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





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

FORM 10-Q

xFORM10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the Quarterly Period Ended March 31,
June 30, 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; StateSecurities 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.
 YesNo
 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).
 YesNo
 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 companyEmerging growth company
Eversource Energyx¨¨¨¨
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):
 YesNo
   
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 StockOutstanding as of April 30,July 31, 2019
  
Eversource Energy Common Shares, $5.00 par value317,461,097 323,602,045
shares
The Connecticut Light and Power Company Common Stock, $10.00 par value6,035,205
shares
NSTAR Electric Company Common Stock, $1.00 par value200
shares
Public Service Company of New Hampshire Common Stock, $1.00 par value301
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 CompanyEversource Energy and subsidiaries
Eversource parent or ES parentEversource Energy, a public utility holding company
ES parent and other companiesES 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), the consolidated operations of CYAPC and YAEC, and Eversource parent's equity ownership interests that are not consolidated
CL&PThe Connecticut Light and Power Company
NSTAR ElectricNSTAR Electric Company
PSNHPublic Service Company of New Hampshire
PSNH FundingPSNH Funding LLC 3, a bankruptcy remote, special purpose, wholly-owned subsidiary of PSNH
NSTAR GasNSTAR Gas Company
Yankee GasYankee Gas Services Company
AquarionEversource Aquarion Holdings, Inc. and its subsidiaries (formerly known as Macquarie Utilities Inc)
NPTNorthern Pass Transmission LLC
Northern PassThe HVDC and associated alternating-current transmission line project from Canada into New Hampshire
Eversource ServiceEversource Energy Service Company
Bay State WindA projectBay State Wind LLC, an offshore wind business being developed jointly by Eversource and Denmark-based Ørsted, (formerly known as DONG Energy) to constructwhich holds the Sunrise Wind project
North East OffshoreNorth East Offshore, LLC, an offshore wind farm offbusiness being developed jointly by Eversource and Denmark-based Ørsted, which holds the coast of MassachusettsRevolution Wind and South Fork Wind projects
CYAPCConnecticut Yankee Atomic Power Company
MYAPCMaine Yankee Atomic Power Company
YAECYankee Atomic Electric Company
Yankee CompaniesCYAPC, YAEC and MYAPC
Regulated companiesThe 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, and the solar power facilities of NSTAR Electric
Regulators: 
DEEPConnecticut Department of Energy and Environmental Protection
DOEU.S. Department of Energy
DOERMassachusetts Department of Energy Resources
DPUMassachusetts Department of Public Utilities
EPAU.S. Environmental Protection Agency
FERCFederal Energy Regulatory Commission
ISO-NEISO New England, Inc., the New England Independent System Operator
MA DEPMassachusetts Department of Environmental Protection
NHPUCNew Hampshire Public Utilities Commission
PURAConnecticut Public Utilities Regulatory Authority
SECU.S. Securities and Exchange Commission
SJCSupreme Judicial Court of Massachusetts
Other Terms and Abbreviations:
ADITAccumulated Deferred Income Taxes
AFUDCAllowance For Funds Used During Construction
AOCIAccumulated Other Comprehensive Income
AROAsset Retirement Obligation
BcfBillion cubic feet
C&LMConservation and Load Management
CfDContract for Differences
CTACompetitive Transition Assessment
CWIPConstruction Work in Progress
EDCElectric distribution company
EDITExcess Deferred Income Taxes
EPSEarnings Per Share
ERISAEmployee Retirement Income Security Act of 1974


i





ESOPEmployee Stock Ownership Plan
Eversource 2018 Form 10-KThe Eversource Energy and Subsidiaries 2018 combined Annual Report on Form 10-K as filed with the SEC
FitchFitch Ratings
FMCCFederally Mandated Congestion Charge
FTRFinancial Transmission Rights
GAAPAccounting principles generally accepted in the United States of America
GSCGeneration Service Charge
GSRPGreater Springfield Reliability Project
GWhGigawatt-Hours
HQHydro-Québec, a corporation wholly-owned by the Québec government, including its divisions that produce, transmit and distribute electricity in Québec, Canada
HVDCHigh-voltage direct current
Hydro Renewable EnergyHydro Renewable Energy, Inc., a wholly-owned subsidiary of Hydro-Québec
IPPIndependent Power Producers
ISO-NE TariffISO-NE FERC Transmission, Markets and Services Tariff
kVKilovolt
kVaKilovolt-ampere
kWKilowatt (equal to one thousand watts)
kWhKilowatt-Hours (the basic unit of electricity energy equal to one kilowatt of power supplied for one hour)
LBRLost Base Revenue
LNGLiquefied natural gas
LRSSupplier of last resort service
MGMillion gallons
MGPManufactured Gas Plant
MMBtuOne million British thermal units
MMcfMillion cubic feet
Moody'sMoody's Investors Services, Inc.
MWMegawatt
MWhMegawatt-Hours
NEEWSNew England East-West Solution
NETOsNew England Transmission Owners (including Eversource, National Grid and Avangrid)
OCIOther Comprehensive Income/(Loss)
PAMPension and PBOP Rate Adjustment Mechanism
PBOPPostretirement Benefits Other Than Pension
PBOP PlanPostretirement Benefits Other Than Pension Plan
PCRBsPollution Control Revenue Bonds
Pension PlanSingle uniform noncontributory defined benefit retirement plan
PPAPension Protection Act
RECsRenewable Energy Certificates
Regulatory ROEThe average cost of capital method for calculating the return on equity related to the distribution business segment excluding the wholesale transmission segment
RNSRegional Network Service
ROEReturn on Equity
RRBsRate Reduction Bonds or Rate Reduction Certificates
RSUsRestricted share units
S&PStandard & Poor's Financial Services LLC
SBCSystems Benefits Charge
SCRCStranded Cost Recovery Charge
SERPSupplemental Executive Retirement Plans and non-qualified defined benefit retirement plans
SSStandard service
TCAMTransmission Cost Adjustment Mechanism
TSATransmission Service Agreement
UIThe United Illuminating Company
VIEVariable Interest Entity




ii





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


TABLE OF CONTENTS
 Page
PART I – FINANCIAL INFORMATION
   
 
   
  
 
 
 
 Condensed Consolidated Statements of Common Shareholders' Equity
 
   
  
 
 
 
 Condensed Statements of Common Stockholder's Equity
 
   
  
 
 
 
 Condensed Consolidated Statements of Common Stockholder's Equity
 
   
 Public Service Company of New Hampshire and Subsidiaries (Unaudited) 
 
 
 
 Condensed Consolidated Statements of Common Stockholder's Equity
 
   
 
   
 
 
 
   
   
   
PART II – OTHER INFORMATION
   
   
   
   
   


iii







EVERSOURCE ENERGY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Thousands of Dollars)As of March 31, 2019
As of December 31, 2018As of June 30, 2019
As of December 31, 2018









ASSETS 

  

 
Current Assets: 

  

 
Cash$35,145

$108,068
$20,578

$108,068
Receivables, Net1,140,348

994,055
964,314

994,055
Unbilled Revenues159,288

176,285
154,920

176,285
Fuel, Materials, Supplies and Inventory277,104
 238,042
174,124
 238,042
Regulatory Assets507,255

514,779
515,265

514,779
Prepayments and Other Current Assets181,724

260,995
302,496

260,995
Total Current Assets2,300,864

2,292,224
2,131,697

2,292,224











Property, Plant and Equipment, Net26,032,781

25,610,428
26,304,446

25,610,428











Deferred Debits and Other Assets: 

 
 

 
Regulatory Assets4,589,427

4,631,137
4,404,176

4,631,137
Goodwill4,427,266

4,427,266
4,427,266

4,427,266
Investments in Unconsolidated Affiliates711,476
 464,286
748,705
 464,286
Marketable Securities415,405

417,508
401,231

417,508
Other Long-Term Assets463,788

398,407
578,385

398,407
Total Deferred Debits and Other Assets10,607,362

10,338,604
10,559,763

10,338,604











Total Assets$38,941,007

$38,241,256
$38,995,906

$38,241,256







LIABILITIES AND CAPITALIZATION 
  
 
Current Liabilities: 
  
 
Notes Payable$1,477,830

$910,000
$729,000

$910,000
Long-Term Debt – Current Portion805,519

837,319
779,289

837,319
Rate Reduction Bonds – Current Portion43,210
 52,332
43,210
 52,332
Accounts Payable1,006,774

1,119,995
903,431

1,119,995
Regulatory Liabilities385,442

370,230
379,850

370,230
Other Current Liabilities840,587

823,006
677,341

823,006
Total Current Liabilities4,559,362

4,112,882
3,512,121

4,112,882







Deferred Credits and Other Liabilities: 
  
 
Accumulated Deferred Income Taxes3,543,052

3,506,030
3,549,922

3,506,030
Regulatory Liabilities3,627,389

3,609,475
3,639,792

3,609,475
Derivative Liabilities372,957

379,562
363,848

379,562
Accrued Pension, SERP and PBOP939,786

962,510
955,092

962,510
Other Long-Term Liabilities1,259,400

1,196,336
1,264,061

1,196,336
Total Deferred Credits and Other Liabilities9,742,584

9,653,913
9,772,715

9,653,913











Long-Term Debt12,284,330

12,248,743
13,039,180

12,248,743
      
Rate Reduction Bonds561,727
 583,331
561,727
 583,331
      
Noncontrolling Interest – Preferred Stock of Subsidiaries155,570

155,570
155,570

155,570











Common Shareholders' Equity:

 

 
Common Shares1,669,392

1,669,392
1,699,292

1,669,392
Capital Surplus, Paid In6,242,089

6,241,222
6,659,009

6,241,222
Retained Earnings4,092,895

3,953,974
3,954,492

3,953,974
Accumulated Other Comprehensive Loss(57,804)
(60,000)(53,641)
(60,000)
Treasury Stock(309,138)
(317,771)(304,559)
(317,771)
Common Shareholders' Equity11,637,434

11,486,817
11,954,593

11,486,817
      
Commitments and Contingencies (Note 9)

 



 













Total Liabilities and Capitalization$38,941,007

$38,241,256
$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 March 31,
(Thousands of Dollars, Except Share Information)2019 2018
    
Operating Revenues$2,415,792
 $2,287,962
    
Operating Expenses:   
Purchased Power, Fuel and Transmission974,882
 946,747
Operations and Maintenance335,597
 332,549
Depreciation214,948
 204,266
Amortization70,961
 45,194
Energy Efficiency Programs140,116
 134,241
Taxes Other Than Income Taxes184,588
 182,433
Total Operating Expenses1,921,092
 1,845,430
Operating Income494,700
 442,532
Interest Expense131,734
 121,129
Other Income, Net30,985
 33,789
Income Before Income Tax Expense393,951
 355,192
Income Tax Expense83,393
 83,766
Net Income310,558
 271,426
Net Income Attributable to Noncontrolling Interests1,880
 1,880
Net Income Attributable to Common Shareholders$308,678
 $269,546
    
Basic and Diluted Earnings Per Common Share$0.97
 $0.85
    
Weighted Average Common Shares Outstanding:   
Basic317,624,593
 317,397,052
Diluted318,316,082
 317,992,999


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 March 31,
(Thousands of Dollars)2019 2018
    
Net Income$310,558
 $271,426
Other Comprehensive Income, Net of Tax:   
Qualified Cash Flow Hedging Instruments316
 724
Changes in Unrealized Gains/(Losses) on Marketable Securities655
 (444)
Changes in Funded Status of Pension, SERP and PBOP Benefit Plans1,225
 2,993
Other Comprehensive Income, Net of Tax2,196
 3,273
Comprehensive Income Attributable to Noncontrolling Interests(1,880) (1,880)
Comprehensive Income Attributable to Common Shareholders$310,874
 $272,819
 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 Transmission620,904
 653,915
 1,595,786
 1,600,662
Operations and Maintenance328,010
 293,858
 663,606
 626,406
Depreciation219,084
 199,140
 434,032
 403,406
Amortization38,945
 36,203
 109,906
 81,397
Energy Efficiency Programs105,837
 101,955
 245,953
 236,196
Taxes Other Than Income Taxes181,083
 177,431
 365,672
 359,865
Impairment of Northern Pass Transmission239,644
 
 239,644
 
Total Operating Expenses1,733,507
 1,462,502
 3,654,599
 3,307,932
Operating Income150,988
 391,354
 645,688
 833,886
Interest Expense132,705
 126,404
 264,438
 247,533
Other Income, Net45,866
 50,149
 76,850
 83,938
Income Before Income Tax Expense64,149
 315,099
 458,100
 670,291
Income Tax Expense30,815
 70,452
 114,209
 154,219
Net Income33,334
 244,647
 343,891
 516,072
Net Income Attributable to Noncontrolling Interests1,880
 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:       
Basic319,664,998
 317,344,596
 318,644,796
 317,370,825
Diluted320,388,490
 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 Instruments262
 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 Tax4,163
 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 Three Months Ended March 31, 2019For the Six Months Ended June 30, 2019
Common Shares 
Capital
Surplus,
Paid In
 Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Common Shareholders' EquityCommon Shares 
Capital
Surplus,
Paid In
 Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Common Shareholders' Equity
(Thousands of Dollars, Except Share Information)Shares AmountShares Amount
Balance as of January 1, 2019316,885,808
 $1,669,392
 $6,241,222
 $3,953,974
 $(60,000) $(317,771) $11,486,817
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
 
  
   310,558
     310,558
Dividends on Common Shares - $0.535 Per Share 
  
   (169,757)     (169,757) 
  
   (169,757)     (169,757)
Dividends on Preferred Stock 
  
   (1,880)     (1,880) 
  
   (1,880)     (1,880)
Long-Term Incentive Plan Activity 
  
 (16,609)       (16,609) 
  
 (16,609)  
     (16,609)
Issuance of Treasury Shares461,662
  
 17,476
     8,633
 26,109
461,662
  
 17,476
  
   8,633
 26,109
Other Comprehensive Income 
  
     2,196
   2,196
 
  
    
 2,196
   2,196
Balance as of March 31, 2019317,347,470
 $1,669,392
 $6,242,089
 $4,092,895
 $(57,804) $(309,138) $11,637,434
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 value5,980,000
 29,900
 403,650
       433,550
Long-Term Incentive Plan Activity 
  
 6,470
       6,470
Issuance of Treasury Shares246,969
  
 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, 2019323,574,439
 $1,699,292

$6,659,009

$3,954,492

$(53,641)
$(304,559)
$11,954,593
For the Three Months Ended March 31, 2018For the Six Months Ended June 30, 2018
Common Shares 
Capital
Surplus,
Paid In
 Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Common Shareholders' EquityCommon Shares 
Capital
Surplus,
Paid In
 Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Common Shareholders' Equity
(Thousands of Dollars, Except Share Information)Shares AmountShares Amount
Balance as of January 1, 2018316,885,808
 $1,669,392
 $6,239,940
 $3,561,084
 $(66,403) $(317,771) $11,086,242
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
   
   271,426
     271,426
Dividends on Common Shares - $0.505 Per Share 
  
   (160,027)     (160,027)   
   (160,027)     (160,027)
Dividends on Preferred Stock 
  
   (1,880)     (1,880)   
   (1,880)     (1,880)
Long-Term Incentive Plan Activity 
  
 (15,320)       (15,320)   
 (15,320)  
     (15,320)
Other Comprehensive Income 
  
     3,273
   3,273
   
    
 3,273
   3,273
Balance as of March 31, 2018316,885,808
 $1,669,392
 $6,224,620
 $3,670,603
 $(63,130) $(317,771) $11,183,714
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, 2018316,885,808
 $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 Three Months Ended March 31,For the Six Months Ended June 30,
(Thousands of Dollars)2019 20182019 2018







Operating Activities: 
  
 
Net Income$310,558

$271,426
$343,891

$516,072
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities: 
  
 
Depreciation214,948

204,266
434,032

403,406
Deferred Income Taxes18,085

88,481
36,535

161,883
Uncollectible Expense18,565
 19,613
31,546
 29,250
Pension, SERP and PBOP Expense/(Income), Net8,428

(1,965)
Pension, SERP and PBOP Expense, Net13,227

3,317
Pension and PBOP Contributions(4,700)
(171,244)(6,648)
(179,002)
Regulatory (Under)/Over Recoveries, Net(19,232)
70,457
Regulatory Overrecoveries, Net23,830

36,669
Amortization70,961

45,194
109,906

81,397
Proceeds from DOE Spent Nuclear Fuel Litigation68,840
 
Impairment of Northern Pass Transmission239,644
 
Other(37,310)
(74,582)(137,428)
(103,256)
Changes in Current Assets and Liabilities: 
  
 
Receivables and Unbilled Revenues, Net(155,823)
(156,888)6,357

(52,923)
Fuel, Materials, Supplies and Inventory(39,063)
(26,956)63,918

65,609
Taxes Receivable/Accrued, Net126,381

(5,061)(6,883)
(132,999)
Accounts Payable(13,556)
(61,571)(156,077)
(80,059)
Other Current Assets and Liabilities, Net(70,242)
(23,456)(140,103)
(51,229)
Net Cash Flows Provided by Operating Activities428,000

177,714
924,587

698,135







Investing Activities: 
  
 
Investments in Property, Plant and Equipment(674,694)
(607,334)(1,377,753)
(1,251,678)
Proceeds from Sales of Marketable Securities234,497

145,438
348,904

316,252
Purchases of Marketable Securities(237,794)
(143,264)(302,950)
(314,406)
Proceeds from the Sale of PSNH Generation Assets
 130,641

 116,809
Investments in Unconsolidated Affiliates(249,138) (7,340)(265,955) (13,220)
Other Investing Activities4,893

2,140
4,055

(902)
Net Cash Flows Used in Investing Activities(922,236)
(479,719)(1,593,699)
(1,147,145)







Financing Activities: 
  
 
Issuance of Common Shares, Net of Issuance Costs426,902
 
Cash Dividends on Common Shares(169,757)
(160,027)(323,346)
(320,055)
Cash Dividends on Preferred Stock(1,880)
(1,880)(3,759)
(3,759)
Issuance of Treasury Shares26,109
 
Increase/(Decrease) in Notes Payable829,430

(240,005)
Decrease in Notes Payable(181,000)
(98,500)
Issuance of Rate Reduction Bonds
 635,663
Repayment of Rate Reduction Bonds(30,727) 
(30,727) 
Issuance of Long-Term Debt

1,150,000
1,000,000

1,150,000
Retirement of Long-Term Debt(250,215)
(150,218)(250,437)
(860,421)
Other Financing Activities(9,676)
(19,140)(10,682)
(17,958)
Net Cash Flows Provided by Financing Activities393,284

578,730
626,951

484,970
Net (Decrease)/Increase in Cash and Restricted Cash(100,952)
276,725
(42,161)
35,960
Cash and Restricted Cash - Beginning of Period209,324

85,890
209,324

85,890
Cash and Restricted Cash - End of Period$108,372

$362,615
$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 March 31, 2019 As of December 31, 2018As of June 30, 2019 As of December 31, 2018
      
ASSETS      
Current Assets:      
Cash$7,496
 $87,721
$2,191
 $87,721
Receivables, Net443,684
 397,026
415,542
 397,026
Accounts Receivable from Affiliated Companies30,363
 23,082
33,519
 23,082
Unbilled Revenues51,300
 56,971
53,670
 56,971
Materials and Supplies52,109
 44,529
55,243
 44,529
Regulatory Assets147,712
 125,155
175,706
 125,155
Prepaid Property Taxes41,341
 19,555
Prepayments and Other Current Assets20,384
 40,724
23,390
 60,279
Total Current Assets794,389
 794,763
759,261
 794,763
      
Property, Plant and Equipment, Net9,065,880
 8,909,701
9,285,633
 8,909,701
      
Deferred Debits and Other Assets:      
Regulatory Assets1,496,679
 1,505,488
1,432,827
 1,505,488
Other Long-Term Assets197,571
 199,767
221,860
 199,767
Total Deferred Debits and Other Assets1,694,250
 1,705,255
1,654,687
 1,705,255
      
Total Assets$11,554,519
 $11,409,719
$11,699,581
 $11,409,719
      
LIABILITIES AND CAPITALIZATION      
Current Liabilities:      
Notes Payable to Eversource Parent$259,400
 $
Long-Term Debt – Current Portion$
 $250,000

 250,000
Accounts Payable347,928
 324,983
287,984
 324,983
Accounts Payable to Affiliated Companies94,738
 26,452
76,792
 26,452
Obligations to Third Party Suppliers56,065
 56,248
52,100
 56,248
Accrued Taxes55,693
 38,205
Accrued Interest42,424
 38,395
Regulatory Liabilities106,489
 109,614
112,414
 109,614
Derivative Liabilities59,651
 55,058
62,075
 55,058
Other Current Liabilities71,461
 84,488
147,764
 161,088
Total Current Liabilities834,449
 983,443
998,529
 983,443
      
Deferred Credits and Other Liabilities:      
Accumulated Deferred Income Taxes1,184,425
 1,166,784
1,192,646
 1,166,784
Regulatory Liabilities1,126,279
 1,122,157
1,153,360
 1,122,157
Derivative Liabilities372,774
 379,536
363,717
 379,536
Accrued Pension, SERP and PBOP279,914
 282,771
275,358
 282,771
Other Long-Term Liabilities165,307
 155,495
153,878
 155,495
Total Deferred Credits and Other Liabilities3,128,699
 3,106,743
3,138,959
 3,106,743
      
Long-Term Debt3,265,756
 3,004,016
3,309,455
 3,004,016
      
Preferred Stock Not Subject to Mandatory Redemption116,200
 116,200
116,200
 116,200
      
Common Stockholder's Equity:      
Common Stock60,352
 60,352
60,352
 60,352
Capital Surplus, Paid In2,410,765
 2,410,765
2,410,765
 2,410,765
Retained Earnings1,737,980
 1,727,899
1,664,995
 1,727,899
Accumulated Other Comprehensive Income318
 301
326
 301
Common Stockholder's Equity4,209,415
 4,199,317
4,136,438
 4,199,317
      
Commitments and Contingencies (Note 9)

 



 


      
Total Liabilities and Capitalization$11,554,519
 $11,409,719
$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 March 31,
(Thousands of Dollars)2019 2018
    
Operating Revenues$849,246
 $784,983
    
Operating Expenses:   
Purchased Power and Transmission319,833
 301,889
Operations and Maintenance130,637
 117,292
Depreciation73,289
 67,498
Amortization of Regulatory Assets, Net35,671
 28,006
Energy Efficiency Programs25,988
 22,760
Taxes Other Than Income Taxes92,000
 90,300
Total Operating Expenses677,418
 627,745
Operating Income171,828
 157,238
Interest Expense35,781
 36,823
Other Income, Net3,880
 6,560
Income Before Income Tax Expense139,927
 126,975
Income Tax Expense29,456
 28,407
Net Income$110,471
 $98,568


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 Transmission246,540
 234,335
 566,373
 536,223
Operations and Maintenance133,351
 109,685
 263,989
 226,977
Depreciation74,555
 69,383
 147,844
 136,881
Amortization of Regulatory Assets, Net12,376
 15,400
 48,047
 43,405
Energy Efficiency Programs20,780
 18,606
 46,768
 41,366
Taxes Other Than Income Taxes86,465
 84,375
 178,463
 174,676
Total Operating Expenses574,067
 531,784
 1,251,484
 1,159,528
Operating Income166,779
 163,108
 338,608
 320,347
Interest Expense36,972
 38,674
 72,754
 75,498
Other Income, Net2,853
 7,063
 6,733
 13,623
Income Before Income Tax Expense132,660
 131,497
 272,587
 258,472
Income Tax Expense27,856
 31,785
 57,312
 60,192
Net Income$104,804
 $99,712
 $215,275
 $198,280
 For the Three Months Ended March 31,
(Thousands of Dollars)2019 2018
    
Net Income$110,471
 $98,568
Other Comprehensive Income, Net of Tax:   
Qualified Cash Flow Hedging Instruments(6) 52
Changes in Unrealized Gains/(Losses) on Marketable Securities23
 (12)
Other Comprehensive Income, Net of Tax17
 40
Comprehensive Income$110,488
 $98,608


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 Tax8
 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 Three Months Ended March 31, 2019For the Six Months Ended June 30, 2019
Common Stock 
Capital
Surplus,
Paid In
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Income
 
Total
Common
Stockholder's
Equity
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 Stock Amount 
Balance as of January 1, 20196,035,205
 $60,352
 $2,410,765
 $1,727,899
 $301
 $4,199,317
6,035,205
 $60,352
 $2,410,765
 $1,727,899
 $301
 $4,199,317
Net Income 
  
   110,471
   110,471
 
  
   110,471
   110,471
Dividends on Preferred Stock 
  
   (1,390)   (1,390) 
  
   (1,390)   (1,390)
Dividends on Common Stock 
  
   (99,000)   (99,000) 
  
   (99,000)   (99,000)
Other Comprehensive Income 
  
     17
 17
 
  
    
 17
 17
Balance as of March 31, 20196,035,205
 $60,352
 $2,410,765
 $1,737,980
 $318
 $4,209,415
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, 20196,035,205
 $60,352
 $2,410,765
 $1,664,995
 $326
 $4,136,438
For the Three Months Ended March 31, 2018For the Six Months Ended June 30, 2018
Common Stock 
Capital
Surplus,
Paid In
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Income
 
Total
Common
Stockholder's
Equity
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 Stock Amount 
Balance as of January 1, 20186,035,205
 $60,352
 $2,110,765
 $1,415,741
 $269
 $3,587,127
6,035,205
 $60,352
 $2,110,765
 $1,415,741
 $269
 $3,587,127
Net Income 
  
   98,568
   98,568
 
  
   98,568
   98,568
Dividends on Preferred Stock 
  
   (1,390)   (1,390) 
  
   (1,390)   (1,390)
Dividends on Common Stock 
  
   (60,000)   (60,000) 
  
   (60,000)   (60,000)
Capital Contributions from Eversource Parent 
  
 9,000
     9,000
 
  
 9,000
  
   9,000
Other Comprehensive Income 
  
     40
 40
 
  
    
 40
 40
Balance as of March 31, 20186,035,205
 $60,352
 $2,119,765
 $1,452,919
 $309
 $3,633,345
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, 20186,035,205
 $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 Three Months Ended March 31,For the Six Months Ended June 30,
(Thousands of Dollars)2019 20182019 2018
      
Operating Activities:      
Net Income$110,471
 $98,568
$215,275
 $198,280
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:      
Depreciation73,289
 67,498
147,844
 136,881
Deferred Income Taxes15,188
 29,109
16,513
 50,915
Uncollectible Expense4,116
 3,912
7,627
 7,747
Pension, SERP, and PBOP Expense, Net4,063
 3,158
6,926
 3,861
Pension Contributions
 (82,276)
 (41,150)
Regulatory Underrecoveries, Net(54,671) (8,878)(40,460) (39,908)
Amortization of Regulatory Assets, Net35,671
 28,006
48,047
 43,405
Other(5,848) (18,940)(40,290) (40,825)
Changes in Current Assets and Liabilities:      
Receivables and Unbilled Revenues, Net(60,506) (46,330)(37,101) (34,772)
Taxes Receivable/Accrued, Net41,399
 42,460
19,701
 105
Accounts Payable75,373
 (28,408)5,443
 (30,805)
Other Current Assets and Liabilities, Net(40,274) (23,160)(3,941) 14,377
Net Cash Flows Provided by Operating Activities198,271
 64,719
345,584
 268,111
      
Investing Activities:      
Investments in Property, Plant and Equipment(189,423) (202,126)(466,112) (457,677)
Other Investing Activities59
 56
551
 110
Net Cash Flows Used in Investing Activities(189,364) (202,070)(465,561) (457,567)
      
Financing Activities:      
Cash Dividends on Common Stock(99,000) (60,000)(275,400) (60,000)
Cash Dividends on Preferred Stock(1,390) (1,390)(2,779) (2,779)
Capital Contributions from Eversource Parent
 9,000

 100,000
Issuance of Long-Term Debt
 500,000
300,000
 500,000
Retirement of Long-Term Debt(250,000) 
(250,000) (300,000)
Increase/(Decrease) in Notes Payable to Eversource Parent261,600
 (69,500)259,400
 (45,500)
Other Financing Activities(326) (6,539)4,237
 (6,189)
Net Cash Flows (Used in)/Provided by Financing Activities(89,116) 371,571
Net (Decrease)/Increase in Cash and Restricted Cash(80,209) 234,220
Net Cash Flows Provided by Financing Activities35,458
 185,532
Net Decrease in Cash and Restricted Cash(84,519) (3,924)
Cash and Restricted Cash - Beginning of Period91,613
 9,619
91,613
 9,619
Cash and Restricted Cash - End of Period$11,404
 $243,839
$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 March 31, 2019 As of December 31, 2018As of June 30, 2019 As of December 31, 2018
      
ASSETS 
  
 
  
Current Assets:      
Cash$1,769
 $1,606
$177
 $1,606
Receivables, Net400,082
 361,296
346,428
 361,296
Accounts Receivable from Affiliated Companies20,097
 31,344
25,071
 31,344
Unbilled Revenues31,698
 34,518
42,144
 34,518
Materials, Supplies and Inventory160,221
 114,202
64,513
 114,202
Regulatory Assets234,662
 241,747
210,032
 241,747
Prepayments and Other Current Assets24,643
 51,960
21,289
 51,960
Total Current Assets873,172
 836,673
709,654
 836,673
      
Property, Plant and Equipment, Net8,915,608
 8,794,700
9,075,789
 8,794,700
      
Deferred Debits and Other Assets:      
Regulatory Assets1,173,851
 1,196,512
1,178,974
 1,196,512
Prepaid PBOP139,132
 132,810
146,717
 132,810
Other Long-Term Assets134,536
 109,764
142,573
 109,764
Total Deferred Debits and Other Assets1,447,519
 1,439,086
1,468,264
 1,439,086
      
Total Assets$11,236,299
 $11,070,459
$11,253,707
 $11,070,459
      
LIABILITIES AND CAPITALIZATION      
Current Liabilities:      
Notes Payable$368,430
 $278,500
$163,000
 $278,500
Notes Payable to Eversource Parent22,300
 
40,300
 
Long-Term Debt – Current Portion95,000
 
95,000
 
Accounts Payable306,888
 384,398
288,153
 384,398
Accounts Payable to Affiliated Companies115,676
 89,636
72,174
 89,636
Obligations to Third Party Suppliers110,742
 109,547
95,360
 109,547
Renewable Portfolio Standards Compliance Obligations175,391
 139,898
66,370
 139,898
Regulatory Liabilities193,959
 190,620
170,970
 190,620
Other Current Liabilities52,156
 74,872
61,710
 74,872
Total Current Liabilities1,440,542
 1,267,471
1,053,037
 1,267,471
      
Deferred Credits and Other Liabilities:      
Accumulated Deferred Income Taxes1,305,518
 1,294,467
1,318,267
 1,294,467
Regulatory Liabilities1,514,557
 1,513,279
1,514,845
 1,513,279
Accrued Pension and SERP5,496
 14,145
29,323
 14,145
Other Long-Term Liabilities293,794
 263,096
297,346
 263,096
Total Deferred Credits and Other Liabilities3,119,365
 3,084,987
3,159,781
 3,084,987
      
Long-Term Debt2,850,196
 2,944,846
3,246,535
 2,944,846
      
Preferred Stock Not Subject to Mandatory Redemption43,000
 43,000
43,000
 43,000
      
Common Stockholder's Equity:      
Common Stock
 

 
Capital Surplus, Paid In1,653,442
 1,633,442
1,653,442
 1,633,442
Retained Earnings2,131,015
 2,098,091
2,099,059
 2,098,091
Accumulated Other Comprehensive Loss(1,261) (1,378)(1,147) (1,378)
Common Stockholder's Equity3,783,196
 3,730,155
3,751,354
 3,730,155
      
Commitments and Contingencies (Note 9)

 



 


      
Total Liabilities and Capitalization$11,236,299

$11,070,459
$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 March 31,For the Three Months Ended June 30, For the Six Months Ended June 30,
(Thousands of Dollars)2019 20182019 2018 2019 2018
          
Operating Revenues$797,612
 $770,127
$681,893
 $690,737
 $1,479,505
 $1,460,865
          
Operating Expenses: 
  
 
  
  
  
Purchased Power and Transmission330,104
 332,579
228,397
 266,108
 558,501
 598,687
Operations and Maintenance112,963
 118,682
108,924
 102,163
 221,887
 220,844
Depreciation72,584
 70,542
73,055
 64,051
 145,639
 134,593
Amortization of Regulatory Assets, Net22,584
 6,364
23,184
 11,954
 45,768
 18,318
Energy Efficiency Programs76,729
 74,793
65,904
 65,184
 142,633
 139,978
Taxes Other Than Income Taxes44,822
 48,186
48,226
 47,627
 93,047
 95,815
Total Operating Expenses659,786
 651,146
547,690
 557,087
 1,207,475
 1,208,235
Operating Income137,826
 118,981
134,203
 133,650
 272,030
 252,630
Interest Expense27,881
 26,464
28,238
 27,359
 56,120
 53,822
Other Income, Net11,086
 12,601
10,657
 14,269
 21,743
 26,870
Income Before Income Tax Expense121,031
 105,118
116,622
 120,560
 237,653
 225,678
Income Tax Expense27,017
 27,969
26,888
 32,639
 53,906
 60,607
Net Income$94,014
 $77,149
$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 March 31,For the Three Months Ended June 30, For the Six Months Ended June 30,
(Thousands of Dollars)2019 20182019 2018 2019 2018
          
Net Income$94,014
 $77,149
$89,734
 $87,921
 $183,747
 $165,071
Other Comprehensive Income, Net of Tax:          
Changes in Funded Status of SERP Benefit Plan1
 1
1
 1
 2
 2
Qualified Cash Flow Hedging Instruments110
 109
109
 109
 219
 218
Changes in Unrealized Gains/(Losses) on Marketable Securities6
 (4)4
 (1) 10
 (5)
Other Comprehensive Income, Net of Tax117
 106
114
 109
 231
 215
Comprehensive Income$94,131
 $77,255
$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 Three Months Ended March 31, 2019For the Six Months Ended June 30, 2019
Common Stock 
Capital
Surplus,
Paid In
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Loss
 
Total
Common
Stockholder's
Equity
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 Stock Amount 
Balance as of January 1, 2019200
 $
 $1,633,442
 $2,098,091
 $(1,378) $3,730,155
200
 $
 $1,633,442
 $2,098,091
 $(1,378) $3,730,155
Net Income 
  
   94,014
   94,014
 
  
   94,014
   94,014
Dividends on Preferred Stock 
  
   (490)   (490) 
  
   (490)   (490)
Dividends on Common Stock 
  
   (60,600)   (60,600) 
  
   (60,600)   (60,600)
Capital Contributions from Eversource Parent 
  
 20,000
     20,000
 
  
 20,000
     20,000
Other Comprehensive Income 
  
     117
 117
 
  
     117
 117
Balance as of March 31, 2019200
 $
 $1,653,442
 $2,131,015
 $(1,261) $3,783,196
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, 2019200
 $
 $1,653,442
 $2,099,059
 $(1,147) $3,751,354
For the Three Months Ended March 31, 2018For the Six Months Ended June 30, 2018
Common Stock 
Capital
Surplus,
Paid In
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Loss
 
Total
Common
Stockholder's
Equity
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 Stock Amount 
Balance as of January 1, 2018200
 $
 $1,502,942
 $1,944,961
 $(1,823) $3,446,080
200
 $
 $1,502,942
 $1,944,961
 $(1,823) $3,446,080
Net Income 
  
   77,149
   77,149
 
  
   77,149
   77,149
Dividends on Preferred Stock 
  
   (490)   (490) 
  
   (490)   (490)
Dividends on Common Stock 
  
   (161,000)   (161,000) 
  
   (161,000)   (161,000)
Capital Contributions from Eversource Parent 
  
 92,500
 
   92,500
Other 
  
   1
   1
 
  
 

 1
   1
Other Comprehensive Income 
  
     106
 106
Balance as of March 31, 2018200
 
 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 
  
 92,500
     92,500
 
  
 8,000
    
 8,000
Other Comprehensive Income 
  
     106
 106
 
  
     109
 109
Balance as of March 31, 2018200
 $
 $1,595,442
 $1,860,621
 $(1,717) $3,454,346
Balance as of June 30, 2018200
 $

$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 Three Months Ended March 31,For the Six Months Ended June 30,
(Thousands of Dollars)2019 20182019 2018
      
Operating Activities: 
  
 
  
Net Income$94,014
 $77,149
$183,747
 $165,071
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities: 
  
 
  
Depreciation72,584
 70,542
145,639
 134,593
Deferred Income Taxes3,722
 22,542
11,603
 29,238
Uncollectible Expense5,953
 7,526
11,605
 11,301
Pension, SERP and PBOP Income, Net(4,279) (9,295)(7,052) (19,785)
Pension and PBOP Contributions(1,503) 
(3,007) (59,156)
Regulatory Overrecoveries, Net4,329
 17,618
17,063
 34,090
Amortization of Regulatory Assets, Net22,584
 6,364
45,768
 18,318
Other(8,043) (9,730)(36,973) (14,646)
Changes in Current Assets and Liabilities: 
  
 
  
Receivables and Unbilled Revenues, Net(29,220) (52,949)(6,769) (40,073)
Materials, Supplies and Inventory(46,020) (37,427)49,688
 45,058
Taxes Receivable/Accrued, Net29,483
 (22,698)25,572
 (37,268)
Accounts Payable(18,109) 43,170
(82,326) (17,194)
Other Current Assets and Liabilities, Net11,466
 23,703
(103,054) (46,861)
Net Cash Flows Provided by Operating Activities136,961
 136,515
251,504
 202,686
      
Investing Activities: 
  
 
  
Investments in Property, Plant and Equipment(208,540) (192,036)(418,571) (356,497)
Other Investing Activities17
 (654)41
 31
Net Cash Flows Used in Investing Activities(208,523) (192,690)(418,530) (356,466)
      
Financing Activities: 
  
 
  
Cash Dividends on Common Stock(60,600) (161,000)(181,800) (161,000)
Cash Dividends on Preferred Stock(490) (490)(980) (980)
Issuance of Long-Term Debt400,000
 
Capital Contributions from Eversource Parent20,000
 92,500
20,000
 100,500
Increase in Notes Payable to Eversource Parent22,300
 
40,300
 
Increase in Notes Payable89,930
 133,000
(Decrease)/Increase in Notes Payable(115,500) 213,810
Other Financing Activities668
 (78)(3,287) (158)
Net Cash Flows Provided by Financing Activities71,808
 63,932
158,733
 152,172
Increase in Cash and Restricted Cash246
 7,757
Net Decrease in Cash and Restricted Cash(8,293) (1,608)
Cash and Restricted Cash - Beginning of Period14,659
 14,708
14,659
 14,708
Cash and Restricted Cash - End of Period$14,905
 $22,465
$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 March 31, 2019 As of December 31, 2018As of June 30, 2019 As of December 31, 2018
      
ASSETS      
Current Assets:      
Cash$3,961
 $1,439
$343
 $1,439
Receivables, Net102,806
 104,854
99,416
 104,854
Accounts Receivable from Affiliated Companies11,520
 8,444
11,476
 8,444
Unbilled Revenues43,289
 47,145
39,665
 47,145
Taxes Receivable7,441
 25,913
6,985
 25,913
Materials, Supplies and Inventory37,361
 37,504
23,280
 37,504
Regulatory Assets76,599
 67,228
77,854
 67,228
Special Deposits21,059
 47,498
35,017
 47,498
Prepayments and Other Current Assets2,940
 17,564
17,293
 17,564
Total Current Assets306,976
 357,589
311,329
 357,589
      
Property, Plant and Equipment, Net2,920,560
 2,880,073
2,969,347
 2,880,073
      
Deferred Debits and Other Assets:      
Regulatory Assets855,369
 862,288
827,898
 862,288
Other Long-Term Assets29,884
 27,406
32,428
 27,406
Total Deferred Debits and Other Assets885,253
 889,694
860,326
 889,694
      
Total Assets$4,112,789
 $4,127,356
$4,141,002
 $4,127,356
      
LIABILITIES AND CAPITALIZATION      
Current Liabilities:      
Notes Payable to Eversource Parent$61,000
 $57,000
$20,100
 $57,000
Long-Term Debt – Current Portion150,000
 150,000
150,000
 150,000
Rate Reduction Bonds – Current Portion43,210
 52,332
43,210
 52,332
Accounts Payable106,398
 111,292
103,749
 111,292
Accounts Payable to Affiliated Companies37,976
 26,029
27,195
 26,029
Regulatory Liabilities45,655
 55,526
54,183
 55,526
Other Current Liabilities55,088
 64,046
45,414
 64,046
Total Current Liabilities499,327
 516,225
443,851
 516,225
      
Deferred Credits and Other Liabilities:      
Accumulated Deferred Income Taxes489,434
 481,221
496,223
 481,221
Regulatory Liabilities429,932
 428,069
416,999
 428,069
Accrued Pension, SERP and PBOP122,490
 124,457
107,007
 124,457
Other Long-Term Liabilities37,956
 36,339
33,584
 36,339
Total Deferred Credits and Other Liabilities1,079,812
 1,070,086
1,053,813
 1,070,086
      
Long-Term Debt655,294
 655,173
951,834
 655,173
      
Rate Reduction Bonds561,727
 583,331
561,727
 583,331
      
Common Stockholder's Equity:      
Common Stock
 

 
Capital Surplus, Paid In678,134
 678,134
678,134
 678,134
Retained Earnings641,039
 627,258
453,891
 627,258
Accumulated Other Comprehensive Loss(2,544) (2,851)(2,248) (2,851)
Common Stockholder's Equity1,316,629
 1,302,541
1,129,777
 1,302,541
      
Commitments and Contingencies (Note 9)

 



 


      
Total Liabilities and Capitalization$4,112,789
 $4,127,356
$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 March 31,For the Three Months Ended June 30, For the Six Months Ended June 30,
(Thousands of Dollars)2019 20182019 2018 2019 2018
          
Operating Revenues$276,435
 $267,350
$240,900
 $235,146
 $517,335
 $502,497
          
Operating Expenses:          
Purchased Power, Fuel and Transmission113,531
 109,717
85,768
 83,494
 199,299
 193,212
Operations and Maintenance52,630
 51,380
52,729
 46,487
 105,359
 97,867
Depreciation22,919
 23,493
23,261
 22,808
 46,180
 46,301
Amortization of Regulatory Assets, Net13,667
 5,035
5,857
 8,926
 19,523
 13,961
Energy Efficiency Programs6,714
 5,157
6,215
 4,674
 12,929
 9,831
Taxes Other Than Income Taxes17,311
 16,801
20,725
 21,879
 38,037
 38,680
Total Operating Expenses226,772
 211,583
194,555
 188,268
 421,327
 399,852
Operating Income49,663
 55,767
46,345
 46,878
 96,008
 102,645
Interest Expense14,367
 12,772
13,909
 14,612
 28,276
 27,386
Other Income, Net7,022
 4,749
2,984
 3,409
 10,006
 8,159
Income Before Income Tax Expense42,318
 47,744
35,420
 35,675
 77,738
 83,418
Income Tax Expense9,537
 12,651
8,568
 9,896
 18,104
 22,547
Net Income$32,781
 $35,093
$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 March 31,For the Three Months Ended June 30, For the Six Months Ended June 30,
(Thousands of Dollars)2019 20182019 2018 2019 2018
          
Net Income$32,781
 $35,093
$26,852
 $25,779
 $59,634
 $60,871
Other Comprehensive Income, Net of Tax:          
Qualified Cash Flow Hedging Instruments269
 290
269
 277
 538
 567
Changes in Unrealized Gains/(Losses) on Marketable Securities38
 (21)27
 (8) 65
 (29)
Other Comprehensive Income, Net of Tax307
 269
296
 269
 603
 538
Comprehensive Income$33,088
 $35,362
$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 Three Months Ended March 31, 2019For the Six Months Ended June 30, 2019
Common Stock 
Capital
Surplus,
Paid In
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Loss
 
Total
Common
Stockholder's
Equity
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 Stock Amount 
Balance as of January 1, 2019301
 $
 $678,134
 $627,258
 $(2,851) $1,302,541
301
 $
 $678,134
 $627,258
 $(2,851) $1,302,541
Net Income 
  
   32,781
   32,781
 
  
   32,781
   32,781
Dividends on Common Stock 
  
   (19,000)   (19,000) 
  
   (19,000)   (19,000)
Other Comprehensive Income 
  
     307
 307
 
  
    
 307
 307
Balance as of March 31, 2019301
 $
 $678,134
 $641,039
 $(2,544) $1,316,629
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, 2019301
 $

$678,134

$453,891

$(2,248)
$1,129,777
For the Three Months Ended March 31, 2018For the Six Months Ended June 30, 2018
Common Stock 
Capital
Surplus,
Paid In
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Loss
 
Total
Common
Stockholder's
Equity
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 Stock Amount 
Balance as of January 1, 2018301
 $
 $843,134
 $511,382
 $(3,922) $1,350,594
301
 $
 $843,134
 $511,382
 $(3,922) $1,350,594
Net Income 
  
   35,093
   35,093
 
  
   35,093
   35,093
Other Comprehensive Income 
  
     269
 269
 
  
    
 269
 269
Balance as of March 31, 2018301
 $
 $843,134
 $546,475
 $(3,653) $1,385,956
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, 2018301
 $

$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 Three Months Ended March 31,For the Six Months Ended June 30,
(Thousands of Dollars)2019 20182019 2018
      
Operating Activities:      
Net Income$32,781
 $35,093
$59,634
 $60,871
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:      
Depreciation22,919
 23,493
46,180
 46,301
Deferred Income Taxes6,541
 43,021
12,030
 41,981
Regulatory (Under)/Over Recoveries, Net(26,986) 129
Regulatory Underrecoveries, Net(29,377) (29,816)
Amortization of Regulatory Assets, Net13,667
 5,035
19,523
 13,961
Other104
 (15,212)(7,381) (3,428)
Changes in Current Assets and Liabilities:      
Receivables and Unbilled Revenues, Net1,103
 (80)7,658
 (10,510)
Materials, Supplies and Inventory144
 4,854
14,225
 21,803
Taxes Receivable/Accrued, Net17,572
 (5,867)18,029
 (15,475)
Accounts Payable58,327
 (18,760)(1,159) (4,843)
Other Current Assets and Liabilities, Net6,472
 24,543
(17,620) (8,050)
Net Cash Flows Provided by Operating Activities132,644
 96,249
121,742
 112,795
      
Investing Activities:      
Investments in Property, Plant and Equipment(110,926) (72,287)(132,791) (149,925)
Proceeds from the Sale of Generation Assets
 130,641

 116,809
Other Investing Activities102
 97
743
 243
Net Cash Flows (Used in)/Provided by Investing Activities(110,824) 58,451
Net Cash Flows Used in Investing Activities(132,048) (32,873)
      
Financing Activities:      
Cash Dividends on Common Stock(19,000) (150,000)(233,000) (150,000)
Capital Contributions from Eversource Parent
 225,000
Return of Capital
 (530,000)
Issuance of Long-Term Debt300,000
 
Retirement of Long-Term Debt
 (110,000)
Issuance of Rate Reduction Bonds
 635,663
Repayment of Rate Reduction Bonds(30,727) 
(30,727) 
Increase in Notes Payable to Eversource Parent4,000
 8,400
Decrease in Notes Payable to Eversource Parent(36,900) (144,200)
Other Financing Activities(20) (38)(2,703) (75)
Net Cash Flows Used in Financing Activities(45,747) (141,638)(3,330) (73,612)
Net (Decrease)/Increase in Cash and Restricted Cash(23,927) 13,062
(13,636) 6,310
Cash and Restricted Cash - Beginning of Period52,723
 2,191
52,723
 2,191
Cash and Restricted Cash - End of Period$28,796
 $15,253
$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.


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 2018 Form 10-K, which was filed with the SEC on February 26, 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 March 31,June 30, 2019 and December 31, 2018, and the results of operations, comprehensive income and common shareholders' equity for the three and six months ended June 30, 2019 and 2018, and the cash flows for the threesix months ended March 31,June 30, 2019 and 2018. The results of operations and comprehensive income for the three and six months ended June 30, 2019 and 2018 and the cash flows for the threesix months ended March 31,June 30, 2019 and 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 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, natural gas and water distribution and transmission businesses 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 June 2016, the FASB issued Accounting Standards Update (“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 amended existing lease accounting guidance. The Company applied the Topic 842 lease criteria to new leases and lease renewals entered into effective on or after January 1, 2019. The ASU required balance sheet recognition of leases deemed to be 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 ASU 2018-11, Leases (Topic 842) - Targeted Improvements, which allowed the Company to adopt the new leases standard as of January 1, 2019, with prior periods presented in the financial statements continuing to follow existing lease accounting guidance under Topic 840 (Leases) in the accounting literature.  Implementation of ASU 2018-11 had no effect on retained earnings, and the requirements of the new lease standard (Topic 842) are reflected in the 2019 financial statements and footnotes.


The Company elected the practical expedient package whereby it did not need to reassess whether or not an existing contract is or contains a lease or whether a lease is an operating or capital lease, and it did not need to reassess initial direct costs for leases. Election of 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 not previously accounted for as leases. The Company also elected to use the discount rate as of the January 1, 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 identifying lease data needed for the disclosure requirements. The Company implemented a new lease accounting system in 2019 to ensure ongoing compliance with the ASU’s requirements. Adoption of the new standard resulted in the recording of operating lease liabilities and right-of-use assets on the balance sheet upon transition at January 1, 2019 of $58.0 million at Eversource, $25.3 million at NSTAR Electric, $0.6 million at CL&P, and $0.6 million at PSNH. Implementation of the new guidance did not have an impact on each company’s results of operations or cash flows.


C.    Impairment of Northern Pass Transmission
Northern Pass is Eversource's planned 1,090 MW HVDC transmission line that willwould 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 March 31, 2019, our capitalized Northern Pass project costs were approximately $311 million.


On January 25, 2018, Northern Pass was selected as the winning bidder in the Massachusetts Clean Energy Request for Proposals ("RFP"). In March 30, 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 after whichapplication. In the Massachusetts EDCs revokedfirst quarter of 2018, Eversource conducted an impairment review of the selection of, and terminated contract negotiations with, Northern Pass underproject and concluded, at that time, that the Massachusetts Clean Energy RFP.recorded amount of project costs was recoverable. On July 12, 2018, the NHSEC issued a written decision denying Northern Pass’ April 2018 motion for rehearing. Onrehearing, and on October 12, 2018, the New Hampshire Supreme Court accepted an appeal filed by NPT, whichNorthern Pass that alleged that the NHSEC failed to follow applicable law in its review of the project. Subsequently, the NHSEC transmitted the record of its proceedings toOn July 19, 2019, the New Hampshire Supreme Court on December 11, 2018. Briefingissued a decision denying Northern Pass’ appeal and affirming the NHSEC’s evaluation and decision that denied Northern Pass’ siting application.

Eversource evaluated the impact of the appeal began on February 4, 2019 and concluded on April 10, 2019. The New Hampshire Supreme Court will hear oral argumentsdecision on May 15,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 subsequent event that required recognition in the financial statements as of 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 a decision is expected later this year. NPT intends to continue to pursue NHSEC approval to constructwas reflected in the project.

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 andElectric Transmission segment. The after-tax impact of the many benefits this project will bring to our customers and the region. We continue to believe that our project costs are recoverable based on our expectation that the Northern Pass project remains probable of being placed in service. If, as a result of future events and changes in circumstances, a future 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 $311 millionthe related land, reimbursement agreements, and the impact of capitalized project costs being impaired. Such anexpected 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.


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 uncollectible accounts is included in Receivables, Net on the balance 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&P88.7
 88.0
 70.9
 71.9
NSTAR Electric81.8
 74.5
 47.7
 42.5
PSNH11.2
 11.1
 
 

 Total Provision for Uncollectible Accounts Provision for Uncollectible Hardship Accounts
(Millions of Dollars)As of March 31, 2019 As of December 31, 2018 As of March 31, 2019 As of December 31, 2018
Eversource$223.3
 $212.7
 $134.6
 $131.5
CL&P93.0
 88.0
 75.2
 71.9
NSTAR Electric74.8
 74.5
 40.9
 42.5
PSNH11.0
 11.1
 
 




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&P3.5
 3.8
 7.6
 7.7
NSTAR Electric5.7
 3.8
 11.6
 11.3
PSNH1.4
 1.5
 3.1
 3.2

 For the Three Months Ended
(Millions of Dollars)March 31, 2019 March 31, 2018
Eversource$18.6
 $19.6
CL&P4.1
 3.9
NSTAR Electric6.0
 7.5
PSNH1.7
 1.7


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: 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, LLC, which holds the Revolution Wind and South Fork Wind power projects, as well as a 257-square-mile tract257 square-mile lease off the coasts of Massachusetts and Rhode Island. ThisEversource also has a 50 percent ownership in Bay State Wind, which holds the Sunrise Wind power project. These equity investment isinvestments 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 EndedFor the Three Months Ended
March 31, 2019 March 31, 2018June 30, 2019 June 30, 2018
(Millions of Dollars)Eversource CL&P NSTAR Electric PSNH Eversource CL&P NSTAR Electric PSNHEversource CL&P NSTAR Electric PSNH Eversource CL&P NSTAR Electric PSNH
Pension, SERP and PBOP Non-Service
Income Components
$7.4
 $(0.6) $7.0
 $0.5
 $15.2
 $3.0
 $8.4
 $2.3
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 Equity10.9
 2.6
 4.0
 0.2
 9.7
 2.8
 3.4
 
13.1
 3.2
 5.1
 0.9
 10.9
 3.3
 3.9
 
Equity in Earnings5.0
 
 0.2
 
 4.6
 
 
 
Equity in Earnings (1)
25.9
 0.1
 0.2
 
 22.9
 
 0.4
 
Investment Income/(Loss)1.2
 1.7
 (0.3) 0.4
 0.7
 (0.1) 0.6
 
(0.6) (0.1) (0.3) (0.1) (0.3) 0.4
 0.3
 
Interest Income (1)
6.5
 0.4
 0.2
 5.9
 3.5
 0.9
 0.2
 2.4
1.3
 0.5
 0.2
 0.7
 1.9
 1.0
 0.2
 1.3
Other
 (0.2) 
 
 0.1
 
 
 
0.4
 0.1
 0.1
 
 0.1
 
 
 
Total Other Income, Net$31.0
 $3.9
 $11.1
 $7.0
 $33.8
 $6.6
 $12.6
 $4.7
$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 Equity24.1
 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
Other0.4
 (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


(1) Equity in earnings includes $20.4 million of unrealized gains associated with an investment in a renewable energy fund 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.

(2) See Note 2, "Regulatory Accounting" for interest income recognized in 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 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&P31.8
 31.5
 68.0
 67.1

 For the Three Months Ended
(Millions of Dollars)March 31, 2019 March 31, 2018
Eversource$45.0
 $43.4
CL&P36.2
 35.6


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 $12.7 million of amounts recorded as Taxes Other than Income Taxes for the three months ended March 31, 2019 and 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 $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 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&P114.0
 110.9
NSTAR Electric85.2
 71.1
PSNH29.9
 46.6

(Millions of Dollars)As of March 31, 2019 As of March 31, 2018
Eversource$336.3
 $274.4
CL&P121.9
 117.7
NSTAR Electric83.2
 59.5
PSNH30.4
 36.0


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 as reported on the balance sheets to the cash 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 Assets54.1
 4.6
 6.1
 35.0
 72.1
 3.5
 13.0
 47.5
Marketable Securities20.5
 0.3
 0.1
 0.6
 25.9
 0.4
 0.1
 0.6
Other Long-Term Assets72.0
 
 
 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 March 31, 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$35.1
 $7.5
 $1.8
 $4.0
 $108.1
 $87.7
 $1.6
 $1.4
Restricted cash included in:               
Prepayments and Other Current Assets45.9
 3.6
 13.0
 21.1
 72.1
 3.5
 13.0
 47.5
Marketable Securities24.2
 0.3
 0.1
 0.5
 25.9
 0.4
 0.1
 0.6
Other Long-Term Assets3.2
 
 
 3.2
 3.2
 
 
 3.2
Cash and Restricted Cash reported on the
   Statements of Cash Flows
$108.4
 $11.4
 $14.9
 $28.8
 $209.3
 $91.6
 $14.7
 $52.7


Restricted cash included in Prepayments and Other Current Assets and Other Long-Term Assets primarily represents cash collections related to the PSNH RRB customer charges that are held in trust, and required ISO-NE cash deposits. Restricted cash included in Marketable Securities 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 storage facilities obligations. Restricted cash included in Other Long-Term Assets at Eversource primarily relates to DOE Phase IV damages proceeds received at CYAPC and YAEC in the second quarter of 2019. See Note 9D, "Commitments and Contingencies - Spent Nuclear Fuel Obligations - Yankee Companies," for further information.


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, Net702.6
 456.5
 104.1
 10.1
 728.6
 454.4
 105.9
 8.3
Securitized Stranded Costs586.9
 
 
 586.9
 608.4
 
 
 608.4
Storm Restoration Costs, Net536.7
 279.6
 191.2
 65.9
 576.0
 302.6
 212.9
 60.5
Regulatory Tracker Mechanisms289.0
 60.3
 138.2
 70.6
 316.0
 33.2
 169.1
 67.3
Derivative Liabilities347.9
 345.4
 
 
 356.5
 356.5
 
 
Goodwill-related340.0
 
 291.9
 
 348.4
 
 299.1
 
Asset Retirement Obligations97.1
 33.3
 48.3
 3.5
 89.2
 32.3
 42.2
 3.3
Other Regulatory Assets148.8
 26.0
 60.5
 17.7
 208.0
 27.0
 64.6
 12.1
Total Regulatory Assets4,919.5
 1,608.5

1,389.0

905.8

5,145.9
 1,630.7

1,438.2

929.5
Less:  Current Portion515.3
 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 March 31, 2019 As of December 31, 2018
(Millions of Dollars)Eversource CL&P 
NSTAR
Electric
 PSNH Eversource CL&P 
NSTAR
Electric
 PSNH
Benefit Costs$1,878.7
 $416.0
 $534.9
 $165.8
 $1,914.8
 $424.7
 $544.4
 $169.6
Income Taxes, Net730.9
 454.3
 106.1
 8.0
 728.6
 454.4
 105.9
 8.3
Securitized Stranded Costs597.7
 
 
 597.7
 608.4
 
 
 608.4
Storm Restoration Costs, Net579.0
 307.4
 204.4
 67.2
 576.0
 302.6
 212.9
 60.5
Regulatory Tracker Mechanisms317.7
 54.4
 160.2
 78.0
 316.0
 33.2
 169.1
 67.3
Derivative Liabilities353.5
 353.1
 
 
 356.5
 356.5
 
 
Goodwill-related344.2
 
 295.5
 
 348.4
 
 299.1
 
Asset Retirement Obligations92.8
 32.8
 44.9
 3.4
 89.2
 32.3
 42.2
 3.3
Other Regulatory Assets202.2
 26.4
 62.6
 11.9
 208.0
 27.0
 64.6
 12.1
Total Regulatory Assets5,096.7
 1,644.4

1,408.6

932.0

5,145.9
 1,630.7

1,438.2

929.5
Less:  Current Portion507.3
 147.7
 234.7
 76.6
 514.8
 125.2
 241.7
 67.2
Total Long-Term Regulatory Assets$4,589.4
 $1,496.7

$1,173.9

$855.4

$4,631.1
 $1,505.5

$1,196.5

$862.3




Storm Filings: On November 16, 2018, 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 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 recorded to capitalplant or other balance sheet accounts. All approved amounts will be fully recoverable through specific mechanisms or through future rate cases.


On March 26, 2019, the NHPUC approved the recovery of $38.1 million, plus carrying charges, of storm costs incurred from December 2013 through April 2016 and the transfer of funding from PSNH’s major storm reserve to 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. 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 $5.2 million (pre-tax) 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 has been collected from customers. Also included in the March 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 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 $129.5$142.0 million (including $41.9$43.6 million for CL&P, $52.8$61.4 million for NSTAR Electric and $13.9$15.3 million for PSNH) and $122.9 million (including $42.1 million for CL&P, $49.3 million for NSTAR Electric and $12.2 million for PSNH) of additional regulatory costs as of March 31,June 30, 2019 and December 31, 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 Removal544.9
 51.0
 319.4
 21.4
 521.0
 39.9
 307.1
 22.1
Benefit Costs83.8
 
 70.9
 
 91.2
 
 76.9
 
Regulatory Tracker Mechanisms333.3
 110.0
 141.9
 31.2
 309.0
 89.5
 163.7
 48.3
AFUDC - Transmission71.7
 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 Liabilities96.1
 29.4
 38.6
 4.1
 80.2
 24.0
 29.2
 4.2
Total Regulatory Liabilities4,019.7
 1,265.8

1,685.8

471.2

3,979.7
 1,231.8

1,703.9

483.6
Less:  Current Portion379.9
 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 March 31, 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$2,871.4
 $1,030.7
 $1,096.7
 $394.6
 $2,883.0
 $1,031.0
 $1,103.7
 $396.4
Cost of Removal535.0
 46.2
 313.4
 22.1
 521.0
 39.9
 307.1
 22.1
Benefit Costs87.2
 
 73.6
 
 91.2
 
 76.9
 
Regulatory Tracker Mechanisms332.5
 79.5
 166.7
 39.9
 309.0
 89.5
 163.7
 48.3
AFUDC - Transmission71.4
 47.1
 24.3
 
 70.7
 47.4
 23.3
 
Revenue Subject to Refund due to Tax Cuts
  and Jobs Act
27.0
 
 
 15.8
 24.6
 
 
 12.6
Other Regulatory Liabilities88.3
 29.3
 33.9
 3.2
 80.2
 24.0
 29.2
 4.2
Total Regulatory Liabilities4,012.8
 1,232.8

1,708.6

475.6

3,979.7
 1,231.8

1,703.9

483.6
Less:  Current Portion385.4
 106.5
 194.0
 45.7
 370.2
 109.6
 190.6
 55.5
Total Long-Term Regulatory Liabilities$3,627.4
 $1,126.3

$1,514.6

$429.9

$3,609.5
 $1,122.2

$1,513.3

$428.1




3.    PROPERTY, PLANT AND EQUIPMENT AND ACCUMULATED DEPRECIATION


The following tables summarize property, plant and equipment by asset category:
EversourceAs of June 30, 2019 As of December 31, 2018
(Millions of Dollars) 
Distribution - Electric$15,472.1
 $15,071.1
Distribution - Natural Gas3,632.9
 3,546.2
Transmission - Electric10,449.5
 10,153.9
Distribution - Water1,664.1
 1,639.8
Solar196.9
 164.1
Utility31,415.5
 30,575.1
Other (1)
882.4
 778.6
Property, Plant and Equipment, Gross32,297.9
 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, Net24,576.9
 23,890.8
Construction Work in Progress1,727.5
 1,719.6
Total Property, Plant and Equipment, Net$26,304.4
 $25,610.4
EversourceAs of March 31, 2019 As of December 31, 2018
(Millions of Dollars) 
Distribution - Electric$15,245.9
 $15,071.1
Distribution - Natural Gas3,635.6
 3,546.2
Transmission - Electric10,251.1
 10,153.9
Distribution - Water1,649.5
 1,639.8
Solar169.9
 164.1
Utility30,952.0
 30,575.1
Other (1)
798.3
 778.6
Property, Plant and Equipment, Gross31,750.3
 31,353.7
Less:  Accumulated Depreciation   
Utility   (7,229.5) (7,126.2)
Other(348.7) (336.7)
Total Accumulated Depreciation(7,578.2) (7,462.9)
Property, Plant and Equipment, Net24,172.1
 23,890.8
Construction Work in Progress1,860.7
 1,719.6
Total Property, Plant and Equipment, Net$26,032.8
 $25,610.4

 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 - Electric4,880.6
 4,148.8
 1,415.2
 4,700.5
 4,065.9
 1,338.7
Solar
 196.9
 
 
 164.1
 
Property, Plant and Equipment, Gross11,233.4
 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, Net8,881.2
 8,452.1
 2,847.1
 8,574.3
 8,284.4
 2,744.4
Construction Work in Progress404.4
 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 March 31, 2019 As of December 31, 2018
(Millions of Dollars)CL&P 
NSTAR
Electric
 PSNH CL&P 
NSTAR
Electric
 PSNH
Distribution - Electric$6,255.8
 $6,828.5
 $2,201.8
 $6,176.4
 $6,756.4
 $2,178.6
Transmission - Electric4,746.4
 4,085.6
 1,370.2
 4,700.5
 4,065.9
 1,338.7
Solar
 169.9
 
 
 164.1
 
Property, Plant and Equipment, Gross11,002.2
 11,084.0
 3,572.0
 10,876.9
 10,986.4
 3,517.3
Less:  Accumulated Depreciation(2,328.0) (2,749.9) (789.3) (2,302.6) (2,702.0) (772.9)
Property, Plant and Equipment, Net8,674.2
 8,334.1
 2,782.7
 8,574.3
 8,284.4
 2,744.4
Construction Work in Progress391.7
 581.5
 137.9
 335.4
 510.3
 135.7
Total Property, Plant and Equipment, Net$9,065.9
 $8,915.6
 $2,920.6
 $8,909.7
 $8,794.7
 $2,880.1


(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 March 31, 2019 As of December 31, 2018 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:                        
CL&PLevel 3 $10.4
 $(1.9) $8.5
 $9.6
 $(3.4) $6.2
Level 3 $11.1
 $(0.3) $10.8
 $9.6
 $(3.4) $6.2
OtherLevel 2 
 
 
 1.5
 (0.9) 0.6
Level 2 
 
 
 1.5
 (0.9) 0.6
Long-Term Derivative Assets:                        
CL&PLevel 3 73.1
 (2.2) 70.9
 74.2
 (2.3) 71.9
Level 3 71.8
 (2.2) 69.6
 74.2
 (2.3) 71.9
Current Derivative Liabilities:                        
CL&PLevel 3 (59.7) 
 (59.7) (55.1) 
 (55.1)Level 3 (62.1) 
 (62.1) (55.1) 
 (55.1)
OtherLevel 2 (0.4) 0.2
 (0.2) 
 
 
Level 2 (2.4) 
 (2.4) 
 
 
Long-Term Derivative Liabilities:                        
CL&PLevel 3 (372.8) 
 (372.8) (379.5) 
 (379.5)Level 3 (363.7) 
 (363.7) (379.5) 
 (379.5)
OtherLevel 2 (0.2) 
 (0.2) 
 
 
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 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 capacitycapacities 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 March 31,June 30, 2019 and December 31, 2018, Eversource had New York Mercantile Exchange ("NYMEX") financial contracts for natural gas futures in order to reduce variability associated with the price of 6.27.1 million and 12.5 million MMBtu of natural gas, respectively.


For the three months ended March 31,June 30, 2019 and 2018, there were losses of $5.2$5.1 million and $36.1gains of $8.6 million, respectively, deferred as regulatory costs, which reflect the change in fair value associated with Eversource's derivative contracts. For the six months ended June 30, 2019 and 2018, there were losses of $10.3 million and $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&PRange 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 Reserve0.75
  1.78
 per kW-Month 2019 - 2024 0.75
  1.78
 per kW-Month 2019 - 2024

 As of March 31, 2019 As of December 31, 2018
CL&PRange 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 Reserve0.75
  1.78
 per kW-Month 2019 - 2024 0.75
  1.78
 per kW-Month 2019 - 2024




Exit price premiums of 3.73.1 percent through 15.114.6 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 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&PFor 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) $(362.3)
Net Realized/Unrealized (Losses)/Gains Included
  in Regulatory Assets
(2.5) 8.6
 (7.8) (28.2)
Settlements10.2
 8.6
 18.9
 21.2
Fair Value as of End of Period$(345.4) $(369.3) $(345.4) $(369.3)

CL&PFor the Three Months Ended March 31,
(Millions of Dollars)2019 2018
Derivatives, Net:   
Fair Value as of Beginning of Period$(356.5) $(362.3)
Net Realized/Unrealized Losses Included in Regulatory Assets(5.3) (36.9)
Settlements8.7
 12.7
Fair Value as of End of Period$(353.1) $(386.5)


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: 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 as of March 31,June 30, 2019 and December 31, 2018 was $49.6$45.2 million and $44.0 million, respectively.  For the three months ended March 31,June 30, 2019 and 2018, there were unrealized gains of $1.0$2.3 million and unrealized losses of $0.7$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 fuel trusts, which had fair values of $166.6$158.5 million and $200.0 million as of March 31,June 30, 2019 and December 31, 2018, respectively.  Unrealized gains and losses for these spent nuclear 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 March 31, 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$212.3
 $0.9
 $(0.9) $212.3
 $190.0
 $0.4
 $(4.0) $186.4


Eversource's debt securities include CYAPC's and YAEC's marketable securities held in spent nuclear fuel trusts in the amounts of $170.7$172.4 million and $143.9 million as of March 31,June 30, 2019 and December 31, 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 six months ended March 31,June 30, 2019 and 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 March 31,June 30, 2019, the contractual maturities of available-for-sale debt securities were as follows:  
Eversource
(Millions of Dollars)
Amortized Cost Fair ValueAmortized Cost Fair Value
Less than one year (1)
$29.7
 $29.6
$26.9
 $26.9
One to five years48.5
 48.5
48.8
 49.6
Six to ten years39.0
 39.4
38.4
 40.0
Greater than ten years95.1
 94.8
90.2
 93.1
Total Debt Securities$212.3
 $212.3
$204.3
 $209.6


(1) 
Amounts in the Less than one year category include securities in the CYAPC and YAEC spent nuclear 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 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 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 Funds20.5
 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 Securities46.1
 39.5
Asset-Backed Debt Securities13.4
 14.0
Municipal Bonds12.8
 19.2
Other Fixed Income Securities9.8
 8.2
Total Level 2$189.1
 $160.5
Total Marketable Securities$413.3
 $430.4

Eversource
(Millions of Dollars)
As of March 31, 2019 As of December 31, 2018
Level 1:     
Mutual Funds and Equities$216.2
 $244.0
Money Market Funds24.2
 25.9
Total Level 1$240.4
 $269.9
Level 2:   
U.S. Government Issued Debt Securities (Agency and Treasury)$104.3
 $79.6
Corporate Debt Securities44.7
 39.5
Asset-Backed Debt Securities13.9
 14.0
Municipal Bonds16.0
 19.2
Other Fixed Income Securities9.2
 8.2
Total Level 2$188.1
 $160.5
Total Marketable Securities$428.5
 $430.4


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, which terminates on December 8, 2023. The revolving credit facility 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, which terminates on December 8, 2023. The revolving credit facility 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)     
Eversource Parent Commercial Paper Program$566.0
 $631.5
 $884.0
 $818.5
 2.55% 2.77%
NSTAR Electric Commercial Paper Program163.0
 278.5
 487.0
 371.5
 2.42% 2.50%

 Borrowings Outstanding as of Available Borrowing Capacity as of Weighted-Average Interest Rate as of
 March 31, 2019 December 31, 2018 March 31, 2019 December 31, 2018 March 31, 2019 December 31, 2018
(Millions of Dollars)     
Eversource Parent Commercial Paper Program$1,371.0
 $631.5
 $79.0
 $818.5
 2.69% 2.77%
NSTAR Electric Commercial Paper Program368.4
 278.5
 281.6
 371.5
 2.49% 2.50%


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


Amounts outstanding under the commercial paper programs and revolving credit facility are included in Notes Payable 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 of the CL&P long-term debt issuance on April 1, 2019, the net proceeds of which were used to repay CL&P's short-term borrowings, $261.6 million of commercial paper borrowings under the Eversource parent commercial paper program were reclassified to Long-Term Debt as of March 31, 2019.


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.


Intercompany Borrowings: Eversource parent uses its available capital resources to provide loans to its subsidiaries to assist them in meeting their short-term borrowing needs. In addition, growth in Eversource's key business initiatives requires cash infusion to those subsidiaries. Eversource parent 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 March 31,June 30, 2019, there were intercompany loans from Eversource parent to CL&P of $261.6$259.4 million, to PSNH of $61.0$20.1 million, and to Harbor Electric Energy Company, a wholly-owned subsidiary of NSTAR Electric ("HEEC"), of $22.3$40.3 million. As of December 31, 2018, there were intercompany loans from Eversource parent to PSNH of $57.0 million. 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. As a result of

Long-Term Debt Issuance Authorization: On April 26, 2019, the CL&PNHPUC approved PSNH’s request for authorization to issue up to $300 million in long-term debt issuance on April 1, 2019, $261.6 million of CL&P's intercompany borrowings were reclassified to Long-Term Debt as of Marchthrough December 31, 2019. The proceeds from the CL&P April 1, 2019 debt issuance were used to repay CL&P’s short-term borrowings that were outstanding as of March 31, 2019, and to fund capital expenditures and working capital.


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
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 capitalApril 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 BondsFebruary 2009 (250.0) February 2019 Repaid at maturity on February 1, 2019February 2009 (250.0) February 2019 Repaid at maturity on February 1, 2019
NSTAR Electric:   
3.25% 2019 DebenturesMay 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 BondsJune 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 BondsJuly 2019 75.0
 August 2049 Repaid short-term borrowings and fund capital expenditures and working capital


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


As a result of the NSTAR Gas debt issuance in July 2019, $75 million of current portion of long-term debt was reclassified to Long-Term Debt on Eversource's consolidated balance sheet as of June 30, 2019.

7.    RATE REDUCTION BONDS AND VARIABLE INTEREST ENTITIES


Rate Reduction Bonds: 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 remaining costs resulting from the divestiture of PSNH’s generation assets.





PSNH Funding is considered a 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 sheets and income statements:
(Millions of Dollars)      
Balance Sheet:As of March 31, 2019 As of December 31, 2018As of June 30, 2019 As of December 31, 2018
Restricted Cash - Current Portion (included in Prepayments and Other Current Assets)$21.1
 $47.5
$35.0
 $47.5
Restricted Cash - Long-Term Portion (included in Other Long-Term Assets)3.2
 3.2
3.2
 3.2
Securitized Stranded Cost (included in Regulatory Assets)597.7
 608.4
Securitized Stranded Costs (included in Regulatory Assets)586.9
 608.4
Other Regulatory Liabilities (included in Regulatory Liabilities)10.0
 5.8
7.9
 5.8
Accrued Interest (included in Other Current Liabilities)3.5
 14.4
8.9
 14.4
Rate Reduction Bonds - Current Portion43.2
 52.3
43.2
 52.3
Rate Reduction Bonds - Long-Term Portion561.7
 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)For the Three Months Ended
Income Statement:March 31, 2019 March 31, 2018
Amortization of RRB Principal (included in Amortization of Regulatory Assets, Net)$10.6
 $
Interest Expense on RRB Principal (included in Interest Expense)5.4
 


8.    PENSION BENEFITS AND POSTRETIREMENT BENEFITS OTHER THAN PENSION


Eversource provides defined benefit retirement plans ("Pension Plans") that cover eligible 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 ("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 meet certain age and service eligibility requirements.


The components of net periodic benefit 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, areportion, is included in Operations and Maintenance expense on the statements of income. The remaining components of net periodic benefit expense for pension, SERP and PBOPexpense/(income), less the deferred portion, are included in Other Income, Net on the statements of income. 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 Cost54.8
 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 Loss35.6
 6.3
 11.8
 2.3
 35.7
 7.1
 10.1
 3.3
Prior Service Cost0.3
 
 
 
 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 AllocationsN/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 Cost109.1
 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 Loss72.1
 14.3
 21.2
 5.9
 71.8
 14.8
 20.7
 6.5
Prior Service Cost0.6
 
 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 AllocationsN/A
 $13.6
 $8.4
 $2.5
 N/A
 $3.0
 $3.2
 $1.0
 Pension and SERP
 For the Three Months Ended March 31, 2019 For the Three Months Ended March 31, 2018
(Millions of Dollars)Eversource CL&P NSTAR Electric PSNH Eversource CL&P NSTAR Electric PSNH
Service Cost$19.3
 $4.8
 $3.9
 $2.6
 $22.7
 $5.7
 $4.7
 $2.9
Interest Cost54.2
 11.5
 11.9
 6.2
 48.4
 10.6
 10.8
 5.3
Expected Return on Pension Plan Assets(92.3) (18.8) (24.4) (10.3) (98.0) (20.8) (25.2) (10.9)
Actuarial Loss35.8
 8.1
 9.4
 3.5
 36.0
 7.4
 10.5
 3.3
Prior Service Cost1.1
 
 0.1
 
 2.2
 0.4
 0.2
 0.1
Total Net Periodic Benefit Expense$18.1
 $5.6
 $0.9
 $2.0
 $11.3
 $3.3
 $1.0
 $0.7
Intercompany AllocationsN/A
 $7.8
 $3.0
 $2.4
 N/A
 $1.4
 $1.5
 $0.5
 PBOP
 For the Three Months Ended March 31, 2019 For the Three Months Ended March 31, 2018
(Millions of Dollars)Eversource CL&P 
NSTAR
Electric
 PSNH Eversource CL&P 
NSTAR
Electric
 PSNH
Service Cost$2.1
 $0.4
 $0.4
 $0.2
 $2.7
 $0.5
 $0.5
 $0.3
Interest Cost8.1
 1.5
 2.3
 0.9
 7.6
 1.4
 2.2
 0.8
Expected Return on Plan Assets(16.6) (2.3) (7.5) (1.3) (18.1) (2.6) (8.1) (1.5)
Actuarial Loss2.5
 0.4
 0.9
 0.2
 2.6
 0.3
 0.7
 0.2
Prior Service Cost/(Credit)(5.8) 0.3
 (4.2) 0.1
 (5.9) 0.3
 (4.3) 0.1
Total Net Periodic Benefit Expense/(Income)$(9.7) $0.3
 $(8.1) $0.1
 $(11.1) $(0.1) $(9.0) $(0.1)
Intercompany AllocationsN/A
 $(0.1) $(0.2) $(0.1) N/A
 $(0.3) $(0.3) $(0.1)



 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 Cost8.2
 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 Loss1.6
 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 AllocationsN/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
 $0.6
Interest Cost16.3
 3.1
 4.7
 1.7
 14.4
 2.9
 4.4
 1.6
Expected Return on Plan Assets(33.4) (4.5) (15.1) (2.8) (34.8) (5.2) (16.2) (3.0)
Actuarial Loss4.1
 0.7
 1.7
 0.2
 4.4
 0.8
 1.1
 0.4
Prior Service Cost/(Credit)(11.6) 0.5
 (8.5) 0.2
 (11.5) 0.5
 (8.5) 0.3
Total Net Periodic Benefit Expense/(Income)$(20.7) $0.5
 $(16.3) $(0.3) $(22.5) $(0.1) $(18.2) $(0.1)
Intercompany AllocationsN/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)
Eversource58
 $71.6
 60
 $64.7
CL&P15
 5.8
 15
 5.4
NSTAR Electric15
 10.5
 16
 10.9
PSNH9
 5.4
 9
 5.4

 As of March 31, 2019 As of December 31, 2018
 Number of Sites 
Reserve
(in millions)
 Number of Sites 
Reserve
(in millions)
Eversource59
 $64.8
 60
 $64.7
CL&P15
 5.6
 15
 5.4
NSTAR Electric15
 10.5
 16
 10.9
PSNH9
 5.3
 9
 5.4


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 $50.6$57.1 million and $50.1 million as of March 31,June 30, 2019 and December 31, 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 goeswould go into commercial operation, Eversource parent willwould 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 willwould 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 concluded that construction of the NPT project was no longer probable. 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. While these guarantees are currently outstanding, it is expected that they will be extinguished pending the final dissolution of 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 March 31,June 30, 2019:  
Company Description 
Maximum Exposure
(in millions)
 Expiration Dates Description 
Maximum Exposure
(in millions)
 Expiration Dates
On behalf of subsidiaries:            
Eversource Investment LLC 
Revolution Wind and South Fork Wind (1)
 $113.9
 - 
North East Offshore (1)
 $113.9
 -
Various 
Surety Bonds (2)
 32.0
 2019 - 2021 
Surety Bonds (2)
 34.0
 2019 - 2021
Rocky River Realty Company and Eversource Service Lease Payments for Real Estate 7.3
 2024 Lease Payments for Real Estate 7.1
 2024
Bay State Wind LLC Real Estate Purchase 2.5
 2019
Bay State Wind Real Estate Purchase 2.5
 2020


(1) 
Eversource parent issued a declining balance guaranty on behalf of its subsidiary, Eversource Investment LLC.LLC, which 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 guaranteed 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.  

Eversource parent issued a declining balance guaranty on behalf of its subsidiary, Eversource Gas Transmission LLC, to guarantee the payment of the subsidiary's authorized capital contributions for its investment in the Access Northeast project. As of March 31, 2019, the amount of the Access Northeast project capital contribution guaranty was $184.8 million. On April 1, 2019, pursuant to a provision in the partnership agreement jointly entered into by Eversource, Enbridge, Inc. and National Grid plc, through Algonquin Gas Transmission, LLC, the Access Northeast project was terminated. The rights under the guaranty were released, which terminated the obligation of Eversource parent.


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 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. CL&P, NSTAR Electric and PSNH, in turn recover these costs from their customers through state regulatory commission-approved retail rates. The Yankee Companies 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. The Yankee Companies sought monetary damages totaling $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 DOEYankee 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 forcontested damages. The Yankee Companies received the $1.2$0.5 million of remaining damages is expected to beginpayment in JuneJuly 2019.


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.




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").


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.


Eversource has recorded a reserve of $39.1 million (pre-tax and excluding interest) for the second complaint period as of March 31,June 30, 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 March 31,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 the proposed framework in each of the four complaint proceedings. Initial briefs were filed by the NETOs, Complainants and FERC Trial Staff on January 11, 2019 and reply briefs were filed on March 8, 2019. The NETOs' brief was supportive of the overall ROE methodology determined in the 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 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 complaint 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 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 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.


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.


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 was fully expensed in 2018. Construction of the new cable is underway and is expected to be completed in 2019.




10.     LEASES


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 purchase of energy that qualify as leases.  These contracts do not have minimum lease payments and therefore are not recognized as a lease liability on the balance sheet and are not reflected in the future minimum lease payments table below.  Expense related to these contracts are included as variable lease cost in the table below. The expense and long-term obligation for these contracts are included in 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 Liabilities0.3
 0.1
 0.2
 
 0.7
 0.3
 0.3
 
Total Finance Lease Cost0.7
 0.3
 0.2
 
 1.4
 0.7
 0.4
 
Operating Lease Cost2.9
 0.1
 0.5
 
 5.9
 0.1
 0.9
 
Variable Lease Cost15.7
 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

 For the Three Months Ended March 31, 2019
(Millions of Dollars)Eversource CL&P NSTAR Electric PSNH
Financing Lease Cost:   ��   
Amortization of Right-of-use-Assets$0.4
 $0.2
 $
 $
Interest on Lease Liabilities0.3
 0.1
 0.3
 
Total Finance Lease Cost0.7
 0.3
 0.3
 
Operating Lease Cost3.0
 0.1
 0.5
 
Variable Lease Cost15.5
 3.5
 
 12.0
Total Lease Cost$19.2
 $3.9
 $0.8
 $12.0


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 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 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, NetOther Long-Term Assets $54.6
 $0.6
 $24.4
 $0.8
Operating Lease Liabilities         
Operating Lease Liabilities - Current PortionOther Current Liabilities $8.8
 $0.2
 $0.5
 $0.2
Operating Lease Liabilities - Long-TermOther 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, NetProperty, Plant and Equipment, Net $9.4
 $2.6
 $3.4
 $0.9
Finance Lease Liabilities         
Finance Lease Liabilities - Current PortionOther Current Liabilities $2.3
 $1.5
 $
 $0.1
Finance Lease Liabilities - Long-TermOther Long-Term Liabilities 9.3
 2.3
 4.4
 0.8
Total Finance Lease Liabilities  $11.6
 $3.8
 $4.4
 $0.9

   As of March 31, 2019
(Millions of Dollars)Balance Sheet Classification Eversource CL&P NSTAR Electric PSNH
Operating Leases:         
Operating Lease Right-of-use-Assets, NetOther Long-Term Assets $56.7
 $0.5
 $25.1
 $0.5
Operating Lease Liabilities         
Operating Lease Liabilities - Current PortionOther Current Liabilities $9.2
 $0.3
 $0.8
 $0.1
Operating Lease Liabilities - Long-TermOther Long-Term Liabilities 47.5
 0.2
 24.3
 0.4
Total Operating Lease Liabilities  $56.7
 $0.5
 $25.1
 $0.5
Finance Leases:         
Finance Lease Right-of-use-Assets, NetProperty, Plant and Equipment, Net $8.8
 $2.9
 $3.5
 $0.9
Finance Lease Liabilities         
Finance Lease Liabilities - Current PortionOther Current Liabilities $1.9
 $1.5
 $
 $0.1
Finance Lease Liabilities - Long-TermOther Long-Term Liabilities 9.1
 2.7
 4.5
 0.8
Total Finance Lease Liabilities  $11.0
 $4.2
 $4.5
 $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 Leases12
 4
 21
 8
Financing Leases11
 2
 23
 9
Weighted-Average Discount Rate (Percentage):       
Operating Leases3.9% 2.7% 4.1% 3.6%
Financing Leases4.3% 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 Leases0.3
 0.1
 0.1
 
Financing Cash Flows from Finance Leases0.5
 0.4
 
 
Supplemental Non-Cash Information on Lease Liabilities:       
Right-of-use-Assets Obtained in Exchange for New Operating Lease Liabilities0.4
 0.2
 
 0.2
Right-of-use-Assets Obtained in Exchange for New Finance Lease Liabilities1.3
 
 
 
 For the Three Months Ended March 31, 2019
 Eversource CL&P NSTAR Electric PSNH
Weighted-Average Remaining Lease Term (Years):       
Operating Leases12
 3
 21
 8
Financing Leases11
 3
 23
 10
Weighted-Average Discount Rate (Percentage):       
Operating Leases3.8% 3.2% 4.1% 3.6%
Financing Leases4.5% 10.5% 2.9% 3.5%
Cash Paid for Amounts Included in the Measurement of Lease Liabilities:       
Operating Cash Flows from Operating Leases$2.9
 $0.1
 $0.3
 $
Operating Cash Flows from Finance Leases0.3
 0.2
 0.1
 
Financing Cash Flows from Finance Leases0.4
 0.3
 
 
Supplemental Non-Cash Information on Lease Liabilities:       
Right-of-use-Assets Obtained in Exchange for New Operating Lease Liabilities1.3
 
 
 
Right-of-use-Assets Obtained in Exchange for New Finance Lease Liabilities1.3
 
 
 



 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 Leases0.6
 0.3
 0.3
 
Financing Cash Flows from Finance Leases0.9
 0.7
 
 
Supplemental Non-Cash Information on Lease Liabilities:       
Right-of-use-Assets Obtained in Exchange for New Operating Lease Liabilities1.7
 0.2
 
 0.2
Right-of-use-Assets Obtained in Exchange for New Finance Lease Liabilities1.3
 
 
 


Future minimum lease payments, excluding variable costs, under long-term leases, as of March 31,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,               
202010.3
 0.2
 1.6
 0.2
 3.4
 2.0
 0.5
 0.1
20219.2
 0.1
 1.6
 0.2
 2.9
 1.5
 0.5
 0.1
20227.5
 
 1.6
 0.1
 1.5
 
 0.6
 0.1
20234.9
 
 1.6
 0.1
 0.7
 
 0.6
 0.1
20242.9
 
 1.7
 
 0.7
 
 0.6
 0.1
Thereafter29.2
 0.1
 28.9
 0.2
 13.2
 
 12.8
 0.4
Future lease payments69.7
 0.7
 37.8
 1.0
 24.1
 4.5
 15.9
 1.0
Less amount representing interest15.1
 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

 Operating Leases Finance Leases

(Millions of Dollars)
Eversource CL&P NSTAR Electric PSNH Eversource CL&P NSTAR Electric PSNH
April 1, 2019 through December 31, 2019$8.3
 $0.2
 $1.4
 $0.1
 $2.5
 $1.5
 $0.4
 $0.1
Year Ending December 31,               
20209.6
 0.2
 1.6
 0.1
 3.4
 2.0
 0.5
 0.1
20218.7
 
 1.6
 0.1
 2.9
 1.5
 0.5
 0.1
20227.3
 
 1.6
 0.1
 1.5
 
 0.6
 0.1
20234.8
 
 1.6
 0.1
 0.7
 
 0.6
 0.1
20242.8
 
 1.7
 0.1
 0.7
 
 0.6
 0.1
Thereafter29.7
 0.1
 29.4
 0.1
 13.2
 
 12.8
 0.4
Future lease payments71.2
 0.5
 38.9
 0.7
 24.9
 5.0
 16.0
 1.0
Less amount representing interest14.5
 
 13.8
 0.2
 13.9
 0.8
 11.5
 0.1
Present value of future minimum lease payments$56.7
 $0.5
 $25.1
 $0.5
 $11.0
 $4.2
 $4.5
 $0.9


At December 31, 2018, future minimum rental payments, excluding executory costs, such as property taxes, state use taxes, insurance, and maintenance were as follows:
Operating Leases
(Millions of Dollars)
Eversource CL&P NSTAR Electric PSNH
2019$11.5
 $1.5
 $7.2
 $0.5
20209.8
 1.4
 6.0
 0.4
20218.7
 1.2
 5.3
 0.4
20227.2
 1.1
 4.4
 0.4
20234.7
 0.5
 3.1
 0.2
Thereafter32.7
 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
20203.4
 2.0
 0.5
 0.1
20212.9
 1.5
 0.5
 0.1
20221.5
 
 0.6
 0.1
20230.7
 
 0.6
 0.1
Thereafter13.9
 
 13.4
 0.5
Future minimum lease payments25.8
 5.5
 16.1
 1.0
Less amount representing interest13.8
 1.0
 12.4
 0.1
Present value of future minimum lease payments$12.0
 $4.5
 $3.7
 $0.9



Operating Leases
(Millions of Dollars)
Eversource CL&P NSTAR Electric PSNH
2019$11.5
 $1.5
 $7.2
 $0.5
20209.8
 1.4
 6.0
 0.4
20218.7
 1.2
 5.3
 0.4
20227.2
 1.1
 4.4
 0.4
20234.7
 0.5
 3.1
 0.2
Thereafter32.7
 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
20203.4
 2.0
 0.5
 0.1
20212.9
 1.5
 0.5
 0.1
20221.5
 
 0.6
 0.1
20230.7
 
 0.6
 0.1
Thereafter13.9
 
 13.4
 0.5
Future minimum lease payments25.8
 5.5
 16.1
 1.0
Less amount representing interest13.8
 1.0
 12.4
 0.1
Present value of future minimum lease payments$12.0
 $4.5
 $3.7
 $0.9




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 Debt13,818.5
 14,639.4
 3,309.5
 3,724.9
 3,341.5
 3,599.6
 1,101.8
 1,145.3
Rate Reduction Bonds604.9
 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 Debt13,086.1
 13,154.9
 3,254.0
 3,429.2
 2,944.8
 3,024.1
 805.2
 819.5
Rate Reduction Bonds635.7
 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 March 31, 2019:               
Preferred Stock Not Subject to Mandatory Redemption$155.6
 $157.1
 $116.2
 $114.2
 $43.0
 $42.9
 $
 $
Long-Term Debt13,089.8
 13,519.6
 3,265.8
 3,538.0
 2,945.2
 3,107.3
 805.3
 831.1
Rate Reduction Bonds604.9
 623.3
 
 
 
 
 604.9
 623.3
                
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 Debt13,086.1
 13,154.9
 3,254.0
 3,429.2
 2,944.8
 3,024.1
 805.2
 819.5
Rate Reduction Bonds635.7
 645.8
 
 
 
 
 635.7
 645.8


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 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, are 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 AOCI0.6
 
 2.1
 2.7
 1.2
 
 2.2
 3.4
Net OCI0.6
 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 Three Months Ended March 31, 2019 For the Three Months Ended March 31, 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
 0.7
 
 0.7
 
 (0.4) 
 (0.4)
Amounts Reclassified from AOCI0.3
 
 1.2
 1.5
 0.7
 
 3.0
 3.7
Net OCI0.3
 0.7
 1.2
 2.2
 0.7
 (0.4) 3.0
 3.3
Balance as of March 31st$(4.1) $0.2
 $(53.9) $(57.8) $(5.5) $(0.4) $(57.2) $(63.1)


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.


Eversource did not elect to reclassify the income tax effects of the Tax Cuts and Jobs Act from AOCI to Retained Earnings as permitted by ASU 2018-02, Income 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  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 March 31, 2019 and December 31, 2018 Issued as of
 Par Value  March 31, 2019 December 31, 2018
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 March 31,June 30, 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, 2018, there were 16,530,93216,283,963 and 16,992,594 Eversource common shares held as treasury shares, respectively. As of March 31,June 30, 2019 and December 31, 2018, Eversource common shares outstanding were 317,347,470323,574,439 and 316,885,808, respectively.


Beginning in 2019, Eversource began issuing treasury shares to satisfy awards under the Company's incentive plan,plans, shares issued under the dividend reinvestment plan, and matching contributions under the Eversource 401k Plan.


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 March 31,June 30, 2019 and 2018 and $3.8 million for each of the six months ended June 30, 2019 and 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 March 31,June 30, 2019 and December 31, 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
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:       
Basic319,664,998
 317,344,596
 318,644,796
 317,370,825
Dilutive Effect of:       
Share-Based Compensation Awards and Other645,450
 540,591
 668,470
 568,269
Equity Forward Sale Agreement78,042
 
 39,021
 
Total Dilutive Effect723,492
 540,591
 707,491
 568,269
Diluted320,388,490
 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
March 31, 2019 March 31, 2018
Net Income Attributable to Common Shareholders$308.7
 $269.5
Weighted Average Common Shares Outstanding:   
Basic317,624,593
 317,397,052
Dilutive Effect691,489
 595,947
Diluted318,316,082
 317,992,999
Basic and Diluted EPS$0.97
 $0.85




16.    REVENUES


The following 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
Commercial612.8
 69.5
 
 16.0
 
 (0.9) 697.4
Industrial81.3
 23.5
 
 1.1
 
 (2.8) 103.1
Total Retail Tariff Sales Revenues1,499.1

193.2
 
 50.7


 (3.7) 1,739.3
Wholesale Transmission Revenues
 
 281.2
 
 14.7
 (239.8) 56.1
Wholesale Market Sales Revenues39.4
 14.4
 
 0.9
 
 
 54.7
Other Revenues from Contracts with Customers15.1
 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 Customers1,550.5

209.5
 284.9
 52.8

250.8
 (480.3) 1,868.2
Alternative Revenue Programs6.3
 (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
Commercial1,265.3
 213.3
 
 30.3
 
 (2.0) 1,506.9
Industrial163.4
 54.4
 
 2.2
 
 (5.5) 214.5
Total Retail Tariff Sales Revenues3,267.0
 626.8
 
 93.0
 
 (7.5) 3,979.3
Wholesale Transmission Revenues
 
 606.1
 
 28.3
 (510.7) 123.7
Wholesale Market Sales Revenues90.8
 36.1
 
 1.9
 
 
 128.8
Other Revenues from Contracts with Customers27.7
 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 Customers3,379.4
 667.4
 613.0
 97.2
 509.0
 (1,000.4) 4,265.6
Alternative Revenue Programs8.4
 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 March 31, 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$1,033.3
 $258.9
 $
 $27.0
 $
 $
 $1,319.2
Commercial652.6
 143.8
 
 14.3
 
 (1.1) 809.6
Industrial82.1
 30.9
 
 1.1
 
 (2.7) 111.4
Total Retail Tariff Sales Revenues1,768.0

433.6
 
 42.4


 (3.8) 2,240.2
Wholesale Transmission Revenues
 
 324.9
 
 13.5
 (270.8) 67.6
Wholesale Market Sales Revenues51.5
 21.7
 
 1.0
 
 
 74.2
Other Revenues from Contracts with Customers12.6
 0.9
 3.2
 1.7
 244.6
 (245.4) 17.6
Reserve for Revenues Subject to Refund(3.1) 1.6
 
 (0.8) 
 
 (2.3)
Total Revenues from Contracts with Customers1,829.0

457.8
 328.1
 44.3

258.1
 (520.0) 2,397.3
Alternative Revenue Programs2.1
 10.4
 12.4
 0.9
 
 (11.1) 14.7
Other Revenues (1)
2.8
 0.7
 
 0.3
 
 
 3.8
Total Operating Revenues$1,833.9

$468.9
 $340.5
 $45.5

$258.1
 $(531.1) $2,415.8


For the Three Months Ended March 31, 2018For 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
Revenues from Contracts with Customers                          
Retail Tariff Sales                          
Residential$994.4
 $248.9
 $
 $26.4
 $
 $
 $1,269.7
$794.4
 $104.1
 $
 $32.3
 $
 $
 $930.8
Commercial611.4
 134.7
 
 13.8
 
 
 759.9
622.0
 70.0
 
 15.7
 
 (2.0) 705.7
Industrial81.5
 29.5
 
 1.0
 
 (2.5) 109.5
88.4
 23.5
 
 1.1
 
 (2.4) 110.6
Total Retail Tariff Sales Revenues1,687.3
 413.1
 
 41.2
 
 (2.5) 2,139.1
1,504.8
 197.6
 
 49.1
 
 (4.4) 1,747.1
Wholesale Transmission Revenues
 
 313.6
 
 10.1
 (258.7) 65.0

 
 310.8
 
 12.6
 (268.0) 55.4
Wholesale Market Sales Revenues58.5
 17.8
 
 0.8
 
 
 77.1
34.2
 12.1
 
 0.9
 
 
 47.2
Other Revenues from Contracts with Customers16.0
 (0.6) 3.1
 4.0
 220.8
 (221.4) 21.9
18.4
 (0.6) 3.2
 1.9
 224.4
 (225.1) 22.2
Reserve for Revenues Subject to Refund(19.3) (4.5) 
 (2.2) 
 
 (26.0)(7.3) (3.5) 
 (0.5) 
 
 (11.3)
Total Revenues from Contracts with Customers1,742.5
 425.8
 316.7
 43.8
 230.9
 (482.6) 2,277.1
1,550.1
 205.6
 314.0
 51.4
 237.0
 (497.5) 1,860.6
Alternative Revenue Programs8.7
 (1.7) (11.7) 0.7
 
 10.6
 6.6
(14.4) 0.1
 3.4
 1.9
 
 (2.9) (11.9)
Other Revenues3.4
 0.8
 
 0.1
 
 
 4.3
4.2
 0.8
 
 0.2
 
 
 5.2
Total Operating Revenues$1,754.6
 $424.9
 $305.0
 $44.6
 $230.9
 $(472.0) $2,288.0
$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
Commercial1,233.4
 204.7
 
 30.0
 
 (2.1) 1,466.0
Industrial169.9
 53.1
 
 2.1
 
 (5.0) 220.1
Total Retail Tariff Sales Revenues3,192.0
 610.7
 
 91.8
 
 (7.1) 3,887.4
Wholesale Transmission Revenues
 
 624.5
 
 22.7
 (526.7) 120.5
Wholesale Market Sales Revenues92.7
 29.9
 
 1.7
 
 
 124.3
Other Revenues from Contracts with Customers35.3
 (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 Customers3,293.5
 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 Revenues6.7
 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 March 31, 2019 For the Three Months Ended March 31, 2018For 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 PSNHCL&P NSTAR Electric PSNH CL&P NSTAR Electric PSNH
Revenues from Contracts with Customers                      
Retail Tariff Sales                     ��
Residential$510.5
 $371.0
 $151.8
 $483.4
 $364.2
 $146.8
$402.8
 $282.3
 $119.9
 $387.1
 $292.5
 $114.8
Commercial236.7
 336.5
 79.8
 222.5
 314.4
 74.9
224.7
 315.8
 72.7
 220.7
 325.5
 76.2
Industrial34.6
 28.8
 18.7
 35.8
 28.1
 17.6
33.8
 28.9
 18.6
 36.5
 30.9
 21.0
Total Retail Tariff Sales Revenues781.8
 736.3
 250.3
 741.7
 706.7
 239.3
661.3
 627.0
 211.2
 644.3
 648.9
 212.0
Wholesale Transmission Revenues154.8
 122.6
 47.5
 150.8
 118.6
 44.2
115.9
 127.5
 37.8
 139.9
 120.9
 50.1
Wholesale Market Sales Revenues13.7
 24.4
 13.4
 10.3
 24.9
 24.1
12.1
 17.2
 10.1
 10.6
 13.4
 10.9
Other Revenues from Contracts with Customers8.9
 4.0
 3.6
 7.5
 8.3
 3.5
9.1
 6.1
 4.2
 8.3
 9.3
 3.9
Reserve for Revenues Subject to Refund
 
 (3.1) (12.5) (3.7) (3.1)
 
 (3.1) (4.2) 
 (3.1)
Total Revenues from Contracts with Customers959.2
 887.3
 311.7
 897.8
 854.8
 308.0
798.4
 777.8
 260.2
 798.9
 792.5
 273.8
Alternative Revenue Programs5.7
 7.3
 1.5
 (5.1) 6.7
 (4.6)55.1
 2.1
 13.7
 1.0
 (6.9) (5.0)
Other Revenues (1)
1.0
 1.5
 0.3
 1.3
 1.7
 0.4
2.7
 1.9
 0.5
 2.4
 1.6
 0.2
Eliminations(116.7) (98.5) (37.1) (109.0) (93.1) (36.4)(115.4) (99.9) (33.5) (107.4) (96.5) (33.9)
Total Operating Revenues$849.2
 $797.6
 $276.4
 $785.0
 $770.1
 $267.4
$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
Commercial461.3
 652.3
 152.6
 443.2
 640.0
 151.1
Industrial68.4
 57.8
 37.2
 72.3
 59.0
 38.6
Total Retail Tariff Sales Revenues1,443.1
 1,363.3
 461.5
 1,385.9
 1,355.7
 451.3
Wholesale Transmission Revenues270.7
 250.1
 85.3
 290.6
 239.5
 94.3
Wholesale Market Sales Revenues25.8
 41.6
 23.4
 21.0
 38.2
 34.9
Other Revenues from Contracts with Customers18.0
 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 Customers1,757.6
 1,665.1
 571.9
 1,697.1
 1,648.0
 581.8
Alternative Revenue Programs60.9
 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.
(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 $1.0 million at Eversource, $0.2 million at CL&P, and $0.6 million at NSTAR Electric for the three months ended March 31, 2019.




17.    SEGMENT INFORMATION


Eversource is organized 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.
 


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 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 that are not consolidated, which include anatural gas pipeline project owned by Enbridge, Inc., the 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 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 March 31, 2019For 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$1,833.9
 $468.9
 $340.5
 $45.5
 $258.1
 $(531.1) $2,415.8
$1,561.8
 $207.7
 $349.6
 $53.7
 $250.8
 $(539.1) $1,884.5
Depreciation and Amortization(179.2) (20.4) (61.5) (11.8) (13.6) 0.6
 (285.9)(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(1,243.0) (179.8) (108.4) (25.0) (218.4) 538.7
 (1,235.9)
Operating Income/(Loss)$168.7
 $8.4
 $(60.7) $16.7
 $17.7
 $0.2
 $151.0
Interest Expense$(50.8) $(11.9) $(30.5) $(8.6) $(44.5) $13.6
 $(132.7)
Other Income/(Loss), Net12.2
 0.7
 8.7
 0.1
 (114.9) 139.1
 45.9
Net Income/(Loss) Attributable to Common Shareholders105.4
 (1.8) (87.4) 8.0
 (145.6) 152.9
 31.5
             
             
For the Six Months Ended June 30, 2019
Eversource
(Millions of Dollars)
Electric Distribution Natural Gas Distribution Electric Transmission Water Distribution Other Eliminations Total
Operating Revenues$3,395.6
 $676.6
 $690.1
 $99.2
 $509.0
 $(1,070.2) $4,300.3
Depreciation and Amortization(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(1,475.6) (341.3) (98.8) (25.0) (225.5) 531.0
 (1,635.2)(2,718.6) (521.1) (207.2) (49.9) (444.0) 1,069.8
 (2,871.0)
Operating Income$179.1
 $107.2
 $180.2
 $8.7
 $19.0
 $0.5
 $494.7
$347.7
 $115.6
 $119.6
 $25.4
 $36.7
 $0.7
 $645.7
Interest Expense$(49.2) $(11.7) $(30.6) $(8.6) $(44.2) $12.6
 $(131.7)$(100.0) $(23.7) $(61.0) $(17.2) $(88.6) $26.1
 $(264.4)
Other Income, Net18.2
 0.2
 8.1
 0.4
 431.7
 (427.6) 31.0
30.4
 1.0
 16.8
 0.4
 316.8
 (288.5) 76.9
Net Income Attributable to Common Shareholders120.1
 76.5
 118.2
 0.9
 407.5
 (414.5) 308.7
225.4
 74.7
 30.9
 8.8
 262.0
 (261.7) 340.1
Cash Flows Used for Investments in Plant279.3
 87.4
 231.4
 20.7
 55.9
 
 674.7
571.3
 202.7
 449.2
 51.4
 103.2
 
 1,377.8


For the Three Months Ended March 31, 2018For 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$1,754.6
 $424.9
 $305.0
 $44.6
 $230.9
 $(472.0) $2,288.0
$1,539.9
 $206.5
 $317.4
 $53.5
 $237.0
 $(500.4) $1,853.9
Depreciation and Amortization(144.4) (26.4) (56.6) (10.7) (12.0) 0.6
 (249.5)(135.5) (19.3) (57.0) (12.2) (11.9) 0.6
 (235.3)
Other Operating Expenses(1,443.5) (312.6) (83.2) (23.9) (204.7) 471.9
 (1,596.0)(1,233.0) (170.6) (88.8) (24.5) (211.7) 501.4
 (1,227.2)
Operating Income$166.7
 $85.9
 $165.2
 $10.0
 $14.2
 $0.5
 $442.5
$171.4
 $16.6
 $171.6
 $16.8
 $13.4
 $1.6
 $391.4
Interest Expense$(47.4) $(11.1) $(29.7) $(8.4) $(31.9) $7.4
 $(121.1)$(52.1) $(11.4) $(30.0) $(8.6) $(32.3) $8.0
 $(126.4)
Other Income/(Loss), Net19.6
 2.0
 8.0
 (0.6) 360.1
 (355.3) 33.8
19.0
 1.6
 9.9
 (0.6) 302.0
 (281.8) 50.1
Net Income Attributable to Common Shareholders104.2
 57.8
 107.4
 1.5
 346.0
 (347.4) 269.5
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), Net38.6
 3.5
 17.8
 (1.1) 662.1
 (637.0) 83.9
Net Income Attributable to Common Shareholders205.5
 62.8
 220.1
 8.7
 634.8
 (619.6) 512.3
Cash Flows Used for Investments in Plant236.0
 70.4
 239.2
 19.0
 42.7
 
 607.3
475.6
 150.3
 508.5
 40.2
 77.1
 
 1,251.7


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
Electric
Distribution
 
Natural Gas
Distribution
 Electric
Transmission
 Water Distribution Other Eliminations Total
As of March 31, 2019$21,507.0
 $4,019.1
 $10,533.4
 $2,268.3
 $18,939.8
 $(18,326.6) $38,941.0
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, 201821,389.1
 3,904.9
 10,285.0
 2,253.0
 17,874.2
 (17,464.9) 38,241.3
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.





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 quarter ended March 31, 2019, as well as the Eversource 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 thisOur 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. ThisThese non-GAAP financial measuremeasures 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 2018 combined Annual Report on Form 10-K.  This combined Quarterly Report on Form 10-Q and Eversource's 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 $308.7 million, or $0.97 per share, in the first quarter of 2019, compared with $269.5 million, or $0.85 per share, in the first quarter of 2018.  


Our electric distribution segment earned $120.1 million, or $0.38 per share, in the first quarter of 2019, compared with $104.2$105.4 million, or $0.33 per share, in the firstsecond quarter of 2018.  Our electric transmission segment earned $118.22019, and $225.4 million, or $0.37$0.71 per share, in the first quarterhalf of 2019, compared with $107.4$101.3 million, or $0.34$0.32 per share, in the second quarter of 2018, and $205.5 million, or $0.65 per share, in the first quarterhalf of 2018.  Our natural gas distribution segment earned $76.5had a net loss of $(1.8) million in the second quarter of 2019, and earnings of $74.7 million, or $0.24$0.23 per share, in the first quarterhalf of 2019, compared with $57.8earnings of $5.0 million, or $0.18$0.02 per share, in the second quarter of 2018, and $62.8 million, or $0.20 per share, in the first quarterhalf of 2018.  Our water distribution segment earned $0.9$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 quarterhalf of 2019, compared with $1.5$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 quarterhalf 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 had a net lossearned $7.3 million, or $0.02 per share, in the second quarter of $7.02019, and $0.3 million in the first quarterhalf of 2019, compared with a net loss$16.6 million, or $0.05 per share, in the second quarter of $1.42018, and $15.2 million, or $0.04 per share, in the first quarterhalf of 2018.  


Excluding the NPT impairment charge, we continue to project non-GAAP 2019 earnings of between $3.40 per share and $3.50 per share.

Liquidity:


Cash flows provided by operating activities totaled $428.0$924.6 million in the first quarterhalf of 2019, compared with $177.7$698.1 million in the first quarter of 2018, due primarily to the $166.5 million decrease in pension and PBOP cash contributions in the first quarter of 2019, compared to the first quarterhalf of 2018. Investments in property, plant and equipment totaled $674.7 million$1.38 billion in the first quarterhalf of 2019, compared with $607.3 million$1.25 billion in the first quarterhalf of 2018.  Cash totaled $35.1$20.6 million as of March 31,June 30, 2019, compared with $108.1 million as of December 31, 2018.


On April 1,June 4, 2019, CL&Pwe completed an equity offering of 17,940,000 common shares, consisting of 5,980,000 common shares issued $300directly 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 second quarter of 2019, we issued $1.0 billion of new long-term debt.debt, consisting of $300 million by CL&P, $400 million by NSTAR Electric and $300 million by PSNH. Proceeds from thisthese new issuanceissuances were used primarily to repay short-term borrowings which were previously usedand to repay at maturity, $250 million of long-term debt previously issued by CL&P that matured in the first quarter of 2019, and to fund capital expenditures and working capital.at maturity.


On February 6,May 1, 2019, our Board of Trustees approved a common share dividend payment of $0.535 per share, which was paid on March 29, 2019 to shareholders of record as of March 5, 2019. On May 1, 2019, our Board of Trustees approved a common share dividend payment of $0.535 per share, payable on June 28, 2019 to shareholders of record as of May 23, 2019.

Strategic:

On 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 that denied Northern Pass’ siting application. As a result of the New Hampshire Supreme Court decision, 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 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 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 project is expected to be operational in 2024.

Earnings Overview


Consolidated:  Below is a summary of our earnings by business, which also reconciles the non-GAAP financial measuremeasures of consolidated non-GAAP earnings and EPS, as well as EPS by business, to the most directly comparable GAAP measuremeasures of consolidated Net Income Attributable to Common Shareholders and diluted EPS.
For the Three Months Ended March 31,For the Three Months Ended June 30, For the Six Months Ended June 30,
2019 20182019 2018 2019 2018
(Millions of Dollars, Except Per Share Amounts)Amount Per Share Amount Per ShareAmount Per Share Amount Per Share Amount Per Share Amount Per Share
Net Income Attributable to Common Shareholders (GAAP)$308.7
 $0.97
 $269.5
 $0.85
$31.5
 $0.10
 $242.8
 $0.76
 $340.1
 $1.07
 $512.3
 $1.61
               
Regulated Companies$315.7
 $0.99
 $270.9
 $0.85
$228.6
 $0.72
 $226.2
 $0.71
 $544.2
 $1.71
 $497.1
 $1.57
Eversource Parent and Other Companies(7.0) (0.02) (1.4) 
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)$308.7
 $0.97
 $269.5

$0.85
$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, 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 March 31,For the Three Months Ended June 30, For the Six Months Ended June 30,
2019 20182019 2018 2019 2018
(Millions of Dollars, Except Per Share Amounts)Amount Per Share Amount Per ShareAmount 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$120.1
 $0.38
 $104.2
 $0.33
$105.4
 $0.33
 $101.3
 $0.32
 $225.4
 $0.71
 $205.5
 $0.65
Electric Transmission118.2
 0.37
 107.4
 0.34
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 Distribution76.5
 0.24
 57.8
 0.18
(1.8) 
 5.0
 0.02
 74.7
 0.23
 62.8
 0.20
Water Distribution0.9
 
 1.5
 
8.0
 0.02
 7.2
 0.02
 8.8
 0.03
 8.7
 0.03
Net Income - Regulated Companies$315.7
 $0.99
 $270.9
 $0.85
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 $15.9$4.1 million in the firstsecond quarter of 2019, as compared to the firstsecond quarter of 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 MayJanuary 1, 2019, and higher earnings from CL&P's capital tracker mechanism effective July 1, 2018 due 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 generation assets in 2018.

Our electric distribution segment earnings increased $19.9 million in the first half of 2019, as compared to the first half of 2018, due primarily to CL&P and NSTAR Electric base distribution rate increases, higher earnings from CL&P's capital tracker mechanism effective 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. The earnings increase was partially offset by higher depreciation expense, higher operations and 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 its thermal and hydroelectric generation assets in 2018, higher depreciation expense and lower non-service income from our benefit plans.2018.


Our electric transmission segment earnings increased $10.8decreased $200.1 million and $189.2 million in the second quarter and first quarterhalf of 2019, respectively, as compared to the second quarter and first half of 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 $6.8 million in the second quarter of 2019, as compared to the second quarter of 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 $18.7$11.9 million in the first quarterhalf of 2019, as compared to the first quarterhalf of 2018, due primarily to the 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 infrastructure. Yankee Gas' decoupled rate structure is seasonally structured and provides greater earnings in the 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 water distribution segment earnings decreased $0.6increased $0.8 million and $0.1 million in the second quarter and first quarterhalf of 2019, respectively, as compared to the second quarter and first quarterhalf of 2018. Our water distribution business is seasonal, in nature, 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 a net lossearnings of $7.0$7.3 million in the second quarter of 2019 and $0.3 million in the first quarterhalf of 2019, compared with a net loss$16.6 million in the second quarter of $1.42018 and $15.2 million in the first quarterhalf of 2018.  The increased lossdecrease in earnings in both periods was due primarily to the absence in 2019 of an income tax benefit associated with our investments in the second quarter of 2018, higher interest expense, and a higher effective tax rate, partially offset by higher return at Eversource Service as a result of increased investments in property, plant and 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 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 impact earnings ("Traditional" in the table below).  For CL&P, NSTAR Electric, 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 summary of our retail electric GWh sales volumes, our firm natural gas MMcf sales volumes, and our water MG sales volumes, and percentage changes, is as follows:  
For the Three Months Ended March 31, 2019 Compared to 2018Electric Firm Natural Gas Water
Electric Firm Natural Gas WaterSales Volumes (GWh) Percentage
Decrease
 Sales Volumes (MMcf) Percentage
Increase/
(Decrease)
 Sales Volumes (MG) Percentage
Decrease
Sales Volumes (GWh) Percentage
Decrease
 Sales Volumes (MMcf) Percentage
Increase
 Sales Volumes (MG) Percentage
Increase/
(Decrease)
2019 
2018 (1)
 2019 
2018 (2)
 2019 2018 
Three Months Ended June 30:2019 
2018 (1)
 Percentage
Decrease
 2019 
2018 (2)
 Percentage
Increase/
(Decrease)
 2019 2018 Percentage
Decrease
Traditional1,968
 1,972
 (0.2)% 
 
 % 451
 467
 (3.4)%1,757
 1,803
 
 
 459
 485
 
Decoupled and Special Contracts (3)
11,183
 11,249
 (0.6)% 45,376
 43,179
 5.1% 4,378
 4,357
 0.5 %9,853
 10,330
 (4.6)% 18,191
 18,932
 (3.9)% 4,834
 5,016
 (3.6)%
Total Sales Volumes13,151
 13,221
 (0.5)% 45,376
 43,179
 5.1% 4,829
 4,824
 0.1 %11,610
 12,133
 (4.3)% 18,191
 18,932
 (3.9)% 5,293
 5,501
 (3.8)%
                 
Six Months Ended June 30:                 
Traditional3,724
 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 Volumes24,761
 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)    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.
(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.


(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.

(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.
(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.



Liquidity


Cash totaled $35.1$20.6 million as of March 31,June 30, 2019, compared with $108.1 million as of December 31, 2018.


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, which terminates on December 8, 2023. The revolving credit facility 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, which terminates on December 8, 2023. The revolving credit facility 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 ofBorrowings Outstanding as of Available Borrowing Capacity as of Weighted-Average Interest Rate as of
March 31, 2019 December 31, 2018 March 31, 2019 December 31, 2018 March 31, 2019 December 31, 2018June 30, 2019 December 31, 2018 June 30, 2019 December 31, 2018 June 30, 2019 December 31, 2018
(Millions of Dollars)  
Eversource Parent Commercial Paper Program$1,371.0
 $631.5
 $79.0
 $818.5
 2.69% 2.77%$566.0
 $631.5
 $884.0
 $818.5
 2.55% 2.77%
NSTAR Electric Commercial Paper Program368.4
 278.5
 281.6
 371.5
 2.49% 2.50%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 March 31,June 30, 2019 or December 31, 2018. Eversource's water distribution segment has a $100 million revolving credit facility, which expires on August 19, 2019, and there were no borrowings outstanding as of March 31,June 30, 2019 or December 31, 2018.


Amounts outstanding under the commercial paper programs and revolving credit facility are included in Notes Payable 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 of the CL&P long-term debt issuance on April 1, 2019, the net proceeds of which were used to repay CL&P's short-term borrowings, $261.6 million of commercial paper borrowings under the Eversource parent commercial paper program were reclassified to Long-Term Debt as of March 31, 2019.


Intercompany Borrowings: Eversource parent uses its available capital resources to provide loans to its subsidiaries to assist them in meeting their short-term borrowing needs. In addition, growth in Eversource's key business initiatives requires cash infusion to those subsidiaries. Eversource parent 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 March 31,June 30, 2019, there were intercompany loans from Eversource parent to CL&P of $261.6$259.4 million, to PSNH of $61.0$20.1 million, and to Harbor Electric Energy Company, a wholly-owned subsidiary of NSTAR Electric ("HEEC"), of $22.3$40.3 million. As of December 31, 2018, there were intercompany loans from Eversource parent to PSNH of $57.0 million. 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. As a result of the CL&P long-term debt issuance on April 1, 2019, $261.6 million of CL&P's intercompany borrowings were reclassified to Long-Term Debt as of March 31, 2019. The proceeds from the CL&P April 1, 2019 debt issuance were used to repay CL&P’s short-term borrowings that were outstanding as of March 31, 2019, and to fund capital expenditures and working capital.


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
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 capitalApril 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 BondsFebruary 2009 (250.0) February 2019 Repaid at maturity on February 1, 2019February 2009 (250.0) February 2019 Repaid at maturity on February 1, 2019
NSTAR Electric:   
3.25% 2019 DebenturesMay 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 BondsJune 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 BondsJuly 2019 75.0
 August 2049 Repaid short-term borrowings and fund capital expenditures and working capital


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

As a result of the NSTAR Gas debt issuance in July 2019, $75 million of current portion of long-term debt was reclassified to Long-Term Debt on Eversource's consolidated balance sheet as of June 30, 2019.



Rate Reduction Bonds: PSNH's RRB payments consist of principal and interest and are paid semi-annually, beginning on February 1, 2019. PSNH paid $30.7 million of RRB principal payments and $16.2 million of interest payments in the first quarterhalf 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 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 June 30, 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.

Eversource intends to use the net proceeds received upon the direct issuance of common shares and the net proceeds expected to be received upon settlement of the forward sale agreement to repay short-term debt under the commercial paper program, to fund capital spending to enhance reliability and fund clean energy initiatives, and for general corporate purposes.

Cash Flows:  Cash flows provided by operating activities totaled $428.0$924.6 million in the first quarterhalf of 2019, compared with $177.7$698.1 million in the first quarterhalf of 2018. The increase in operating cash flows was due primarily to the $166.5a $172.4 million decrease in pension and PBOP cash contributions made in the first quarterhalf of 2019 compared to the first quarterhalf of 2018, approximately $70$172 million of storm restoration cost payments made in the first quarterhalf of 2018, and the timing of cash collections on our accounts payable cash payments.receivable. Also contributing to the increase were lower income tax refunds receivedpayments made in the first quarterhalf of 2019 of $52.6$59.2 million compared to tax payments of $11.5and $68.8 million in 2018.DOE Phase IV proceeds received by CYAPC and YAEC in the second quarter of 2019. Partially offsetting these favorable impacts were the timing of collections for regulatory tracking mechanisms, and the timing of accounts payable cash collectionspayments and payments related to other working capital items.


On February 6,May 1, 2019, our Board of Trustees approved a common share dividend payment of $0.535 per share, which was paid on March 29, 2019 to shareholders of record as of March 5, 2019. In the first quarter of 2019, we paid cash dividends of $169.8 million, compared with $160.0 million paid in the first quarter of 2018. On May 1, 2019, our Board of Trustees approved a common share dividend payment of $0.535 per share, payable on June 28, 2019 to shareholders of record as of May 23, 2019. In the first half of 2019, we paid cash dividends of $323.3 million, compared with $320.1 million paid in the first half of 2018.


In the first quarterhalf of 2019, CL&P, NSTAR Electric and PSNH paid $99.0$275.4 million, $60.6$181.8 million, and $19.0$233.0 million, respectively, in common stock dividends to Eversource parent.




Beginning in 2019, Eversource began issuing treasury shares to satisfy awards under the Company's incentive plan,plans, shares issued under the dividend reinvestment plan, and matching contributions under the Eversource 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 quarterhalf of 2019, investments for Eversource, CL&P, NSTAR Electric, and PSNH were $674.7$1.38 billion, $466.1 million, $189.4 million, $208.5$418.6 million, and $110.9$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 February 12,June 5, 2019, S&P changed the outlook on all its credit ratings for Eversource, CL&P, NSTAR Electric and PSNH from stable to negative. On March 22, 2019, Fitch changed the outlook onMoody’s raised the credit ratings of Eversource parentNSTAR 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 ParentBaa1 Stable A+A- NegativeStable BBB+ Stable
CL&PA3 Stable A+A NegativeStable A-  Stable
NSTAR ElectricA2A1 PositiveStable A+A NegativeStable A   Stable
PSNHA3 Stable A+A NegativeStable 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'sS&PFitch
CurrentOutlookCurrentOutlookCurrentOutlook
Eversource ParentBaa1StableBBB+StableBBB+ Stable
CL&PA1StableA+StableA+Stable
NSTAR ElectricA1StableAStableA+Stable
PSNHA1StableA+StableA+ 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 $603.1 million$1.41 billion in the first quarterhalf of 2019, compared to $496.2 million$1.18 billion in the first quarterhalf of 2018.  These amounts included $49.3$97.6 million and $30.9$69.8 million in the first quarterhalf of 2019 and 2018, respectively, related to information technology and facilities upgrades and enhancements, primarily at Eversource Service and The Rocky River Realty Company.


Electric Transmission Business:  Our consolidated electric transmission business capital expenditures increaseddecreased by $3.9$30.8 million in the first quarterhalf of 2019, as compared to the first quarterhalf of 2018.  A summary of electric transmission capital expenditures by company is as follows:  
For the Three Months Ended March 31,For the Six Months Ended June 30,
(Millions of Dollars)2019 20182019 2018
CL&P$112.2
 $101.1
$220.6
 $240.4
NSTAR Electric59.3
 53.7
166.4
 138.6
PSNH27.7
 33.4
59.6
 88.7
NPT5.0
 12.1
9.7
 19.4
Total Electric Transmission Segment$204.2
 $200.3
$456.3
 $487.1


Northern Pass:  Northern Pass is Eversource's planned 1,090 MW HVDC transmission line that willwould 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 to date, including receiving the majority of federal, state and Canadian permits required to be constructed and placed in service to ultimately provide delivery of hydropower. Three permits remain outstanding.


On January 25, 2018, Northern Pass was selected as the winning bidder in the Massachusetts Clean Energy Request for Proposals ("RFP"). In March 30, 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 after whichapplication. In the Massachusetts EDCs revokedfirst quarter of 2018, Eversource conducted an impairment review of the selection of, and terminated contract negotiations with, Northern Pass underproject and concluded, at that time, that the Massachusetts Clean Energy RFP.recorded amount of project costs was recoverable. On July 12, 2018, the NHSEC issued a written decision denying Northern Pass’ April 2018 motion for rehearing. Onrehearing, and on October 12, 2018, the New Hampshire Supreme Court accepted an appeal filed by NPT, whichNorthern Pass that alleged that the NHSEC failed to follow applicable law in its review of the project. Subsequently, the NHSEC transmitted the record of its proceedings toOn July 19, 2019, the New Hampshire Supreme Court on December 11, 2018. Briefingissued a decision denying Northern Pass’ appeal and affirming the NHSEC’s evaluation and decision that denied Northern Pass’ siting application.

Eversource evaluated the impact of the appeal began on February 4, 2019 and concluded on April 10, 2019. The New Hampshire Supreme Court will hear oral argumentsdecision on May 15,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 subsequent event that required recognition in the financial statements as of 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 a decision is expected later this year. NPT intends to continue to pursue NHSEC approval to constructwas reflected in the project.


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 andElectric Transmission segment. The after-tax impact of the many benefits this project will bring to our customers and the region. We continue to believe that our project costs are recoverable based on our expectation that the Northern Pass project remains probable of being placed in service. If, as a result of future events and changes in circumstances, a future 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 $311 millionthe related land, reimbursement agreements, and the impact of capitalized project costs being impaired. Such anexpected 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: The Greater Boston and New Hampshire 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 (two in New Hampshire and 26 in Massachusetts). The two New Hampshire upgrades, including the Merrimack Valley Reliability Project, have been placed in service and 1617 Massachusetts upgrades have been placed in service. Seven upgrades are under construction and one upgrade is expected to enter construction in the secondfourth quarter of 2019. We anticipate approval from the Massachusetts Energy Facilities Siting Board on the two remaining projectsproject in the second quarter of 2019. Most upgrades are expected to be completed by the end of 2019.  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 $369.0$396.7 million has been spent and capitalized through March 31,June 30, 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. As of March 31,June 30, 2019, 2324 projects have been placed in service, and fourthree projects are in active construction and are expected to be placed in service through 2019. As of March 31,June 30, 2019, CL&P had spent and capitalized $240.0$253.1 million in costs associated with GHCC.


Seacoast Reliability Project:  On April 12, 2016, PSNH filed a siting application with the NHSEC for theThe Seacoast Reliability Project consists of a 13-mile, 115kV transmission line within several New Hampshire communities, which proposes to useusing a combination of overhead, underground and underwater line designs to help meet the growing demand for electricity in the Seacoast region. On December 10, 2018, the NHSEC indicated its unanimous approval of the project, and subsequently issued its written decision on January 31, 2019. On 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 Supreme Court. The court has not yet determined whether it will hear those appeals. On July 3, 2019, the U.S. Army Corps of Engineers issued its permit allowing construction in 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 $32.2$38.5 million in costs through March 31,June 30, 2019.


Distribution Business:  A summary of distribution capital expenditures is as follows:
For the Three Months Ended March 31,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$33.3
 $66.8
 $8.1
 $108.2
 $11.2
 $2.1
 $121.5
$142.9
 $142.4
 $19.1
 $304.4
 $29.4
 $5.6
 $339.4
Aging Infrastructure45.2
 43.0
 25.4
 113.6
 53.2
 13.0
 179.8
96.0
 96.6
 52.7
 245.3
 125.8
 42.9
 414.0
Load Growth and Other14.3
 17.4
 3.9
 35.6
 10.0
 0.4
 46.0
32.0
 28.6
 7.1
 67.7
 26.3
 0.9
 94.9
Total Distribution92.8
 127.2
 37.4
 257.4
 74.4
 15.5
 347.3
270.9
 267.6
 78.9
 617.4
 181.5
 49.4
 848.3
Solar
 2.3
 
 2.3
 
 
 2.3

 4.8
 
 4.8
 
 
 4.8
Total$92.8
 $129.5
 $37.4
 $259.7
 $74.4
 $15.5
 $349.6
$270.9
 $272.4
 $78.9
 $622.2
 $181.5
 $49.4
 $853.1
2018                          
Basic Business$49.8
 $38.7
 $17.6
 $106.1
 $10.0
 $2.2
 $118.3
$87.2
 $92.6
 $37.5
 $217.3
 $29.0
 $7.5
 $253.8
Aging Infrastructure22.7
 20.1
 19.9
 62.7
 28.7
 9.2
 100.6
54.2
 45.3
 41.0
 140.5
 87.6
 27.8
 255.9
Load Growth and Other13.3
 2.7
 3.6
 19.6
 4.7
 0.4
 24.7
34.9
 14.1
 5.9
 54.9
 19.1
 1.1
 75.1
Total Distribution85.8
 61.5
 41.1
 188.4
 43.4
 11.8
 243.6
176.3
 152.0
 84.4
 412.7
 135.7
 36.4
 584.8
Solar and Generation
 21.0
 0.4
 21.4
 
 
 21.4

 38.5
 0.8
 39.3
 
 
 39.3
Total$85.8
 $82.5
 $41.5
 $209.8
 $43.4
 $11.8
 $265.0
$176.3
 $190.5
 $85.2
 $452.0
 $135.7
 $36.4
 $624.1


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 key offshore wind assets in the Northeast, including contractsNorth East Offshore and Bay State Wind, which collectively hold power purchase agreements for the Revolution Wind and South Fork Wind projects.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, LLC, which holds the Revolution Wind and South Fork Wind power projects, as well as a 257-square-mile tract257 square-mile lease off the coasts of Massachusetts and Rhode Island.

This transaction augments our existing 50-50 partnership with Ørsted for Eversource also has a 50 percent ownership in Bay State Wind.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 tractlease adjacent to the North East Offshore area.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 hostdevelop at least 4,000 MW of offshore wind generation.

Eversource and Ørsted have jointly participated, or expect to participate, As of June 30, 2019, Eversource's total equity investment balance in the following opportunities for future solicitations forits offshore wind based on each state's clean energy requirements:

The New York State Energy Research and Development Authority ("NYSERDA") RFP for 800 MW, issued in November 2018. NYSERDA has the authority to award more than 800 MW in the first solicitation if sufficient attractive offers are received. On February 14,business was $499.5 million. In July 2019, Eversource and Ørsted submitted joint proposals in response to the RFP under the project name Sunrise Wind. NYSERDA will award contracts to its selected bidders in 2019. 
made an additional capital contribution of $54.9 million.


Massachusetts’ second offshore wind RFP for 400 MW to 800 MW, expected to be issued by mid-2019.

Revolution Wind and South Fork Wind:Wind Projects: Revolution Wind is a 700704 MW offshore wind power project located approximately 15 miles south of the Rhode Island coast, that will deliver power to Rhode Island (400 MW) and Connecticut (300(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.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 is awaiting regulatory approval. The remaining 100 MW was awarded inhas been approved by the Connecticut RFP, and a power purchase agreement is currently under negotiation with the electric distribution companies.Rhode Island Public Utilities Commission.


South Fork Wind is a 130 MW offshore wind power project located approximately 35 miles east of Long Island, that will interconnect into eastern Long Island where it will deliver power to the Long Island Power Authority households.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.


Bay State Wind: Bay StateSunrise Wind is located approximately 25 miles south ofProject: On February 14, 2019, Eversource and Ørsted submitted joint proposals under the coast of Massachusetts and has the ultimate potential to generate at least 2,000 MW of clean, renewable energy.

Natural Gas Transmission Project: On April 1, 2019, pursuantproject name Sunrise Wind in response to a provisionNew 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 partnershipfirst 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 jointly entered into byfor 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 Enbridge, Inc. and National Grid plc, through Algonquin Gas Transmission, LLC, the Access Northeast project was terminated. The full carrying value of our equity method investmentØrsted are considering participation in the Access Northeast projectfollowing 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 written offissued on May 23, 2019. Bids are due in 2018.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 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").



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 March 31,June 30, 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 March 31,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 the proposed framework in each of the four complaint proceedings. Initial briefs were filed by the NETOs, Complainants and FERC Trial Staff on January 11, 2019 and reply briefs were filed on March 8, 2019. The NETOs' brief was supportive of the overall ROE methodology determined in the 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 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 complaint 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 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 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.


FERC Notices of Inquiry: On March 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. InitialOn June 26, 2019, the NETOs jointly filed comments in the FERC ROE NOI, supporting the methodology established in the FERC’s October 16, 2018 order with minor enhancements going forward. Also on both NOIsJune 26, 2019, Eversource filed comments in the FERC transmission incentives NOI, requesting that FERC retain policies that have been effective in 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 in June 2019 with reply comments due in JulyAugust 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 proceeding to review the NETOs' regional and local transmission formula rates due to a lack of transparency, finding that the formula rates appeared to lack 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 included, among other things, a new formula rate template, to be 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 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 a request by the 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 trial judge to be issued September 21, 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 quarterhalf of 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 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 and (2) the reduction in ADIT liabilities (now excess ADIT or EDIT), which are estimated to be approximately $2.9 billion and included in regulatory liabilities as of March 31,June 30, 2019. The refund of these EDIT regulatory liabilities to customers will generally be made over the same period as the remaining useful lives of the underlying assets that gave rise to the ADIT liabilities. The refund of EDIT has begun at several of our distribution companies and is reflected in rates. The refund to customers and resulting amortization of the EDIT regulatory liabilities results in lower Revenues on the statements of income and lower current tax expense as a result ofexpense. This is offset by the lower revenue and the amortization of the EDIT regulatory liabilities, both of which are recognized as a reduction to Income Tax Expense ondue to the statementsamortization of income.the EDIT. The refund of EDIT results in a lower effective tax rate and no impact on net income.
                         
Connecticut:


CL&P Storm Filing: CL&P's approved rate case settlement in 2018 incorporated $18.6 million of rate base recovery for catastrophic storms occurring after December 31, 2016, subject to a future storm filing.  On November 16, 2018, 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 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 recorded to capitalplant or other balance sheet accounts.



Clean Energy RFP: 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 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 All approved amounts will be recovered from customers infully recoverable through specific mechanisms or through future rates, the contract will not have an impact on the net income of CL&P.rate cases.


Massachusetts:


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 northNorth Cohasset with water.  The 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 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 endfirst quarter of 2019.2020. As of March 31,June 30, 2019, these water distribution assets were included within Property, Plant and Equipment, Net and goodwill on the balance sheet and were also reflected in the Water Distribution segment and reporting unit.


New Hampshire:


Distribution Rates:On April 26, 2019, PSNH filed an application with the NHPUC for approval of a temporary annual base distribution rate increase of approximately $33 million, effective July 1, 2019. AlsoOn June 27, 2019, the NHPUC approved a settlement agreement that was reached by 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. Although new rates were implemented on April 26,August 1, 2019 to customers, the 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 temporary rate increase.

On May 28, 2019, PSNH filed a notice of intentan application with the NHPUC to request anfor a permanent increase in permanent base distribution rates of approximately $70 million, effective July 1, 2020, which is inclusive ofincludes the $33 million temporary rate increase request.  The temporary rates are subject to reconciliation based on the outcome of the permanent rate case now before the NHPUC.

Legislative and Policy Matters

New Hampshire:  On July 8, 2019, the New Hampshire Superior Court approved a settlement between PSNH expects to file an application withand the NHPUCTown of Bow, New Hampshire, where the town had over-assessed the value of the property owned by PSNH for the permanent increase2014 through 2018 property tax years.  The result of this settlement was $10.0 million in base distribution ratesover-paid property taxes that will be refundable to PSNH, with $4.3 million payable in the second quarter of 2019.

2013 through 2016 Storm Costs:On March 26, 2019, the NHPUC approved the recovery of $38.1 million, plus carrying charges, of storm costs incurred from December 2013 through April 2016 and the transfer of funding from PSNH’s major storm reserveremainder to recover those costs. The costs of these storms (excludingbe received over 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. 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 $5.2 million (pre-tax) 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 has been collected from customers. Also included in the March 26, 2019 NHPUC approval is a prospective requirement for PSNH to annually net its storm funding reserve collected from customers against deferred storm costs.following 4 years.


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 2018 Form 10-K.  There have been no material changes with regard to these critical accounting policies.



Refer to Note 1C, "Summary of Significant Accounting Policies - Impairment of Northern Pass 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:  Refer to Note 9B, "Commitments and Contingencies – Long-Term Contractual
Arrangements," for discussion of material changes to contractual 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 six months ended March 31,June 30, 2019 and 2018 included in this combined Quarterly Report on Form 10-Q:  
For the Three Months Ended March 31,For the Three Months Ended June 30, For the Six Months Ended June 30,
(Millions of Dollars)2019 2018 Increase/
(Decrease)
2019 2018 Increase/
(Decrease)
 2019 2018 Increase/
(Decrease)
Operating Revenues$2,415.8
 $2,288.0
 $127.8
$1,884.5
 $1,853.9
 $30.6
 $4,300.3
 $4,141.8
 $158.5
Operating Expenses: 
  
  
 
  
  
    
  
Purchased Power, Fuel and Transmission974.9
 946.8
 28.1
620.9
 653.9
 (33.0) 1,595.8
 1,600.7
 (4.9)
Operations and Maintenance335.6
 332.5
 3.1
328.0
 293.9
 34.1
 663.6
 626.4
 37.2
Depreciation214.9
 204.3
 10.6
219.1
 199.1
 20.0
 434.0
 403.4
 30.6
Amortization71.0
 45.2
 25.8
38.9
 36.2
 2.7
 109.9
 81.4
 28.5
Energy Efficiency Programs140.1
 134.2
 5.9
105.8
 102.0
 3.8
 246.0
 236.2
 9.8
Taxes Other Than Income Taxes184.6
 182.5
 2.1
181.2
 177.5
 3.7
 365.7
 359.8
 5.9
Impairment of Northern Pass Transmission239.6
 
 239.6
 239.6
 
 239.6
Total Operating Expenses1,921.1
 1,845.5
 75.6
1,733.5
 1,462.6
 270.9
 3,654.6
 3,307.9
 346.7
Operating Income494.7
 442.5
 52.2
151.0
 391.3
 (240.3) 645.7
 833.9
 (188.2)
Interest Expense131.7
 121.1
 10.6
132.7
 126.4
 6.3
 264.5
 247.5
 17.0
Other Income, Net31.0
 33.8
 (2.8)45.9
 50.1
 (4.2) 76.9
 83.9
 (7.0)
Income Before Income Tax Expense394.0
 355.2
 38.8
64.2
 315.0
 (250.8) 458.1
 670.3
 (212.2)
Income Tax Expense83.4
 83.8
 (0.4)30.8
 70.4
 (39.6) 114.2
 154.2
 (40.0)
Net Income310.6
 271.4
 39.2
33.4
 244.6
 (211.2) 343.9
 516.1
 (172.2)
Net Income Attributable to Noncontrolling Interests1.9
 1.9
 
1.9
 1.9
 
 3.8
 3.8
 
Net Income Attributable to Common Shareholders$308.7
 $269.5
 $39.2
$31.5
 $242.7
 $(211.2) $340.1
 $512.3
 $(172.2)


Operating Revenues
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, is as follows: 
For the Three Months Ended March 31, 2019 Compared to 2018Electric Firm Natural Gas Water
Electric Firm Natural Gas WaterSales Volumes (GWh) Percentage
Decrease
 Sales Volumes (MMcf) Percentage
Increase/
(Decrease)
 Sales Volumes (MG) Percentage
Decrease
Sales Volumes (GWh) Percentage
Decrease
 Sales Volumes (MMcf) Percentage
Increase
 Sales Volumes (MG) Percentage
Increase/
(Decrease)
2019 
2018 (1)
 2019 
2018 (2)
 2019 2018 
Three Months Ended June 30:2019 
2018 (1)
 Percentage
Decrease
 2019 
2018 (2)
 Percentage
Increase/
(Decrease)
 2019 2018 Percentage
Decrease
Traditional1,968
 1,972
 (0.2)% 
 
 % 451
 467
 (3.4)%1,757
 1,803
 
 
 459
 485
 
Decoupled and Special Contracts (3)
11,183
 11,249
 (0.6)% 45,376
 43,179
 5.1% 4,378
 4,357
 0.5 %9,853
 10,330
 (4.6)% 18,191
 18,932
 (3.9)% 4,834
 5,016
 (3.6)%
Total Sales Volumes13,151
 13,221
 (0.5)% 45,376
 43,179
 5.1% 4,829
 4,824
 0.1 %11,610
 12,133
 (4.3)% 18,191
 18,932
 (3.9)% 5,293
 5,501
 (3.8)%
                 
Six Months Ended June 30:                 
Traditional3,724
 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 Volumes24,761
 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)    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.
(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.


(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.

(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.

(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 impact earnings ("Traditional" in the table above).  For CL&P, NSTAR Electric, 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.





Operating Revenues: Operating Revenues by segment increased for the three and six months ended March 31,June 30, 2019, as compared to the same periodperiods in 2018, as follows:
(Millions of Dollars)Three Months EndedThree Months Ended Six Months Ended
Electric Distribution$79.3
$21.9
 $101.1
Natural Gas Distribution44.0
1.2
 45.2
Electric Transmission35.5
32.2
 67.7
Water Distribution0.9
0.2
 1.2
Other27.2
13.8
 41.1
Eliminations(59.1)(38.7) (97.8)
Total Operating Revenues$127.8
$30.6
 $158.5


Three Months Ended:
Electric Distribution Revenues:
Base electric distribution revenues increased $18.3$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 MayJanuary 1, 2018 (a portion of which did not impact earnings).2019.


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, retail transmission charges, energy efficiency program costs, 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 ($56.193.6 million), an increase in stranded cost recovery revenues ($23.513.9 million), and an increase in other distribution tracking mechanisms ($18.326.8 million), partially offset by a decrease in retail electric transmission charges ($31.873.2 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 $7.0$1.9 million.


Natural Gas Distribution Revenues:
Base natural gas distribution revenues increased $20.2$16.7 million due primarily to the seasonality of the decoupled rate structure atarising from the Yankee Gas beginning November 15, 2018,base distribution rate case, which is seasonally structured and 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 ($21.222.1 million) and, 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).



Electric Transmission Revenues:  Electric transmission revenues increased $35.5$67.7 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. Intercompany eliminationsEliminations 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.


Purchased Power, Fuel and Transmission expense includes costs associated with purchasing electricity and natural gas 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/(decreased) for the three and six months ended March 31,June 30, 2019, as compared to the same periodperiods in 2018, due primarily to the following:
(Millions of Dollars)Three Months EndedThree Months Ended Six Months Ended
Electric Distribution$60.4
$23.9
 $84.3
Natural Gas Distribution25.6
3.6
 29.1
Transmission(27.4)(37.1) (64.5)
Eliminations(30.5)(23.4) (53.8)
Total Purchased Power, Fuel and Transmission$28.1
$(33.0) $(4.9)


The increase in purchased power expense at the electric distribution business for the three and six months ended March 31,June 30, 2019, as compared to the same periodperiods in 2018, was driven primarily by higher prices associated with the procurement of energy supply. The increase in natural gas supply costs at our natural gas distribution business was due primarily to higher average sales volumes.


The decrease in transmission costs for the three and six months ended March 31,June 30, 2019, as compared to the same periodperiods in 2018, was primarily the 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 increaseinvestments 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 six months ended March 31,June 30, 2019, as compared to the same periodperiods in 2018, due primarily to the following:
(Millions of Dollars)Three Months EndedThree Months Ended 
Six Months
Ended
Base Electric Distribution (Non-Tracked Costs):    
Employee-related expenses, including labor and benefits$(12.4)$0.4
 $(12.0)
Operations-related expenses, including vegetation management, vehicles, and outside services (excluding storm restoration costs)10.2
Operations-related expenses, including vegetation management, vehicles, and outside services7.8
 17.9
Storm Restoration Costs5.1
 4.0
Other non-tracked operations and maintenance0.3
1.0

2.4
Total Base Electric Distribution (Non-Tracked Costs)(1.9)14.3

12.3
Base Natural Gas Distribution (Non-Tracked Costs)3.0
4.8
 7.9
Water Distribution0.8
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 assets9.3
21.5

30.9
Other and eliminations:    
Eversource Parent and Other Companies - other operations and maintenance20.6
6.6
 27.3
Eliminations(28.7)(13.5) (42.3)
Total Operations and Maintenance$3.1
$34.1

$37.2


Depreciation expense increased for the three and six months ended March 31,June 30, 2019, as compared to the same periodperiods in 2018, due primarily to higher 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 six months ended March 31,June 30, 2019, as compared to the same periodperiods in 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. In addition,The increase for the increase includesthree and six month periods is also due to higher amortization of PSNH's securitized regulatory asset of $10.6 million related to the 2018 RRB issuance.issuance of $4.0 million and $14.7 million, respectively.



Energy Efficiency Programs expense increased for the three and six months ended March 31,June 30, 2019, as compared to the same periodperiods in 2018, due primarily to higher spending for CL&P's, NSTAR Electric's and PSNH's energy efficiency 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 six months ended March 31,June 30, 2019, as compared to the same periodperiods in 2018, due primarily to higher property taxes as a result of 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's future remittance of energy efficiency funds to the State of Connecticut (which totaled $10.7of $2.0 million inand $4.0 million for the first three months of 2019, as compared to $12.7 million in the first three months of 2018)and six month periods, respectively, and a decrease in NSTAR Electric's property taxes due to a decrease in 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 March 31,June 30, 2019, as compared to the same periodperiods in 2018, due primarily to an increase in interest expenseon long-term debt ($7.1 million and $11.3 million, respectively) as a result of new debt issuances, an increase in interest on the 2018 PSNH RRB issuance ($5.4 million),2.5 million and $7.9 million, respectively) and an increase in interest on notes payable ($4.3 million)2.9 million and an increase in interest on long-term debt ($4.2 million) as a result of new debt issuances.$7.1 million, respectively). Partially offsetting these increases was an increase in AFUDC related to debt funds and other capitalized interest ($4.6 million)5.4 million and $10.9 million, respectively).


Other Income, Net decreased for the three and six months ended March 31,June 30, 2019, as compared to the same periodperiods in 2018, due primarily to a decrease related to pension, SERP and PBOP non-service income components ($7.8 million)8.8 million and $16.7 million, respectively), partially offset by an increase in equity in earnings related to Eversource's equity method investments ($3.0 million and $3.4 million, respectively), an increase in AFUDC related to equity funds ($2.2 million and $3.5 million, respectively) and the recognition in the first quarter of 2019 of $5.2 million of the equity return component of the carrying charges related to stormsstorm costs incurred from December 2013 through April 2016 recorded in interest income at PSNH.


Income Tax Expense decreased for the three months ended March 31,June 30, 2019, as compared to the same period in 2018, due primarily to the impairment of NPT ($35.2 million), the amortization of EDIT ($8.18.8 million), and lower pre-tax earnings ($2.4 million), partially offset by items that impact our tax rate as a result of regulatory treatment (flow-through items) and permanent differences ($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 Expense decreased for the six months ended June 30, 2019, as compared to the same period in 2018, due primarily to the impairment of NPT ($35.2 million), and the amortization of EDIT ($17 million), partially offset by higher pre-tax earnings ($5.8 million), higher state taxes ($1.3 million), and by items that impact our tax rate as a result of regulatory treatment (flow-through items) and permanent differences ($0.4 million), partially offset by higher pre-tax earnings ($8.15.1 million). The impact of the amortization of the EDIT regulatory liability, including the tax gross up portion, that reduced revenue is $11.2$23.3 million offset by current tax benefit of $3.1$6.3 million and amortization of EDIT of $8.1$17 million, for the first quartersix months ended March 31,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 threesix months ended March 31,June 30, 2019 and 2018 included in this combined Quarterly Report on Form 10-Q:
For the Three Months Ended March 31,For the Six Months Ended June 30,
CL&P NSTAR Electric PSNHCL&P NSTAR Electric PSNH
(Millions of Dollars)2019 2018 Increase/
(Decrease)
 2019 2018 
Increase/
(Decrease)
 2019 2018 
Increase/
(Decrease)
2019 2018 Increase/
(Decrease)
 2019 2018 
Increase/
(Decrease)
 2019 2018 
Increase/
(Decrease)
Operating Revenues$849.2
 $785.0
 $64.2
 $797.6
 $770.1
 $27.5
 $276.4
 $267.4
 $9.0
$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 Transmission319.8
 301.9
 17.9
 330.1
 332.6
 (2.5) 113.5
 109.7
 3.8
566.4
 536.2
 30.2
 558.5
 598.7
 (40.2) 199.3
 193.2
 6.1
Operations and Maintenance130.6
 117.3
 13.3
 113.0
 118.7
 (5.7) 52.6
 51.4
 1.2
264.0
 227.0
 37.0
 221.9
 220.8
 1.1
 105.4
 97.9
 7.5
Depreciation73.3
 67.5
 5.8
 72.6
 70.5
 2.1
 22.9
 23.5
 (0.6)147.8
 136.9
 10.9
 145.6
 134.6
 11.0
 46.2
 46.3
 (0.1)
Amortization of Regulatory Assets, Net35.7
 28.0
 7.7
 22.6
 6.4
 16.2
 13.7
 5.0
 8.7
48.0
 43.4
 4.6
 45.8
 18.3
 27.5
 19.5
 14.0
 5.5
Energy Efficiency Programs26.0
 22.8
 3.2
 76.7
 74.8
 1.9
 6.7
 5.2
 1.5
46.8
 41.4
 5.4
 142.6
 140.0
 2.6
 12.9
 9.8
 3.1
Taxes Other Than Income Taxes92.0
 90.3
 1.7
 44.8
 48.1
 (3.3) 17.3
 16.8
 0.5
178.5
 174.7
 3.8
 93.1
 95.9
 (2.8) 38.0
 38.7
 (0.7)
Total Operating Expenses677.4
 627.8
 49.6
 659.8
 651.1
 8.7
 226.7
 211.6
 15.1
1,251.5
 1,159.6
 91.9
 1,207.5
 1,208.3
 (0.8) 421.3
 399.9
 21.4
Operating Income171.8
 157.2
 14.6
 137.8
 119.0
 18.8
 49.7
 55.8
 (6.1)338.6
 320.3
 18.3
 272.0
 252.6
 19.4
 96.0
 102.6
 (6.6)
Interest Expense35.8
 36.8
 (1.0) 27.9
 26.5
 1.4
 14.4
 12.8
 1.6
72.7
 75.5
 (2.8) 56.1
 53.8
 2.3
 28.3
 27.4
 0.9
Other Income, Net3.9
 6.6
 (2.7) 11.1
 12.6
 (1.5) 7.0
 4.7
 2.3
6.7
 13.7
 (7.0) 21.7
 26.9
 (5.2) 10.0
 8.2
 1.8
Income Before Income Tax Expense139.9
 127.0
 12.9
 121.0
 105.1
 15.9
 42.3
 47.7
 (5.4)272.6
 258.5
 14.1
 237.6
 225.7
 11.9
 77.7
 83.4
 (5.7)
Income Tax Expense29.4
 28.4
 1.0
 27.0
 28.0
 (1.0) 9.5
 12.6
 (3.1)57.3
 60.2
 (2.9) 53.9
 60.6
 (6.7) 18.1
 22.5
 (4.4)
Net Income$110.5
 $98.6
 $11.9
 $94.0
 $77.1
 $16.9
 $32.8
 $35.1
 $(2.3)$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 Three Months Ended March 31,For the Six Months Ended June 30,
2019 2018 Decrease Percentage Decrease2019 2018 Decrease Percentage Decrease
CL&P5,350
 5,376
 (26) (0.5)%9,953
 10,222
 (269) (2.6)%
NSTAR Electric5,833
 5,874
 (41) (0.7)%11,084
 11,357
 (273) (2.4)%
PSNH1,968
 1,972
 (4) (0.2)%3,724
 3,775
 (51) (1.4)%


Fluctuations in retail electric sales volumes at PSNH impact earnings.  For CL&P and NSTAR Electric, 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 $64.2$110.2 million at CL&P, $27.5$18.6 million at NSTAR Electric and $9.0$14.8 million forat PSNH for the threesix months ended March 31,June 30, 2019, as compared to the same period in 2018.


Base Distribution Revenues:
CL&P's distribution revenues increased $19.6$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 agreement that became effective May 1, 2018 (a portion of which did not impact earnings).

NSTAR Electric's distribution revenues decreased $0.9 million due primarily to the impact of its decoupled rate structure, which was effective February 1, 2018, partially offset by an increase to base distribution rates effective January 1, 2019.


PSNH's base distribution revenues decreased $0.4$1.9 million due primarily to lower demand revenues in the first quarterhalf of 2019, as compared to the same period in 2018.





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, 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 and carrying charges that are billed in rates to customers. 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, which do impact earnings. Tracked revenues increased/(decreased) for the threesix months ended March 31,June 30, 2019, as compared to the same period in 2018, due primarily to the following:
(Millions of Dollars)CL&P NSTAR Electric PSNHCL&P NSTAR Electric PSNH
Retail Tariff Tracked Revenues          
Energy supply procurement (1)
$36.3
 $27.8
 $(8.0)$60.2
 $25.3
 $8.1
Retail transmission(9.5) (13.9) (8.4)(17.5) (37.7) (18.0)
Stranded cost recovery(2.9) 0.8
 25.6
(6.3) 2.4
 17.8
Other distribution tracking mechanisms5.0
 11.0
 2.3
8.5
 14.0
 4.3
Wholesale Market Sales Revenue3.4
 (0.5) (10.7)4.8
 3.4
 (11.5)

(1)
The decrease at PSNH 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.


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 increased $17.3$38.6 million at CL&P, $8.8$13.4 million at NSTAR Electric, and $9.4$15.7 million at PSNH respectively, due primarily to ongoing investments in our transmission infrastructure.


Eliminations: Intercompany 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 $7.7$15.7 million at CL&P, $5.4$8.7 million at NSTAR Electric and $0.7$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 threesix months ended March 31,June 30, 2019, as compared to the same period in 2018, due primarily to the following:
(Millions of Dollars)CL&P NSTAR Electric PSNHCL&P NSTAR Electric PSNH
Purchased Power Costs$34.1
 $16.0
 $10.3
$60.5
 $5.3
 $18.5
Transmission Costs(8.5) (13.2) (5.7)(15.3) (37.0) (12.2)
Eliminations(7.7) (5.3) (0.8)(15.0) (8.5) (0.2)
Total Purchased Power, Fuel and Transmission$17.9
 $(2.5) $3.8
$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.


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


The decrease in transmission costs at CL&P was primarily a result of 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. 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 and 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, 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 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 threesix months ended March 31,June 30, 2019, as compared to the same period in 2018, due primarily to the following:
(Millions of Dollars)CL&P NSTAR Electric PSNHCL&P NSTAR Electric PSNH
Base Electric Distribution (Non-Tracked Costs):          
Employee-related expenses, including labor and benefits$(1.8) $(9.8) $(0.8)$(4.2) $(7.1) $(0.7)
Operations-related expenses, including vegetation management, vehicles, and outside services11.0
 2.1
 4.8
Storm restoration costs(4.4) 2.2
 1.0
(3.3) 5.9
 1.4
Operations-related expenses, including vegetation management, vehicles, and outside services (excluding storm restoration costs)5.1
 
 5.1
Other non-tracked operations and maintenance3.4
 (1.9) 
6.8
 (5.2) 0.8
Total Base Electric Distribution (Non-Tracked Costs)2.3
 (9.5) 5.3
10.3
 (4.3) 6.3
Tracked Costs:          
Absence in 2019 of PSNH generation operations expenses due to the 2018 sales of thermal and hydroelectric generation assets
 
 (6.8)
 
 (7.0)
Transmission expenses9.7
 1.1
 2.7
24.6
 0.4
 3.0
Other tracked operations and maintenance1.3
 2.7
 
2.1
 5.0
 5.2
Total Tracked Costs11.0
 3.8
 (4.1)26.7
 5.4
 1.2
Total Operations and Maintenance$13.3
 $(5.7) $1.2
$37.0
 $1.1
 $7.5


Depreciation increased/(decreased)increased for the threesix months ended March 31,June 30, 2019, as compared to the same period in 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 primarily to higher depreciation rates on certain distribution property, partially offset by overall lower depreciation rates on remaining property.net plant in service balances.
The decrease at PSNH was due primarily to the sale of the thermal and hydroelectric generation assets in 2018.

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 expense to match the corresponding revenues. Amortization of Regulatory Assets, Net increased at CL&P NSTAR Electric and PSNH for the threesix months ended March 31,June 30, 2019, as compared to the same period in 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. Energy supply and energy-related costs are recovered from customers in rates and have no impact on earnings. In addition, theThe increase at PSNH includesis also due to higher amortization of its securitized regulatory asset of $10.6 million related to the 2018 RRB issuance.issuance of $14.7 million.


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 expenseincreased for the threesix months ended March 31,June 30, 2019, as compared to the same period in 2018, due primarily to higher spending for CL&P's, NSTAR Electric's and PSNH's energy efficiency programs.


Taxes Other Than Income Taxes increased/(decreased) for the threesix months ended March 31,June 30, 2019, as compared to the same period in 2018, due primarily to the following:


The increase at CL&P was due primarily to higher property taxes 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 future remittance of energy efficiency funds to the State of Connecticut (which totaled $10.7 million in the first three months of 2019, as compared to $12.7 million in the first three months of 2018).$4.0 million.
The decrease at NSTAR Electric was due primarily to lower property taxes as a result of a decrease in tax rates.


Interest Expenseincreased at PSNH for the three months ended March 31, 2019, as compared to the same period in 2018, due primarily to interest on the 2018 RRB issuance ($5.4 million), partially offset by lower interest on long-term debt ($2.1 million) and lower interest on notes payable ($1.0 million).

Other Income, Net (decreased)/increased for the threesix months ended March 31,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 lower interest on long-term debt ($3.5 million) and an increase in AFUDC related to debt funds ($0.4 million), partially offset by an increase in interest expense on 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).





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 ($3.66.9 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 the recognition in the first quarter of 2019 of $5.2 million of the equity return component of the carrying charges related to stormsstorm costs incurred from December 2013 through April 2016 recorded in interest income, and an increase in AFUDC related to equity funds ($1.1 million), partially offset by a decrease related to pension, SERP and PBOP non-service income components ($1.82.4 million).




Income Tax Expense increased/(decreased) decreased for the threesix months ended March 31,June 30, 2019, as compared to the same period in 2018, due primarily to the following:


The increasedecrease at CL&P was due primarily to higher pre-tax earningsamortization of EDIT ($2.81.5 million), partially offsetlower state taxes ($1.2 million), and by items that impact our tax rate as a result of regulatory treatment (flow-through items) and permanent differences ($1.83.2 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 amortization of EDIT ($4.99.6 million), partially offset by higher pre-tax earnings ($3.52.5 million), and by items that impact our tax rate as a result of regulatory treatment (flow-through items) and permanent differences ($0.4 million). The impact of the amortization of the EDIT regulatory liability, including the tax gross up portion, that reduced revenue is $6.8$13.3 million offset by a current tax benefit of $1.9$3.7 million and amortization of EDIT of $4.9$9.6 million, for the first quartersix months ended March 31,June 30, 2019, which results in no impact on net income.
The decrease at PSNH was due primarily to lower pre-tax earnings ($1.41.2 million), amortization of EDIT ($1.32.1 million), and items that impact our tax rate as a result of regulatory treatment (flow-through items) and permanent differences ($0.41.1 million). The impact of the amortization of the EDIT regulatory liability, including the tax gross up portion, that reduced revenue is $1.8$2.8 million offset by a current tax benefit of $0.5$0.7 million and amortization of EDIT of $1.3$2.1 million, for the first quartersix months ended March 31,June 30, 2019,which results in no impact on net income.


EARNINGS SUMMARY


CL&P's earnings increased $11.9$17.0 millionfor the threesix months ended March 31,June 30, 2019, as compared to the same period in 2018, due primarily to the impact of the CL&P base distribution rate increaseincreases 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. 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.


NSTAR Electric's earnings increased $16.9$18.6 million for the threesix months ended March 31,June 30, 2019, as compared to the same period in 2018, due primarily to lower operations and maintenance expense, 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 $2.3$1.3 million for the threesix months ended March 31,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 thermal and hydroelectricthe sale of its generation asset salesassets in 2018, higher operations and maintenance expense and higher property and other tax expense.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 and an increase in transmission earnings driven by a higher transmission rate base.recovery.


LIQUIDITY


Cash Flows: CL&P had cash flows provided by operating activities of $198.3$345.6 million for the threesix months ended March 31,June 30, 2019, as compared to $64.7$268.1 million in the same period of 2018.  The increase in operating cash flows was due primarily to the timing of accounts payable cash payments, the absence in 2019 of cash payments of $82.3 million in pension contributions, and approximately $21$71 million of storm restoration cost payments and $41.2 million in pension contributions made in the first quarterhalf of 2018.2018, and the timing of accounts payable cash payments. Partially offsetting these increasesfavorable impacts were the timing of collections for regulatory tracking mechanisms and the timing of cash collections on our accounts receivable and other working capital items.
 
NSTAR Electric had cash flows provided by operating activities of $137.0$251.5 million for the threesix months ended March 31,June 30, 2019, as compared to $136.5 million in the same period of 2018.  The increase in operating cash flows was due primarily to $46 million of cash payments made in 2018 for storm restoration costs, income tax refunds received in the first quarter of 2019 of $27.8 million, compared to income tax payments of $8.8 million in the first quarter of 2018, and the timing of cash collections on our accounts receivables. Partially offsetting these increases were the timing of accounts payable cash payments and the timing of collections for regulatory tracking mechanisms.

PSNH had cash flows provided by operating activities of $132.6 million for the three months ended March 31, 2019, as compared to $96.2$202.7 million in the same period of 2018.  The increase in operating cash flows was due primarily to the absence in 2019 of approximately $85 million of storm restoration cost payments made in the first half of 2018, a decrease of $56.1 million in pension and PBOP cash contributions, lower income tax payments made in the first half of 2019 of $47 million, and the timing of cash collections on our accounts receivables. Partially offsetting these favorable impacts were the timing of accounts payable cash payments, and income tax refunds of $20.3 million in the first quarter of 2019, as compared to income tax refunds of $4.4 million in the same period in 2018. Partially offsetting these increases were the timing of collections for regulatory tracking mechanisms, and the timing of other working capital items.



PSNH had cash flows provided by operating activities of $121.7 million for the six months ended June 30, 2019, as compared to $112.8 million in the same period of 2018.  The 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 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 June 30, 2019 and 2018 included in this combined Quarterly Report on Form 10-Q:
 For the Three Months Ended June 30,
(Millions of Dollars)2019 2018 Increase/(Decrease)
Operating Revenues$740.8
 $694.9
 $45.9
Operating Expenses: 
  
  
Purchased Power and Transmission246.5
 234.3
 12.2
Operations and Maintenance133.4
 109.7
 23.7
Depreciation74.6
 69.4
 5.2
Amortization of Regulatory Assets, Net12.4
 15.4
 (3.0)
Energy Efficiency Programs20.8
 18.6
 2.2
Taxes Other Than Income Taxes86.4
 84.4
 2.0
Total Operating Expenses574.1
 531.8
 42.3
Operating Income166.7
 163.1
 3.6
Interest Expense36.9
 38.7
 (1.8)
Other Income, Net2.9
 7.1
 (4.2)
Income Before Income Tax Expense132.7
 131.5
 1.2
Income Tax Expense27.9
 31.8
 (3.9)
Net Income$104.8
 $99.7
 $5.1

Operating Revenues
Sales Volumes: CL&P's retail electric GWh sales volumes 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 $45.9 million for the three months ended June 30, 2019, as compared to the same period in 2018.

Base Distribution Revenues: CL&P's distribution revenues increased $14.5 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.

Tracked Revenues: Tracked revenues increased/(decreased) for the three months ended June 30, 2019, as compared to the same period in 2018, due primarily to the following:
(Millions of Dollars) 
Retail Tariff Tracked Revenues 
Energy supply procurement$23.9
Retail transmission(8.1)
Other distribution tracking mechanisms0.2
Wholesale Market Sales Revenue1.5

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 June 30, 2019, as compared to the same period in 2018, due primarily to the following:
(Millions of Dollars) 
Purchased Power Costs$26.3
Transmission Costs(6.8)
Eliminations(7.3)
Total Purchased Power and Transmission$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 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 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 June 30, 2019, as compared to the same period in 2018, due primarily to the following:
(Millions of Dollars) 
Base Electric Distribution (Non-Tracked Costs): 
Employee-related expenses, including labor and benefits$(2.0)
Operations-related expenses, including vegetation management, vehicles, and outside services5.8
Other non-tracked operations and maintenance4.1
Total Base Electric Distribution (Non-Tracked Costs)7.9
Total Tracked Costs15.8
Total Operations and Maintenance$23.7

Depreciation expense increased for the three months ended June 30, 2019, as compared to the same period in 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 decreased at CL&P for the three months ended June 30, 2019, as compared to the same period in 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 expenseincreased for the three months ended June 30, 2019, as compared to the same period in 2018, due primarily to higher spending for energy efficiency programs.

Taxes Other Than Income Taxes increasedfor the three months ended June 30, 2019, as compared to the same period in 2018, due primarily to higher property taxes 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.

Interest Expense decreased at CL&P for the three months ended June 30, 2019, as compared to the same period in 2018, due primarily to lower interest on long-term debt ($1.9 million) and an increase in AFUDC related to debt funds ($0.3 million), partially offset by 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 the same period in 2018, due primarily to a decrease related to pension, SERP and PBOP non-service income components ($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 ($0.5 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 three months ended June 30, 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 2018, due primarily to base distribution rate increases effective May 1, 2019 and May 1, 2018 and higher earnings from 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 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 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 energy related transactions entered into by its 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.


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 companies are subject to credit risk from certain long-term or high-volume supply contracts with energy marketing companies.  Our regulated companies manage the credit risk with these counterparties in accordance with established credit risk practices and monitor contracting risks, including credit risk.  As of March 31,June 30, 2019, our regulated companies held collateral in the form of letters of credit of $5.0$8.0 million from counterparties related to our standard service contracts.  As of March 31,June 30, 2019, Eversource had $24.8$19.1 million of cash 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 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 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 March 31,June 30, 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 March 31,June 30, 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 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. The Yankee Companies sought monetary damages totaling $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. The DOEOn 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 forcontested damages. The Yankee Companies received the $1.2$0.5 million of remaining damages is expected to beginpayment in JuneJuly 2019. For a further discussion of the Yankee Companies v. U.S. Department of Energy, see Part I, Item 3, “Legal Proceedings” of our 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 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 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 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 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 ProgramsApproximate Dollar Value of Shares that May Yet Be Purchased Under the Plans and Programs (at month end)
January 1 - January 31, 2019966
$64.14


February 1 - February 28, 2019



March 1 - March 31, 20192,756
70.49


Total3,722
$68.84


Period
Total Number of
Shares Purchased
Average Price
Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or ProgramsApproximate 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, 20192,709
75.76


Total2,709
$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)
*10.1
Forward Sale Agreement between Eversource Energy and Goldman Sachs & Co. LLC, dated as of May 30, 2019 (Exhibit 10.1, Eversource Energy Current Report on Form 8-K filed on June 5, 2019, File No. 001-05324)
 31 
    
 31.1 
    
 32 
    
 Listing of Exhibits (CL&P)
*4.1
Supplemental Indenture (2019 Series A Bonds) between CL&P and Deutsche Bank Trust Company Americas, as Trustee dated as of March 1, 2019 (Exhibit 4.1, CL&P Current Report on Form 8-K field on April 4, 2019, File No. 000-00404)

 31 
    
 31.1 
    
 32 
    
 Listing of Exhibits (NSTAR Electric Company)
*4.1
 31 
    
 31.1 
    
 32 
    
 Listing of Exhibits (PSNH)
*4.1
Twenty-Second Supplemental Indenture, between PSNH and U.S. Bank National Association, as Trustee dated as of June 1, 2019 (Exhibit 4.1, PSNH Current Report on Form 8-K filed July 3, 2019, File No. 001-06392)
 31 
    
 31.1 
    
 32 
    
 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
    
May 7,August 6, 2019 By:/s/ Jay S. Buth
   Jay S. Buth
   Vice President, Controller and Chief Accounting Officer


     




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.


  THE CONNECTICUT LIGHT AND POWER COMPANY
    
May 7,August 6, 2019 By:/s/ Jay S. Buth
   Jay S. Buth
   Vice President, Controller and Chief Accounting Officer


     




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.


  NSTAR ELECTRIC COMPANY
    
May 7,August 6, 2019 By:/s/ Jay S. Buth
   Jay S. Buth
   Vice President, Controller and Chief Accounting Officer


     




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.


  PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
    
May 7,August 6, 2019 By:/s/ Jay S. Buth
   Jay S. Buth
   Vice President, Controller and Chief Accounting Officer


5669