying motions for rehearing submitted by three entities that intervened in the proceeding. On May 13, 2019, two appeals of the NHSEC's approval orders were filed with the New Hampshire ~~Department of Environmental Services issued a final decision and recommended approval of the application to the NHSEC.~~Supreme Court. The court has not yet determined whether it will hear those appeals. On July ~~1, 2018, PSNH filed with~~3, 2019, the ~~NHSEC, per~~U.S. Army Corps of Engineers issued its ~~order, a more detailed review of potential~~permit allowing construction ~~methods for installing the underwater line. The review supports the original proposed method of embedding the cable~~ in ~~the floor of the bay as cost effective with minimal environmental impacts. The NHSEC decision is expected in early 2019.~~wetlands to proceed. This project is scheduled to be completed by the end of 2019. We estimate the investment in this project to be approximately $84 million, of which PSNH had spent and capitalized ~~$29.4~~$38.5 million in costs through ~~September~~June 30, ~~2018.~~2019.

Distribution Business: A summary of distribution capital expenditures is as follows:


	For the Nine Months Ended September 30,														For the Six Months Ended June 30,
(Millions of Dollars)	CL&P		NSTAR Electric		PSNH		Total Electric		Natural Gas		Water		Total		CL&P		NSTAR Electric		PSNH		Total Electric		Natural Gas		Water		Total
2019
Basic Business															$	142.9	$	142.4	$	19.1	$	304.4	$	29.4	$	5.6	$	339.4
Aging Infrastructure															96.0		96.6		52.7		245.3		125.8		42.9		414.0
Load Growth and Other															32.0		28.6		7.1		67.7		26.3		0.9		94.9
Total Distribution															270.9		267.6		78.9		617.4		181.5		49.4		848.3
Solar															—		4.8		—		4.8		—		—		4.8
Total															$	270.9	$	272.4	$	78.9	$	622.2	$	181.5	$	49.4	$	853.1
2018
Basic Business	$	199.5	$	144.6	$	57.4	$	401.5	$	52.7	$	10.9	$	465.1	$	87.2	$	92.6	$	37.5	$	217.3	$	29.0	$	7.5	$	253.8
Aging Infrastructure	100.7		79.7		61.6		242.0		166.3		51.4		459.7		54.2		45.3		41.0		140.5		87.6		27.8		255.9
Load Growth and Other	59.5		39.3		9.1		107.9		38.2		1.8		147.9		34.9		14.1		5.9		54.9		19.1		1.1		75.1
Total Distribution	359.7		263.6		128.1		751.4		257.2		64.1		1,072.7		176.3		152.0		84.4		412.7		135.7		36.4		584.8
Generation and Solar	—		48.1		0.9		49.0		—		—		49.0
Solar and Generation															—		38.5		0.8		39.3		—		—		39.3
Total	$	359.7	$	311.7	$	129.0	$	800.4	$	257.2	$	64.1	$	1,121.7	$	176.3	$	190.5	$	85.2	$	452.0	$	135.7	$	36.4	$	624.1

2017
Basic Business	$	161.8	$	126.7	$	52.5	$	341.0	$	51.3	N/A		$	392.3
Aging Infrastructure	127.4		65.9		63.9		257.2		149.6		N/A		406.8
Load Growth and Other	41.0		51.7		14.1		106.8		30.6		N/A		137.4
Total Distribution	330.2		244.3		130.5		705.0		231.5		N/A		936.5
Generation and Solar	—		45.5		6.7		52.2		—		N/A		52.2
Total	$	330.2	$	289.8	$	137.2	$	757.2	$	231.5	N/A		$	988.7

For the electric distribution business, basic business includes the purchase of meters, tools, vehicles, information technology, transformer replacements, equipment facilities, and the relocation of plant. Aging infrastructure relates to reliability and the replacement of overhead lines, plant substations, underground cable replacement, and equipment failures. Load growth and other includes requests for new business and capacity additions on distribution lines and substation additions and expansions.

For the natural gas distribution business, basic business addresses daily operational needs including meters, pipe relocations due to public works projects, vehicles, and tools. Aging infrastructure projects seek to improve the reliability of the system through enhancements related to cast iron and bare steel replacement of main and services, corrosion mediation, and station upgrades. Load growth and other reflects growth in existing service territories including new developments, installation of services, and expansion.

For the water distribution business, basic business addresses daily operational needs including periodic meter replacement, water main relocation, facility maintenance, and tools. Aging infrastructure relates to reliability and the replacement of water mains, regulators, storage tanks, pumping stations, wellfields, reservoirs, and treatment facilities. Load growth and other reflects growth in our service territory, including improvements to acquisitions, installation of new services, and interconnections of systems.

Offshore Wind Business: Our offshore wind business includes ownership interests in North East Offshore and Bay State Wind, which collectively hold power purchase agreements for the Revolution Wind and South Fork Wind projects and are in process of negotiating a power purchase agreement for the Sunrise Wind project. Our offshore wind projects are being developed in partnership with Ørsted. This business also participates in opportunities for future solicitations for offshore wind in the Northeast U.S.

On February 8, 2019, Eversource and Ørsted entered into a 50-50 partnership for key offshore wind assets in the Northeast. Eversource's initial payment and contribution under the terms of the partnership agreements totaled approximately $225 million for a 50 percent interest in North East Offshore, which holds the Revolution Wind and South Fork Wind power projects, as well as a 257 square-mile lease off the coasts of Massachusetts and Rhode Island. Eversource also has a 50 percent ownership in Bay State Wind, which holds the Sunrise Wind power project. Bay State Wind is located approximately 25 miles south of the coast of Massachusetts on a separate 300-square-mile ocean lease adjacent to the North East Offshore area and has the ultimate potential to generate at least 2,000 MW of clean, renewable energy. Together, the Bay State Wind and the North East Offshore lease sites jointly-owned by Eversource and Ørsted could eventually develop at least 4,000 MW of offshore wind generation. As of June 30, 2019, Eversource's total equity investment balance in its offshore wind business was $499.5 million. In July 2019, Eversource made an additional capital contribution of $54.9 million.

Revolution Wind and South Fork Wind Projects: Revolution Wind is a 704 MW offshore wind power project that will deliver power to Rhode Island (400 MW) and Connecticut (304 MW). The Revolution Wind project was selected under separate respective Connecticut and Rhode Island competitive RFPs based on each state's clean energy requirements. In Connecticut, two 20-year power purchase agreements for a total of 200 MW were executed and have been approved by the PURA, and two 20-year power purchase agreements for a total of 104 MW were executed and are currently awaiting regulatory approval. In Rhode Island, a 20-year power purchase agreement for 400 MW was executed and has been approved by the Rhode Island Public Utilities Commission.

South Fork Wind is a 130 MW offshore wind power project that will interconnect into eastern Long Island where it will deliver power to the Long Island Power Authority. The South Fork Wind project was selected by the Long Island Power Authority, and a 20-year power purchase agreement for 90 MW was executed. Subsequently, the Long Island Power Authority agreed to expand the original power purchase agreement to 130 MW through an amendment to the original agreement. Negotiations are currently underway to finalize this amendment.

South Fork Wind is expected to be commissioned by the end of 2022, and Revolution Wind is expected to be commissioned in 2023. The completion dates are subject to permitting, engineering, siting and finalizing power purchase agreements, where applicable.

Sunrise Wind Project: On February 14, 2019, Eversource and Ørsted submitted joint proposals under the project name Sunrise Wind in response to a New York State Energy Research and Development Authority ("NYSERDA") RFP that was issued in November 2018. NYSERDA had the authority to award more than 800 MW in the first solicitation if sufficient attractive offers were received. On July 18, 2019, NYSERDA announced that Sunrise Wind was selected to negotiate a 25-year power purchase agreement for an 880 MW offshore wind facility. Sunrise Wind will be developed 30 miles east of Montauk Point, Long Island. Subject to contract signing and Eversource’s and Ørsted's final investment decisions, the project is expected to be operational in 2024.

Future Solicitations for OffShore Wind: Eversource and Ørsted are considering participation in the following opportunities for future solicitations for offshore wind based on each state's clean energy requirements:

Massachusetts’ second offshore wind RFP for 400 MW to 800 MW was issued on May 23, 2019. Bids are due in August 2019 and contracts are expected to be awarded to selected bidders by the end of 2019. Eversource and Ørsted are evaluating participation in the RFP.

Connecticut’s offshore wind RFP for 400 MW (and up to 2,000 MW) is expected to be issued in August 2019, with bids due in September 2019 and contracts awarded to selected bidders by the end of 2019. Eversource and Ørsted are evaluating participation in the RFP.

FERC Regulatory Matters

~~FERC Transmission Rate Settlement:~~ On December 28, 2015, FERC initiated a proceeding to review the New England transmission owners’ (NETOs) regional and local transmission rates due to a lack of transparency. The FERC also found that the formula rates generally lacked sufficient details to determine how costs are derived and recovered in rates. This proceeding was set for hearing but held in abeyance to provide time for settlement judge procedures. On August 17, 2018, a signed Settlement Agreement between twenty-eight parties, including all six New England state regulatory commissions, the NETOs (including CL&P, NSTAR Electric and PSNH) and other settling parties, was filed at the FERC. The Settlement Agreement includes, among other things, a new formula rate template, effective on January 1, 2020, in which all regional and local transmission revenue requirements will be determined through a single formula rate. The Settlement Agreement will need to be certified to the FERC by the Settlement Administrative Law Judge and then ordered on by the FERC.

FERC ROE Complaints: Four separate complaints have been filed at the FERC by combinations of New England state attorneys general, state regulatory commissions, consumer advocates, consumer groups, municipal parties and other parties (collectively the "Complainants"). In each of the first three complaints, filed on October 1, 2011, December 27, 2012, and July 31, 2014, respectively, the Complainants challenged the NETOs' base ROE of 11.14 percent that had been utilized since 2005 and sought an order to reduce it prospectively from the date of the final FERC order and for the separate 15-month complaint periods. In the fourth complaint, filed April 29, 2016, the Complainants challenged the NETOs' base ROE billed of 10.57 percent and the maximum ROE for transmission incentive ("incentive cap") of 11.74 percent, asserting that these ROEs were unjust and unreasonable.

The ROE originally billed during the period October 1, 2011 (beginning of the first complaint period) through October 15, 2014 consisted of a base ROE of 11.14 percent and incentives up to 13.1 percent. On October 16, 2014, the FERC set the base ROE at 10.57 percent and the incentive cap at 11.74 percent for the first complaint period. This was also effective for all prospective billings to customers beginning October 16, 2014. This FERC order was vacated on April 14, 2017 by the U.S. Court of Appeals for the D.C. Circuit (the "Court").

~~The ROE billed during the period October 1, 2011 (beginning of the first complaint period) through October 15, 2014 consisted of a base ROE of 11.14 percent and incentives up to 13.1 percent.~~

All amounts associated with the first complaint period have been refunded. Eversource has recorded a reserve of $39.1 million (pre-tax and excluding interest) for the second complaint period as of ~~September~~June 30, ~~2018.~~2019. This reserve represents the difference between the billed rates during the second complaint period and a 10.57 percent base ROE and 11.74 percent incentive cap. The reserve consisted of $21.4 million for CL&P, $14.6 million for NSTAR Electric and $3.1 million for PSNH as of ~~September~~June 30, ~~2018.~~2019.

Eversource, CL&P, NSTAR Electric and PSNH currently record revenues at the 10.57 percent base ROE and incentive cap at 11.74 percent established in the October 16, 2014 FERC order.

The average impact of a 10 basis point change to the base ROE for each of the 15-month complaint periods would affect Eversource's after-tax earnings by approximately $3 million.

~~U.S. Federal Corporate Income Taxes:~~FERC Notices of Inquiry: On March ~~15, 2018,~~21, 2019, FERC issued two Notices of Inquiry ("NOI") that may affect Eversource transmission ROEs and incentives. One NOI (the "FERC ROE NOI") seeks comments from all stakeholders on FERC's policies for evaluating ROEs for electric public utilities, and interstate natural gas and oil pipelines. The other NOI (the "FERC transmission incentives NOI") seeks comments on FERC's policies for implementing electric transmission incentives. On June 26, 2019, the NETOs jointly filed comments in the FERC ~~issued a notice of inquiry requesting~~ROE NOI, supporting the methodology established in the FERC’s October 16, 2018 order with minor enhancements going forward. Also on June 26, 2019, Eversource filed comments ~~from FERC-regulated utilities on whether and how~~in the FERC ~~should address changes~~transmission incentives NOI, requesting that FERC retain policies that have been effective in ~~ADIT as~~encouraging new transmission investment and remain flexible enough to attract investment in new and emerging transmission technologies. The NETOs jointly filed reply comments in the FERC ROE NOI on July 26, 2019. Reply comments in the FERC transmission incentives NOI are due August 26, 2019. At this time, Eversource cannot predict how these NOIs will affect its ROEs or incentives.

FERC Transmission Rate Settlement: On December 28, 2015, FERC initiated a ~~result~~proceeding to review the NETOs' regional and local transmission formula rates due to a lack of transparency, finding that the ~~Tax Cuts~~formula rates appeared to lack sufficient details to determine how costs are derived and ~~Jobs Act. Effective~~recovered in rates. This proceeding was set for hearing but held in abeyance to provide time for settlement judge procedures. On August 17, 2018, a signed Settlement Agreement between twenty-eight parties, including all six New England state regulatory commissions, the NETOs (including CL&P, NSTAR Electric and PSNH) and other settling parties, was filed at the FERC. The Settlement Agreement included, among other things, a new formula rate template, to be effective on January 1, ~~2018, the~~2020, in which all regional and local transmission ~~service rates were updated~~revenue requirements will be determined through a single formula rate. The Settlement Agreement was contested by a group of municipal entities and the FERC Trial Staff. On May 22, 2019, FERC rejected the Settlement Agreement and remanded the proceeding for hearings. On July 29, 2019, in response to ~~reflect~~a request by the ~~lower U.S. federal corporate income tax rate that resulted~~NETOs to continue settlement discussions, the FERC Chief Judge suspended the procedural schedule for 45 days and set the date for hearings to begin on April 27, 2020, with the initial decision from the ~~act, which impacts only the revenue requirements we currently bill customers, not the excess ADIT. On June 28, 2018, FERC granted a one-time tariff waiver related~~trial judge to ~~the federal corporate income tax rate so that effective June 1, 2018, the regional transmission service rates reflect the reduced federal corporate income tax rate at~~be issued September 21, ~~percent.~~2020.

Regulatory Developments and Rate Matters

Electric, Natural Gas and Water Utility Base Distribution Rates:

The regulated companies’ distribution rates are set by their respective state regulatory commissions, and their tariffs include mechanisms for periodically adjusting their rates for the recovery of specific incurred costs. Other than as described below, for the first ~~nine months~~half of ~~2018,~~2019, changes made to the regulated companies’ rates did not have a material impact on their earnings, financial position, or cash flows. For further information, see "Financial Condition and Business Analysis – Regulatory Developments and Rate Matters" included in Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations," of the Eversource ~~2017~~2018 Form 10-K.

U.S. Federal Corporate Income Taxes:

On December 22, 2017, the Tax Cuts and Jobs Act became law, which amended existing federal tax rules to reduce the U.S. federal corporate income tax rate from 35 percent to 21 percent effective January 1, 2018. For our regulated companies, the most significant changes are (1) the benefit of incurring a lower federal income tax expense ~~which we expect to be passed back to customers once reflected in rates, depending on regulatory outcomes,~~ and (2) the ~~provisional regulated~~reduction in ADIT liabilities (now excess ADIT ~~liabilities that we expect will benefit our customers in future periods,~~or EDIT), which ~~were~~are estimated to be approximately $2.9 billion and included in regulatory liabilities as of ~~September~~June 30, ~~2018.~~

~~Eversource established a liability, recorded~~2019. The refund of these EDIT regulatory liabilities to customers will generally be made over the same period as ~~a reduction~~the remaining useful lives of the underlying assets that gave rise to ~~revenue, to reflect~~ the ~~difference between the 35 percent federal corporate income tax rate included~~ADIT liabilities. The refund of EDIT has begun at several of our distribution companies and is reflected in ~~rates charged~~rates. The refund to customers and resulting amortization of the ~~21 percent federal corporate~~EDIT regulatory liabilities results in lower Revenues on the statements of income and lower current tax expense. This is offset by the reduction to Income Tax Expense due to the amortization of the EDIT. The refund of EDIT results in a lower effective tax rate ~~effective January 1, 2018 as a result of the Tax Cuts~~ and ~~Jobs Act, until rates billed to customers reflect the lower federal tax rate. As of September 30, 2018, this liability,~~no impact on net ~~of amounts refunded to customers, was $36.2 million.~~

For information on filings with regulatory commissions and the impact to customer rates, see "Connecticut," "Massachusetts," and "New Hampshire" sections below and "FERC Regulatory Matters - U.S. Federal Corporate Income Taxes" in this ~~Management's Discussion and Analysis of Financial Condition and Results of Operations.~~income.

Connecticut:

CL&P ~~Rate Case Settlement:~~ ~~On April 18, 2018, PURA~~Storm Filing: CL&P's approved ~~the distribution~~ rate case settlement agreement that was reached by CL&P, the Prosecutorial Unit of PURA, and the OCC on December 15, 2017, as amended on March 23, 2018. The distribution rate case settlement agreement included, among other things, rate increases of $64.3 million, $31.1 million, and $29.2 million, effective May 1,in 2018 2019, and 2020, respectively, an authorized regulatory ROE of 9.25 percent, 53 percent common equity in CL&P's capital structure, and a new capital tracker, effective July 1, 2018, for core capital additions in excess of $270 million per rate year and also for capital additions for system resiliency and grid modernization. The new capital tracker also included a provision to return to customers the impact of a lower federal corporate income tax rate from the Tax Cuts and Jobs Act from January through April 2018, offset by the impacts of rate base growth since the previous rate case for the same period. In addition, the distribution rates charged to customers were adjusted to reflect the prospective impacts of a lower federal income tax rate from the Tax Cuts and Jobs Act. Amounts related to the excess ADIT liabilities will be incorporated into the May 1, 2019 distribution rate change. The settlement agreement also incorporated $18.6 million of rate base recovery for catastrophic storms occurring after December 31, 2016, subject to a future storm filing.

~~Yankee Gas Rate Case Settlement~~: On ~~June 15,~~November 16, 2018, ~~Yankee Gas~~CL&P filed for recovery of $153 million of storm costs incurred from October 2017 through May 2018, with recovery over six years to begin May 1, 2019. Through the course of the proceeding, CL&P updated its ~~rate case application with PURA.~~request to $145.5 million to reflect final invoicing and capitalization amounts. On ~~September 21, 2018, an amended settlement agreement was reached with the Office~~April 17, 2019, PURA authorized recovery of ~~Consumer Counsel~~$141.0 million as part of storm cost recovery and the prosecutorial division of the PURA and filed for approval by PURA, which included revised rate increases of $1.4 million, $15.8 million and $13.0 million, for rate years beginning November 15, 2018, January 1, 2020, and January 1, 2021, respectively. As part of the settlement, Yankee Gas proposed to continue its ongoing natural gas system expansion program, implement a Distribution Integrity Management Program cost recovery mechanism that includes recovery of approximately $26 million to $37 million of capital additions annually in excess of $150 million included in rate base per year, implement a revenue decoupling rate mechanism, and recover merger costs. The settlement agreement includes a regulatory ROE of 9.3 percent. In addition, the distribution ratesremainder to be ~~charged~~recorded to ~~customers~~plant or other balance sheet accounts. All approved amounts will be ~~adjusted to reflect the prospective impacts of the lower federal corporate income tax~~fully recoverable through specific mechanisms or through future rate the overcollection of the lower income tax rate from January 1, 2018, and the excess ADIT from the Tax Cuts and Jobs Act. The settlement results in new rates effective November 15, 2018. A final decision from PURA is expected in late 2018.cases.

Massachusetts:

~~U.S. Federal Corporate Income Taxes~~:Hingham Condemnation: On April 22, 2019, the town of Hingham, Massachusetts voted to acquire the water system and treatment plant that supply the towns of Hingham, Hull and North Cohasset with water. The ~~DPU opened an investigation into~~acquisition price is currently estimated to be more than $100 million, subject to adjustment based on actual capital investments as legally required and other future closing adjustments. Aquarion will continue to operate the water system during the transition period until the sale occurs. The Company is evaluating the impact of the ~~Tax Cuts~~sale on its financial statements, which will be recorded when the sale transaction occurs. No loss is expected. The transaction is expected to close by the first quarter of 2020. As of June 30, 2019, these water distribution assets were included within Property, Plant and ~~Jobs Act~~Equipment, Net and goodwill on ~~Massachusetts regulated utilities.~~ the balance sheet and were also reflected in the Water Distribution segment and reporting unit.

New Hampshire:

Distribution Rates:On ~~June 29, 2018,~~April 26, 2019, PSNH filed an application with the ~~DPU issued~~NHPUC for approval of a ~~decision ordering NSTAR Gas to lower rates~~temporary annual base distribution rate increase of approximately $33 million, effective July 1, ~~2018~~2019. On June 27, 2019, the NHPUC approved a settlement agreement that was reached by ~~an annualized $7.3~~PSNH, the NHPUC Staff, the Office of the Consumer Advocate, and another settling party, to implement a temporary annual base distribution rate increase of $28.3 million. ~~For NSTAR Electric, lower~~Although new rates ~~due~~were implemented on August 1, 2019 to customers, the ~~reduction~~provisions of the temporary base distribution rate increase were effective July 1, 2019. The settlement agreement also permits PSNH to recover approximately $68.5 million in unrecovered storm costs over a five-year period beginning August 1, 2019, with debt carrying charges, which is included in the ~~federal corporate income tax~~temporary rate ~~were~~increase.

On May 28, 2019, PSNH filed an application with the NHPUC for a permanent increase in base distribution rates of approximately $70 million, effective ~~February~~July 1, ~~2018. A second phase~~2020, which includes the temporary rate increase request. The temporary rates are subject to reconciliation based on the outcome of the ~~investigation will address~~permanent rate case now before the ~~excess ADIT issue~~NHPUC.

Legislative and ~~any potential refunds for~~Policy Matters

New Hampshire: On July 8, 2019, the periods January 1, 2018 to the effective dates of the rate changes that have occurred. On September 19, 2018, NSTAR Electric submitted a filing to the DPU to adjust rates to refund the excess ADIT to customers, effective January 1, 2019. NSTAR Gas' excess ADIT is pending DPU approval.

~~New Hampshire:~~

~~Generation Divestiture: In June 2015, Eversource and PSNH entered into the 2015 Public Service Company of~~ New Hampshire ~~Restructuring~~Superior Court approved a settlement between PSNH and ~~Rate Stabilization Agreement, pursuant to which PSNH agreed to divest its generation assets, subject to NHPUC approval. The NHPUC approved this agreement as well as~~ the ~~final divestiture plan and auction process in~~Town of Bow, New Hampshire, where the second half of 2016. On October 11, 2017, PSNH entered into two Purchase and Sale Agreements with private investors, one to sell its thermal generation assets at a purchase price of $175 million, subject to adjustment, (the “Thermal Agreement”) and a second to sell its hydroelectric generation assets at a purchase price of $83 million, subject to adjustment (the “Hydro Agreement”). The NHPUC approved these agreements in late November 2017.

~~On January 10, 2018, PSNH completed~~town had over-assessed the sale of its thermal generation assets pursuant to the Thermal Agreement. In accordance with the Thermal Agreement, the original purchase price of $175 million was adjusted to reflect working capital adjustments, closing date adjustments and proration of taxes and fees prior to closing, totaling $40.9 million, resulting in net proceeds of $134.1 million. In the second quarter of 2018, the purchase price was further adjusted by $17.3 million relating to the valuation of certain allowances. As a result of these adjustments, net proceeds from the sale of the thermal assets totaled $116.8 million.

On July 16, 2018, FERC issued its order approving the transfer of PSNH's six hydroelectric licenses to private investors. On August 26, 2018, PSNH completed the sale of its hydroelectric generation assets pursuant to the Hydro Agreement. In accordance with the Hydro Agreement, the original purchase price of $83 million was adjusted to reflect contractual adjustments totaling $5.7 million, resulting in net proceeds of $77.3 million. The difference between the carrying value of the ~~hydroelectric generation assets~~property owned by PSNH for the 2014 through 2018 property tax years. The result of this settlement was $10.0 million in over-paid property taxes that will be refundable to PSNH, with $4.3 million payable in 2019, and the ~~sale proceeds resulted in a gain of $17.2 million. An estimated gain from~~remainder to be received over the ~~sale of these assets was included as an offset to the total stranded costs associated with the sale of generation assets.~~following 4 years.

On May 8, 2018, PSNH Funding issued $635.7 million of securitized RRBs pursuant to a finance order issued by the NHPUC on January 30, 2018 to recover stranded costs resulting from the divestiture of PSNH’s generation assets. These bonds are secured by a non-bypassable charge billed to PSNH's customers. PSNH recorded regulatory assets and other deferred costs in connection with the generation asset divestiture and the securitization of stranded costs, which are probable of recovery through collection of the non-bypassable charge. For further information on the securitized RRB issuance, see "Liquidity - Rate Reduction Bonds" in this ~~Management's Discussion and Analysis of Financial Condition and Results of Operations.~~

~~U.S. Federal Corporate Income Taxes:~~On September 27, 2018, the NHPUC issued a decision on the impact of the U.S. federal corporate income tax rate reduction from the Tax Cuts and Jobs Act. The NHPUC concluded that the tax law change qualified as an exogenous event, as defined in the 2015 Public Service Company of New Hampshire Restructuring and Rate Stabilization Agreement, and that the benefit of incurring the lower federal income tax expense would be passed back to customers with carrying charges. Distribution rates are to reflect the deferred excess ADIT, the impact of the lower federal income tax rate, and the overcollection of the lower income tax rate from January 1, 2018 to the rate adjustment effective date of July 1, 2019, or earlier if a rate case is filed for rates effective prior to July 1, 2019. As of September 30, 2018, PSNH has recorded a reserve of $9.4 million to reflect the difference between the 35 percent federal corporate income tax rate included in rates charged to customers and the 21 percent federal corporate income tax rate, effective January 1, 2018.

~~2011 through 2013 Storm Costs:~~On September 17, 2018, the NHPUC approved the recovery of $49 million, plus carrying charges, in storm costs incurred from August 2011 through March 2013 and the transfer of funding from PSNH’s major storm funding reserve to offset those costs. The costs of these storms (excluding the equity return component of the carrying charges) were deferred as regulatory assets, and the funding reserve collected from customers was accrued as a regulatory liability. The storm cost deferral is separate from the major storm funding reserve that is being collected from customers. As a result of the approval, PSNH recognized $8.7 million (pre-tax) within Other Income, Net on our statement of income in the third quarter of 2018 for the equity return component of the carrying charges, which have been billed and collected. Storm costs incurred from March 2013 through 2016 are currently being audited by the NHPUC staff. As of September 30, 2018, the pre-tax equity return component of the carrying charges related to storms incurred after March 2013 was $6.5 million, which will be recognized to earnings upon NHPUC approval of those storm costs.

Critical Accounting Policies

The preparation of financial statements in conformity with GAAP requires management to make estimates, assumptions and, at times, difficult, subjective or complex judgments. Changes in these estimates, assumptions and judgments, in and of themselves, could materially impact our financial position, results of operations or cash flows. Our management communicates to and discusses with the Audit Committee of our Board of Trustees significant matters relating to critical accounting policies. Our critical accounting policies that we believed were the most critical in nature were reported in the Eversource ~~2017~~2018 Form 10-K. There have been no material changes with regard to these critical accounting policies.

~~See~~

Refer to Note 1C, "Summary of Significant Accounting Policies –- Impairment of Northern Pass~~" and Note 1D, "Summary of Significant Accounting Policies – Impairment of Access Northeast,~~ Transmission," to the financial statements for further discussion of critical accounting estimates surrounding impairment analysis.

Other Matters

Accounting Standards: For information regarding new accounting standards, see Note 1B, "Summary of Significant Accounting Policies – Accounting Standards," to the financial statements.

Contractual Obligations and Commercial Commitments: ~~There have been no material contractual obligations identified~~Refer to Note 9B, "Commitments and noContingencies – Long-Term Contractual

Arrangements," for discussion of material changes ~~with regard~~ to ~~the~~ contractual ~~obligations and commercial commitments previously disclosed in the Eversource 2017 Form 10-K.~~obligations.

Web Site: Additional financial information is available through our website at www.eversource.com. We make available through our website a link to the SEC's EDGAR website (http://www.sec.gov/edgar/searchedgar/companysearch.html), at which site Eversource's, CL&P's, NSTAR Electric's and PSNH's combined Annual Reports on Form 10-K, combined Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to those reports may be reviewed. Information contained on the Company's website or that can be accessed through the website is not incorporated into and does not constitute a part of this combined Quarterly Report on Form 10-Q.

RESULTS OF OPERATIONS – EVERSOURCE ENERGY AND SUBSIDIARIES

The following provides the amounts and variances in operating revenues and expense line items in the statements of income for Eversource for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018 included in this combined Quarterly Report on Form 10-Q:


	For the Three Months Ended September 30,							For the Nine Months Ended September 30,							For the Three Months Ended June 30,							For the Six Months Ended June 30,
(Millions of Dollars)	2018		2017		Increase/ (Decrease)			2018		2017		Increase/ (Decrease)			2019		2018		Increase/ (Decrease)			2019		2018		Increase/ (Decrease)
Operating Revenues	$	2,271.4	$	1,988.5	$	282.9		$	6,413.2	$	5,856.5	$	556.7		$	1,884.5	$	1,853.9	$	30.6		$	4,300.3	$	4,141.8	$	158.5
Operating Expenses:
Purchased Power, Fuel and Transmission	842.3		651.8		190.5			2,443.0		1,955.1		487.9			620.9		653.9		(33.0		)	1,595.8		1,600.7		(4.9		)
Operations and Maintenance	344.5		307.7		36.8			970.9		956.3		14.6			328.0		293.9		34.1			663.6		626.4		37.2
Depreciation	208.7		194.5		14.2			612.1		571.2		40.9			219.1		199.1		20.0			434.0		403.4		30.6
Amortization	92.7		41.8		50.9			174.1		58.1		116.0			38.9		36.2		2.7			109.9		81.4		28.5
Energy Efficiency Programs	130.0		129.2		0.8			366.1		391.8		(25.7		)	105.8		102.0		3.8			246.0		236.2		9.8
Taxes Other Than Income Taxes	187.2		168.2		19.0			547.1		479.6		67.5			181.2		177.5		3.7			365.7		359.8		5.9
Impairment of Northern Pass Transmission															239.6		—		239.6			239.6		—		239.6
Total Operating Expenses	1,805.4		1,493.2		312.2			5,113.3		4,412.1		701.2			1,733.5		1,462.6		270.9			3,654.6		3,307.9		346.7
Operating Income	466.0		495.3		(29.3		)	1,299.9		1,444.4		(144.5		)	151.0		391.3		(240.3		)	645.7		833.9		(188.2		)
Interest Expense	125.2		108.7		16.5			372.7		319.5		53.2			132.7		126.4		6.3			264.5		247.5		17.0
Other Income, Net	16.7		28.5		(11.8		)	100.6		79.2		21.4			45.9		50.1		(4.2		)	76.9		83.9		(7.0		)
Income Before Income Tax Expense	357.5		415.1		(57.6		)	1,027.8		1,204.1		(176.3		)	64.2		315.0		(250.8		)	458.1		670.3		(212.2		)
Income Tax Expense	66.2		152.8		(86.6		)	220.5		447.9		(227.4		)	30.8		70.4		(39.6		)	114.2		154.2		(40.0		)
Net Income	291.3		262.3		29.0			807.3		756.2		51.1			33.4		244.6		(211.2		)	343.9		516.1		(172.2		)
Net Income Attributable to Noncontrolling Interests	1.9		1.9		—			5.6		5.6		—			1.9		1.9		—			3.8		3.8		—
Net Income Attributable to Common Shareholders	$	289.4	$	260.4	$	29.0		$	801.7	$	750.6	$	51.1		$	31.5	$	242.7	$	(211.2	)	$	340.1	$	512.3	$	(172.2	)

Operating Revenues

Operating Revenues by segment increased/(decreased) for the three and nine months ended September 30, 2018, as compared to the same periods in 2017, as follows (the variance in electric distribution revenues reflects intercompany transmission billings in both periods):

(Millions of Dollars) Three Months Ended Nine Months Ended
Electric Distribution $ 210.3
$ 338.1
Natural Gas Distribution (0.2 ) 41.7
Electric Transmission 2.1
(17.0 )
Water Distribution 63.5
161.5
Other 0.4
15.0
Eliminations 6.8
17.4
Total Operating Revenues $ 282.9
$ 556.7

Sales Volumes: A summary of our retail electric GWh sales volumes, our firm natural gas MMcf sales volumes, and our water MG sales volumes, and percentage changes, ~~for the three and nine months ended September 30, 2018, as compared to 2017,~~ is as follows:

Electric Firm Natural Gas Water
Sales Volumes (GWh) Percentage
Increase Sales Volumes (MMcf) Percentage
Increase/
(Decrease) Sales Volumes (MG) Percentage
Increase/
(Decrease)
2018
2017 ⁽¹⁾
2018 2017 2018
2017 ⁽²⁾

Three Months Ended September 30:
Traditional 2,206
2,020
9.2 % 5,984
5,550
7.8 % 732
706
3.7 %
Decoupled 13,110
12,076
8.6 % 4,674
4,828
(3.2 )% 7,118
7,257
(1.9 )%
Special Contracts ⁽³⁾
N/A
N/A
N/A
684
1,147
(40.4 )% N/A
N/A
N/A
Total - Decoupled and
Special Contracts 13,110
12,076
8.6 % 5,358
5,975
(10.3 )% 7,118
7,257
(1.9 )%
Total Sales Volumes 15,316
14,096
8.7 % 11,342
11,525
(1.6 )% 7,850
7,963
(1.4 )%



	Electric				Firm Natural Gas				Water
	Sales Volumes (GWh)		Percentage Decrease		Sales Volumes (MMcf)		Percentage Increase/ (Decrease)		Sales Volumes (MG)		Percentage Decrease
Three Months Ended June 30:	2019	2018 ⁽¹⁾	Percentage Decrease		2019	2018 ⁽²⁾	Percentage Increase/ (Decrease)		2019	2018	Percentage Decrease
Traditional	1,757	1,803	(2.6	)%	—	—	—	%	459	485	(5.4	)%
Decoupled and Special Contracts ⁽³⁾	9,853	10,330	(4.6	)%	18,191	18,932	(3.9	)%	4,834	5,016	(3.6	)%
Total Sales Volumes	11,610	12,133	(4.3	)%	18,191	18,932	(3.9	)%	5,293	5,501	(3.8	)%

Six Months Ended June 30:
Traditional	3,724	3,775	(1.4	)%	—	—	—	%	910	953	(4.5	)%
Decoupled and Special Contracts ⁽³⁾	21,037	21,579	(2.5	)%	63,358	61,983	2.2	%	9,212	9,373	(1.7	)%
Total Sales Volumes	24,761	25,354	(2.3	)%	63,358	61,983	2.2	%	10,122	10,326	(2.0	)%

⁽¹⁾ Effective February 1, 2018, NSTAR Electric operated entirely under a decoupled rate structure. The 2018 sales volumes for NSTAR Electric have been recast to present January 2018 as decoupled to conform to the current year presentation.

⁽¹⁾


⁽²⁾	~~Eversource acquired its water distribution business on December 4, 2017. Prior year sales volumes have been presented for comparative purposes.~~


⁽³⁾	Special contracts are unique to Yankee Gas natural gas distribution customers who take service under such an arrangement and generally specify the amount of distribution revenue to be paid to Yankee Gas regardless of the customers' usage.

⁽³⁾ Special contracts are unique to Yankee Gas natural gas distribution customers who take service under such an arrangement and generally specify the amount of distribution revenue to be paid to Yankee Gas regardless of the customers' usage.

Fluctuations in retail electric sales volumes at PSNH ~~and natural gas sales volumes at Yankee Gas~~ impact earnings ("Traditional" in the table above). For CL&P, NSTAR Electric, ~~(effective February 1, 2018, as a result of the DPU-approved rate case decision)~~Yankee Gas, and NSTAR Gas, fluctuations in retail sales volumes do not impact earnings due to their respective regulatory commission-approved distribution revenue decoupling mechanisms ("Decoupled" in the table above). These distribution revenues are decoupled from their customer sales volumes, which breaks the relationship between sales volumes and revenues recognized. Fluctuations in water sales volumes largely do not impact earnings as our Connecticut water distribution business is also decoupled.

CL&P and NSTAR Electric reconcile their annual base distribution rate recovery amounts to their respective pre-established levels of baseline distribution delivery service revenues of approximately $1.1 billion (effective May 1, 2018) and $947 million, respectively. Any difference between the allowed level of distribution revenue and the actual amount realized during a 12-month period is adjusted through rates in the following period.

~~Three Months Ended:~~Operating Revenues: Operating Revenues ~~which primarily consist of base distribution revenues and tracked revenues further described below,~~by segment increased ~~$282.9 million~~ for the three and six months ended ~~September~~June 30, ~~2018,~~2019, as compared to the same ~~period~~periods in ~~2017.~~ 2018, as follows:

~~Base~~



(Millions of Dollars)	Three Months Ended			Six Months Ended
Electric Distribution	$	21.9		$	101.1
Natural Gas Distribution	1.2			45.2
Electric Transmission	32.2			67.7
Water Distribution	0.2			1.2
Other	13.8			41.1
Eliminations	(38.7		)	(97.8		)
Total Operating Revenues	$	30.6		$	158.5

Three Months Ended:

Electric ~~and Natural Gas~~ Distribution Revenues:

~~Electric~~Base electric distribution revenues increased ~~$9.7~~$20.9 million due primarily to the impact of CL~~&P's~~&P base distribution rate increases effective May 1, 2019 and May 1, 2018, which includes recovery of storm costs and certain other items that do not impact earnings, and an NSTAR Electric base distribution rate increase as a result of the PURA-approved rate case settlement that became effective May 1, 2018 (a portion of which did not impact earnings) and an increase in non-decoupled sales volumes driven by warmer summer weather in 2018. The increase in revenues was partially offset by lower base distribution rates at NSTAR Electric, as per the DPU-approved rate case decision that became effective February 1, 2018. NSTAR Electric's rates were adjusted to reflect the new lower federal corporate income tax rate and the movement of certain costs from base distribution rates to fully-reconciled cost tracking mechanisms (most of which did not impact earnings).

Electric distribution revenues decreased $3.1 million due to the liability established to reflect the difference between the 35 percent federal corporate income tax rate included in rates charged to customers and the 21 percent federal corporate income tax rate, effective January 1, 2018 as a result of the Tax Cuts and Jobs Act. Effective February 1, 2018 for NSTAR Electric and May 1, 2018 for CL&P, rates charged to customers have been adjusted to reflect the new federal corporate income tax rate.2019.

Base natural gas distribution revenues increased $1.1 million due primarily to an increase in demand revenues. The increase in revenues was more than offset by a $3.5 million decrease due to the liability established to reflect the impact of the reduction in federal corporate income tax rates, effective January 1, 2018. Effective July 1, 2018 for NSTAR Gas, rates charged to customers have been adjusted to reflect the new federal corporate income tax rate.

~~Tracked Electric and Natural Gas Distribution Revenues:~~ Tracked revenues consist of certain costs that are recovered from customers in retail rates through regulatory commission-approved cost tracking mechanisms and therefore, recovery of these costs have no impact on earnings. Costs recovered through cost tracking mechanisms include, among others, energy supply procurement and other energy-related costs, ~~for our electric and natural gas customers,~~ retail transmission charges, energy efficiency program costs, ~~net metering for distributed generation, and~~ restructuring and stranded cost recovery revenues (including securitized RRB charges)., and additionally for NSTAR Electric, pension and PBOP benefits and net metering for distributed generation. In addition, tracked revenues include certain incentives earned, certain return on rate base, and carrying charges that are billed in rates to customers. Tracked retail electric distribution revenues decreased as a result of a decrease in retail electric transmission charges ($41.4 million) and a decrease in other distribution tracking mechanisms ($1.1 million), partially offset by an increase in electric energy supply costs ($37.5 million). Tracked revenues also include wholesale market sales transactions, such as sales of energy and energy-related products into the ISO-NE wholesale electricity market and the sale of RECs to various counterparties, which increased $5.2 million.

Natural Gas Distribution Revenues:

Base natural gas distribution revenues decreased $3.5 million due primarily to the seasonality of the decoupled rate structure arising from the Yankee Gas base distribution rate case, which provides lower revenues in non-heating months.

Tracked natural gas distribution revenues increased as a result of an increase in wholesale sales of natural gas to third party suppliers ($2.3 million), an increase in capital tracker and other distribution tracking mechanisms ($1.2 million), and an increase in natural gas supply costs ($0.9 million).

Electric Transmission Revenues: Electric transmission revenues increased $32.2 million due primarily to ongoing investments in our transmission infrastructure.

Other Revenues and Eliminations: Other revenues primarily include the revenues of Eversource's service company, most of which are eliminated in consolidation. Eliminations are primarily related to the Eversource electric transmission revenues that are derived

from ISO-NE regional transmission charges to the distribution businesses of CL&P, NSTAR Electric and PSNH that recover the costs of the

wholesale transmission business, and revenues from Eversource's service company.

Six Months Ended:

Electric Distribution Revenues:

Base electric distribution revenues increased $39.2 million due primarily to the impact of CL&P base distribution rate increases effective May 1, 2019 and May 1, 2018, which includes recovery of storm costs and certain other items that do not impact earnings, and an NSTAR Electric base distribution rate increase effective January 1, 2019.

Tracked retail electric distribution revenues increased as a result of an increase in electric energy supply costs ($~~97.4~~93.6 million), ~~driven by increased average retail prices. In addition, there was~~ an increase in stranded cost recovery revenues ($~~31.7~~13.9 million), and an increase in other distribution tracking mechanisms ($26.8 million), partially offset by a decrease in retail electric transmission charges ($~~24.6~~73.2 million). Tracked revenues also include wholesale market sales transactions, such as sales of energy and energy-related products into the ISO-NE wholesale electricity market and the sale of RECs to various counterparties, which decreased $1.9 million.

Natural Gas Distribution Revenues:

Base natural gas distribution revenues increased $16.7 million due primarily to the seasonality of the decoupled rate structure arising from the Yankee Gas base distribution rate case, which provides higher revenues in the winter heating months.

Tracked natural gas distribution revenues increased as a result of an increase in natural gas supply costs ($~~3.0~~22.1 million), an increase in wholesale sales of natural gas to third party suppliers ($6.2 million) and an increase in capital tracker and other distribution tracking mechanisms ($3.9 million).

~~Water:~~ ~~Water operating revenues totaled $63.5 million for the three months ended September 30, 2018 as a result of the acquisition of Aquarion on December 4, 2017.~~

Electric Transmission Revenues: ~~The electric~~ Electric transmission ~~segment~~ revenues increased ~~$2.1~~$67.7 million due ~~to an increase related~~primarily to ongoing investments in our transmission ~~infrastructure, partially offset by lower revenue requirements~~infrastructure.

Other Revenues and Eliminations: Other revenues primarily include the revenues of Eversource's service company, most of which are eliminated in consolidation. Eliminations are primarily related to the ~~lower federal corporate income tax rate~~Eversource electric transmission revenues that ~~was reflected in 2018~~are derived

from ISO-NE regional transmission ~~revenues.~~

~~Nine Months Ended:~~ Operating Revenues, which primarily consist of base distribution revenues and tracked revenues further described below, increased $556.7 million for the nine months ended September 30, 2018, as comparedcharges to the ~~same period in 2017.~~

~~Base Electric and Natural Gas Distribution Revenues:~~

~~Electric~~ distribution revenues decreased $39.6 million due primarily to lower base distribution rates at NSTAR Electric, as per the DPU-approved rate case decision that became effective February 1, 2018. NSTAR Electric's rates were adjusted to reflect the new lower federal corporate income tax rate and the movementbusinesses of ~~certain costs from base distribution rates to fully-reconciled cost tracking mechanisms (most of which did not impact earnings). The decrease in revenues was partially offset by~~ CL&P's base distribution rate increase as a result of the PURA-approved rate case settlement that became effective May 1, 2018 (a portion of which did not impact earnings), and an increase in non-decoupled sales volumes primarily driven by colder weather in January 2018 at NSTAR Electric (prior to its decoupled rate structure) and warmer summer weather in 2018 at PSNH. Effective February 1, 2018, NSTAR Electric operated entirely under a decoupled rate structure.

Electric distribution revenues also decreased $29.5 million due to the liability established to reflect the difference between the 35 percent federal corporate income tax rate included in rates charged to customers and the 21 percent federal corporate income tax rate, effective January 1, 2018 as a result of the Tax Cuts and Jobs Act. Effective February 1, 2018 for&P, NSTAR Electric and ~~May 1, 2018 for CL&P, rates charged to customers have been adjusted to reflect~~PSNH that recover the ~~new federal corporate income tax rate.~~

Base natural gas distribution revenues increased $10.7 million due primarily to an increase in sales volumes and demand revenues driven by colder January and April weather in Connecticut in 2018, as well as growth in new customer base. The increase in revenues was more than offset by an $11.5 million decrease due to the liability established to reflect the impactcosts of the reduction in federal corporate income tax rates, effective January 1, 2018. Effective July 1, 2018 for NSTAR Gas, rates charged to customers have been adjusted to reflect the new federal corporate income tax rate.

wholesale transmission business, and revenues from Eversource's service company.

~~Tracked Electric and Natural Gas Distribution Revenues:~~ Tracked revenues consist of certain costs that are recovered from customers in rates through regulatory commission-approved cost tracking mechanisms and therefore, have no impact on earnings. Costs recovered through cost tracking mechanisms include energy supply procurement and other energy-related costs for our electric and natural gas customers, retail transmission charges, energy efficiency program costs, net metering for distributed generation, and restructuring and stranded cost recovery revenues (including securitized RRB charges). In addition, tracked revenues include certain incentives earned and carrying charges that are billed in rates to customers.

Tracked electric distribution revenues increased as a result of an increase in electric energy supply costs ($234.1 million), driven by increased average retail prices. In addition, there was an increase in stranded cost recovery revenues ($49.9 million) and an increase in retail electric transmission charges ($57.4 million).

~~Tracked natural gas distribution revenues increased as a result of an increase in natural gas supply costs ($36.6 million) and an increase in energy efficiency program revenues ($4.6 million).~~

~~Water:~~ ~~Water operating revenues totaled $161.5 million for the nine months ended September 30, 2018 as a result of the acquisition of Aquarion on December 4, 2017.~~

~~Electric Transmission Revenues:~~ The electric transmission segment revenues decreased $17.0 million due to lower revenue requirements primarily related to the lower federal corporate income tax rate that was reflected in 2018 transmission revenues, partially offset by an increase related to ongoing investments in our transmission infrastructure.

Purchased Power, Fuel and Transmission expense includes costs associated with purchasing electricity and natural gas ~~and water,~~ on behalf of our customers. These electric and natural gas supply costs are recovered from customers in rates through commission-approved cost tracking mechanisms, which have no impact on earnings (tracked costs). Purchased Power, Fuel and Transmission expense ~~increased~~increased/(decreased) for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, as compared to the same periods in ~~2017,~~2018, due primarily to the following:


(Millions of Dollars)	Three Months Ended		Nine Months Ended		Three Months Ended			Six Months Ended
Electric Distribution	$	145.8	$	338.4	$	23.9		$	84.3
Natural Gas Distribution	2.9		31.0		3.6			29.1
Transmission	36.3		79.0		(37.1		)	(64.5		)
Water Distribution	0.4		1.1
Eliminations	5.1		38.4		(23.4		)	(53.8		)
Total Purchased Power, Fuel and Transmission	$	190.5	$	487.9	$	(33.0	)	$	(4.9	)

~~The variance in electric distribution reflects intercompany transmission charges in both periods.~~ The increase in purchased power expense at the electric distribution business for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, as compared to the same periods in ~~2017,~~2018, was driven primarily by higher prices associated with the procurement of energy supply. As a result of the sale of PSNH's thermal generation assets on January 10, 2018, and the sale of PSNH's hydroelectric assets on August 26, 2018, PSNH purchased power in place of its self-generation output in the first nine months of 2018. The increase in natural gas supply costs at our natural gas distribution business was due primarily to higher average ~~prices and~~ sales volumes.

The ~~increase~~decrease in transmission costs for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, as compared to the same periods in ~~2017,~~2018, was primarily the result of ~~an increase in costs billed by ISO-NE that support regional grid investment, and an increase~~a decrease in the retail transmission cost deferral, which reflects the actual costs of transmission service compared to estimated amounts billed to ~~customers. This was partially offset~~customers, a decrease in costs billed by ISO-NE that support regional grid investments and a decrease in Local Network Service charges, which reflect the cost of transmission service provided by Eversource over our local transmission network.

Operations and Maintenance expense includes tracked costs and costs that are part of base electric, natural gas and water distribution rates with changes impacting earnings (non-tracked costs). Operations and Maintenance expense increased/(decreased) for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, as compared to the same periods in ~~2017,~~2018, due primarily to the following:


(Millions of Dollars)	Three Months Ended			Nine Months Ended			Three Months Ended			Six Months Ended
Base Electric Distribution (Non-Tracked Costs):
Employee-related expenses, including labor and benefits	$	26.4		$	30.7		$	0.4		$	(12.0	)
Bad debt expense	2.6			13.6
Shared corporate costs (including computer software depreciation at Eversource Service)	(8.8		)	1.1
Storm restoration costs	(3.3		)	(11.4		)
Operations-related expenses, including vegetation management, vehicles, and outside services (excluding storm restoration costs)	(1.8		)	(12.9		)
Operations-related expenses, including vegetation management, vehicles, and outside services							7.8			17.9
Storm Restoration Costs							5.1			4.0
Other non-tracked operations and maintenance	5.1			5.7			1.0			2.4
Total Base Electric Distribution (Non-Tracked Costs)	20.2			26.8			14.3			12.3
Base Natural Gas Distribution (Non-Tracked Costs)	3.8			11.3			4.8			7.9
Water Distribution (Addition of Aquarion operations and maintenance expenses due to acquisition on December 4, 2017)	20.5			59.4
Tracked Costs (Electric Distribution, Electric Transmission and Natural Gas Distribution) - Decrease primarily due to lower PSNH generation operations expenses due to the 2018 sales of thermal and hydroelectric generation assets and lower transmission expenses	(16.5		)	(78.2		)
Water Distribution							0.4			1.1
Tracked Costs (Electric Distribution, Electric Transmission and Natural Gas Distribution) - Increase due primarily to higher electric transmission expenses, partially offset by the absence in 2019 of PSNH generation operations expenses due to the 2018 sales of thermal and hydroelectric generation assets							21.5			30.9
Other and eliminations:
Eversource Parent and Other Companies - other operations and maintenance	(1.2		)	(1.1		)	6.6			27.3
Eliminations	10.0			(3.6		)	(13.5		)	(42.3		)
Total Operations and Maintenance	$	36.8		$	14.6		$	34.1		$	37.2

Depreciation expense increased for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, as compared to the same periods in ~~2017,~~2018, due primarily to higher ~~net~~utility plant in service balances and new depreciation rates effective with the CL&P distribution rate case settlement agreement. ~~Partially offsetting these increases was lower depreciation expense at PSNH as a result of the sale of the thermal and hydroelectric generation assets in 2018.~~

Amortization expense includes the deferral of energy supply and energy-related costs included in certain regulatory commission-approved cost tracking mechanisms, and the amortization of certain costs. This deferral adjusts expense to match the corresponding revenues. Amortization increased for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, as compared to the same periods in ~~2017,~~2018, due primarily to the deferral of energy supply and energy-related costs, which can fluctuate from period to period based on the timing of costs incurred and the related rate changes to recover these costs. Energy supply and energy-related costs are recovered from customers in rates and have no impact on earnings. The increase for the three and six month periods is also due to higher amortization of PSNH's securitized regulatory asset related to the 2018 RRB issuance of $4.0 million and $14.7 million, respectively.

Energy Efficiency Programs expense ~~decreased~~increased for the ~~nine~~three and six months ended ~~September~~June 30, ~~2018,~~2019, as compared to the same ~~period~~periods in ~~2017,~~2018, due primarily to ~~a State of Connecticut policy change requiring~~higher spending for CL~~&P to remit 2018~~&P's, NSTAR Electric's and PSNH's energy efficiency funds to the State of Connecticut. For the three and nine months ended September 30, 2018, these amounts totaled $10.7 million and $36.1 million, respectively. These costs were collected from CL&P's customers and remitted to the State of Connecticut; as such we have classified these amounts as Taxes Other than Income Taxes.programs. The costs for the majority of the state energy policy initiatives and expanded energy efficiency programs are recovered from customers in rates and have no impact on earnings.

Taxes Other Than Income Taxes expense increased for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, as compared to the same periods in ~~2017,~~2018, due primarily to higher property taxes as a ~~State~~result of ~~Connecticut policy change requiring~~higher utility plant in service balances and higher gross earnings taxes (the costs of which are tracked), partially offset by a decrease related to CL~~&P to remit 2018~~&P's remittance of energy efficiency funds to the State of Connecticut ~~(which totaled $10.7~~of $2.0 million and ~~$36.1~~$4.0 million for the three and ~~nine months ended September 30, 2018, respectively), as well as higher~~six month periods, respectively, and a decrease in NSTAR Electric's property taxes due to ~~higher utility plant~~a decrease in ~~service balances.~~tax rates.

Impairment of Northern Pass Transmission reflects an impairment charge of $239.6 million that was recorded in the second quarter of 2019 as a result of the July 19, 2019 New Hampshire Supreme Court decision. The after-tax impact of this impairment charge was $204.4 million. For further information on the impairment of NPT, see "Business Development and Capital Expenditures - Electric Transmission Business - Northern Pass" in this Management's Discussion and Analysis of Financial Condition and Results of Operations.

Interest Expense increased for the three and six months ended ~~September~~June 30, ~~2018,~~2019, as compared to the same ~~period~~periods in ~~2017,~~2018, due primarily to an increase in interest on long-term debt ($~~5.9 million)~~7.1 million and $11.3 million, respectively) as a result of new debt issuances, ~~the addition of Aquarion~~an increase in interest ~~in 2018 ($6.4 million), interest expense~~ on the 2018 PSNH RRB issuance ($~~6.0 million)~~2.5 million and $7.9 million, respectively) and an increase in interest on ~~short-term borrowings~~notes payable ($~~2.7 million), partially offset by higher~~2.9 million and $7.1 million, respectively). Partially offsetting these increases was an increase in AFUDC related to debt funds ~~($1.9 million)~~ and ~~a decrease in regulatory deferrals, primarily at NSTAR Electric, which~~other capitalized interest ($5.4 million and $10.9 million, respectively).

Other Income, Net decreased ~~interest expense ($1.3 million).~~

~~Interest Expense increased~~ for the ~~nine~~three and six months ended ~~September~~June 30, ~~2018,~~2019, as compared to the same ~~period~~periods in ~~2017, due primarily to an increase in interest on long-term debt ($29.0 million) as a result of new debt issuances, the addition of Aquarion interest in~~ 2018, ($19.2 million), interest expense on the 2018 RRB issuance ($8.8 million) and an increase in interest on short-term borrowings ($6.5 million), partially offset by higher AFUDC related to debt funds ($5.9 million) and a decrease in regulatory deferrals, primarily at NSTAR Electric, which decreased interest expense ($3.3 million).

~~Other Income, Net~~ ~~decreased for the three months ended September 30, 2018, as compared to the same period in 2017,~~ due primarily to a decrease related to pension, SERP and PBOP non-service income components ($8.8 million and $16.7 million, respectively), partially offset by an increase in equity in earnings ~~of unconsolidated affiliates~~ related to Eversource's equity method investments ($~~33.0 million)~~3.0 million and ~~changes~~$3.4 million, respectively), an increase in the market value related to deferred compensation plans ($3.6 million). In the third quarter of 2018, Eversource recognized a $32.9 million other-than-temporary impairment to our equity method investment in the Access Northeast project, which was reflected as a loss within equity in earnings. ~~These decreases were partially offset by higher~~ AFUDC related to equity funds ($~~2.8 million),~~2.2 million and $3.5 million, respectively) and the recognition in the first quarter of ~~$8.7~~2019 of $5.2 million of the equity return component of the carrying charges related to ~~storms~~storm costs incurred from ~~August 2011~~December 2013 through ~~March 2013~~April 2016 recorded in interest income at ~~PSNH, an increase related to pension, SERP and PBOP non-service income components ($7.5 million) and gains on the sale of property ($5.0 million).~~PSNH.

~~Other~~ Income ~~Net increased~~Tax Expense decreased for the ~~nine~~three months ended ~~September~~June 30, ~~2018,~~2019, as compared to the same period in 2017, due primarily to higher AFUDC related to equity funds ($8.8 million), the recognition of $8.7 million of the equity return component of the carrying charges related to storms incurred from August 2011 through March 2013 at PSNH, an increase related to pension, SERP and PBOP non-service income components ($21.7 million) and gains on the sale of property ($5.0 million). Partially offsetting these increases was a decrease in equity in earnings of unconsolidated affiliates related to Eversource's equity investments ($23.4 million), driven by a $32.9 million other-than-temporary impairment to our equity method investment in the Access Northeast project. The equity in earnings decrease was partially offset by increased unrealized gains on our investment in a renewable energy fund.

~~Income Tax Expense~~ ~~decreased for the three months ended September 30,~~ 2018, ~~as compared to the same period in 2017,~~ due primarily to the ~~new federal tax law enacted December 22, 2017,~~impairment of NPT ($35.2 million), the ~~Tax Cuts and Jobs Act, reducing the federal corporate income tax rate from 35 percent to 21 percent~~amortization of EDIT ($8.8 million), and lower pre-tax earnings ($~~63.5~~2.4 million), partially offset by higher state taxes ($1.2 million). Income tax expense was further decreased by the impairment of Access Northeast ($6.9 million), return to provision items ($1.2 million), and an aggregate benefit relating to both federal tax reform impacts on the tax return compared to the provision estimate and remeasurement of a tax reserve based on new information from a change in Connecticut tax law ($18.0 million), all partially offset by items that impact our tax rate as a result of regulatory treatment (flow-through items) and permanent differences ($~~1.8~~6.8 million). The impact of the amortization of the EDIT regulatory liability, including the tax gross up portion, that reduced revenue is $12.1 million offset by current tax benefit of $3.4 million and amortization of EDIT of $8.8 million, for the three months ended June 30, 2019, which results in no impact on net income.

Income Tax Expensedecreased for the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, as compared to the same period in ~~2017,~~2018, due primarily to ~~a reduction in~~ the ~~federal corporate income tax rate from 35 percent to 21 percent~~impairment of NPT ($35.2 million), and ~~lower~~the amortization of EDIT ($17 million), partially offset by higher pre-tax earnings ($~~198.9 million) and by the impairment of Access Northeast ($6.9 million). Income tax expense was further decreased by return to provision items ($1.2~~5.8 million), an aggregate benefit relating to both federal tax reform impacts on the tax return compared to the provision estimate and remeasurement of a tax reserve based on new information from a change in Connecticut tax lawhigher state taxes ($~~18.0~~1.3 million), and by ~~flow-through~~ items that impact our tax rate as a result of regulatory treatment (flow-through items) and permanent differences ($~~2.4~~5.1 million). The impact of the amortization of the EDIT regulatory liability, including the tax gross up portion, that reduced revenue is $23.3 million offset by current tax benefit of $6.3 million and amortization of EDIT of $17 million, for the six months ended June 30, 2019, which results in no impact on net income.

RESULTS OF OPERATIONS –

THE CONNECTICUT LIGHT AND POWER COMPANY

NSTAR ELECTRIC COMPANY AND SUBSIDIARY

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES

The following provides the amounts and variances in operating revenues and expense line items in the statements of income for CL&P, NSTAR Electric and PSNH for the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018 included in this combined Quarterly Report on Form 10-Q:


	For the Nine Months Ended September 30,																						For the Six Months Ended June 30,
	CL&P							NSTAR Electric							PSNH								CL&P							NSTAR Electric							PSNH
(Millions of Dollars)	2018		2017		Increase/ (Decrease)			2018		2017		Increase/ (Decrease)			2018		2017			Increase/ (Decrease)			2019		2018		Increase/ (Decrease)			2019		2018		Increase/ (Decrease)			2019		2018		Increase/ (Decrease)
Operating Revenues	$	2,344.9	$	2,173.6	$	171.3		$	2,400.3	$	2,290.4	$	109.9		$	792.7	$	733.6		$	59.1		$	1,590.1	$	1,479.9	$	110.2		$	1,479.5	$	1,460.9	$	18.6		$	517.3	$	502.5	$	14.8
Operating Expenses:
Purchased Power, Fuel and Transmission	850.8		711.2		139.6			981.9		799.0		182.9			294.0		179.3			114.7			566.4		536.2		30.2			558.5		598.7		(40.2		)	199.3		193.2		6.1
Operations and Maintenance	355.5		361.1		(5.6		)	344.5		346.5		(2.0		)	153.3		195.6			(42.3		)	264.0		227.0		37.0			221.9		220.8		1.1			105.4		97.9		7.5
Depreciation	208.9		184.3		24.6			205.2		204.4		0.8			69.5		95.3			(25.8		)	147.8		136.9		10.9			145.6		134.6		11.0			46.2		46.3		(0.1		)
Amortization of Regulatory Assets/(Liabilities), Net	97.4		58.8		38.6			35.5		17.2		18.3			41.3		(10.7		)	52.0
Amortization of Regulatory Assets, Net																							48.0		43.4		4.6			45.8		18.3		27.5			19.5		14.0		5.5
Energy Efficiency Programs	71.6		106.5		(34.9		)	229.4		228.5		0.9			15.7		11.0			4.7			46.8		41.4		5.4			142.6		140.0		2.6			12.9		9.8		3.1
Taxes Other Than Income Taxes	267.7		223.4		44.3			145.7		130.6		15.1			59.8		67.0			(7.2		)	178.5		174.7		3.8			93.1		95.9		(2.8		)	38.0		38.7		(0.7		)
Total Operating Expenses	1,851.9		1,645.3		206.6			1,942.2		1,726.2		216.0			633.6		537.5			96.1			1,251.5		1,159.6		91.9			1,207.5		1,208.3		(0.8		)	421.3		399.9		21.4
Operating Income	493.0		528.3		(35.3		)	458.1		564.2		(106.1		)	159.1		196.1			(37.0		)	338.6		320.3		18.3			272.0		252.6		19.4			96.0		102.6		(6.6		)
Interest Expense	113.1		106.6		6.5			80.8		88.7		(7.9		)	44.0		38.7			5.3			72.7		75.5		(2.8		)	56.1		53.8		2.3			28.3		27.4		0.9
Other Income, Net	20.7		15.4		5.3			40.6		24.6		16.0			24.3		7.3			17.0			6.7		13.7		(7.0		)	21.7		26.9		(5.2		)	10.0		8.2		1.8
Income Before Income Tax Expense	400.6		437.1		(36.5		)	417.9		500.1		(82.2		)	139.4		164.7			(25.3		)	272.6		258.5		14.1			237.6		225.7		11.9			77.7		83.4		(5.7		)
Income Tax Expense	102.0		159.5		(57.5		)	112.2		196.0		(83.8		)	37.9		65.1			(27.2		)	57.3		60.2		(2.9		)	53.9		60.6		(6.7		)	18.1		22.5		(4.4		)
Net Income	$	298.6	$	277.6	$	21.0		$	305.7	$	304.1	$	1.6		$	101.5	$	99.6		$	1.9		$	215.3	$	198.3	$	17.0		$	183.7	$	165.1	$	18.6		$	59.6	$	60.9	$	(1.3	)

Operating Revenues

Sales Volumes: A summary of our retail electric GWh sales volumes was as follows:


	For the Nine Months Ended September 30,					For the Six Months Ended June 30,
	2018	2017	Increase	Percent		2019	2018	Decrease		Percentage Decrease
CL&P	16,376	15,812	564	3.6	%	9,953	10,222	(269	)	(2.6	)%
NSTAR Electric	18,314	17,784	530	3.0	%	11,084	11,357	(273	)	(2.4	)%
PSNH	5,981	5,835	146	2.5	%	3,724	3,775	(51	)	(1.4	)%

Fluctuations in retail electric sales volumes at PSNH impact earnings. For CL&P and NSTAR Electric, ~~(effective February 1, 2018, as a result of the DPU-approved rate case decision),~~ fluctuations in retail electric sales volumes do not impact earnings due to their respective regulatory commission-approved distribution revenue decoupling mechanisms.

Operating Revenues: Operating Revenues, which consist of base distribution revenues and tracked revenues further described below, increased $110.2 million at CL&P, $18.6 million at NSTAR Electric and $14.8 million at PSNH for the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, as compared to the same period in ~~2017, as follows:~~2018.

(Millions of Dollars) CL&P NSTAR Electric PSNH
Operating Revenues $ 171.3
$ 109.9
$ 59.1

Base Distribution Revenues:

CL&P's distribution revenues increased ~~$17.0~~$34.1 million due primarily to the impact of its base distribution rate increases effective May 1, 2019 and May 1, 2018 as a result of the PURA-approved rate case settlement agreement, which includes recovery of storm costs and certain other items that do not impact earnings.

NSTAR Electric's distribution revenues increased $7.0 million due primarily to the impact of its base distribution rate increase ~~as a result of the PURA-approved rate case settlement that became~~ effective ~~May~~January 1, ~~2018 (a portion of which did not impact earnings).~~2019.

~~NSTAR Electric's~~

PSNH's distribution revenues decreased ~~$60.9~~$1.9 million due primarily to lower ~~base distribution rates at NSTAR Electric, as per~~demand revenues in the ~~DPU-approved rate case decision that became effective February 1, 2018. NSTAR Electric's rates were adjusted to reflect the new lower federal corporate income tax rate and the movement~~first half of certain costs from base distribution rates to fully-reconciled cost tracking mechanisms (most of which did not impact earnings). The decrease in revenues was partially offset by an increase in January 2018 sales volumes,2019, as compared to ~~January 2017, primarily driven by~~ the ~~colder weather. Effective February 1, 2018, NSTAR Electric operated entirely under a decoupled rate structure, and changes~~same period in ~~sales volumes no longer impact earnings.~~2018.

PSNH's base distribution revenues increased $4.3 million primarily as a result of an increase in sales volumes in 2018, partially offset by a rate change due to the completion of the full recovery of certain costs in revenues. The rate change did not impact earnings.

Distribution revenues decreased $16.6 million at CL&P, $3.7 million at NSTAR Electric and $9.2 million at PSNH due to the liability established to reflect the difference between the 35 percent federal corporate income tax rate included in rates charged to customers and the 21 percent federal corporate income tax rate, effective January 1, 2018 as a result of the Tax Cuts and Jobs Act. Effective February 1, 2018 for NSTAR Electric and May 1, 2018 for CL&P, rates charged to customers have been adjusted to reflect the new federal corporate income tax rate.

Tracked Revenues: Tracked revenues consist of certain costs that are recovered from customers in rates through regulatory commission-approved cost tracking mechanisms and therefore, recovery of these costs have no impact on earnings. Costs recovered through cost tracking mechanisms include, among others, energy supply procurement and other energy-related costs, retail transmission charges, energy efficiency program costs, ~~net metering for distributed generation and~~ restructuring and stranded cost recovery revenues (including securitized RRB charges)., and additionally for NSTAR Electric, pension and PBOP benefits and net metering for distributed generation. Tracked revenues also include wholesale market sales transactions, such as sales of energy and energy-related products into the ISO-NE wholesale electricity market and the sale of RECs to various counterparties. In addition, tracked revenues include certain incentives earned, certain return on rate base, and carrying charges that are billed in rates to ~~customers.~~customers, which do impact earnings. Tracked revenues increased/(decreased) for the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, as compared to the same period in ~~2017,~~2018, due primarily to the following:


(Millions of Dollars)	CL&P			NSTAR Electric			PSNH			CL&P			NSTAR Electric			PSNH
Retail Tariff Tracked Revenues
Energy supply procurement	$	156.3		$	80.6		$	(2.8	)	$	60.2		$	25.3		$	8.1
Retail transmission	(5.1		)	62.2			0.3			(17.5		)	(37.7		)	(18.0		)
Stranded cost recovery	2.3			(17.0		)	64.6			(6.3		)	2.4			17.8
Other distribution tracking mechanisms	2.0			45.0			6.7			8.5			14.0			4.3
Wholesale Market Sales Revenue										4.8			3.4			(11.5		)

PSNH's energy supply procurement revenues includes the absence in 2019 of the recovery of generation rate base return due to the sales of its thermal and hydroelectric generation assets in 2018. Revenues from CL&P's other distribution tracking mechanisms include higher earnings in 2019 from its capital tracker mechanism effective July 1, 2018 due to increased electric system improvements.

Transmission Revenues: Transmission revenues ~~decreased $8.4 million and $13.4~~increased $38.6 million at CL&P, ~~and~~$13.4 million at NSTAR Electric, ~~respectively,~~and $15.7 million at PSNH due ~~to lower revenue requirements~~ primarily ~~related to the lower federal corporate income tax rate that was reflected in 2018 transmission revenues, partially offset by an increase related~~ to ongoing investments in our transmission infrastructure.

Eliminations: Eliminations are primarily related to the Eversource electric transmission revenues that are derived from ISO-NE regional transmission charges to the distribution businesses of CL&P, NSTAR Electric and PSNH that recover the costs of the wholesale transmission business. The impact of eliminations decreased revenues by $15.7 million at CL&P, $8.7 million at NSTAR Electric and $0.3 million at PSNH.

Purchased Power, Fuel and Transmission expense includes costs associated with purchasing electricity on behalf of CL&P, NSTAR Electric and PSNH's customers. These energy supply costs are recovered from customers in commission-approved cost tracking mechanisms, which have no impact on earnings (tracked costs). Purchased Power, Fuel and Transmission expense increased/(decreased) for the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, as compared to the same period in ~~2017,~~2018, due primarily to the following:


(Millions of Dollars)	CL&P		NSTAR Electric		PSNH			CL&P			NSTAR Electric			PSNH
Purchased Power Costs	$	121.0	$	107.5	$	109.9		$	60.5		$	5.3		$	18.5
Transmission Costs	9.5		62.1		7.4			(15.3		)	(37.0		)	(12.2		)
Eliminations	9.1		13.3		(2.6		)	(15.0		)	(8.5		)	(0.2		)
Total Purchased Power, Fuel and Transmission	$	139.6	$	182.9	$	114.7		$	30.2		$	(40.2	)	$	6.1

Purchased Power Costs: Included in purchased power costs are the costs associated with providing electric generation service supply to all customers who have not migrated to third party suppliers.

The increase at CL&P was due primarily to an increase in the price and volume of power procured on behalf of our customers.

The increase at NSTAR Electric was due primarily to an increase in the price of power procured on behalf of our customers.

The increase at PSNH was due primarily to higher purchased power energy expenses that are recovered as a component of the Energy Service tracking mechanism. As a result of the sale of its thermal generation assets on January 10, 2018 and its hydroelectric generation assets on August 26, 2018, PSNH purchased power in place of its self-generation output in the first nine months of 2018.

Transmission Costs: Included in transmission costs are charges that recover the cost of transporting electricity over high-voltage lines from ~~generating plants~~generation facilities to substations, including costs allocated by ISO-NE to maintain the wholesale electric market.

The ~~increase~~decrease in transmission costs at CL&P ~~NSTAR Electric and PSNH~~ was primarily ~~the~~a result of ~~an increase~~a decrease in costs billed by ISO-NE that support regional grid ~~investment~~investments, and a decrease in Local Network Service charges, which reflect the cost of transmission service provided by Eversource over our local transmission network. This was partially offset by an increase in the retail transmission cost deferral, which reflects the actual costs of transmission service compared to estimated amounts billed to customers.

The decrease in transmission costs at NSTAR Electric was primarily a result of a decrease in the retail transmission cost deferral, which reflects the actual costs of transmission service compared to estimated amounts billed to customers, and a decrease in costs billed by ISO-NE that support regional grid investments. This was partially offset by an increase in Local Network Service charges, which reflect the cost of transmission service provided by Eversource over our local transmission network.

The decrease in transmission costs at PSNH was primarily a result of a decrease in the retail transmission cost deferral, which reflects the actual costs of transmission service compared to estimated amounts billed to customers, a decrease in costs billed by ISO-NE that support regional grid investments and a decrease in Local Network Service charges, which reflect the cost of transmission ~~service.~~service provided by Eversource over our local transmission network.

Operations and Maintenance expense includes tracked costs and costs that are part of base distribution rates with changes impacting earnings (non-tracked costs). Operations and Maintenance expense increased/(decreased) for the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, as compared to the same period in ~~2017,~~2018, due primarily to the following:


(Millions of Dollars)	CL&P			NSTAR Electric			PSNH			CL&P			NSTAR Electric			PSNH
Base Electric Distribution (Non-Tracked Costs):
Employee-related expenses, including labor and benefits	$	16.7		$	11.5		$	2.5		$	(4.2	)	$	(7.1	)	$	(0.7	)
Bad debt expense	6.6			7.1			(0.1		)
Operations-related expenses, including vegetation management, vehicles, and outside services										11.0			2.1			4.8
Storm restoration costs	(10.5		)	0.1			(1.0		)	(3.3		)	5.9			1.4
Operations-related expenses, including vegetation management, vehicles, and outside services (excluding storm restoration costs)	(9.0		)	(0.4		)	(3.5		)
Other non-tracked operations and maintenance	(2.1		)	9.7			(0.8		)	6.8			(5.2		)	0.8
Total Base Electric Distribution (Non-Tracked Costs)	1.7			28.0			(2.9		)	10.3			(4.3		)	6.3
Tracked Costs:
Decrease of PSNH generation operations expenses due to the 2018 sales of thermal and hydroelectric generation assets	—			—			(36.3		)
Absence in 2019 of PSNH generation operations expenses due to the 2018 sales of thermal and hydroelectric generation assets										—			—			(7.0		)
Transmission expenses	(9.8		)	(10.2		)	(1.7		)	24.6			0.4			3.0
Other tracked operations and maintenance	2.5			(19.8		)	(1.4		)	2.1			5.0			5.2
Total Tracked Costs	(7.3		)	(30.0		)	(39.4		)	26.7			5.4			1.2
Total Operations and Maintenance	$	(5.6	)	$	(2.0	)	$	(42.3	)	$	37.0		$	1.1		$	7.5

Depreciation ~~increased/(decreased)~~increased for the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, as compared to the same period in ~~2017,~~2018, due primarily to the following:

The increase at CL&P was due primarily to higher net plant in service balances and the implementation of new depreciation rates effective with the CL&P distribution rate case settlement agreement.

The increase at NSTAR Electric was due to higher net plant in service ~~balances, offset by lower depreciation composite rates.~~balances.

~~The decrease at PSNH was due to the sale of the thermal and hydroelectric generation assets in 2018.~~

Amortization of Regulatory ~~Assets/(Liabilities),~~Assets, Net expense includes the deferral of energy supply and energy-related costs included in certain regulatory-approved cost tracking mechanisms, and the amortization of certain costs. This deferral adjusts expense to match the corresponding revenues. Amortization of Regulatory ~~Assets/(Liabilities),~~Assets, Net increased at CL&P ~~NSTAR Electric and PSNH~~ for the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, as compared to the same period in ~~2017,~~2018, due primarily to higher recovery of deferred storm restoration costs approved in distribution rates, and at NSTAR Electric and PSNH due primarily to the deferral adjustment of energy supply and energy-related costs, which can fluctuate from period to period based on the timing of costs incurred and related rate changes to recover these costs. ~~In addition, the increase at PSNH includes amortization of the securitized asset rate reduction bonds in 2018.~~ Energy supply and energy-related costs ~~which are the primary drivers of amortization,~~ are recovered from customers in rates and have no impact on earnings. The increase at PSNH is also due to higher amortization of its securitized regulatory asset related to the 2018 RRB issuance of $14.7 million.

~~The decrease at~~higher spending for CL~~&P was due primarily to a State of Connecticut policy change requiring CL&P to remit 2018~~&P's, NSTAR Electric's and PSNH's energy efficiency funds to the State of Connecticut. In the first nine months of 2018, this amount totaled $36.1 million. These costs were collected from CL&P's customers and remitted to the State of Connecticut; as such we have classified this amount as Taxes Other than Income Taxes.programs.

The increase at PSNH was due to the deferral adjustment, which reflects the actual costs of energy efficiency programs compared to the estimated amounts billed to customers and the timing of the recovery of energy efficiency costs.

Taxes Other Than Income Taxes ~~increased/~~increased/(decreased) for the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, as compared to the same period in ~~2017,~~2018, due primarily to the following:

The increase at CL&P was due primarily to ~~a State of Connecticut policy change requiring CL&P to remit 2018 energy efficiency funds to the State of Connecticut (which totaled $36.1 million for the first nine months of 2018), as well as~~ higher property taxes ~~due to~~as a result of higher utility plant balances and higher gross earnings taxes (the costs of which are tracked)., partially offset by a decrease related to CL&P's remittance of energy efficiency funds to the State of Connecticut of $4.0 million.

The ~~increase~~decrease at NSTAR Electric was due primarily to ~~higher property taxes due to higher utility plant balances.~~

~~The decrease at PSNH was due primarily to the absence of~~lower property taxes as a result of ~~the sales of its thermal and hydroelectric generation assets~~a decrease in ~~2018, and a 2018 refund of disputed property taxes for prior years from the Town of Bow, New Hampshire, partially offset by higher property taxes due to higher utility distribution plant balances.~~tax rates.

Interest Expense~~increased/~~(decreased)/increased for the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, as compared to the same period in ~~2017,~~2018, due primarily to the following:

The ~~increase~~decrease at CL&P was due primarily to ~~higher interest on long-term debt as a result of new debt issuances ($5.9 million).~~

~~The decrease at NSTAR Electric wasdue primarily to a decrease in regulatory deferrals, which decreased interest expense ($5.6 million) and~~ lower interest on long-term debt ($~~4.3~~3.5 million) and an increase in AFUDC related to debt funds ($0.4 million), partially offset by an increase in interest expense on ~~short-term borrowings~~regulatory deferrals ($1.4 million).


•	Theincrease at NSTAR Electric was due primarily to higher interest on long-term debt ($1.6 million).

The increase at PSNH was due primarily to an increase in interest on the 2018 PSNH RRB issuance ($7.9 million), partially offset by lower interest on long-term debt ($3.3 million), a decrease in interest on notes payable ($1.5 million) and an increase in AFUDC related to debt funds ($0.9 million).

~~($3.3~~

Other Income, Net (decreased)/increased for the six months ended June 30, 2019, as compared to the same period in 2018, due primarily to the following:

The decrease at CL&P was due primarily to a decrease related to pension, SERP and PBOP non-service income components ($6.9 million).

The decrease at NSTAR Electric was due primarily to a decrease related to pension, SERP and PBOP non-service income components ($5.5 million).

The increase at PSNH was due primarily to ~~interest on RRBs ($8.8 million) and higher interest on short-term borrowings ($1.2 million), partially offset by lower interest on long-term debt ($4.8 million).~~

~~Other Income, Net~~ ~~increased for the nine months ended September 30, 2018, as compared to the same period in 2017, due primarily to the following:~~

~~The increase at CL&P was due to an increase related to pension, SERP and PBOP non-service income components ($6.0 million) and higher AFUDC related to equity funds ($1.2 million).~~

The increase at NSTAR Electric was due to an increase related to pension, SERP and PBOP non-service income components ($12.3 million) and higher AFUDC related to equity funds ($4.8 million), partially offset by amounts related to officer's life insurance policies ($1.5 million).

~~The increase at PSNH was due to~~ the recognition in the first quarter of ~~$8.7~~2019 of $5.2 million of the equity return component of the carrying charges related to ~~storms~~storm costs incurred from ~~August 2011~~December 2013 through ~~March 2013, a gain on the sale of property ($4.4 million),~~April 2016 recorded in interest income, ~~primarily~~and an increase in AFUDC related to ~~a 2018 refund of disputed property taxes for prior years~~equity funds ($~~2.6~~1.1 million), ~~and an increase~~partially offset by a decrease related to pension, SERP and PBOP non-service income components ($~~1.9~~2.4 million).

Income Tax Expense decreased for the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, as compared to the same period in ~~2017,~~2018, due primarily to the following:

The decrease at CL&P was due primarily to ~~the new federal tax law enacted December 22, 2017, the Tax Cuts and Jobs Act, reducing the federal corporate income tax rate from 35 percent to 21 percent and~~amortization of EDIT ($1.5 million), lower ~~pre-tax earnings ($68.9 million) and~~ state taxes ($~~5.4~~1.2 million)~~. This decrease was partially offset by return to provision items ($11.1 million)~~, and by items that impact our tax rate as a result of regulatory treatment (flow-through items) and permanent differences ($~~5.7~~3.2 million) offset by higher pre-tax earnings ($3 million). The impact of the amortization of the EDIT regulatory liability, including the tax gross up portion, that reduced revenue is $2.0 million offset by a current tax benefit of $0.5 million and amortization of EDIT of $1.5 million, for the six months ended June 30, 2019, which results in no impact on net income.

The decrease at NSTAR Electric was due primarily to ~~a reduction in the federal corporate tax rate and lower pre-tax earnings~~amortization of EDIT ($~~87.3~~9.6 million), partially offset by ~~return to provision items~~higher pre-tax earnings ($~~1.2~~2.5 million), and by ~~flow-through~~ items that impact our tax rate as a result of regulatory treatment (flow-through items) and permanent differences ($~~2.3~~0.4 million). The impact of the amortization of the EDIT regulatory liability, including the tax gross up portion, that reduced revenue is $13.3 million offset by a current tax benefit of $3.7 million and amortization of EDIT of $9.6 million, for the six months ended June 30, 2019, which results in no impact on net income.

The decrease at PSNH was due primarily to ~~a reduction in the federal corporate income tax rate and~~ lower pre-tax earnings ($~~28.3~~1.2 million), amortization of EDIT ($2.1 million), and ~~flow-through~~ items that impact our tax rate as a result of regulatory treatment (flow-through items) and permanent differences ($~~1.7~~1.1 million)~~, partially~~. The impact of the amortization of the EDIT regulatory liability, including the tax gross up portion, that reduced revenue is $2.8 million offset by ~~state taxes ($2.8 million).~~a current tax benefit of $0.7 million and amortization of EDIT of $2.1 million, for the six months ended June 30, 2019,which results in no impact on net income.

EARNINGS SUMMARY

CL&P's earnings increased ~~$21.0~~$17.0 millionfor the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, as compared to the same period in ~~2017,~~2018, due primarily to ~~the impact of the CL&P~~ base distribution rate ~~increase~~increases effective May 1, 2019 and May 1, 2018, higher earnings from its capital tracker mechanism, and an increase in transmission earnings driven by a higher transmission rate base, and higher non-service income from our benefit plans. Earnings were also favorably impacted by lower income tax expense, net of lower distribution revenues resulting from the Tax Cuts and Jobs Act. The earnings increase was partially offset by higher depreciation expense, higher property and other tax expense, and higher interest expense.

NSTAR Electric's earnings increased $1.6 million for the nine months ended September 30, 2018, as compared to the same period in 2017, due primarily to an increase in transmission earnings driven by a higher transmission rate base, higher non-service income from our benefit plans, lower interest expense, and lower depreciation expense. Earnings were also favorably impacted by lower income tax expense, net of lower distribution revenues resulting from the Tax Cuts and Jobs Act.base. The earnings increase was partially offset by higher operations and maintenance expense, lower non-service income from our benefit plans, higher depreciation expense and higher property and other tax expense.

~~PSNH's~~NSTAR Electric's earnings increased ~~$1.9~~$18.6 million for the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, as compared to the same period in ~~2017,~~2018, due primarily to an increase in transmission earnings driven by a higher transmission rate base, the NSTAR Electric base distribution rate increase effective January 1, 2019, lower operations and maintenance expense, and lower property and other tax expense. The earnings increase was partially offset by higher depreciation expense.

PSNH's earnings decreased $1.3 million for the six months ended June 30, 2019, as compared to the same period in 2018, due primarily to the absence in 2019 of generation earnings as a result of the sale of its generation assets in 2018, higher operations and maintenance expense and lower demand revenues. The earnings decrease was partially offset by an increase in transmission earnings driven by a higher transmission rate base and the recognition in 2019 of carrying charges on storm costs approved for recovery, a gain on the sale of property, lower operations and maintenance expense, higher sales volumes, and lower property tax expense due to the 2018 refund of disputed property taxes for prior tax years. Earnings were also favorably impacted by lower income tax expense, net of lower distribution revenues resulting from the Tax Cuts and Jobs Act. The earnings increase was partially offset by lower generation earnings due to the sales of its thermal and hydroelectric generation assets in 2018, and higher depreciation expense.recovery.

LIQUIDITY

Cash Flows: CL&P had cash flows provided by operating activities of ~~$451.1~~$345.6 million for the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, as compared to ~~$625.1~~$268.1 million in the same period of ~~2017.~~2018. The ~~decrease~~increase in operating cash flows was due primarily to ~~cash~~the absence in 2019 of approximately $71 million of storm restoration cost payments and $41.2 million in pension contributions made in the first ~~nine months~~half of 2018, ~~for storm restoration costs of approximately $120 million, an increase in pension contributions of $39.3 million~~ and the timing of ~~collections and payments related to our working capital items, including~~ accounts ~~receivable and accounts payable.~~payable cash payments. Partially offsetting these ~~unfavorable~~favorable impacts were ~~an increase related to~~ the timing of ~~cash collected~~collections for regulatory tracking mechanisms and ~~income tax payments made in 2018 of $3.6 million, compared to income tax payments made in 2017 of $19.8 million.~~other working capital items.

NSTAR Electric had cash flows provided by operating activities of ~~$574.3~~$251.5 million for the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, as compared to ~~$505.8~~$202.7 million in the same period of ~~2017.~~2018. The increase in operating cash flows was due primarily to the ~~timing~~absence in 2019 of ~~cash collected for regulatory tracking mechanisms,~~approximately $85 million of storm restoration cost payments made in the first half of 2018, a decrease of ~~$22.6~~$56.1 million in ~~Pension~~pension and PBOP cash contributions, lower income tax payments made in the first half of 2019 of $47 million, and the timing of ~~payments related to~~cash collections on our ~~working capital items.~~accounts receivables. Partially offsetting these favorable impacts were the timing of accounts payable cash payments, ~~made~~the timing of collections for ~~storm restoration costs~~regulatory tracking mechanisms, and the timing of ~~approximately $93 million and income tax payments made in 2018 of $42.4 million, compared to income tax payments made in 2017 of $25.9 million.~~other working capital items.

PSNH had cash flows provided by operating activities of ~~$217.7~~$121.7 million for the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, as compared to ~~$263.9~~$112.8 million in the same period of ~~2017.~~2018. The ~~decrease~~increase in operating cash flows was due primarily to income tax refunds of $11.8 million in the first half of 2019, as compared to income tax payments of $9.0 million in the same period in 2018, the timing of cash ~~collected for regulatory tracking mechanisms~~collections on accounts receivable, and the timing of accounts payable cash payments. Partially offsetting these favorable impacts was the timing of collections and payments of our other working capital items.

For further information on CL&P's, NSTAR Electric's and PSNH's liquidity and capital resources, see "Liquidity" and "Business Development and Capital Expenditures" included in this Management's Discussion and Analysis of Financial Condition and Results of Operations.

RESULTS OF OPERATIONS – THE CONNECTICUT LIGHT AND POWER COMPANY

The following provides the amounts and variances in operating revenues and expense line items in the statements of income for CL&P for the three months ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018 included in this combined Quarterly Report on Form 10-Q:


	For the Three Months Ended September 30,							For the Three Months Ended June 30,
(Millions of Dollars)	2018		2017		Increase/(Decrease)			2019		2018		Increase/(Decrease)
Operating Revenues	$	865.0	$	774.8	$	90.2		$	740.8	$	694.9	$	45.9
Operating Expenses:
Purchased Power and Transmission	314.6		259.0		55.6			246.5		234.3		12.2
Operations and Maintenance	128.5		123.5		5.0			133.4		109.7		23.7
Depreciation	72.0		63.7		8.3			74.6		69.4		5.2
Amortization of Regulatory Assets, Net	54.0		34.6		19.4			12.4		15.4		(3.0		)
Energy Efficiency Programs	30.2		37.7		(7.5		)	20.8		18.6		2.2
Taxes Other Than Income Taxes	93.0		79.2		13.8			86.4		84.4		2.0
Total Operating Expenses	692.3		597.7		94.6			574.1		531.8		42.3
Operating Income	172.7		177.1		(4.4		)	166.7		163.1		3.6
Interest Expense	37.6		36.3		1.3			36.9		38.7		(1.8		)
Other Income, Net	7.0		7.9		(0.9		)	2.9		7.1		(4.2		)
Income Before Income Tax Expense	142.1		148.7		(6.6		)	132.7		131.5		1.2
Income Tax Expense	41.8		52.6		(10.8		)	27.9		31.8		(3.9		)
Net Income	$	100.3	$	96.1	$	4.2		$	104.8	$	99.7	$	5.1

Operating Revenues

Sales Volumes: ~~A summary of~~ CL&P's retail electric GWh sales volumes ~~was as follows:~~

For the Three Months Ended September 30,
2018 2017 Increase Percent
CL&P 6,153
5,644
509
9.0 %

were 4,602 and 4,846 for the three months ended June 30, 2019 and 2018, respectively, resulting in a decrease of 5.0 percent. Fluctuations in retail electric sales volumes do not impact earnings due to its PURA-approved distribution revenue decoupling mechanism.

Operating Revenues: Operating Revenues, which consist of base distribution revenues and tracked revenues further described below, increased ~~$90.2~~$45.9 million for the three months ended ~~September~~June 30, ~~2018,~~2019, as compared to the same period in ~~2017.~~2018.

Base Distribution Revenues: CL&P's distribution revenues increased ~~$11.4~~$14.5 million due primarily to the impact of its base distribution rate ~~increase~~increases effective May 1, 2019 and May 1, 2018 as a result of the PURA-approved rate case settlement agreement, which includes recovery of storm costs and certain other items that ~~became effective May 1, 2018 (a portion of which did~~do not impact ~~earnings). Effective May 1, 2018, CL&P's rates charged to customers have been adjusted to reflect the new federal corporate income tax rate of 21 percent.~~earnings.

Tracked Revenues: Fluctuations in the overall level of operating revenues are primarily related to tracked revenues. Tracked revenues consist of certain costs that are recovered from customers in rates through PURA-approved cost tracking mechanisms and therefore have no impact on earnings. Costs recovered through cost tracking mechanisms include energy supply procurement and other energy-related costs, retail transmission charges, energy efficiency program costs, and restructuring and stranded cost recovery revenues. In addition, tracked revenues include certain incentives earned and carrying charges that are billed in rates to customers. Tracked revenues increased/(decreased) for the three months ended ~~September~~June 30, ~~2018,~~2019, as compared to the same period in ~~2017,~~2018, due primarily to the following:


(Millions of Dollars)
Retail Tariff Tracked Revenues
Energy supply procurement	$	64.6		$	23.9
Retail transmission	(9.3		)	(8.1		)
Other distribution tracking mechanisms	8.9			0.2
Wholesale Market Sales Revenue				1.5

Revenues from CL&P's other distribution tracking mechanisms include higher earnings from its capital tracker mechanism effective July 1, 2018 due to increased electric system improvements.

Transmission Revenues: Transmission revenues increased $21.2 million due primarily to ongoing investments in our transmission infrastructure.

Eliminations: Eliminations are primarily related to transmission revenues derived from ISO-NE regional transmission charges to the distribution business that recovers the costs of the wholesale transmission business. The impact of eliminations decreased revenues by $8.0 million.

Purchased Power and Transmission expense includes costs associated with purchasing electricity on behalf of CL&P's customers. These energy supply costs are recovered from customers in PURA-approved cost tracking mechanisms, which have no impact on earnings (tracked costs). Purchased Power and Transmission expense increased/(decreased) for the three months ended ~~September~~June 30, ~~2018,~~2019, as compared to the same period in ~~2017,~~2018, due primarily to the following:


(Millions of Dollars)
Purchased Power Costs	$	56.8		$	26.3
Transmission Costs	(3.3		)	(6.8		)
Eliminations	2.1			(7.3		)
Total Purchased Power and Transmission	$	55.6		$	12.2

The increase in purchased power costs was due primarily to an increase in both the price and volume of power procured on behalf of our customers. The decrease in transmission costs was ~~the~~primarily a result of a decrease in Local Network Service charges, which reflect the cost of transmission service provided over the local transmission network, and a decrease in costs billed by ISO-NE that support regional grid investments. This was partially offset by an increase in the retail transmission cost deferral, which reflects the actual costs of transmission service compared to estimated amounts billed to customers and a decrease in Local Network Service charges, which reflect the cost of transmission service. This was partially offset by an increase in costs billed by ISO-NE that support regional grid investment.network.

Operations and Maintenance expense includes tracked costs and costs that are part of base distribution rates with changes impacting earnings (non-tracked costs). Operations and Maintenance expense increased/(decreased) for the three months ended ~~September~~June 30, ~~2018,~~2019, as compared to the same period in ~~2017,~~2018, due primarily to the following:


(Millions of Dollars)
Base Electric Distribution (Non-Tracked Costs):
Employee-related expenses, including labor and benefits	$	12.2		$	(2.0	)
Storm restoration costs	(6.0		)
Operations-related expenses, including vegetation management, vehicles, and outside services				5.8
Other non-tracked operations and maintenance	(0.6		)	4.1
Total Base Electric Distribution (Non-Tracked Costs)	5.6			7.9
Total Tracked Costs	(0.6		)	15.8
Total Operations and Maintenance	$	5.0		$	23.7

Depreciation expense increased for the three months ended ~~September~~June 30, ~~2018,~~2019, as compared to the same period in ~~2017,~~2018, due primarily to higher net plant in service balances and the implementation of new depreciation rates effective with the CL&P distribution rate case settlement agreement.

Amortization of Regulatory Assets, Net expense includes the deferral of energy supply and energy-related costs included in certain regulatory-approved cost tracking mechanisms, and the amortization of certain costs. This deferral adjusts expenses to match the corresponding revenues. Amortization of Regulatory Assets, Net ~~increased~~decreased at CL&P for the three months ended ~~September~~June 30, ~~2018,~~2019, as compared to the same period in ~~2017,~~2018, due primarily to the deferral adjustment of energy supply and energy-related costs, which can fluctuate from period to period based on the timing of costs incurred and related rate changes to recover these costs. Energy supply and energy-related costs, which are the primary drivers of amortization, are recovered from customers in rates and have no impact on earnings.

Energy Efficiency Programs expenseincludes costs for various state energy policy initiatives and expanded energy efficiency programs, the majority of which are recovered from customers in rates and have no impact on earnings. Energy Efficiency Programs expense~~decreased~~increased for the three months ended ~~September~~June 30, ~~2018,~~2019, as compared to the same period in ~~2017,~~2018, due primarily to ~~a State of Connecticut policy change requiring CL&P to remit 2018~~higher spending for energy efficiency funds to the State of Connecticut. For the three months ended September 30, 2018, this amount totaled $10.7 million. These costs were collected from CL&P's customers and remitted to the State of Connecticut; as such we have classified this amount as Taxes Other than Income Taxes.programs.

Taxes Other Than Income Taxes increasedfor the three months ended ~~September~~June 30, ~~2018,~~2019, as compared to the same period in ~~2017,~~2018, due primarily to a State of Connecticut policy change requiring CL&P to remit 2018 energy efficiency funds to the State of Connecticut (which totaled $10.7 million for the three months ended September 30, 2018), as well as higher property taxes ~~due to~~as a result of higher utility plant balances and higher gross earnings taxes (the costs of which are tracked)., partially offset by a decrease related to CL&P's remittance of energy efficiency funds to the State of Connecticut of $2.0 million.

~~Income Tax~~Interest Expense decreased at CL&P for the three months ended ~~September~~June 30, ~~2018,~~2019, as compared to the same period in ~~2017,~~2018, due primarily to ~~the new federal tax law enacted December 22, 2017, the Tax Cuts and Jobs Act, reducing the federal corporate income tax rate from 35 percent to 21 percent and~~ lower ~~pre-tax earnings~~interest on long-term debt ($~~22.2~~1.9 million) and ~~state taxes~~an increase in AFUDC related to debt funds ($~~1.7~~0.3 million)~~. This decrease was~~, partially offset by ~~return~~an increase in interest expense on regulatory deferrals ($0.4 million).

Other Income, Net decreased for the three months ended June 30, 2019, as compared to ~~provision items~~the same period in 2018, due primarily to a decrease related to pension, SERP and PBOP non-service income components ($~~11.1~~3.3 million).

Income Tax Expense decreased for the three months ended June 30, 2019, as compared to the same period in 2018, due primarily to amortization of EDIT ($1.5 million), lower state taxes ($1.9 million) and by items that impact our tax rate as a result of regulatory treatment (flow-through items) and permanent differences ($~~2.0~~0.5 million).

~~EARNINGS SUMMARY~~

~~CL&P's earnings increased $4.2~~ The impact of the amortization of the EDIT regulatory liability, including the tax gross up portion, that reduced revenue is $2.0 million offset by a current tax benefit of $0.5 million and amortization of EDIT of $1.5 million, for the three months ended ~~September~~June 30, ~~2018,~~2019, which results in no impact on net income.

EARNINGS SUMMARY

CL&P's earnings increased $5.1 millionfor the three months ended June 30, 2019, as compared to the same period in ~~2017,~~2018, due primarily to ~~the impact of the CL&P~~ base distribution rate ~~increase~~increases effective May 1, ~~2018. Earnings were also favorably impacted by lower income tax expense, net of lower distribution revenues resulting~~2019 and May 1, 2018 and higher earnings from ~~the Tax Cuts and Jobs Act.~~its capital tracker mechanism. The earnings increase was partially offset by higher operations and maintenance expense, lower non-service income from our benefit plans, higher depreciation expense and higher property and other tax expense.


ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk Information

Commodity Price Risk Management: Our ~~Regulated~~regulated companies enter into energy contracts to serve our customers and the economic impacts of those contracts are passed on to our customers. Accordingly, the ~~Regulated~~regulated companies have no exposure to loss of future earnings or fair values due to these market risk-sensitive instruments. Eversource's Energy Supply Risk Committee, comprised of senior officers, reviews and approves all ~~large scale~~large-scale energy related transactions entered into by its ~~Regulated~~regulated companies.

Other Risk Management Activities

Interest Rate Risk Management: We manage our interest rate risk exposure in accordance with our written policies and ~~procedures by maintaining a mix of fixed and variable rate long-term debt.~~ procedures.

Credit Risk Management: Credit risk relates to the risk of loss that we would incur as a result of non-performance by counterparties pursuant to the terms of our contractual obligations. We serve a wide variety of customers and transact with suppliers that include IPPs, industrial companies, natural gas and electric utilities, oil and gas producers, financial institutions, and other energy marketers. Margin accounts exist within this diverse group, and we realize interest receipts and payments related to balances outstanding in these margin accounts. This wide customer and supplier mix generates a need for a variety of contractual structures, products and terms that, in turn, require us to manage the portfolio of market risk inherent in those transactions in a manner consistent with the parameters established by our risk management process.

Our ~~Regulated~~regulated companies are subject to credit risk from certain long-term or high-volume supply contracts with energy marketing companies. Our ~~Regulated~~regulated companies manage the credit risk with these counterparties in accordance with established credit risk practices and monitor ~~contracting~~contracting risks, including credit risk. As of ~~September~~June 30, ~~2018,~~2019, our ~~Regulated~~regulated companies held collateral ~~(letters~~in the form of letters of credit ~~or cash)~~ of $5$8.0 million from counterparties related to our standard service contracts. As of ~~September~~June 30, ~~2018,~~2019, Eversource had ~~$24.6~~$19.1 million of cash ~~posted~~posted with ISO-NE related to energy transactions.

We have provided additional disclosures regarding interest rate risk management and credit risk management in Part II, Item 7A, "Quantitative and Qualitative Disclosures about Market Risk," in Eversource's ~~2017~~2018 Form 10-K, which is incorporated herein by reference. There have been no additional risks identified and no material changes with regard to the items previously disclosed in the Eversource ~~2017~~2018 Form 10-K.


ITEM 4.	CONTROLS AND PROCEDURES

Management, on behalf of Eversource, CL&P, NSTAR Electric and PSNH, evaluated the design and operation of the disclosure controls and procedures as of ~~September~~June 30, ~~2018~~2019 to determine whether they are effective in ensuring that the disclosure of required information is made timely and in accordance with the Securities Exchange Act of 1934 and the rules and regulations of the SEC. This evaluation was made under management's supervision and with management's participation, including the principal executive officer and principal financial officer as of the end of the period covered by this Quarterly Report on Form 10-Q. There are inherent limitations of disclosure controls and procedures, including the possibility of human error and the circumventing or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. The principal executive officer and principal financial officer have concluded, based on their review, that the disclosure controls and procedures of Eversource, CL&P, NSTAR Electric and PSNH are effective to ensure that information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 (i) is recorded, processed, summarized, and reported within the time periods specified in SEC rules and regulations and (ii) is accumulated and communicated to management, including the principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures.

There have been no changes in internal controls over financial reporting for Eversource, CL&P, NSTAR Electric and PSNH during the quarter ended ~~September~~June 30, ~~2018~~2019 that have materially affected, or are reasonably likely to materially affect, internal controls over financial reporting.

PART II. OTHER INFORMATION


ITEM 1.	LEGAL PROCEEDINGS

We are parties to various legal proceedings. We have disclosed these legal proceedings in Part I, Item 3, "Legal Proceedings," and elsewhere in our ~~2017~~2018 Form 10-K. These disclosures are incorporated herein by reference.

As previously disclosed, on May 22, 2017, each of the Yankee Companies filed subsequent lawsuits against the DOE in the Court of Federal ~~Claims on May 22, 2017 seeking~~Claims. The Yankee Companies sought monetary damages totaling ~~approximately $100~~$104.4 million for CYAPC, YAEC and MYAPC, resulting from the DOE's failure to begin accepting spent nuclear fuel for disposal covering the years from 2013 to 2016 (“DOE Phase IV”). On February 21, 2019, the Yankee Companies received a partial summary judgment and partial final judgment in their favor for the undisputed amount of monetary damages of $103.2 million. The court awarded CYAPC, YAEC and MYAPC damages of $40.7 million, $28.1 million and $34.4 million, respectively. The DOE did not appeal the court's judgment and the decision became final on April 23, 2019. On June 12, 2019, the court accepted an offer of judgment in the amount of $0.5 million to settle the disputed amount of approximately $1 million in Phase IV ~~trial is now expected to begin~~contested damages. The Yankee Companies received the $0.5 million payment in ~~early~~July 2019. For a further discussion of the Yankee Companies v. U.S. Department of Energy, see Part I, Item 3, “Legal Proceedings” of our ~~2017~~2018 Form 10-K.

Other than as set forth above, there have been no additional material legal proceedings identified and no further material changes with regard to the legal proceedings previously disclosed in our ~~2017~~2018 Form 10-K.


ITEM 1A.	RISK FACTORS

We are subject to a variety of significant risks in addition to the matters set forth under our forward-looking statements section in Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations," of this Quarterly Report on Form 10-Q. We have identified a number of these risk factors in Part I, Item 1A, "Risk Factors," in our ~~2017~~2018 Form 10-K, which risk factors are incorporated herein by reference. These risk factors should be considered carefully in evaluating our risk profile. There have been no additional risk factors identified and no material changes with regard to the risk factors previously disclosed in our ~~2017~~2018 Form 10-K.


ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table discloses purchases of our common shares made by us or on our behalf for the periods shown below. The common shares purchased consist of open market purchases made by the Company or an independent agent. These share transactions related to ~~shares awarded under the Company's Incentive Plan and Dividend Reinvestment Plan and~~ matching contributions under the Eversource 401k Plan.

Period
Total Number of
Shares Purchased
Average Price
Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans and Programs (at month end)
July 1 - July 31, 2018 2,751
$ 59.43
—
—
August 1 - August 31, 2018 3,546
61.75
—
—
September 1 - September 30, 2018 6,069
61.85
—
—
Total 12,366
$ 61.28
—
—



Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans and Programs (at month end)
April 1 - April 30, 2019	—	$	—	—	—
May 1 - May 31, 2019	—	—		—	—
June 1 - June 30, 2019	2,709	75.76		—	—
Total	2,709	$	75.76	—	—


ITEM 6.	EXHIBITS

Each document described below is filed herewith, unless designated with an asterisk (*), which exhibits are incorporated by reference by the registrant under whose name the exhibit appears.



	Exhibit No.	Description

	Listing of Exhibits (Eversource)
*
	1210.1	~~Ratio~~Forward Sale Agreement between Eversource Energy and Goldman Sachs & Co. LLC, dated as of ~~Earnings to Fixed Charges~~May 30, 2019 (Exhibit 10.1, Eversource Energy Current Report on Form 8-K filed on June 5, 2019, File No. 001-05324)

	31	Certification by the Chief Executive Officer of Eversource Energy pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

	31.1	Certification by the Chief Financial Officer of Eversource Energy pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

	32	Certification by the Chief Executive Officer and Chief Financial Officer of Eversource Energy pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

	Listing of Exhibits (CL&P)

	12	~~Ratio of Earnings to Fixed Charges~~

	31	Certification by the Chairman of The Connecticut Light and Power Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

	31.1	Certification by the Chief Financial Officer of The Connecticut Light and Power Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

	32	Certification by the Chairman and the Chief Financial Officer of The Connecticut Light and Power Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

	Listing of Exhibits (NSTAR Electric Company)
*
	124.1	~~Ratio~~Form of ~~Earnings to Fixed Charges~~3.25% Debenture due May 15, 2029 (Exhibit 4, NSTAR Electric Company Current Report on Form 8-K filed on May 23, 2019, File No. 001-02301)

	31	Certification by the Chairman of NSTAR Electric Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

	31.1	Certification by the Chief Financial Officer of NSTAR Electric Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

	32	Certification by the Chairman and the Chief Financial Officer of NSTAR Electric Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

	Listing of Exhibits (PSNH)
*
	124.1	~~Ratio~~Twenty-Second Supplemental Indenture, between PSNH and U.S. Bank National Association, as Trustee dated as of ~~Earnings to Fixed Charges~~June 1, 2019 (Exhibit 4.1, PSNH Current Report on Form 8-K filed July 3, 2019, File No. 001-06392)

	31	Certification by the Chairman of Public Service Company of New Hampshire pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

	31.1	Certification by the Chief Financial Officer of Public Service Company of New Hampshire pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

	32	Certification by the Chairman and the Chief Financial Officer of Public Service Company of New Hampshire pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



	Listing of Exhibits (Eversource, CL&P, NSTAR Electric, PSNH)

	101.INS		Inline XBRL Instance Document - the instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document

	101.SCH		Inline XBRL Taxonomy Extension Schema

	101.CAL		Inline XBRL Taxonomy Extension Calculation



	101.DEF		Inline XBRL Taxonomy Extension Definition

	101.LAB		Inline XBRL Taxonomy Extension Labels

	101.PRE		Inline XBRL Taxonomy Extension Presentation

	104		The cover page from the Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, formatted in Inline XBRL

SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



	EVERSOURCE ENERGY

~~November~~August 6, ~~2018~~2019	By:	/s/ Jay S. Buth
		Jay S. Buth
		Vice President, Controller and Chief Accounting Officer

SIGNATURE



	THE CONNECTICUT LIGHT AND POWER COMPANY

~~November~~August 6, ~~2018~~2019	By:	/s/ Jay S. Buth
		Jay S. Buth
		Vice President, Controller and Chief Accounting Officer

SIGNATURE



	NSTAR ELECTRIC COMPANY

~~November~~August 6, ~~2018~~2019	By:	/s/ Jay S. Buth
		Jay S. Buth
		Vice President, Controller and Chief Accounting Officer

SIGNATURE



	PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE

~~November~~August 6, ~~2018~~2019	By:	/s/ Jay S. Buth
		Jay S. Buth
		Vice President, Controller and Chief Accounting Officer

6869



	Total Provision for Uncollectible Accounts				Uncollectible Hardship
(Millions of Dollars)	As of September 30, 2018		As of December 31, 2017		As of September 30, 2018		As of December 31, 2017
Eversource	$	218.1	$	195.7	$	132.6	$	122.5
CL&P	84.6		78.9		68.3		65.5
NSTAR Electric	82.0		69.7		46.5		40.3
PSNH	11.3		10.5		—		—



	For the Three Months Ended				For the Nine Months Ended
(Millions of Dollars)	September 30, 2018		September 30, 2017		September 30, 2018		September 30, 2017
Eversource	$	21.5	$	14.4	$	50.7	$	30.1
CL&P	4.4		3.6		12.1		1.8
NSTAR Electric	9.1		8.1		20.4		14.9
PSNH	1.6		1.5		4.9		5.2



(Millions of Dollars)	As of September 30, 2018		As of September 30, 2017
Eversource	$	303.7	$	307.7
CL&P	103.0		113.4
NSTAR Electric	62.5		92.5
PSNH	48.3		39.6



(Millions of Dollars)	Issue Date	Issuances/(Repayments)			Maturity Date	Use of Proceeds for Issuances/ Repayment Information
CL&P:
4.00% 2018 Series A First Mortgage Bonds	March 2018	$	500.0		April 2048	Repaid long-term debt that matured in 2018 and repaid short-term borrowings
5.65% 2008 Series A First Mortgage Bonds	May 2008	(300.0		)	May 2018	Repaid at maturity on May 1, 2018
PSNH:
6.00% 2008 Series O First Mortgage Bonds	May 2008	(110.0		)	May 2018	Repaid at maturity on May 1, 2018
Other:
Eversource Parent 2.50% Series I Senior Notes ⁽¹⁾	January 2018	200.0			March 2021	Repaid long-term debt that matured in 2018 and repaid short-term borrowings
Eversource Parent 3.30% Series M Senior Notes	January 2018	450.0			January 2028	Repaid long-term debt that matured in 2018
Eversource Parent 1.60% Series G Senior Notes	January 2015	(150.0		)	January 2018	Repaid at maturity on January 15, 2018
Eversource Parent 1.45% Series E Senior Notes	May 2013	(300.0		)	May 2018	Repaid at maturity on May 1, 2018
Yankee Gas 4.13% Series O First Mortgage Bonds	September 2018	50.0			October 2048	Repaid long-term debt that matured in 2018
NSTAR Gas 4.09% Series P First Mortgage Bonds	September 2018	100.0			October 2048	Repaid short-term borrowings
Yankee Gas 6.90% Series J First Mortgage Bonds	October 2018	(100.0		)	October 2018	Repaid at maturity on October 1, 2018



(Millions of Dollars) Income Statement:	For the Three Months Ended September 30, 2018		For the Nine Months Ended September 30, 2018
Amortization of RRB Principal (included in Amortization of Regulatory Assets, Net)	$	10.2	$	17.1
Interest Expense on RRB Principal (included in Interest Expense)	6.0		8.8



Complaint	15-Month Time Period of Complaint (Beginning as of Complaint Filing Date)	Original Base ROE Authorized by FERC at Time of Complaint Filing Date ⁽¹⁾	Base ROE Subsequently Authorized by FERC for First Complaint Period and also Effective from October 16, 2014 through April 14, 2017 ⁽¹⁾	Reserve (Pre-Tax and Excluding Interest) as of September 30, 2018 (in millions)
First	10/1/2011 - 12/31/2012	11.14%	10.57%	$—	⁽²⁾
Second	12/27/2012 - 3/26/2014	11.14%	N/A	39.1	⁽³⁾
Third	7/31/2014 - 10/30/2015	11.14%	10.57%	—
Fourth	4/29/2016 - 7/28/2017	10.57%	10.57%	—



(Millions of Dollars)	As of December 31, 2017
Thermal Gross Plant	$	1,091.4
Hydroelectric Gross Plant	83.0
Accumulated Depreciation	(575.4		)
Net Plant	599.0
Fuel and Inventory	87.7
Materials and Supplies	27.3
Emissions Allowances	19.1
Other Assets	2.6
Deferred Costs from Thermal Generation Asset Sale	(516.1		)
Total Generation Assets Held for Sale	$	219.6



	Shares
			Authorized as of September 30, 2018 and	Issued as of
	Par Value		December 31, 2017	September 30, 2018	December 31, 2017
Eversource	$	5	380,000,000	333,878,402	333,878,402
CL&P	$	10	24,500,000	6,035,205	6,035,205
NSTAR Electric	$	1	100,000,000	200	200
PSNH	$	1	100,000,000	301	301



(Millions of Dollars)
Current Assets	$	41.2
PP&E	1,034.9
Goodwill	907.9
Other Noncurrent Assets, excluding Goodwill	215.5
Current Liabilities	(121.9		)
Noncurrent Liabilities	(421.6		)
Long-Term Debt	(778.3		)
Total Cash Purchase Price	$	877.7



Nine Months Ended September 30:
Traditional	7,857	7,542	4.2	%	35,745	32,233	10.9	%	1,684	1,608	4.7	%
Decoupled	32,814	31,889	2.9	%	35,358	33,958	4.1	%	16,491	17,084	(3.5	)%
Special Contracts ⁽³⁾	N/A	N/A	N/A		2,222	3,495	(36.4	)%	N/A	N/A	N/A
Total - Decoupled and Special Contracts	32,814	31,889	2.9	%	37,580	37,453	0.3	%	16,491	17,084	(3.5	)%
Total Sales Volumes	40,671	39,431	3.1	%	73,325	69,686	5.2	%	18,175	18,692	(2.8	)%