Item 8. Financial Statements and Supplementary Data

Financial Statements and Supplementary Data



Eversource
	Company Report on Internal Controls Over Financial Reporting
	Report of Independent Registered Public Accounting Firm
	Consolidated Financial Statements

CL&P
	Company Report on Internal Controls Over Financial Reporting
	Report of Independent Registered Public Accounting Firm
	Financial Statements

NSTAR Electric
	Company Report on Internal Controls Over Financial Reporting
	Report of Independent Registered Public Accounting Firm
	Consolidated Financial Statements

PSNH
	Company Report on Internal Controls Over Financial Reporting
	Report of Independent Registered Public Accounting Firm
	Consolidated Financial Statements

WMECO
	Company Report on Internal Controls Over Financial Reporting
	Report of Independent Registered Public Accounting Firm
	Financial Statements

Company Report on Internal Controls Over Financial Reporting

Eversource Energy

Management is responsible for the preparation, integrity, and fair presentation of the accompanying consolidated financial statements of Eversource Energy and subsidiaries (Eversource or the Company) and of other sections of this annual report. Eversource's internal controls over financial reporting were audited by Deloitte & Touche LLP.

Management is responsible for establishing and maintaining adequate internal controls over financial reporting. The Company's internal control framework and processes have been designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. There are inherent limitations of internal controls over financial reporting that could allow material misstatements due to error or fraud to occur and not be prevented or detected on a timely basis by employees during the normal course of business. Additionally, internal controls over financial reporting may become inadequate in the future due to changes in the business environment.

Under the supervision and with the participation of the principal executive officer and principal financial officer, Eversource conducted an evaluation of the effectiveness of internal controls over financial reporting based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation under the framework in COSO, management concluded that internal controls over financial reporting were effective as of December 31, 2015.

February 26, 2016

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Trustees and Shareholders of Eversource Energy:

We have audited the accompanying consolidated balance sheets of Eversource Energy and subsidiaries (the "Company") as of December 31, 2015 and 2014, and the related consolidated statements of income, comprehensive income, common shareholders' equity, and cash flows for each of the three years in the period ended December 31, 2015. Our audits also included the financial statement schedules listed in the Index at Item 15 of Part IV. We also have audited the Company's internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company's management is responsible for these financial statements and financial statement schedules, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Company Report on Internal Controls Over Financial Reporting. Our responsibility is to express an opinion on these financial statements and financial statement schedules and an opinion on the Company's internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Eversource Energy and subsidiaries as of December 31, 2015 and 2014, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2015, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015, based on the criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission_._

/s/ Deloitte & Touche LLP

Hartford, Connecticut

February 26, 2016


EVERSOURCE ENERGY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS


				As of December 31,
(Thousands of Dollars)				2015		2014

ASSETS

Current Assets:
	Cash and Cash Equivalents			$	23,947	$	38,703
	Receivables, Net				775,480		856,346
	Unbilled Revenues				202,647		211,758
	Taxes Receivable				305,359		337,307
	Fuel, Materials and Supplies				336,476		349,664
	Regulatory Assets				845,843		672,493
	Prepayments and Other Current Assets				129,034		226,194
Total Current Assets					2,618,786		2,692,465

Property, Plant and Equipment, Net					19,892,441		18,647,041

Deferred Debits and Other Assets:
	Regulatory Assets				3,737,960		4,054,086
	Goodwill				3,519,401		3,519,401
	Marketable Securities				516,478		515,025
	Other Long-Term Assets				295,243		312,369
Total Deferred Debits and Other Assets					8,069,082		8,400,881

Total Assets				$	30,580,309	$	29,740,387

LIABILITIES AND CAPITALIZATION

Current Liabilities:
	Notes Payable			$	1,160,953	$	956,825
	Long-Term Debt - Current Portion				228,883		245,583
	Accounts Payable				813,646		868,231
	Regulatory Liabilities				107,759		235,022
	Accumulated Deferred Income Taxes				-		160,288
	Other Current Liabilities				678,549		668,432
Total Current Liabilities					2,989,790		3,134,381

Deferred Credits and Other Liabilities:
	Accumulated Deferred Income Taxes				5,147,678		4,467,473
	Regulatory Liabilities				513,595		515,144
	Derivative Liabilities				337,102		409,632
	Accrued Pension, SERP and PBOP				1,407,288		1,638,558
	Other Long-Term Liabilities				871,499		874,387
Total Deferred Credits and Other Liabilities					8,277,162		7,905,194

Capitalization:
	Long-Term Debt				8,805,574		8,568,429

	Noncontrolling Interest - Preferred Stock of Subsidiaries				155,568		155,568

	Equity:
		Common Shareholders' Equity:
			Common Shares		1,669,313		1,666,796
			Capital Surplus, Paid In		6,262,368		6,235,834
			Retained Earnings		2,797,355		2,448,661
			Accumulated Other Comprehensive Loss		(66,844)		(74,009)
			Treasury Stock		(309,977)		(300,467)
		Common Shareholders' Equity			10,352,215		9,976,815
Total Capitalization					19,313,357		18,700,812

Commitments and Contingencies (Note 11)

Total Liabilities and Capitalization				$	30,580,309	$	29,740,387



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


EVERSOURCE ENERGY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME


			For the Years Ended December 31,
(Thousands of Dollars, Except Share Information)			2015		2014		2013

Operating Revenues			$	7,954,827	$	7,741,856	$	7,301,204

Operating Expenses:
	Purchased Power, Fuel and Transmission			3,086,905		3,021,550		2,482,954
	Operations and Maintenance			1,329,289		1,427,589		1,514,986
	Depreciation			665,856		614,657		610,777
	Amortization of Regulatory Assets, Net			22,339		10,704		206,322
	Amortization of Rate Reduction Bonds			-		-		42,581
	Energy Efficiency Programs			495,701		473,127		401,919
	Taxes Other Than Income Taxes			590,573		561,380		512,230
		Total Operating Expenses		6,190,663		6,109,007		5,771,769
Operating Income				1,764,164		1,632,849		1,529,435
Interest Expense				372,420		362,106		338,699
Other Income, Net				34,227		24,619		29,894
Income Before Income Tax Expense				1,425,971		1,295,362		1,220,630
Income Tax Expense				539,967		468,297		426,941
Net Income				886,004		827,065		793,689
Net Income Attributable to Noncontrolling Interests				7,519		7,519		7,682
Net Income Attributable to Common Shareholders			$	878,485	$	819,546	$	786,007

Basic Earnings Per Common Share			$	2.77	$	2.59	$	2.49

Diluted Earnings Per Common Share			$	2.76	$	2.58	$	2.49

Weighted Average Common Shares Outstanding:
	Basic			317,336,881		316,136,748		315,311,387
	Diluted			318,432,687		317,417,414		316,211,160

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




CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


Net Income			$	886,004	$	827,065	$	793,689
Other Comprehensive Income/(Loss), Net of Tax:
	Qualified Cash Flow Hedging Instruments			2,079		2,037		2,049
	Changes in Unrealized (Losses)/Gains on Marketable Securities			(2,588)		315		(940)
	Changes in Funded Status of Pension, SERP and PBOP Benefit Plans			7,674		(30,330)		25,714
Other Comprehensive Income/(Loss), Net of Tax				7,165		(27,978)		26,823
Comprehensive Income Attributable to Noncontrolling Interests				(7,519)		(7,519)		(7,682)
Comprehensive Income Attributable to Common Shareholders			$	885,650	$	791,568	$	812,830

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


EVERSOURCE ENERGY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDERS' EQUITY

						Accumulated		Total
				Capital		Other		Common
		Common Shares		Surplus,	Retained	Comprehensive	Treasury	Shareholders'
(Thousands of Dollars, Except Share Information)		Shares	Amount	Paid In	Earnings	Income/(Loss)	Stock	Equity
Balance as of January 1, 2013		314,053,634	$ 1,662,547	$ 6,183,267	$ 1,802,714	$ (72,854)	$ (338,624)	$ 9,237,050
	Net Income				793,689			793,689
	Dividends on Common Shares - $1.47 Per Share				(462,741)			(462,741)
	Dividends on Preferred Stock				(7,682)			(7,682)
	Issuance of Common Shares, $5 Par Value	560,848	2,804	8,274				11,078
	Long-Term Incentive Plan Activity			(10,748)				(10,748)
	Issuance of Treasury Shares	659,077		17,381			12,087	29,468
	Other Changes in Shareholders' Equity			(5,409)				(5,409)
	Other Comprehensive Income					26,823		26,823
Balance as of December 31, 2013		315,273,559	1,665,351	6,192,765	2,125,980	(46,031)	(326,537)	9,611,528
	Net Income				827,065			827,065
	Dividends on Common Shares - $1.57 Per Share				(496,524)			(496,524)
	Dividends on Preferred Stock				(7,519)			(7,519)
	Issuance of Common Shares, $5 Par Value	288,941	1,445	5,164				6,609
	Long-Term Incentive Plan Activity			(9,569)				(9,569)
	Issuance of Treasury Shares	1,420,837		37,817			26,070	63,887
	Other Changes in Shareholders' Equity			9,657	(341)			9,316
	Other Comprehensive Loss					(27,978)		(27,978)
Balance as of December 31, 2014		316,983,337	1,666,796	6,235,834	2,448,661	(74,009)	(300,467)	9,976,815
	Net Income				886,004			886,004
	Dividends on Common Shares - $1.67 Per Share				(529,791)			(529,791)
	Dividends on Preferred Stock				(7,519)			(7,519)
	Issuance of Common Shares, $5 Par Value	503,443	2,517	6,951				9,468
	Long-Term Incentive Plan Activity			(6,140)				(6,140)
	Increase in Treasury Shares	(295,531)		22,070			(9,510)	12,560
	Other Changes in Shareholders' Equity			3,653				3,653
	Other Comprehensive Income					7,165		7,165
Balance as of December 31, 2015		317,191,249	$ 1,669,313	$ 6,262,368	$ 2,797,355	$ (66,844)	$ (309,977)	$ 10,352,215



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


EVERSOURCE ENERGY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS



			For the Years Ended December 31,
(Thousands of Dollars)			2015		2014		2013

Operating Activities:
	Net Income		$	886,004	$	827,065	$	793,689
	Adjustments to Reconcile Net Income to Net Cash Flows
		Provided by Operating Activities:
		Depreciation		665,856		614,657		610,777
		Deferred Income Taxes		491,736		443,259		431,413
		Pension, SERP and PBOP Expense		96,017		99,056		195,698
		Pension and PBOP Contributions		(162,452)		(211,649)		(342,184)
		Regulatory (Under)/Over Recoveries, Net		(163,287)		6,853		(24,276)
		Amortization of Regulatory Assets, Net		22,339		10,704		206,322
		Amortization of Rate Reduction Bonds		-		-		42,581
		(Payments)/Refunds Related to Spent Nuclear Fuel, Net		(297,253)		132,138		-
		Other		(91,945)		39,523		56,071
	Changes in Current Assets and Liabilities:
		Receivables and Unbilled Revenues, Net		(39,797)		(122,139)		(163,549)
		Fuel, Materials and Supplies		34,112		(41,310)		(14,811)
		Taxes Receivable/Accrued, Net		30,282		(323,224)		(50,950)
		Accounts Payable		(91,618)		144,743		(54,619)
		Other Current Assets and Liabilities, Net		44,031		15,797		(22,623)
Net Cash Flows Provided by Operating Activities				1,424,025		1,635,473		1,663,539

Investing Activities:
	Investments in Property, Plant and Equipment			(1,724,139)		(1,603,744)		(1,456,787)
	Proceeds from Sales of Marketable Securities			799,165		488,789		627,532
	Purchases of Marketable Securities			(717,114)		(491,220)		(679,784)
	Other Investing Activities			(17,062)		14,380		67,816
Net Cash Flows Used in Investing Activities				(1,659,150)		(1,591,795)		(1,441,223)

Financing Activities:
	Cash Dividends on Common Shares			(529,791)		(475,227)		(462,741)
	Cash Dividends on Preferred Stock			(7,519)		(7,519)		(7,682)
	(Decrease)/Increase in Short-Term Debt			(242,122)		285,075		(397,000)
	Issuance of Long-Term Debt			1,225,000		725,000		1,680,000
	Retirements of Long-Term Debt			(216,700)		(576,551)		(929,885)
	Retirements of Rate Reduction Bonds			-		-		(82,139)
	Other Financing Activities			(8,499)		883		(25,253)
Net Cash Flows Provided by/(Used in) Financing Activities				220,369		(48,339)		(224,700)
Net Decrease in Cash and Cash Equivalents				(14,756)		(4,661)		(2,384)
Cash and Cash Equivalents - Beginning of Year				38,703		43,364		45,748
Cash and Cash Equivalents - End of Year			$	23,947	$	38,703	$	43,364

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

Company Report on Internal Controls Over Financial Reporting

The Connecticut Light and Power Company

Management is responsible for the preparation, integrity, and fair presentation of the accompanying financial statements of The Connecticut Light and Power Company (CL&P or the Company) and of other sections of this annual report.

Under the supervision and with the participation of the principal executive officer and principal financial officer, CL&P conducted an evaluation of the effectiveness of internal controls over financial reporting based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation under the framework in COSO, management concluded that internal controls over financial reporting were effective as of December 31, 2015.

February 26, 2016

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholder of The Connecticut Light and Power Company:

We have audited the accompanying balance sheets of The Connecticut Light and Power Company (the "Company") as of December 31, 2015 and 2014, and the related statements of income, comprehensive income, common stockholder's equity, and cash flows for each of the three years in the period ended December 31, 2015. Our audits also included the financial statement schedule listed in the Index at Item 15 of Part IV. These financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material respects, the financial position of The Connecticut Light and Power Company as of December 31, 2015 and 2014, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2015, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

/s/ Deloitte & Touche LLP

Hartford, Connecticut

February 26, 2016


THE CONNECTICUT LIGHT AND POWER COMPANY
BALANCE SHEETS


			As of December 31,
(Thousands of Dollars)			2015		2014

ASSETS

Current Assets:
	Cash		$	1,057	$	2,356
	Receivables, Net			352,536		355,140
	Accounts Receivable from Affiliated Companies			21,214		16,757
	Unbilled Revenues			99,879		102,137
	Taxes Receivable			137,643		116,148
	Regulatory Assets			268,318		220,344
	Materials and Supplies			43,124		46,664
	Prepayments and Other Current Assets			32,234		37,822
Total Current Assets				956,005		897,368

Property, Plant and Equipment, Net				7,156,809		6,809,664

Deferred Debits and Other Assets:
	Regulatory Assets			1,369,028		1,475,508
	Other Long-Term Assets			111,115		161,860
Total Deferred Debits and Other Assets				1,480,143		1,637,368

Total Assets			$	9,592,957	$	9,344,400

LIABILITIES AND CAPITALIZATION

Current Liabilities:
	Notes Payable to Eversource Parent		$	277,400	$	133,400
	Long-Term Debt - Current Portion			-		162,000
	Accounts Payable			267,764		272,971
	Accounts Payable to Affiliated Companies			66,456		65,594
	Obligations to Third Party Suppliers			60,746		73,624
	Regulatory Liabilities			61,155		124,722
	Derivative Liabilities			91,820		88,459
	Other Current Liabilities			110,631		153,420
Total Current Liabilities				935,972		1,074,190

Deferred Credits and Other Liabilities:
	Accumulated Deferred Income Taxes			1,820,865		1,642,805
	Regulatory Liabilities			74,830		81,298
	Derivative Liabilities			336,189		406,199
	Accrued Pension, SERP and PBOP			271,056		273,854
	Other Long-Term Liabilities			133,446		148,844
Total Deferred Credits and Other Liabilities				2,636,386		2,553,000

Capitalization:
	Long-Term Debt			2,763,682		2,664,243

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

	Common Stockholder's Equity:
		Common Stock		60,352		60,352
		Capital Surplus, Paid In		1,910,663		1,804,869
		Retained Earnings		1,170,278		1,072,477
		Accumulated Other Comprehensive Loss		(576)		(931)
	Common Stockholder's Equity			3,140,717		2,936,767
Total Capitalization				6,020,599		5,717,210

Commitments and Contingencies (Note 11)

Total Liabilities and Capitalization			$	9,592,957	$	9,344,400



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


THE CONNECTICUT LIGHT AND POWER COMPANY
STATEMENTS OF INCOME



			For the Years Ended December 31,
(Thousands of Dollars)			2015		2014		2013

Operating Revenues			$	2,802,675	$	2,692,582	$	2,442,341

Operating Expenses:
	Purchased Power and Transmission			1,054,313		982,876		872,769
	Operations and Maintenance			487,281		494,578		523,247
	Depreciation			215,289		188,837		177,603
	Amortization of Regulatory Assets, Net			12,318		59,336		4,870
	Energy Efficiency Programs			153,725		156,335		89,858
	Taxes Other Than Income Taxes			268,688		255,370		234,418
		Total Operating Expenses		2,191,614		2,137,332		1,902,765
Operating Income				611,061		555,250		539,576
Interest Expense				145,795		147,421		133,650
Other Income, Net				11,490		13,376		15,149
Income Before Income Tax Expense				476,756		421,205		421,075
Income Tax Expense				177,396		133,451		141,663
Net Income			$	299,360	$	287,754	$	279,412



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




STATEMENTS OF COMPREHENSIVE INCOME

Net Income			$	299,360	$	287,754	$	279,412
Other Comprehensive Income, Net of Tax:
	Qualified Cash Flow Hedging Instruments			444		444		444
	Changes in Unrealized (Losses)/Gains on Marketable Securities			(89)		12		(31)
Other Comprehensive Income, Net of Tax				355		456		413
Comprehensive Income			$	299,715	$	288,210	$	279,825



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


THE CONNECTICUT LIGHT AND POWER COMPANY
STATEMENTS OF COMMON STOCKHOLDER'S EQUITY

										Accumulated		Total
						Capital				Other		Common
		Common Stock				Surplus,		Retained		Comprehensive		Stockholder's
(Thousands of Dollars, Except Stock Information)		Stock		Amount		Paid In		Earnings		Income/(Loss)		Equity
Balance as of January 1, 2013		6,035,205	$	60,352	$	1,640,149	$	839,628	$	(1,800)	$	2,538,329
	Net Income							279,412				279,412
	Dividends on Preferred Stock							(5,559)				(5,559)
	Dividends on Common Stock							(151,999)				(151,999)
	Allocation of Benefits - ESOP					1,847						1,847
	Capital Stock Expenses, Net					51						51
	Capital Contributions from Eversource Parent					40,000						40,000
	Other Comprehensive Income									413		413
Balance as of December 31, 2013		6,035,205		60,352		1,682,047		961,482		(1,387)		2,702,494
	Net Income							287,754				287,754
	Dividends on Preferred Stock							(5,559)				(5,559)
	Dividends on Common Stock							(171,200)				(171,200)
	Allocation of Benefits - ESOP					2,771						2,771
	Capital Stock Expenses, Net					51						51
	Capital Contributions from Eversource Parent					120,000						120,000
	Other Comprehensive Income									456		456
Balance as of December 31, 2014		6,035,205		60,352		1,804,869		1,072,477		(931)		2,936,767
	Net Income							299,360				299,360
	Dividends on Preferred Stock							(5,559)				(5,559)
	Dividends on Common Stock							(196,000)				(196,000)
	Allocation of Benefits - ESOP					743						743
	Capital Stock Expenses, Net					51						51
	Capital Contributions from Eversource Parent					105,000						105,000
	Other Comprehensive Income									355		355
Balance as of December 31, 2015		6,035,205	$	60,352	$	1,910,663	$	1,170,278	$	(576)	$	3,140,717



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


THE CONNECTICUT LIGHT AND POWER COMPANY
STATEMENTS OF CASH FLOWS



			For the Years Ended December 31,
(Thousands of Dollars)			2015		2014		2013

Operating Activities:
	Net Income		$	299,360	$	287,754	$	279,412
	Adjustments to Reconcile Net Income to Net Cash Flows
		Provided by Operating Activities:
		Depreciation		215,289		188,837		177,603
		Deferred Income Taxes		135,994		130,949		130,038
		Pension, SERP and PBOP Expense, Net of PBOP Contributions		14,091		14,992		24,416
		Regulatory (Under)/Over Recoveries, Net		(53,781)		(20,502)		28,298
		Amortization of Regulatory Assets, Net		12,318		59,336		4,870
		(Payments)/Refunds Related to Spent Nuclear Fuel, Net		(242,231)		68,610		-
		Other		(36,385)		(1,342)		(3,478)
	Changes in Current Assets and Liabilities:
		Receivables and Unbilled Revenues, Net		(29,195)		(78,631)		(56,593)
		Materials and Supplies		22,810		13,063		9,997
		Taxes Receivable/Accrued, Net		(13,517)		(126,376)		(41,594)
		Accounts Payable		(16,910)		68,891		(66,225)
		Other Current Assets and Liabilities, Net		(9,514)		6,838		8,513
Net Cash Flows Provided by Operating Activities				298,329		612,419		495,257

Investing Activities:
	Investments in Property, Plant and Equipment			(523,849)		(515,710)		(434,934)
	Other Investing Activities			(716)		12,653		2,650
Net Cash Flows Used in Investing Activities				(524,565)		(503,057)		(432,284)

Financing Activities:
	Cash Dividends on Common Stock			(196,000)		(171,200)		(151,999)
	Cash Dividends on Preferred Stock			(5,559)		(5,559)		(5,559)
	Decrease in Short-Term Debt			-		-		(89,000)
	Increase/(Decrease) in Notes Payable to Eversource Parent			144,000		(153,900)		(117,800)
	Issuance of Long-Term Debt			350,000		250,000		400,000
	Retirements of Long-Term Debt			(162,000)		(150,000)		(125,000)
	Capital Contributions from Eversource Parent			105,000		120,000		40,000
	Other Financing Activities			(10,504)		(3,584)		(6,379)
Net Cash Flows Provided by/(Used in) Financing Activities				224,937		(114,243)		(55,737)
Net (Decrease)/Increase in Cash				(1,299)		(4,881)		7,236
Cash - Beginning of Year				2,356		7,237		1
Cash - End of Year			$	1,057	$	2,356	$	7,237

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

Company Report on Internal Controls Over Financial Reporting

NSTAR Electric Company

Management is responsible for the preparation, integrity, and fair presentation of the accompanying consolidated financial statements of NSTAR Electric Company and subsidiary (NSTAR Electric or the Company) and of other sections of this annual report.

Under the supervision and with the participation of the principal executive officer and principal financial officer, NSTAR Electric conducted an evaluation of the effectiveness of internal controls over financial reporting based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation under the framework in COSO, management concluded that internal controls over financial reporting were effective as of December 31, 2015.

February 26, 2016

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholder of NSTAR Electric Company:

We have audited the accompanying consolidated balance sheets of NSTAR Electric Company and subsidiary (the "Company") as of December 31, 2015 and 2014 and the related consolidated statements of income, comprehensive income, common stockholder's equity, and cash flows for each of the three years in the period ended December 31, 2015. Our audits also included the financial statement schedule listed in the Index at Item 15 of Part IV. These financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of NSTAR Electric Company and subsidiary as of December 31, 2015 and 2014, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2015, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

/s/ Deloitte & Touche LLP

Hartford, Connecticut

February 26, 2016


NSTAR ELECTRIC COMPANY AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS


			As of December 31,
(Thousands of Dollars)			2015		2014

ASSETS

Current Assets:
	Cash and Cash Equivalents		$	3,346	$	12,773
	Receivables, Net			229,936		234,481
	Accounts Receivable from Affiliated Companies			4,034		40,353
	Unbilled Revenues			29,464		29,741
	Taxes Receivable			70,236		144,601
	Materials and Supplies			75,487		74,179
	Regulatory Assets			348,408		198,710
	Prepayments and Other Current Assets			11,448		10,815
Total Current Assets				772,359		745,653

Property, Plant and Equipment, Net				5,655,458		5,335,436

Deferred Debits and Other Assets:
	Regulatory Assets			1,112,977		1,179,100
	Other Long-Term Assets			62,467		61,880
Total Deferred Debits and Other Assets				1,175,444		1,240,980

Total Assets			$	7,603,261	$	7,322,069

LIABILITIES AND CAPITALIZATION

Current Liabilities:
	Notes Payable		$	62,500	$	302,000
	Long-Term Debt - Current Portion			200,000		4,700
	Accounts Payable			228,250		217,311
	Accounts Payable to Affiliated Companies			38,648		63,517
	Obligations to Third Party Suppliers			56,718		34,824
	Renewable Portfolio Standards Compliance Obligations			104,847		60,750
	Accumulated Deferred Income Taxes			-		55,136
	Regulatory Liabilities			3,281		49,611
	Other Current Liabilities			72,007		90,939
Total Current Liabilities				766,251		878,788

Deferred Credits and Other Liabilities:
	Accumulated Deferred Income Taxes			1,760,339		1,527,667
	Regulatory Liabilities			264,352		262,738
	Accrued Pension, SERP and PBOP			209,153		235,529
	Other Long-Term Liabilities			120,939		129,279
Total Deferred Credits and Other Liabilities				2,354,783		2,155,213

Capitalization:
	Long-Term Debt			1,829,766		1,781,541

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

	Common Stockholder's Equity:
		Common Stock		-		-
		Capital Surplus, Paid In		995,378		994,130
		Retained Earnings		1,613,538		1,468,955
		Accumulated Other Comprehensive Income		545		442
	Common Stockholder's Equity			2,609,461		2,463,527
Total Capitalization				4,482,227		4,288,068

Commitments and Contingencies (Note 11)

Total Liabilities and Capitalization			$	7,603,261	$	7,322,069



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


NSTAR ELECTRIC COMPANY AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME



			For the Years Ended December 31,
(Thousands of Dollars)			2015		2014		2013

Operating Revenues			$	2,681,342	$	2,536,677	$	2,493,479

Operating Expenses:
	Purchased Power and Transmission			1,190,191		1,122,298		849,149
	Operations and Maintenance			306,528		326,972		376,360
	Depreciation			196,770		188,693		180,298
	Amortization of Regulatory (Liabilities)/Assets, Net			(12,989)		(6,330)		230,148
	Amortization of Rate Reduction Bonds			-		-		15,054
	Energy Efficiency Programs			224,755		193,516		206,536
	Taxes Other Than Income Taxes			133,260		133,072		127,778
		Total Operating Expenses		2,038,515		1,958,221		1,985,323
Operating Income				642,827		578,456		508,156
Interest Expense				75,347		77,878		70,383
Other Income, Net				5,106		4,491		3,639
Income Before Income Tax Expense				572,586		505,069		441,412
Income Tax Expense				228,044		201,981		172,866
Net Income			$	344,542	$	303,088	$	268,546



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




CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Net Income			$	344,542	$	303,088	$	268,546
Other Comprehensive Income, Net of Tax:
		Changes in Funded Status of SERP Benefit Plan		103		442		-
Other Comprehensive Income, Net of Tax				103		442		-
Comprehensive Income			$	344,645	$	303,530	$	268,546



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


NSTAR ELECTRIC COMPANY AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDER'S EQUITY

										Accumulated		Total
						Capital				Other		Common
		Common Stock				Surplus,		Retained		Comprehensive		Stockholder's
(Thousands of Dollars, Except Stock Information)		Stock		Amount		Paid In		Earnings		Income		Equity
Balance as of January 1, 2013		100	$	-	$	992,625	$	1,210,405	$	-	$	2,203,030
	Net Income							268,546				268,546
	Dividends on Preferred Stock							(2,123)				(2,123)
	Dividends on Common Stock							(56,000)				(56,000)
Balance as of December 31, 2013		100		-		992,625		1,420,828		-		2,413,453
	Net Income							303,088				303,088
	Dividends on Preferred Stock							(1,961)				(1,961)
	Dividends on Common Stock							(253,000)				(253,000)
	Other Changes in Stockholder's Equity					1,505						1,505
	Accumulated Other Comprehensive Income									442		442
Balance as of December 31, 2014		100		-		994,130		1,468,955		442		2,463,527
	Net Income							344,542				344,542
	Dividends on Preferred Stock							(1,960)				(1,960)
	Dividends on Common Stock							(197,999)				(197,999)
	Other Changes in Stockholder's Equity					1,248						1,248
	Accumulated Other Comprehensive Income									103		103
Balance as of December 31, 2015		100	$	-	$	995,378	$	1,613,538	$	545	$	2,609,461



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


NSTAR ELECTRIC COMPANY AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS



			For the Years Ended December 31,
(Thousands of Dollars)			2015		2014		2013

Operating Activities:
	Net Income		$	344,542	$	303,088	$	268,546
	Adjustments to Reconcile Net Income to Net Cash Flows
		Provided by Operating Activities:
		Depreciation		196,770		188,693		180,298
		Deferred Income Taxes		173,155		108,133		48,808
		Pension and PBOP Expense		10,786		6,760		35,731
		Pension and PBOP Contributions		(9,886)		(120,306)		(82,000)
		Regulatory (Under)/Over Recoveries, Net		(124,323)		57,696		(119,433)
		Amortization of Regulatory (Liabilities)/Assets, Net		(12,989)		(6,330)		230,148
		Amortization of Rate Reduction Bonds		-		-		15,054
		Bad Debt Expense		14,228		24,740		28,108
		Refunds Related to Spent Nuclear Fuel		783		30,193		-
		Other		(56,063)		(51,478)		4,428
	Changes in Current Assets and Liabilities:
		Receivables and Unbilled Revenues, Net		(35,525)		(18,853)		(45,405)
		Materials and Supplies		406		(29,943)		3,227
		Taxes Receivable/Accrued, Net		77,429		(122,746)		(38,003)
		Accounts Payable		21,961		9,753		31,875
		Accounts Receivable from/Payable to Affiliates, Net		11,450		115,092		(44,491)
		Other Current Assets and Liabilities, Net		44,302		38,535		(6,468)
Net Cash Flows Provided by Operating Activities				657,026		533,027		510,423

Investing Activities:
	Investments in Property, Plant and Equipment			(469,466)		(465,028)		(476,600)
	Decrease in Special Deposits			-		-		37,604
	Other Investing Activities			-		-		400
Net Cash Flows Used in Investing Activities				(469,466)		(465,028)		(438,596)

Financing Activities:
	Cash Dividends on Common Stock			(197,999)		(253,000)		(56,000)
	Cash Dividends on Preferred Stock			(1,960)		(1,961)		(2,123)
	(Decrease)/Increase in Short-Term Debt			(239,500)		198,500		(172,500)
	Issuance of Long-Term Debt			250,000		300,000		200,000
	Retirements of Long-Term Debt			(4,700)		(301,650)		(1,650)
	Retirements of Rate Reduction Bonds			-		-		(43,493)
	Other Financing Activities			(2,828)		(5,136)		(1,735)
Net Cash Flows Used in Financing Activities				(196,987)		(63,247)		(77,501)
Net (Decrease)/Increase in Cash and Cash Equivalents				(9,427)		4,752		(5,674)
Cash and Cash Equivalents - Beginning of Year				12,773		8,021		13,695
Cash and Cash Equivalents - End of Year			$	3,346	$	12,773	$	8,021

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

Company Report on Internal Controls Over Financial Reporting

Public Service Company of New Hampshire

Management is responsible for the preparation, integrity, and fair presentation of the accompanying consolidated financial statements of Public Service Company of New Hampshire and subsidiary (PSNH or the Company) and of other sections of this annual report.

Under the supervision and with the participation of the principal executive officer and principal financial officer, PSNH conducted an evaluation of the effectiveness of internal controls over financial reporting based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation under the framework in COSO, management concluded that internal controls over financial reporting were effective as of December 31, 2015.

February 26, 2016

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholder of Public Service Company of New Hampshire:

We have audited the accompanying consolidated balance sheets of Public Service Company of New Hampshire and subsidiary (the "Company") as of December 31, 2015 and 2014 and the related consolidated statements of income, comprehensive income, common stockholder's equity, and cash flows for each of the three years in the period ended December 31, 2015. Our audits also included the financial statement schedule listed in the Index at Item 15 of Part IV. These financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Public Service Company of New Hampshire and subsidiary as of December 31, 2015 and 2014, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2015, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

/s/ Deloitte & Touche LLP

Hartford, Connecticut

February 26, 2016


PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS


			As of December 31,
(Thousands of Dollars)			2015		2014

ASSETS

Current Assets:
	Cash		$	1,733	$	489
	Receivables, Net			77,546		80,151
	Accounts Receivable from Affiliated Companies			2,352		3,194
	Unbilled Revenues			38,207		40,181
	Taxes Receivable			43,128		14,571
	Fuel, Materials and Supplies			156,868		148,139
	Regulatory Assets			104,971		111,705
	Prepayments and Other Current Assets			24,302		27,821
Total Current Assets				449,107		426,251

Property, Plant and Equipment, Net				2,855,363		2,635,844

Deferred Debits and Other Assets:
	Regulatory Assets			257,873		293,115
	Other Long-Term Assets			34,176		32,963
Total Deferred Debits and Other Assets				292,049		326,078

Total Assets			$	3,596,519	$	3,388,173

LIABILITIES AND CAPITALIZATION

Current Liabilities:
	Notes Payable to Eversource Parent		$	231,300	$	90,500
	Accounts Payable			87,925		93,349
	Accounts Payable to Affiliated Companies			24,214		33,734
	Regulatory Liabilities			6,898		16,044
	Accumulated Deferred Income Taxes			-		36,164
	Other Current Liabilities			43,921		38,969
Total Current Liabilities				394,258		308,760

Deferred Credits and Other Liabilities:
	Accumulated Deferred Income Taxes			705,894		587,292
	Regulatory Liabilities			47,851		51,372
	Accrued Pension, SERP and PBOP			89,579		93,243
	Other Long-Term Liabilities			50,746		50,155
Total Deferred Credits and Other Liabilities				894,070		782,062

Capitalization:
	Long-Term Debt			1,071,017		1,070,021

	Common Stockholder's Equity:
		Common Stock		-		-
		Capital Surplus, Paid In		748,634		748,240
		Retained Earnings		494,901		486,459
		Accumulated Other Comprehensive Loss		(6,361)		(7,369)
	Common Stockholder's Equity			1,237,174		1,227,330
Total Capitalization				2,308,191		2,297,351

Commitments and Contingencies (Note 11)

Total Liabilities and Capitalization			$	3,596,519	$	3,388,173



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


PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME


			For the Years Ended December 31,
(Thousands of Dollars)			2015		2014		2013

Operating Revenues			$	972,203	$	959,500	$	935,402

Operating Expenses:
	Purchased Power, Fuel and Transmission			247,721		313,732		269,754
	Operations and Maintenance			276,554		261,848		267,797
	Depreciation			105,372		98,436		91,581
	Amortization of Regulatory Assets/(Liabilities), Net			16,276		(29,602)		(20,387)
	Amortization of Rate Reduction Bonds			-		-		19,748
	Energy Efficiency Programs			14,324		14,286		14,494
	Taxes Other Than Income Taxes			81,779		71,417		67,196
		Total Operating Expenses		742,026		730,117		710,183
Operating Income				230,177		229,383		225,219
Interest Expense				45,990		45,349		46,176
Other Income, Net				3,315		2,045		3,455
Income Before Income Tax Expense				187,502		186,079		182,498
Income Tax Expense				73,060		72,135		71,101
Net Income			$	114,442	$	113,944	$	111,397



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




CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Net Income			$	114,442	$	113,944	$	111,397
Other Comprehensive Income, Net of Tax:
	Qualified Cash Flow Hedging Instruments			1,162		1,162		1,162
	Changes in Unrealized (Losses)/Gains on Marketable Securities			(154)		19		(54)
	Changes in Funded Status of SERP Benefit Plan			-		-		(3)
Other Comprehensive Income, Net of Tax				1,008		1,181		1,105
Comprehensive Income			$	115,450	$	115,125	$	112,502



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


PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDER'S EQUITY

										Accumulated		Total
						Capital				Other		Common
		Common Stock				Surplus,		Retained		Comprehensive		Stockholder's
(Thousands of Dollars, Except Stock Information)		Stock		Amount		Paid In		Earnings		Income/(Loss)		Equity
Balance as of January 1, 2013		301	$	-	$	701,052	$	395,118	$	(9,655)	$	1,086,515
	Net Income							111,397				111,397
	Dividends on Common Stock							(68,000)				(68,000)
	Allocation of Benefits - ESOP					859						859
	Other Comprehensive Income									1,105		1,105
Balance as of December 31, 2013		301		-		701,911		438,515		(8,550)		1,131,876
	Net Income							113,944				113,944
	Dividends on Common Stock							(66,000)				(66,000)
	Capital Contributions from Eversource Parent					45,000						45,000
	Allocation of Benefits - ESOP					1,329						1,329
	Other Comprehensive Income									1,181		1,181
Balance as of December 31, 2014		301		-		748,240		486,459		(7,369)		1,227,330
	Net Income							114,442				114,442
	Dividends on Common Stock							(106,000)				(106,000)
	Allocation of Benefits – ESOP					394						394
	Other Comprehensive Income									1,008		1,008
Balance as of December 31, 2015		301	$	-	$	748,634	$	494,901	$	(6,361)	$	1,237,174



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


PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS



			For the Years Ended December 31,
(Thousands of Dollars)			2015		2014		2013

Operating Activities:
	Net Income		$	114,442	$	113,944	$	111,397
	Adjustments to Reconcile Net Income to Net Cash Flows
		Provided by Operating Activities:
		Depreciation		105,372		98,436		91,581
		Deferred Income Taxes		83,776		94,813		75,693
		Pension, SERP and PBOP Expense		4,580		7,197		26,846
		Pension and PBOP Contributions		(982)		(2,482)		(112,964)
		Regulatory Over/(Under) Recoveries, Net		41		(11,875)		(8,481)
		Amortization of Regulatory Assets/(Liabilities), Net		16,276		(29,602)		(20,387)
		Amortization of Rate Reduction Bonds		-		-		19,748
		Refunds Related to Spent Nuclear Fuel		979		14,453		-
		Other		8,677		10,095		16,079
	Changes in Current Assets and Liabilities:
		Receivables and Unbilled Revenues, Net		(4,750)		(15,576)		2,412
		Fuel, Materials and Supplies		(8,729)		(19,403)		(33,391)
		Taxes Receivable/Accrued, Net		(23,909)		(23,857)		26,462
		Accounts Payable		(22,203)		17,796		2,632
		Other Current Assets and Liabilities, Net		953		(5,972)		(9,520)
Net Cash Flows Provided by Operating Activities				274,523		247,967		188,107

Investing Activities:
	Investments in Property, Plant and Equipment			(308,036)		(256,159)		(186,009)
	(Increase)/Decrease in Special Deposits			-		(1,013)		22,040
	Other Investing Activities			306		(139)		(88)
Net Cash Flows Used in Investing Activities				(307,730)		(257,311)		(164,057)

Financing Activities:
	Cash Dividends on Common Stock			(106,000)		(66,000)		(68,000)
	Increase in Short-Term Debt			-		4,000		23,200
	Issuance of Long-Term Debt			-		75,000		250,000
	Retirements of Long-Term Debt			-		(50,000)		(198,235)
	Retirements of Rate Reduction Bonds			-		-		(29,294)
	Increase in Notes Payable to Eversource Parent			140,800		-		-
	Capital Contributions from Eversource Parent			-		45,000		-
	Other Financing Activities			(349)		1,703		(4,084)
Net Cash Flows Provided by/(Used in) Financing Activities				34,451		9,703		(26,413)
Net Increase/(Decrease) in Cash				1,244		359		(2,363)
Cash - Beginning of Year				489		130		2,493
Cash - End of Year			$	1,733	$	489	$	130

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

Company Report on Internal Controls Over Financial Reporting

Western Massachusetts Electric Company

Management is responsible for the preparation, integrity, and fair presentation of the accompanying financial statements of Western Massachusetts Electric Company (WMECO or the Company) and of other sections of this annual report.

Under the supervision and with the participation of the principal executive officer and principal financial officer, WMECO conducted an evaluation of the effectiveness of internal controls over financial reporting based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation under the framework in COSO, management concluded that internal controls over financial reporting were effective as of December 31, 2015.

February 26, 2016

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholder of Western Massachusetts Electric Company:

We have audited the accompanying balance sheets of Western Massachusetts Electric Company (the "Company") as of December 31, 2015 and 2014 and the related statements of income, comprehensive income, common stockholder's equity, and cash flows for each of the three years in the period ended December 31, 2015. Our audits also included the financial statement schedule listed in the Index at Item 15 of Part IV. These financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material respects, the financial position of Western Massachusetts Electric Company as of December 31, 2015 and 2014, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2015, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

/s/ Deloitte & Touche LLP

Hartford, Connecticut

February 26, 2016


WESTERN MASSACHUSETTS ELECTRIC COMPANY
BALANCE SHEETS


			As of December 31,
(Thousands of Dollars)			2015		2014

ASSETS

Current Assets:
	Cash		$	834	$	-
	Receivables, Net			50,912		51,066
	Accounts Receivable from Affiliated Companies			18,633		7,851
	Unbilled Revenues			15,065		15,146
	Taxes Receivable			33,407		18,126
	Regulatory Assets			56,166		51,923
	Marketable Securities			-		28,658
	Prepayments and Other Current Assets			7,882		7,607
Total Current Assets				182,899		180,377

Property, Plant and Equipment, Net				1,575,306		1,461,321

Deferred Debits and Other Assets:
	Regulatory Assets			135,010		146,307
	Marketable Securities			-		29,452
	Other Long-Term Assets			24,875		18,731
Total Deferred Debits and Other Assets				159,885		194,490

Total Assets			$	1,918,090	$	1,836,188

LIABILITIES AND CAPITALIZATION

Current Liabilities:
	Notes Payable to Eversource Parent		$	143,400	$	21,400
	Long-Term Debt - Current Portion			-		50,000
	Accounts Payable			58,364		53,732
	Accounts Payable to Affiliated Companies			19,896		14,328
	Regulatory Liabilities			13,122		22,486
	Accumulated Deferred Income Taxes			-		18,089
	Other Current Liabilities			29,927		24,080
Total Current Liabilities				264,709		204,115

Deferred Credits and Other Liabilities:
	Accumulated Deferred Income Taxes			470,539		416,822
	Regulatory Liabilities			11,597		10,835
	Accrued Pension, SERP and PBOP			19,515		17,705
	Other Long-Term Liabilities			36,819		33,747
Total Deferred Credits and Other Liabilities				538,470		479,109

Capitalization:
	Long-Term Debt			517,329		575,184

	Common Stockholder's Equity:
		Common Stock		10,866		10,866
		Capital Surplus, Paid In		391,398		391,256
		Retained Earnings		198,140		178,834
		Accumulated Other Comprehensive Loss		(2,822)		(3,176)
	Common Stockholder's Equity			597,582		577,780
Total Capitalization				1,114,911		1,152,964

Commitments and Contingencies (Note 11)

Total Liabilities and Capitalization			$	1,918,090	$	1,836,188



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


WESTERN MASSACHUSETTS ELECTRIC COMPANY
STATEMENTS OF INCOME



			For the Years Ended December 31,
(Thousands of Dollars)			2015		2014		2013

Operating Revenues			$	518,128	$	493,423	$	472,724

Operating Expenses:
	Purchased Power and Transmission			177,172		172,876		147,059
	Operations and Maintenance			86,360		89,406		96,194
	Depreciation			43,362		41,886		37,568
	Amortization of Regulatory Assets/(Liabilities), Net			14,545		(6,228)		(3,206)
	Amortization of Rate Reduction Bonds			-		-		7,780
	Energy Efficiency Programs			42,867		42,937		39,524
	Taxes Other Than Income Taxes			38,302		34,907		28,458
		Total Operating Expenses		402,608		375,784		353,377
Operating Income				115,520		117,639		119,347
Interest Expense				24,792		24,931		24,851
Other Income, Net				2,748		2,379		3,310
Income Before Income Tax Expense				93,476		95,087		97,806
Income Tax Expense				36,970		37,268		37,368
Net Income			$	56,506	$	57,819	$	60,438



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




STATEMENTS OF COMPREHENSIVE INCOME

Net Income			$	56,506	$	57,819	$	60,438
Other Comprehensive Income, Net of Tax:
	Qualified Cash Flow Hedging Instruments			379		338		338
	Changes in Unrealized (Losses)/Gains on Marketable Securities			(25)		3		(9)
Other Comprehensive Income, Net of Tax				354		341		329
Comprehensive Income			$	56,860	$	58,160	$	60,767



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


WESTERN MASSACHUSETTS ELECTRIC COMPANY
STATEMENTS OF COMMON STOCKHOLDER'S EQUITY

										Accumulated		Total
						Capital				Other		Common
		Common Stock				Surplus,		Retained		Comprehensive		Stockholder's
(Thousands of Dollars, Except Stock Information)		Stock		Amount		Paid In		Earnings		Income/(Loss)		Equity
Balance as of January 1, 2013		434,653	$	10,866	$	390,412	$	160,577	$	(3,846)	$	558,009
	Net Income							60,438				60,438
	Dividends on Common Stock							(40,001)				(40,001)
	Allocation of Benefits - ESOP					331						331
	Other Comprehensive Income									329		329
Balance as of December 31, 2013		434,653		10,866		390,743		181,014		(3,517)		579,106
	Net Income							57,819				57,819
	Dividends on Common Stock							(59,999)				(59,999)
	Allocation of Benefits - ESOP					513						513
	Other Comprehensive Income									341		341
Balance as of December 31, 2014		434,653		10,866		391,256		178,834		(3,176)		577,780
	Net Income							56,506				56,506
	Dividends on Common Stock							(37,200)				(37,200)
	Allocation of Benefits - ESOP					142						142
	Other Comprehensive Income									354		354
Balance as of December 31, 2015		434,653	$	10,866	$	391,398	$	198,140	$	(2,822)	$	597,582



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


WESTERN MASSACHUSETTS ELECTRIC COMPANY
STATEMENTS OF CASH FLOWS



			For the Years Ended December 31,
(Thousands of Dollars)			2015		2014		2013

Operating Activities:
	Net Income		$	56,506	$	57,819	$	60,438
	Adjustments to Reconcile Net Income to Net Cash Flows
		Provided by Operating Activities:
		Depreciation		43,362		41,886		37,568
		Deferred Income Taxes		39,428		34,108		87,028
		Regulatory (Under)/Over Recoveries, Net		(17,501)		1,925		8,458
		Amortization of Regulatory Assets/(Liabilities), Net		14,545		(6,228)		(3,206)
		Amortization of Rate Reduction Bonds		-		-		7,780
		(Payments)/Refunds Related to Spent Nuclear Fuel, Net		(56,784)		18,883		-
		Other		(6,421)		(2,005)		3,381
	Changes in Current Assets and Liabilities:
		Receivables and Unbilled Revenues, Net		(17,822)		39,872		(53,292)
		Taxes Receivable/Accrued, Net		(15,281)		(22,454)		19,840
		Accounts Payable		(2,602)		1,269		7,456
		Other Current Assets and Liabilities, Net		5,594		(11,796)		3,356
Net Cash Flows Provided by Operating Activities				43,024		153,279		178,807

Investing Activities:
	Investments in Property, Plant and Equipment			(134,551)		(116,205)		(128,786)
	Proceeds from Sales of Marketable Securities			186,444		73,198		70,778
	Purchases of Marketable Securities			(128,861)		(73,888)		(71,390)
	Other Investing Activities			-		3,200		7,401
Net Cash Flows Used in Investing Activities				(76,968)		(113,695)		(121,997)

Financing Activities:
	Cash Dividends on Common Stock			(37,200)		(59,999)		(40,001)
	Issuance of Long-Term Debt			-		-		80,000
	Retirements of Long-Term Debt			(50,000)		-		(55,000)
	Increase/(Decrease) in Notes Payable to Eversource Parent			122,000		21,400		(31,900)
	Retirements of Rate Reduction Bonds			-		-		(9,352)
	Other Financing Activities			(22)		(985)		(558)
Net Cash Flows Provided by/(Used in) Financing Activities				34,778		(39,584)		(56,811)
Net Increase/(Decrease) in Cash				834		-		(1)
Cash - Beginning of Year				-		-		1
Cash - End of Year			$	834	$	-	$	-

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

EVERSOURCE ENERGY AND SUBSIDIARIES

THE CONNECTICUT LIGHT AND POWER COMPANY

NSTAR ELECTRIC COMPANY AND SUBSIDIARY

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARY

WESTERN MASSACHUSETTS ELECTRIC COMPANY

COMBINED NOTES TO FINANCIAL STATEMENTS

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

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

About Eversource, CL&P, NSTAR Electric, PSNH and WMECO

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

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

Eversource, CL&P, NSTAR Electric, PSNH and WMECO are reporting companies under the Securities Exchange Act of 1934. Eversource Energy is a public utility holding company under the Public Utility Holding Company Act of 2005. Arrangements among the regulated electric companies and other Eversource companies, outside agencies and other utilities covering interconnections, interchange of electric power and sales of utility property are subject to regulation by the FERC. The Regulated companies are subject to regulation of rates, accounting and other matters by the FERC and/or applicable state regulatory commissions (the PURA for CL&P and Yankee Gas, the DPU for NSTAR Electric, WMECO and NSTAR Gas, and the NHPUC for PSNH).

Regulated Companies: CL&P, NSTAR Electric, PSNH and WMECO furnish franchised retail electric service in Connecticut, Massachusetts and New Hampshire. Yankee Gas and NSTAR Gas are engaged in the distribution and sale of natural gas to customers within Connecticut and Massachusetts, respectively. CL&P, NSTAR Electric, PSNH and WMECO's results include the operations of their respective distribution and transmission businesses. PSNH and WMECO's distribution results include the operations of their respective generation businesses. Eversource also has a regulated subsidiary, NPT, which was formed to construct, own and operate the Northern Pass line, a HVDC transmission line from Québec to New Hampshire under development that will interconnect with a new HVDC transmission line being developed by a transmission subsidiary of HQ.

Other: Eversource Service, Eversource's service company, Rocky River Realty Company, a wholly-owned real estate subsidiary of Eversource, Renewable Properties, Inc., an indirect, wholly-owned subsidiary of Eversource, and Properties, Inc., a wholly-owned subsidiary of PSNH, provide support services to Eversource, including its Regulated companies. Eversource Gas Transmission LLC, an indirect, wholly-owned subsidiary of Eversource, holds an equity interest in the Access Northeast project.

Basis of Presentation

The 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 consolidated financial statements of Eversource, NSTAR Electric and PSNH and the financial statements of CL&P and WMECO are herein collectively referred to as the "financial statements."

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.

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

Eversource's utility subsidiaries' distribution (including generation) and transmission businesses 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 year data were made in the accompanying financial statements to conform to the current year presentation and as a result of the adoption of new accounting guidance. See Note 1C, "Summary of Significant Accounting Policies – Accounting Standards," for further information.

In accordance with accounting guidance on noncontrolling interests in consolidated financial statements, the Preferred Stock of CL&P and the Preferred Stock of NSTAR Electric, which are not owned by Eversource or its consolidated subsidiaries and are not subject to mandatory redemption, have been presented as noncontrolling interests in the financial statements of Eversource. The Preferred Stock of CL&P and the

Preferred Stock of NSTAR Electric are considered to be temporary equity and have been classified between liabilities and permanent shareholders' equity on the balance sheets of Eversource, CL&P and NSTAR Electric due to a provision in the preferred stock agreements of both CL&P and NSTAR Electric that grant preferred stockholders the right to elect a majority of the CL&P and NSTAR Electric Boards of Directors, respectively, should certain conditions exist, such as if preferred dividends are in arrears for a specified amount of time. The Net Income reported in the statements of income and cash flows represents net income prior to apportionment to noncontrolling interests, which is represented by dividends on preferred stock of CL&P and NSTAR Electric.

As of December 31, 2015 and 2014, Eversource's carrying amount of goodwill was approximately $3.5 billion. Eversource performs an assessment for possible impairment of its goodwill at least annually. Eversource completed its annual goodwill impairment test for each of its reporting units as of October 1, 2015 and determined that no impairment exists. See Note 21, "Goodwill," for further information.

Accounting Standards

Accounting Standards Issued but not Yet Effective: In May 2014, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers, which amends existing revenue recognition guidance and is required to be applied retrospectively (either to each reporting period presented or cumulatively at the date of initial application). In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers – Deferral of the Effective Date, which defers the effective date of ASU 2014-09 to the first quarter of 2018, with 2017 application permitted. The Company is reviewing the requirements of ASU 2014-09 and will implement the standard in the first quarter of 2018. The ASU is not expected to have a material impact on the financial statements of Eversource, CL&P, NSTAR Electric, PSNH or WMECO.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Liabilities, which is required to be implemented in the first quarter of 2018. The Company is reviewing the requirements of the ASU. The ASU will remove the available-for-sale designation for equity securities, whereby changes in fair value are recorded in other comprehensive income in shareholders' equity, and will require changes in fair value of all equity securities to be recorded in earnings beginning on January 1, 2018, with the unrealized gain or loss on available-for-sale equity securities as of that date reclassified to retained earnings as a cumulative effect of adoption. The fair value of available-for-sale equity securities subject to this guidance as of December 31, 2015 was approximately $52 million. The remaining available-for-sale equity securities included in marketable securities on the balance sheet are held in nuclear decommissioning trusts and are subject to regulatory accounting treatment and will not be impacted by this guidance. Implementation of the ASU for other financial instruments is not expected to have a material impact on the financial statements of Eversource, CL&P, NSTAR Electric, PSNH or WMECO.

On February 25, 2016, the FASB issued ASU 2016-02, Leases, which changes existing lease accounting guidance and is required to be applied in the first quarter of 2019, with earlier application permitted. The ASU is required to be implemented for leases beginning on the date of initial application. For prior periods presented, leases are required to be recognized and measured using a modified retrospective approach. The Company is reviewing the requirements of ASU 2016-02.

Recently Adopted Accounting Standards: In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, that changed the balance sheet presentation of debt issuance costs. Under the ASU, issuance costs related to debt are presented on the balance sheet as a direct deduction from the carrying amount of the debt liability rather than as a deferred cost. The new accounting guidance is effective for interim and annual periods beginning in the first quarter of 2016 with early adoption permitted and is required to be applied retrospectively. On December 31, 2015, the Company adopted the new accounting guidance and applied it retrospectively to all prior periods presented in the financial statements. The adoption of this ASU did not have a material effect on the balance sheets and had no impact on the results of operations or cash flows of Eversource, CL&P, NSTAR Electric, PSNH or WMECO. See Note 8, "Long-Term Debt," for the prior year amounts that have been retrospectively adjusted.

On November 20, 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes, that required all deferred tax liabilities and assets, along with any related valuation allowance, be classified as noncurrent on the balance sheet. This new accounting guidance is effective for interim and annual periods beginning in the first quarter of 2017 with early adoption permitted and may be applied either prospectively or retrospectively. On December 31, 2015, the Company adopted the new accounting guidance and applied it prospectively. The adoption of this ASU did not have a material effect on the balance sheets and had no impact on the results of operations or cash flows of Eversource, CL&P, NSTAR Electric, PSNH or WMECO. The current portion of Accumulated Deferred Income Taxes as of December 31, 2014, which was included in Total Current Liabilities on the balance sheets, was $160.3 million for Eversource, $34.1 million for CL&P, $55.1 million for NSTAR Electric, $36.2 million for PSNH, and $18.1 million for WMECO.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand and short-term cash investments that are highly liquid in nature and have original maturities of three months or less. At the end of each reporting period, any overdraft amounts are reclassified from Cash and Cash Equivalents to Accounts Payable on the balance sheets.

Provision for Uncollectible Accounts

Eversource, including CL&P, NSTAR Electric, PSNH and WMECO, presents its receivables at estimated net realizable value by maintaining a provision for uncollectible accounts. This provision is determined based upon a variety of judgments and factors, including the application of an estimated uncollectible percentage to each receivable aging category. The estimate is based upon historical collection and write-off experience and management's assessment of collectability from customers. Management continuously assesses the collectability of receivables and adjusts collectability estimates based on actual experience. Receivable balances are written off against the provision for uncollectible accounts when the 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 WMECO and NSTAR Gas to also recover in rates amounts associated with certain uncollectible hardship accounts receivable. Certain of NSTAR Electric's uncollectible hardship accounts receivable are expected to be recovered in future rates, similar to WMECO and NSTAR Gas. Uncollectible customer account balances, which are expected to be recovered in rates, are included in Regulatory Assets or Other Long-Term Assets on the balance sheets.

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


	Total Provision for Uncollectible Accounts				Uncollectible Hardship
	As of December 31,				As of December 31,
(Millions of Dollars)	2015		2014		2015		2014
Eversource	$	190.7	$	175.3	$	118.5	$	91.5
CL&P		79.5		84.3		68.1		74.0
NSTAR Electric		52.6		40.7		25.3		-
PSNH		8.7		7.7		-		-
WMECO		14.0		9.9		7.4		6.2

Fuel, Materials and Supplies and Allowance Inventory

Fuel, Materials and Supplies include natural gas, coal, biomass and oil inventories as well as materials purchased primarily for construction or operation and maintenance purposes. Natural gas, coal, biomass and oil inventories are valued at their respective weighted average cost. Materials and supplies are valued at the lower of average cost or market.

Fuel, Materials and Supplies also include Renewable Energy Certificates (RECs), which are purchased from suppliers of renewable sources of generation. RECs are used to meet state mandated Renewable Portfolio Standards requirements.

PSNH is subject to federal and state laws and regulations that regulate emissions of air pollutants, including SO2, CO2, and NOx related to its regulated generation units, and uses SO2, CO2, and NOx emissions allowances. At the end of each compliance period, PSNH is required to relinquish SO2, CO2, and NOx emissions allowances corresponding to the actual respective emissions emitted by its generating units over the compliance period. SO2 and NOx emissions allowances are obtained through an annual allocation from the federal and state regulators that are granted at no cost and through purchases from third parties. CO2 emissions allowances are obtained through an annual allocation from the state regulator that are granted at no cost and are acquired through auctions and through purchases from third parties. SO2, CO2, and NOx emissions allowances are charged to expense based on their weighted average cost as they are utilized against emissions volumes at PSNH's generating units. SO2, CO2, and NOx emissions allowances are recorded within Fuel, Materials and Supplies on the balance sheet and are classified as short-term or long-term depending on the period in which they are expected to be utilized against actual emissions. Current SO2 and CO2 emissions allowances were classified as Fuel, Materials and Supplies on the balance sheets and long-term SO2 and CO2 emissions allowances were classified as Other Long-Term Assets on the balance sheets.

The carrying amount of fuel, materials and supplies, RECs, and emission allowances were as follows:


	As of December 31,
	2015						2014
			NSTAR						NSTAR
(Millions of Dollars)	Eversource		Electric		PSNH		Eversource		Electric		PSNH
Current:
Fuel	$	152.5	$	-	$	103.4	$	164.3	$	-	$	95.1
Materials and Supplies		131.2		32.2		44.6		159.5		49.1		52.2
RECs		50.9		43.3		7.0		25.8		25.1		0.7
Emission Allowances		1.9		-		1.9		0.1		-		0.1

Long-Term:
Emission Allowances		17.5		-		17.5		20.1		-		20.1

Deposits

As of December 31, 2015, Eversource, CL&P, NSTAR Electric and PSNH had $17.1 million, $0.7 million, $8.5 million and $1.5 million, respectively, of cash collateral posted not subject to master netting agreements, with ISO-NE related to energy purchase transactions, which was included in Prepayments and Other Current Assets on the balance sheets. As of December 31, 2014, these amounts were $9.9 million, $1.2 million and $2.5 million for Eversource, CL&P and PSNH, respectively.

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 and long-term debt.

Fair Value Hierarchy: In measuring fair value, Eversource uses observable market data when available in order to minimize the use of unobservable inputs. Inputs used in fair value measurements are categorized into three fair value hierarchy levels for disclosure purposes. The entire fair value measurement is categorized based on the lowest level of input that is significant to the fair value measurement. Eversource evaluates the

classification of assets and liabilities measured at fair value on a quarterly basis, and Eversource's policy is to recognize transfers between levels of the fair value hierarchy as of the end of the reporting period. The three levels of the fair value hierarchy are described below:

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

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

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

Determination of Fair Value: The valuation techniques and inputs used in Eversource's fair value measurements are described in Note 4, "Derivative Instruments," Note 5, "Marketable Securities," Note 6, "Asset Retirement Obligations," Note 9A, "Employee Benefits – Pension Benefits and Postretirement Benefits Other Than Pensions," and Note 13, "Fair Value of Financial Instruments" to the financial statements.

Derivative Accounting

Many of the Regulated companies' contracts for the purchase and sale of energy or energy-related products are derivatives. The accounting treatment for energy contracts entered into varies and depends on the intended use of the particular contract and on whether or not the contract is a derivative. For the Regulated companies, regulatory assets or regulatory liabilities are recorded to offset the fair values of derivative contracts, as contract settlements are recovered from, or refunded to, customers in future rates.

The application of derivative accounting is complex and requires management judgment in the following respects: identification of derivatives and embedded derivatives, election and designation of a contract as normal, and determination of the fair value of derivative contracts. All of these judgments can have a significant impact on the financial statements.

The judgment applied in the election of a contract as normal (and resulting accrual accounting) includes the conclusion that it is probable at the inception of the contract and throughout its term that it will result in physical delivery of the underlying product and that the quantities will be used or sold by the business in the normal course of business. If facts and circumstances change and management can no longer support this conclusion, then a contract cannot be considered normal and accrual accounting is terminated, and fair value accounting is applied prospectively.

The fair value of derivative contracts is based upon the contract terms and conditions and the underlying market price or fair value per unit. When quantities are not specified in the contract, the Company determines whether the contract has a determinable quantity by using amounts referenced in default provisions and other relevant sections of the contract. The fair value of derivative assets and liabilities with the same counterparty are offset and recorded as a net derivative asset or liability on the balance sheets.

All changes in the fair value of derivative contracts are recorded as regulatory assets or liabilities and do not impact net income.

For further information regarding derivative contracts, see Note 4, "Derivative Instruments," to the financial statements.

Equity Method Investments

Equity investments are included in Other Long-Term Assets on the balance sheets and net earnings related to these equity investments are included in Other Income, Net on the statements of income.

Regional Decommissioned Nuclear Companies: CL&P, NSTAR Electric, PSNH and WMECO own common stock in three regional nuclear generation companies (CYAPC, YAEC and MYAPC, collectively referred to as the Yankee Companies), each of which owned a single nuclear generating facility that has been decommissioned. For CL&P, NSTAR Electric, PSNH and WMECO, the respective investments in CYAPC, YAEC and MYAPC are accounted for under the equity method. Eversource consolidates CYAPC and YAEC because CL&P's, NSTAR Electric's, PSNH's and WMECO's combined ownership interest in each of these entities is greater than 50 percent. Intercompany transactions between CL&P, NSTAR Electric, PSNH and WMECO and the CYAPC and YAEC companies have been eliminated in consolidation of the Eversource financial statements.

CL&P's, NSTAR Electric's, PSNH's and WMECO's ownership interests in the Yankee Companies and the total carrying values, which were included in Other Long-Term Assets on their respective balance sheets, were as follows:


	Ownership Interests (percent)						Carrying Amount (in millions)
	As of December 31, 2015 and 2014						As of December 31,
	CYAPC		YAEC		MYAPC		2015		2014
CL&P	34.5	%	24.5	%	12.0	%	$	1.2	$	1.2
NSTAR Electric	14.0		14.0		4.0			0.5		0.5
PSNH	5.0		7.0		5.0			0.3		0.3
WMECO	9.5		7.0		3.0			0.3		0.3

For further information on the Yankee Companies, see Note 11C, "Commitments and Contingencies - Contractual Obligations - Yankee Companies," to the financial statements.

Infrastructure and Other Investments: As of December 31, 2015 and 2014, Eversource had an equity ownership interest in an energy investment fund of $30.3 million and $17.8 million, respectively. Eversource had a 40 percent equity ownership interest in the Algonquin Gas Transmission, LLC (legal entity that owns Access Northeast assets) of $10.7 million as of December 31, 2015.

Revenues

Regulated Companies' Retail Revenues: The Regulated companies' retail revenues are based on rates approved by their respective state regulatory commissions. In general, rates can only be changed through formal proceedings with the state regulatory commissions. The Regulated companies' rates are designed to recover the costs to provide service to their customers, and include a return on investment. The Regulated companies also utilize regulatory commission-approved tracking mechanisms to recover certain costs on a fully-reconciling basis. These tracking mechanisms require rates to be changed periodically to ensure recovery of actual costs incurred.

CL&P (effective December 1, 2014), WMECO, and NSTAR Gas (effective January 1, 2016), each have a regulatory commission approved revenue decoupling mechanism. Distribution revenues are decoupled from customer sales volumes, which breaks the relationship between sales volumes and revenues recognized. CL&P and WMECO reconcile their annual base distribution rate recovery to pre-established levels of baseline distribution delivery service revenues. Any difference between the allowed level of distribution revenue and the actual amount incurred during a 12-month period is adjusted through rates in the following period.

A significant portion of the Regulated companies' retail revenues relate to the recovery of costs incurred for the sale of electricity and natural gas purchased on behalf of customers. These energy supply costs are recovered from customers in rates through cost tracking mechanisms. Energy purchases are recorded in Purchased Power, Fuel and Transmission, and the sales of energy associated with these purchases are recorded in Operating Revenues.

Regulated Companies' Unbilled Revenues: Because customers are billed throughout the month based on pre-determined cycles rather than on a calendar month basis, an estimate of electricity or natural gas delivered to customers for which the customers have not yet been billed is calculated as of the balance sheet date. Unbilled revenues are included in Operating Revenues on the statements of income and in Current Assets on the balance sheets. Actual amounts billed to customers when meter readings become available may vary from the estimated amount.

The Regulated companies estimate unbilled sales monthly using the daily load cycle method. The daily load cycle method allocates billed sales to the current calendar month based on the daily load for each billing cycle. The billed sales are subtracted from total month load, net of delivery losses, to estimate unbilled sales. Unbilled revenues are estimated by first allocating unbilled sales to the respective customer classes, then applying an estimated rate by customer class to those sales. The estimate of unbilled revenues can significantly impact the amount of revenues recorded at NSTAR Electric and PSNH because they do not have a revenue decoupling mechanism. CL&P and WMECO record a regulatory deferral to reflect the actual allowed amount of revenue for decoupling.

Regulated Companies' Transmission Revenues - Wholesale Rates: Wholesale transmission revenues are recovered through FERC approved formula rates. Wholesale transmission revenues for CL&P, NSTAR Electric, PSNH, and WMECO are collected through a combination of regional and local rates, both of which are under the ISO New England Transmission, Markets and Services Tariff (ISO-NE Tariff). The ISO-NE Tariff includes Regional Network Service (RNS), Schedule 21 – ES rate schedules, which recover the costs of transmission and other transmission-related services for CL&P, PSNH and WMECO, and Schedule 21 - NSTAR rate schedules, which recover costs of transmission and other transmission-related services for NSTAR Electric. The RNS rate, administered by ISO-NE and billed to all New England transmission load, including CL&P, NSTAR Electric, PSNH and WMECO's distribution businesses, is reset on June 1st of each year and recovers the revenue requirements associated with Pool Transmission Facilities (PTF) that benefit the entire New England region. The Schedule 21 – ES rate and Schedule 21 - NSTAR rate are administered by Eversource and recover any PTF costs not recovered under RNS rates, as well as the cost of transmission facilities associated with the respective utility's local system. The Schedule 21 - ES rate is reset on January 1st and June 1st of each year, while the Schedule 21 - NSTAR rate is reset on June 1st of each year. The Schedule 21 – ES rate and Schedule 21 - NSTAR rate calculations recover total transmission revenue requirements net of revenues received from other sources (i.e., RNS, rentals, etc.), thereby ensuring that Eversource recovers all of CL&P's, NSTAR Electric’s, PSNH's and WMECO's regional and local transmission revenue requirements in accordance with the ISO-NE Tariff. The RNS, Schedule 21 – ES rate and Schedule 21 - NSTAR rate provide for the annual reconciliation and recovery or refund of estimated costs to actual costs. The financial impacts of differences between actual and estimated costs are deferred for future recovery from, or refunded to, transmission customers. See Note 11E, "Commitments and Contingencies – FERC ROE Complaints," for complaints filed at the FERC relating to Eversource's ROE.

Regulated Companies' Transmission Revenues - Retail Rates: A significant portion of the Eversource transmission segment revenue comes from ISO-NE charges to the distribution businesses of CL&P, NSTAR Electric, PSNH and WMECO, each of which recovers these costs through rates charged to their retail customers. CL&P, NSTAR Electric, PSNH and WMECO each have a retail transmission cost tracking mechanism as part of their rates, which allows the electric distribution companies to charge their retail customers for transmission costs on a timely basis.

Operating Expenses

Costs related to fuel and natural gas included in Purchased Power, Fuel and Transmission on the statements of income were as follows:


	For the Years Ended December 31,
(Millions of Dollars)	2015		2014		2013
Eversource - Natural Gas and Fuel	$	516.7	$	599.4	$	466.5
PSNH - Fuel		85.4		113.4		104.8

Allowance for Funds Used During Construction

AFUDC represents the cost of borrowed and equity funds used to finance construction and is included in the cost of the Regulated companies' utility plant on the balance sheet. The portion of AFUDC attributable to borrowed funds is recorded as a reduction of Other Interest Expense, and the AFUDC related to equity funds is recorded as Other Income, Net on the statements of income. AFUDC costs are recovered from customers over the service life of the related plant in the form of increased revenue collected as a result of higher depreciation expense.

The Regulated companies' average AFUDC rate is based on a FERC-prescribed formula using the cost of a company's short-term financings and capitalization (preferred stock, long-term debt and common equity), as appropriate. The average rate is applied to average eligible CWIP amounts to calculate AFUDC.

AFUDC costs and the weighted-average AFUDC rates were as follows:


Eversource	For the Years Ended December 31,
(Millions of Dollars, except percentages)	2015		2014		2013
Borrowed Funds	$	7.2	$	5.8	$	4.1
Equity Funds		18.8		13.7		7.1
Total AFUDC	$	26.0	$	19.5	$	11.2
Average AFUDC Rate		3.9%		3.4%		2.7%


	For the Years Ended December 31,
	2015								2014								2013
(Millions of Dollars,			NSTAR								NSTAR								NSTAR
except percentages)	CL&P		Electric		PSNH		WMECO		CL&P		Electric		PSNH		WMECO		CL&P		Electric		PSNH		WMECO
Borrowed Funds	$	2.6	$	2.0	$	1.0	$	1.0	$	1.9	$	2.0	$	0.6	$	0.9	$	2.2	$	0.5	$	0.5	$	0.5
Equity Funds		5.2		4.3		1.2		1.7		2.9		3.8		0.6		1.7		2.9		-		0.2		1.0
Total AFUDC	$	7.8	$	6.3	$	2.2	$	2.7	$	4.8	$	5.8	$	1.2	$	2.6	$	5.1	$	0.5	$	0.7	$	1.5
Average AFUDC Rate		5.5%		3.2%		1.8%		4.4%		3.4%		2.5%		1.8%		5.6%		3.7%		0.5%		1.1%		6.1%

Other Income, Net

Items included within Other Income, Net on the statements of income primarily consist of investment income/(loss), interest income, AFUDC related to equity funds, and equity in earnings of equity method investees. Investment income/(loss) primarily relates to debt and equity securities held in trust. For further information, see Note 5, "Marketable Securities," to the financial statements. For further information on AFUDC related to equity funds, see Note 1M, "Summary of Significant Accounting Policies – Allowance for Funds Used During Construction," to the financial statements.

Other Taxes

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


	For the Years Ended December 31,
(Millions of Dollars)	2015		2014		2013
Eversource	$	147.2	$	148.2	$	144.1
CL&P		128.5		127.9		128.2

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.


P.		Supplemental Cash Flow Information

Eversource			As of and For the Years Ended December 31,
(Millions of Dollars)			2015		2014		2013
Cash Paid During the Year for:
	Interest, Net of Amounts Capitalized		$	365.9	$	349.6	$	343.3
	Income Taxes			10.3		334.2		50.0
Non-Cash Investing Activities:
	Plant Additions Included in Accounts Payable (As of)			216.6		181.9		193.1


		As of and For the Years Ended December 31,
		2015								2014								2013
				NSTAR								NSTAR								NSTAR
(Millions of Dollars)		CL&P		Electric		PSNH		WMECO		CL&P		Electric		PSNH		WMECO		CL&P		Electric		PSNH		WMECO
Cash Paid/(Received) During the Year for:
	Interest, Net of Amounts Capitalized	$	144.4	$	75.7	$	42.3	$	26.7	$	144.1	$	75.3	$	41.1	$	25.9	$	131.6	$	75.8	$	43.3	$	25.8
	Income Taxes		55.2		(19.8)		14.4		14.7		135.4		217.1		2.3		25.1		55.0		163.4		(30.1)		(69.0)
Non-Cash Investing Activities:
	Plant Additions Included in Accounts Payable (As of)		76.0		23.5		46.5		27.0		63.5		34.6		39.3		14.2		51.4		57.0		34.9		19.5

The 2015 cash paid for interest excludes interest payments made by CL&P and WMECO in connection with the full satisfaction of their respective obligations to the DOE for the disposal of spent nuclear fuel and high-level radioactive waste. For further information, see Note 8, "Long-Term Debt," to the financial statements.

In 2014, as a result of damages awarded to the Yankee Companies for spent nuclear fuel lawsuits against the DOE described in Note 11C, "Commitments and Contingencies - Contractual Obligations - Yankee Companies," Eversource received total proceeds of $132.1 million, which were net of $80.6 million in proceeds CYAPC and YAEC returned to non-affiliated member companies.

Related Parties

Eversource Service, Eversource's service company, provides centralized accounting, administrative, engineering, financial, information technology, legal, operational, planning, purchasing, and other services to Eversource's companies. The Rocky River Realty Company, Renewable Properties, Inc. and Properties, Inc., three other Eversource subsidiaries, construct, acquire or lease some of the property and facilities used by Eversource's companies.

As of both December 31, 2015 and 2014, CL&P, PSNH and WMECO had long-term receivables from Eversource Service in the amounts of $25 million, $3.8 million and $5.5 million, respectively, which were included in Other Long-Term Assets on the balance sheets. These amounts related to the funding of investments held in trust by Eversource Service in connection with certain postretirement benefits for CL&P, PSNH and WMECO employees and have been eliminated in consolidation on the Eversource financial statements.

Included in the CL&P, NSTAR Electric, PSNH and WMECO balance sheets as of December 31, 2015 and 2014 were Accounts Receivable from Affiliated Companies and Accounts Payable to Affiliated Companies relating to transactions between CL&P, NSTAR Electric, PSNH and WMECO and other subsidiaries that are wholly-owned by Eversource. These amounts have been eliminated in consolidation on the Eversource financial statements.

Severance Benefits

For the years ended December 31, 2015, 2014 and 2013, Eversource recorded severance benefit expense of $4.7 million, $15 million and $9.7 million, respectively, in connection with organizational and cost saving initiatives, and, in 2014, the partial outsourcing of information technology functions. As of December 31, 2015 and 2014, the severance accrual totaled $9.3 million and $10.4 million, respectively, and was included in Other Current Liabilities on the balance sheets.

REGULATORY ACCOUNTING

Eversource's Regulated companies are subject to rate-regulation that is based on cost recovery and meets the criteria for application of accounting guidance for rate-regulated operations, which 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 their respective investments in long-lived assets, including regulatory assets. If management were to determine that it could no longer apply the accounting guidance applicable to rate-regulated enterprises to any of the Regulated companies' operations, or 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:


Eversource	As of December 31,
(Millions of Dollars)	2015		2014
Benefit Costs	$	1,828.2	$	2,016.0
Derivative Liabilities		388.0		425.5
Income Taxes, Net		650.9		635.3
Storm Restoration Costs		436.9		502.8
Goodwill-related		484.9		505.4
Regulatory Tracker Mechanisms		526.5		350.5
Contractual Obligations - Yankee Companies		134.4		123.8
Other Regulatory Assets		134.0		167.3
Total Regulatory Assets		4,583.8		4,726.6
Less: Current Portion		845.8		672.5
Total Long-Term Regulatory Assets	$	3,738.0	$	4,054.1


	As of December 31,
	2015								2014
			NSTAR								NSTAR
(Millions of Dollars)	CL&P		Electric		PSNH		WMECO		CL&P		Electric		PSNH		WMECO
Benefit Costs	$	413.6	$	479.9	$	164.2	$	84.9	$	445.4	$	515.9	$	174.3	$	85.0
Derivative Liabilities		380.8		1.3		-		-		410.9		4.5		-		-
Income Taxes, Net		444.4		85.7		34.5		31.8		437.7		83.7		38.0		35.5
Storm Restoration Costs		271.4		110.9		31.5		23.1		319.6		103.7		47.7		31.8
Goodwill-related		-		416.3		-		-		-		433.9		-		-
Regulatory Tracker Mechanisms		45.1		311.0		101.2		40.1		16.1		141.4		103.5		33.0
Other Regulatory Assets		82.0		56.3		31.5		11.3		66.1		94.7		41.3		12.9
Total Regulatory Assets		1,637.3		1,461.4		362.9		191.2		1,695.8		1,377.8		404.8		198.2
Less: Current Portion		268.3		348.4		105.0		56.2		220.3		198.7		111.7		51.9
Total Long-Term Regulatory Assets	$	1,369.0	$	1,113.0	$	257.9	$	135.0	$	1,475.5	$	1,179.1	$	293.1	$	146.3

Benefit Costs: Eversource's Pension, SERP and PBOP Plans are accounted for in accordance with accounting guidance on defined benefit pension and other PBOP plans. The liability recorded by the Regulated companies to recognize the funded status of their retiree benefit plans is offset by a regulatory asset in lieu of a charge to Accumulated Other Comprehensive Income/(Loss), reflecting ultimate recovery from customers through rates. The regulatory asset is amortized as the actuarial gains and losses and prior service cost are amortized to net periodic benefit cost for the pension and PBOP plans. All amounts are remeasured annually. Regulatory accounting is also applied to the portions of Eversource's service company costs that support the Regulated companies, as these amounts are also recoverable. As these regulatory assets do not represent a cash outlay for the Regulated companies, no carrying charge is recovered from customers.

CL&P, NSTAR Electric, PSNH and WMECO recover benefit costs related to their distribution and transmission operations from customers in rates as allowed by their applicable regulatory commissions. NSTAR Electric and WMECO each recover their qualified pension and PBOP expenses related to distribution operations through rate reconciling mechanisms that fully track the change in net pension and PBOP expenses each year.

Derivative Liabilities: Regulatory assets are recorded as an offset to derivative liabilities and relate to the fair value of contracts used to purchase energy and energy-related products that will be recovered from customers in future rates. These assets are excluded from rate base and are being recovered as the actual settlements occur over the duration of the contracts. See Note 4, "Derivative Instruments," to the financial statements for further information on these contracts.

Income Taxes, Net: The tax effect of temporary book-tax differences (differences between the periods in which transactions affect income in the financial statements and the periods in which they affect the determination of taxable income, including those differences relating to uncertain tax positions) is accounted for in accordance with the rate-making treatment of the applicable regulatory commissions and accounting guidance for income taxes. Differences in income taxes between the accounting guidance and the rate-making treatment of the applicable regulatory commissions are recorded as regulatory assets. As these assets are offset by deferred income tax liabilities, no carrying charge is collected. The amortization period of these assets varies depending on the nature and/or remaining life of the underlying assets and liabilities. For further information regarding income taxes, see Note 10, "Income Taxes," to the financial statements.

Storm Restoration Costs: The storm restoration cost deferrals relate to costs incurred for major storm events at CL&P, NSTAR Electric, PSNH and WMECO that each company expects to recover from customers. A storm must meet certain criteria to qualify as a major storm with the criteria specific to each state jurisdiction and utility company. Once a storm qualifies as a major storm, all qualifying expenses incurred during storm restoration efforts are deferred and recovered from customers. In addition to storm restoration costs, CL&P and PSNH are each allowed to recover pre-staging storm costs. Of the total deferred storm restoration costs, $197 million is pending regulatory approval (including $106 million at NSTAR Electric, $61 million at PSNH, and $30 million at WMECO). Management believes the storm restoration costs were prudent and meet the criteria for specific cost recovery in Connecticut, Massachusetts and New Hampshire, and that recovery from customers is probable through the applicable regulatory recovery process. Each electric utility has sought, or is seeking, recovery of its deferred storm restoration costs through its applicable regulatory recovery process. Each electric utility company earns a return on its deferred storm restoration cost regulatory asset balance.

Goodwill-related: The goodwill regulatory asset originated from a 1999 merger transaction and the DPU allowed its recovery in NSTAR Electric and NSTAR Gas rates. This regulatory asset is currently being amortized and recovered from customers in rates without a carrying charge over a 40-year period, and, as of December 31, 2015, there were 24 years of amortization remaining.

Regulatory Tracker Mechanisms: The Regulated companies’ approved rates are designed to recover their costs incurred to provide service to customers. The Regulated companies recover certain of their costs on a fully-reconciling basis through regulatory commission-approved tracking mechanisms. The differences between the costs incurred (or the rate recovery allowed) and the actual revenues are recorded as regulatory assets (for undercollections) or as regulatory liabilities (for overcollections) to be included in future customer rates each year. Carrying charges are recorded on all material regulatory tracker mechanisms.

CL&P, NSTAR Electric, PSNH and WMECO each recover, on a fully reconciling basis, the costs associated with the procurement of energy, transmission related costs from FERC-approved transmission tariffs, energy efficiency programs (including LBR at NSTAR Electric), low income assistance programs, certain uncollectible accounts receivable for hardship customers, and restructuring and stranded costs as a result of deregulation. Energy procurement costs at PSNH include the costs related to its generating stations and at WMECO include the costs related to its solar generation.

CL&P (effective December 1, 2014) and WMECO each have a regulatory commission approved revenue decoupling mechanism. Distribution revenues are decoupled from customer sales volumes, which breaks the relationship between sales volumes and revenues recognized. CL&P and WMECO reconcile their annual base distribution rate recovery to pre-established levels of baseline distribution delivery service revenues. Any difference between the allowed level of distribution revenue and the actual amount received during a 12-month period is adjusted through rates in the following period. CL&P and WMECO's revenue decoupling mechanisms permit recovery of an annual base amount of distribution revenues of $1.059 billion and $132.4 million, respectively.

Contractual Obligations - Yankee Companies: CL&P, NSTAR Electric, PSNH and WMECO are responsible for their proportionate share of the remaining costs of the CYAPC, YAEC and MYAPC nuclear facilities, including nuclear fuel storage. A portion of these costs was recorded as a regulatory asset. Amounts for CL&P are earning a return and are being recovered through the CTA. Amounts for NSTAR Electric and WMECO are being recovered without a return through the transition charge. Amounts for PSNH were fully recovered in 2006. As a result of Eversource's consolidation of CYAPC and YAEC, Eversource's regulatory asset balance also includes the regulatory assets of CYAPC and YAEC, which totaled $110.9 million and $97.8 million as of December 31, 2015 and 2014, respectively. Intercompany transactions between CL&P, NSTAR Electric, PSNH and WMECO and the CYAPC and YAEC companies have been eliminated in consolidation of the Eversource financial statements.

Other Regulatory Assets: Other Regulatory Assets primarily include asset retirement obligations, environmental remediation costs, losses associated with the reacquisition or redemption of long-term debt, purchase power contract termination costs and various other items.

Regulatory Costs in Other Long-Term Assets: The Regulated companies had $75.3 million (including $3.1 million for CL&P, $35.4 million for NSTAR Electric, $4.8 million for PSNH and $16.7 million for WMECO) and $60.5 million (including $1.3 million for CL&P, $33.2 million for NSTAR Electric, $0.9 million for PSNH, and $11 million for WMECO) of additional regulatory costs as of December 31, 2015 and 2014, respectively, that were included in Other 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. The NSTAR Electric balance as of December 31, 2015 and 2014 primarily related to the deferral of certain bad debt costs expected to be recovered in future rates.

Equity Return on Regulatory Assets: For rate-making purposes, the Regulated companies recover the carrying costs related to their regulatory assets. For certain regulatory assets, the carrying cost recovered includes an equity return component. This equity return, which is not recorded on the balance sheets, totaled $1.5 million and $1.7 million for CL&P as of December 31, 2015 and 2014, respectively. These carrying costs will be recovered from customers in future rates.

As of December 31, 2015 and 2014, this equity return, which is not recorded on the balance sheets, totaled $48.3 million and $43.3 million, respectively, for PSNH. These amounts include $25 million of equity return on the Clean Air Project costs that PSNH has agreed not to bill customers pending NHPUC approval of a generation divestiture settlement agreement. For further information on the divestiture, see Note 11H, "Commitments and Contingencies – PSNH Generation Restructuring."

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


Eversource	As of December 31,
(Millions of Dollars)	2015		2014
Cost of Removal	$	437.1	$	439.9
Regulatory Tracker Mechanisms		99.7		192.3
AFUDC - Transmission		66.1		67.1
Other Regulatory Liabilities		18.5		50.8
Total Regulatory Liabilities		621.4		750.1
Less: Current Portion		107.8		235.0
Total Long-Term Regulatory Liabilities	$	513.6	$	515.1


	As of December 31,
	2015								2014
			NSTAR								NSTAR
(Millions of Dollars)	CL&P		Electric		PSNH		WMECO		CL&P		Electric		PSNH		WMECO
Cost of Removal	$	24.1	$	257.4	$	47.2	$	2.8	$	19.7	$	258.3	$	50.3	$	1.1
Regulatory Tracker Mechanisms		56.2		3.3		3.4		12.9		122.6		20.7		14.2		22.3
AFUDC - Transmission		51.5		5.7		-		8.9		53.6		4.4		-		9.1
Other Regulatory Liabilities		4.2		1.3		4.2		0.1		10.1		28.9		2.9		0.8
Total Regulatory Liabilities		136.0		267.7		54.8		24.7		206.0		312.3		67.4		33.3
Less: Current Portion		61.2		3.3		6.9		13.1		124.7		49.6		16.0		22.5
Total Long-Term Regulatory Liabilities	$	74.8	$	264.4	$	47.9	$	11.6	$	81.3	$	262.7	$	51.4	$	10.8

Cost of Removal: Eversource's Regulated companies currently recover amounts in rates for future costs of removal of plant assets over the lives of the assets. The estimated cost to remove utility assets from service is recognized as a component of depreciation expense and the cumulative amount collected from customers but not yet expended is recognized as a regulatory liability. Expended costs that exceed amounts collected from customers are recognized as regulatory assets, as they are probable of recovery in future rates.

AFUDC - Transmission: Regulatory liabilities were recorded by CL&P and WMECO for AFUDC accrued on certain reliability-related transmission projects to reflect local rate base recovery as a result of a FERC-approved transmission tariff. A regulatory liability was recorded by NSTAR Electric for AFUDC accrued on certain reliability-related transmission projects through December 31, 2015 to reflect local rate base recovery. These regulatory liabilities for CL&P, NSTAR Electric and WMECO will be amortized over the depreciable life of the related transmission assets.

2015 Regulatory Developments:

FERC ROE Complaints: As a result of the actions taken by the FERC and other developments in the pending ROE complaint proceedings described in Note 11E, "Commitments and Contingencies – FERC ROE Complaints," Eversource recorded reserves for the first and second ROE complaints, which were recorded as a regulatory liability and as a reduction to operating revenues. The cumulative pre-tax reserves (excluding interest) as of December 31, 2015, which include the impact of refunds given to customers, totaled $39.1 million for Eversource (including $21.4 million for CL&P, $8.5 million for NSTAR Electric, $3.1 million for PSNH, and $6.1 million for WMECO).

NSTAR Electric and NSTAR Gas Comprehensive Settlement Agreement: On March 2, 2015, the DPU approved the comprehensive settlement agreement between NSTAR Electric, NSTAR Gas and the Massachusetts Attorney General (the "Settlement") as filed with the DPU on December 31, 2014. The Settlement resolved the outstanding NSTAR Electric CPSL program filings for 2006 through 2011, the NSTAR Electric and NSTAR Gas PAM and energy efficiency-related customer billing adjustments reported in 2012, and the recovery of LBR related to NSTAR Electric's energy efficiency programs for 2009 through 2011 (11 dockets in total). In 2015, as a result of the DPU order, NSTAR Electric and NSTAR Gas commenced refunding a combined $44.7 million to customers, which was recorded as a regulatory liability. Refunds to customers will continue through December 2016. As a result of the Settlement, NSTAR Electric increased its operating revenues and decreased its amortization expense in 2015, resulting in the recognition of a $21.7 million pre-tax benefit in 2015.

NSTAR Electric Basic Service Bad Debt Adder: On January 7, 2015, the DPU issued an order concluding that NSTAR Electric had removed energy-related bad debt costs from base distribution rates effective January 1, 2006. As a result of the DPU order, in the first quarter of 2015, NSTAR Electric increased its regulatory assets and reduced its operations and maintenance expense by an under recovered amount of $24.2 million for energy-related bad debt costs through 2014, resulting in a pre-tax benefit in 2015. NSTAR Electric filed for recovery of the energy-related bad debt costs regulatory asset from customers and on November 20, 2015 the DPU approved NSTAR Electric's proposed rate increase to recover these costs over a 12-month period, effective January 1, 2016.

CL&P Distribution Rates: On July 2, 2015, PURA issued a final order that approved a settlement agreement filed on May 19, 2015, which allows for an increase to rate base of approximately $163 million associated with ADIT, including a regulatory asset to recover the incremental revenue requirement for the period December 1, 2014 through November 30, 2015 over a subsequent 24-month period. The rate base increase provided an increase to total allowed annual revenue requirements of $18.4 million beginning December 1, 2014. As part of the settlement agreement, the $18.4 million for the period December 1, 2014 through November 30, 2015 was recorded as a regulatory asset with a corresponding increase in Operating Revenues, and is being collected from customers in rates over a 24-month period beginning December 1, 2015.

NSTAR Gas Distribution Rates: On October 30, 2015, the DPU issued its order in the NSTAR Gas distribution rate case, which approved an annualized base rate increase of $15.8 million, plus other increases of approximately $11.5 million, mostly relating to recovery of pension and PBOP expenses and the Hopkinton GSA, effective January 1, 2016. In the order, the DPU also approved an authorized regulatory ROE of 9.8 percent, the establishment of a revenue decoupling mechanism, the recovery of certain bad debt expenses, and a 52.1 percent equity component of its capital structure. On November 19, 2015, NSTAR Gas filed a motion for reconsideration of the order with the DPU seeking the correction of mathematical errors and other plant and cost of service items.

As a result of this order, Eversource recorded regulatory deferrals for costs that have been approved for recovery or are expected to be approved for recovery in future rate proceedings, which resulted in the recognition of a $17.2 million pre-tax benefit in 2015. Included in this amount is a $10.5 million pre-tax benefit recorded at NSTAR Electric for certain uncollectible hardship accounts receivable that are expected to be recovered in future rates given the allowed recoveries of uncollectible hardship accounts receivable by WMECO and NSTAR Gas.

PROPERTY, PLANT AND EQUIPMENT AND ACCUMULATED DEPRECIATION

Utility property, plant and equipment is recorded at original cost. Original cost includes materials, labor, construction overhead and AFUDC for regulated property. The cost of repairs and maintenance, including planned major maintenance activities, is charged to Operating Expenses as incurred.

The following tables summarize the investments in utility property, plant and equipment by asset category:


Eversource		As of December 31,
(Millions of Dollars)		2015		2014
Distribution - Electric		$	13,054.8	$	12,495.2
Distribution - Natural Gas			2,727.2		2,595.4
Transmission - Electric			7,691.9		6,930.7
Generation			1,194.1		1,170.9
Electric and Natural Gas Utility			24,668.0		23,192.2
Other (1)			558.6		551.3
Property, Plant and Equipment, Gross			25,226.6		23,743.5
Less: Accumulated Depreciation
	Electric and Natural Gas Utility		(6,141.1)		(5,777.8)
	Other		(255.6)		(231.8)
Total Accumulated Depreciation			(6,396.7)		(6,009.6)
Property, Plant and Equipment, Net			18,829.9		17,733.9
Construction Work in Progress			1,062.5		913.1
Total Property, Plant and Equipment, Net		$	19,892.4	$	18,647.0

(1)

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


	As of December 31,
	2015								2014
			NSTAR								NSTAR
(Millions of Dollars)	CL&P		Electric		PSNH		WMECO		CL&P		Electric		PSNH		WMECO
Distribution	$	5,377.2	$	5,100.5	$	1,804.8	$	812.3	$	5,158.8	$	4,895.5	$	1,696.7	$	784.2
Transmission		3,618.0		2,131.3		928.2		964.9		3,274.0		1,928.5		789.7		891.0
Generation		-		-		1,158.1		36.0		-		-		1,136.5		34.4
Property, Plant and Equipment, Gross		8,995.2		7,231.8		3,891.1		1,813.2		8,432.8		6,824.0		3,622.9		1,709.6
Less: Accumulated Depreciation		(2,041.9)		(1,886.8)		(1,171.0)		(307.0)		(1,928.0)		(1,761.4)		(1,090.0)		(297.4)
Property, Plant and Equipment, Net		6,953.3		5,345.0		2,720.1		1,506.2		6,504.8		5,062.6		2,532.9		1,412.2
Construction Work in Progress		203.5		310.5		135.3		69.1		304.9		272.8		102.9		49.1
Total Property, Plant and Equipment, Net	$	7,156.8	$	5,655.5	$	2,855.4	$	1,575.3	$	6,809.7	$	5,335.4	$	2,635.8	$	1,461.3

As of December 31, 2015, PSNH had $1.2 billion in gross generation utility plant assets and related Accumulated Depreciation of $522.4 million. These generation assets are the subject of a divestiture agreement entered into on June 10, 2015 between Eversource, PSNH and key New Hampshire officials whereby, among other resolutions, PSNH has agreed to divest these generation assets upon NHPUC approval. Upon completion of the divestiture process, remaining costs not recovered by the sale of these assets (stranded costs) will be recovered via bonds that will be secured by a non-bypassable charge or other recovery mechanisms in rates billed to PSNH’s customers. See Note 11H, “Commitments and Contingencies – PSNH Generation Restructuring,” for further information.

Depreciation of utility assets is calculated on a straight-line basis using composite rates based on the estimated remaining useful lives of the various classes of property (estimated useful life for PSNH distribution). The composite rates, which are subject to approval by the appropriate state regulatory agency, include a cost of removal component (other than PSNH Generation), which is collected from customers over the lives of the plant assets and is recognized as a regulatory liability. Depreciation rates are applied to property from the time it is placed in service.

Upon retirement from service, the cost of the utility asset is charged to the accumulated provision for depreciation. The actual incurred removal costs are applied against the related regulatory liability.

The depreciation rates for the various classes of utility property, plant and equipment aggregate to composite rates as follows:


(Percent)	2015		2014		2013
Eversource	2.9	%	3.0	%	2.8	%
CL&P	2.7	%	2.7	%	2.5	%
NSTAR Electric	3.0	%	3.0	%	2.9	%
PSNH	3.2	%	3.0	%	3.0	%
WMECO	2.7	%	3.3	%	2.9	%


The following table summarizes average remaining useful lives of depreciable assets:

	As of December 31, 2015
(Years)	Eversource		CL&P		NSTAR Electric		PSNH		WMECO
Distribution		34.8		37.3		31.9		31.3		30.5
Transmission		41.6		38.7		43.8		41.6		50.0
Generation		30.7		-		-		30.9		25.0
Other		14.1		-		-		-		-

DERIVATIVE INSTRUMENTS

The Regulated 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. The Regulated companies manage the risks associated with the price volatility of energy and energy-related products through the use of derivative and nonderivative 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 or Operating Revenues 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 Regulated 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 December 31,
		2015						2014
		Commodity Supply				Net Amount		Commodity Supply				Net Amount
		and Price Risk				Recorded as		and Price Risk					Recorded as
(Millions of Dollars)		Management		Netting (1)		a Derivative		Management		Netting (1)		a Derivative
Current Derivative Assets:
Level 3:
	Eversource	$	16.7	$	(10.9)	$	5.8	$	16.2	$	(6.6)	$	9.6
	CL&P		16.7		(10.9)		5.8		16.1		(6.6)		9.5
	NSTAR Electric		-		-		-		0.1		-		0.1

Long-Term Derivative Assets:
Level 2:
	Eversource	$	0.1	$	-	$	0.1	$	-	$	-	$	-
Level 3:
	Eversource		62.0		(19.3)		42.7		93.5		(19.2)		74.3
	CL&P		60.7		(19.3)		41.4		93.5		(19.2)		74.3
	NSTAR Electric		1.3		-		1.3		-		-		-

Current Derivative Liabilities:
Level 2:
	Eversource	$	(5.8)	$	-	$	(5.8)	$	(9.8)	$	-	$	(9.8)
Level 3:
	Eversource		(92.3)		-		(92.3)		(90.0)		-		(90.0)
	CL&P		(91.8)		-		(91.8)		(88.5)		-		(88.5)
	NSTAR Electric		(0.5)		-		(0.5)		(1.5)		-		(1.5)

Long-Term Derivative Liabilities:
Level 2:
	Eversource	$	-	$	-	$	-	$	(0.3)	$	-	$	(0.3)
Level 3:
	Eversource		(337.1)		-		(337.1)		(409.3)		-		(409.3)
	CL&P		(336.2)		-		(336.2)		(406.2)		-		(406.2)
	NSTAR Electric		(0.9)		-		(0.9)		(3.1)		-		(3.1)

(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.

The business activities that result in the recognition of derivative assets also create exposure to various counterparties. As of December 31, 2015, Eversource’s and CL&P's derivative assets were exposed to counterparty credit risk. Of Eversource's and CL&P's derivative assets, approximately $47 million was contracted with investment grade entities.

For further information on the fair value of derivative contracts, see Note 1H, "Summary of Significant Accounting Policies - Fair Value Measurements," and Note 1I, "Summary of Significant Accounting Policies - Derivative Accounting," to the financial statements.

Derivative Contracts At Fair Value with Offsetting Regulatory Amounts

Commodity Supply and Price Risk Management: As required by regulation, CL&P, along with UI, has capacity-related contracts with generation facilities. CL&P has a sharing agreement with UI, with 80 percent of the costs or benefits of each contract borne by or allocated to CL&P and 20 percent borne by or allocated to UI. The combined capacity of these contracts is 787 MW. 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.

NSTAR Electric has a renewable energy contract to purchase 0.1 million MWh of energy per year through 2018 and a capacity-related contract to purchase up to 35 MW per year through 2019.

As of December 31, 2015 and 2014, Eversource had NYMEX financial contracts for natural gas futures in order to reduce variability associated with the purchase price of approximately 9.1 million and 8.8 million MMBtu of natural gas, respectively.

For the years ended December 31, 2015, 2014 and 2013, there were losses of $60.2 million and gains of $134.4 million and $160.6 million, respectively, deferred as regulatory costs, which reflect the change in fair value associated with Eversource's derivative contracts.

Credit Risk

Certain of Eversource's derivative contracts contain credit risk contingent provisions. These provisions require Eversource to maintain investment grade credit ratings from the major rating agencies and to post collateral for contracts in a net liability position over specified credit limits. As of December 31, 2015 and 2014, Eversource had $5.8 million and $10 million, respectively, of derivative contracts in a net liability position that were

subject to credit risk contingent provisions and would have been required to post additional collateral of $5.8 million and $10 million, respectively, if Eversource parent's unsecured debt credit ratings had been downgraded to below investment grade.

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 relating 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 time period 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 Eversource's, including CL&P's and NSTAR Electric's, Level 3 derivative contracts and the range of the significant unobservable inputs utilized in their respective valuations over the duration of the contracts:


	As of December 31,
	2015						2014
		Range				Period Covered		Range				Period Covered
Capacity Prices:
Eversource	$	10.81	-	15.82	per kW-Month	2016 - 2026	$	5.30	-	12.98	per kW-Month	2016 - 2026
CL&P	$	10.81	-	12.60	per kW-Month	2019 - 2026	$	11.08	-	12.98	per kW-Month	2018 - 2026
NSTAR Electric	$	10.81	-	15.82	per kW-Month	2016 - 2019	$	5.30	-	11.10	per kW-Month	2016 - 2019

Forward Reserve:
Eversource, CL&P	$	2.00			per kW-Month	2016 - 2024	$	5.80	-	9.50	per kW-Month	2015 - 2024

REC Prices:
Eversource, NSTAR Electric	$	45	-	51	per REC	2016 - 2018	$	38	-	56	per REC	2015 - 2018

Exit price premiums of 5 percent to 22 percent are also applied on 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.

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.


(Millions of Dollars)	Eversource		CL&P		NSTAR Electric
Derivatives, Net:
Fair Value as of January 1, 2014	$	(635.2)	$	(630.6)	$	(7.3)
Net Realized/Unrealized Gains Included in Regulatory Assets and Liabilities		141.3		139.7		4.3
Settlements		78.5		80.0		(1.5)
Fair Value as of December 31, 2014	$	(415.4)	$	(410.9)	$	(4.5)
Net Realized/Unrealized Losses Included in Regulatory Assets and Liabilities		(52.1)		(51.3)		(0.8)
Settlements		86.6		81.4		5.2
Fair Value as of December 31, 2015	$	(380.9)	$	(380.8)	$	(0.1)

Significant increases or decreases in future energy or capacity 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.

MARKETABLE SECURITIES

Eversource maintains trusts that hold marketable securities to fund certain non-qualified executive benefits. These trusts 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 decommissioning and spent nuclear fuel removal obligations of their nuclear fuel storage facilities.

WMECO maintained a spent nuclear fuel trust to fund WMECO's pre-1983 spent nuclear fuel obligation. In late 2015, this trust was liquidated to satisfy the spent nuclear fuel obligation with the DOE. For further information, see Note 8, "Long-Term Debt."

Trading Securities: Eversource has elected to record certain equity securities as trading securities, with the changes in fair values recorded in Other Income, Net on the statements of income. As of December 31, 2015 and 2014, these securities were classified as Level 1 in the fair value hierarchy and totaled $14.2 million and $85.1 million, respectively. For the years ended December 31, 2015, 2014 and 2013, net gains on these securities of $2 million, $1.9 million and $10.2 million, respectively, were recorded in Other Income, Net on the statements of income. Dividend income is recorded in Other Income, Net when dividends are declared. In 2015, certain of the securities classified as trading securities were sold and the proceeds were re-invested in equity securities designated as available-for-sale securities.

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


		As of December 31,
		2015								2014
				Pre-Tax		Pre-Tax						Pre-Tax		Pre-Tax
		Amortized		Unrealized		Unrealized				Amortized		Unrealized		Unrealized
(Millions of Dollars)		Cost		Gains		Losses		Fair Value		Cost		Gains		Losses		Fair Value
Eversource
	Debt Securities (1) (2)	$	256.5	$	4.5	$	(0.6)	$	260.4	$	313.0	$	7.5	$	(0.3)	$	320.2
	Equity Securities (1)		215.3		59.2		(3.4)		271.1		160.6		73.3		-		233.9
WMECO
	Debt Securities (2)		-		-		-		-		58.2		-		(0.1)		58.1

(1)

Amounts include CYAPC's and YAEC's marketable securities held in nuclear decommissioning trusts of $436.9 million and $450.8 million as of December 31, 2015 and 2014, respectively. Unrealized gains and losses for the nuclear decommissioning trusts 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.

(2)

Unrealized gains and losses on debt securities held by WMECO were recorded in Marketable Securities with the corresponding offset to Other Long-Term Assets on the balance sheets.

Unrealized Losses and Other-than-Temporary Impairment: There have been no significant unrealized losses, other-than-temporary impairments or credit losses in 2015 or 2014. 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.

Realized Gains and Losses: Realized gains and losses on available-for-sale securities 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 benefit trust and the average cost basis method for the CYAPC and YAEC nuclear decommissioning trusts to compute the realized gains and losses on the sale of available-for-sale securities.

Contractual Maturities: As of December 31, 2015, the contractual maturities of available-for-sale debt securities were as follows:


Eversource	Amortized		Fair
(Millions of Dollars)	Cost		Value
Less than one year (1)	$	33.3	$	33.2
One to five years		50.2		50.7
Six to ten years		56.6		57.2
Greater than ten years		116.4		119.3
Total Debt Securities	$	256.5	$	260.4

(1)

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

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		As of December 31,
(Millions of Dollars)		2015		2014
Level 1:
	Mutual Funds and Equities	$	285.3	$	319.0
	Money Market Funds		26.9		24.9
Total Level 1		$	312.2	$	343.9
Level 2:
	U.S. Government Issued Debt Securities (Agency and Treasury)	$	46.6	$	51.3
	Corporate Debt Securities		43.9		49.1
	Asset-Backed Debt Securities		20.0		54.1
	Municipal Bonds		111.4		116.3
	Other Fixed Income Securities		11.6		24.5
Total Level 2		$	233.5	$	295.3
Total Marketable Securities		$	545.7	$	639.2

As of December 31, 2014, the WMECO spent nuclear fuel trust included investments in money market funds of $4.3 million classified as Level 1 in the fair value hierarchy, and $14.7 million of corporate debt securities, $14.5 million of asset-backed debt securities, $13 million of municipal bonds and $11.6 million of other fixed income securities classified as Level 2 in the fair value hierarchy. The trust was liquidated in late 2015.

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 instrument 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.

ASSET RETIREMENT OBLIGATIONS

Eversource, including CL&P, NSTAR Electric, PSNH and WMECO, recognizes a liability for the fair value of an ARO on the obligation date if the liability's fair value can be reasonably estimated and is conditional on a future event. Settlement dates and future costs are reasonably estimated when sufficient information becomes available. Management has identified various categories of AROs, primarily certain assets containing asbestos and hazardous contamination, and has performed fair value calculations reflecting expected probabilities for settlement scenarios.

The fair value of an ARO is recorded as a liability in Other Long-Term Liabilities with a corresponding amount included in Property, Plant and Equipment, Net on the balance sheets. The ARO assets are depreciated, and the ARO liabilities are accreted over the estimated life of the obligation with corresponding credits recorded as accumulated depreciation and ARO liabilities, respectively. As the Regulated companies are rate-regulated on a cost-of-service basis, these companies apply regulatory accounting guidance and both the depreciation and accretion costs associated with the Regulated companies' AROs are recorded as increases to Regulatory Assets on the balance sheets.

A reconciliation of the beginning and ending carrying amounts of ARO liabilities are as follows:


Eversource	As of December 31,
(Millions of Dollars)	2015		2014
Balance as of Beginning of Year	$	426.3	$	424.9
Liabilities Incurred During the Year		6.6		1.3
Liabilities Settled During the Year		(18.2)		(19.5)
Accretion		26.5		25.1
Revisions in Estimated Cash Flows		(11.1)		(5.5)
Balance as of End of Year	$	430.1	$	426.3


	As of December 31,
	2015								2014
			NSTAR								NSTAR
(Millions of Dollars)	CL&P		Electric		PSNH		WMECO		CL&P		Electric		PSNH		WMECO
Balance as of Beginning of Year	$	35.3	$	34.3	$	20.6	$	5.9	$	35.0	$	32.8	$	19.5	$	4.5
Liabilities Incurred During the Year		-		6.2		0.4		-		-		-		-		1.1
Liabilities Settled During the Year		-		(1.5)		-		(0.1)		(1.1)		-		-		-
Accretion		2.2		1.8		1.3		0.4		1.9		1.5		1.1		0.3
Revisions in Estimated Cash Flows		(3.7)		(5.5)		(0.7)		(0.5)		(0.5)		-		-		-
Balance as of End of Year	$	33.8	$	35.3	$	21.6	$	5.7	$	35.3	$	34.3	$	20.6	$	5.9

Eversource's amounts include CYAPC and YAEC's AROs of $319.1 million and $317.3 million as of December 31, 2015 and 2014, respectively. The fair value of the ARO for CYAPC and YAEC includes uncertainties of the fuel off-load dates related to the DOE’s timing of performance regarding its obligation to dispose of the spent nuclear fuel and high level waste. The incremental asset recorded as an offset to the ARO liability was fully depreciated since the plants have no remaining useful life. Any changes in the assumptions used to calculate the fair value of the ARO liability are recorded with a corresponding offset to the related regulatory asset. The assets held in the CYAPC and YAEC nuclear decommissioning trusts are restricted for settling the ARO and all other decommissioning obligations. For further information on the assets held in the nuclear decommissioning trusts, see Note 5, "Marketable Securities," to the financial statements.

SHORT-TERM DEBT

Short-Term Borrowing Limits: The amount of short-term borrowings that may be incurred by CL&P, NSTAR Electric and WMECO is subject to periodic approval by the FERC. As a result of the NHPUC having jurisdiction over PSNH's short-term debt, PSNH is not currently required to obtain FERC approval for its short-term borrowings. On June 16, 2015, the FERC granted authorization that allows CL&P and WMECO to incur total short-term borrowings up to a maximum of $600 million and $300 million, respectively, effective January 1, 2016 through December 31, 2017. On June 11, 2014, the FERC granted authorization to allow NSTAR Electric to issue total short-term debt securities in an aggregate principal amount not to exceed $655 million outstanding at any one time, effective October 24, 2014 through October 23, 2016.

PSNH is authorized by regulation of the NHPUC to incur short-term borrowings up to 10 percent of net fixed plant plus an additional $60 million until further ordered by the NHPUC. As of December 31, 2015, PSNH's short-term debt authorization under the 10 percent of net fixed plant test plus $60 million totaled approximately $325 million.

CL&P's certificate of incorporation contains preferred stock provisions restricting the amount of unsecured debt that CL&P may incur, including limiting unsecured indebtedness with a maturity of less than 10 years to 10 percent of total capitalization. As of December 31, 2015, CL&P had $327.3 million of unsecured debt capacity available under this authorization.

Yankee Gas and NSTAR Gas are not required to obtain approval from any state or federal authority to incur short-term debt.

Credit Agreements and Commercial Paper Programs: Eversource parent, CL&P, PSNH, WMECO, NSTAR Gas and Yankee Gas are parties to a five-year $1.45 billion revolving credit facility. On October 26, 2015, this revolving credit facility was amended and restated and the termination date was extended to September 4, 2020. Under the revolving credit facility, CL&P has a borrowing sublimit of $600 million, and PSNH and WMECO each have borrowing sublimits of $300 million. The revolving credit facility serves to backstop Eversource parent's $1.45 billion commercial paper program. The commercial paper program allows Eversource parent to issue commercial paper as a form of short-term debt. As of December 31, 2015 and 2014, Eversource parent had approximately $1.1 billion in short-term borrowings outstanding on each date under the Eversource parent commercial paper program, leaving $351.5 million and $348.9 million of available borrowing capacity as of December 31, 2015 and 2014, respectively. The weighted-average interest rate on these borrowings as of December 31, 2015 and 2014 was 0.72 percent and 0.43 percent, respectively. As of December 31, 2015, there were intercompany loans from Eversource parent of $277.4 million to CL&P, $231.3 million to PSNH and $143.4 million to WMECO. As of December 31, 2014, there were intercompany loans from Eversource parent of $133.4 million to CL&P, $90.5 million to PSNH and $21.4 million to WMECO.

NSTAR Electric has a five-year $450 million revolving credit facility. On October 26, 2015, this revolving credit facility was amended and restated and the termination date was extended to September 4, 2020. The facility serves to backstop NSTAR Electric's $450 million commercial paper program. As of December 31, 2015 and 2014, NSTAR Electric had $62.5 million and $302 million, respectively, in short-term borrowings outstanding under its commercial paper program, leaving $387.5 million and $148 million of available borrowing capacity as of December 31, 2015 and 2014, respectively. The weighted-average interest rate on these borrowings as of December 31, 2015 and 2014 was 0.40 percent and 0.27 percent, respectively.

Except as described below, amounts outstanding under the commercial paper programs are included in Notes Payable for Eversource and NSTAR Electric and are classified in current liabilities on the balance sheets as all borrowings are outstanding for no more than 364 days at one time. Intercompany loans from Eversource parent to CL&P, PSNH and WMECO are included in Notes Payable to Eversource Parent and are classified in current liabilities on their respective balance sheets. Intercompany loans from Eversource to CL&P, PSNH and WMECO are eliminated in consolidation on Eversource's balance sheets.

On January 15, 2015, Eversource parent issued $150 million of 1.60 percent Series G Senior Notes due to mature in 2018 and $300 million of 3.15 percent Series H Senior Notes, due to mature in 2025. The proceeds, net of issuance costs, were used to repay short-term borrowings outstanding under the Eversource parent commercial paper program. As the debt proceeds, net of issuance costs, refinanced short-term debt, the short-term debt was classified as Long-Term Debt as of December 31, 2014. See Note 8, "Long-Term Debt," for further information on these debt issuances.

Under the credit facilities described above, Eversource and its subsidiaries must comply with certain financial and non-financial covenants, including a consolidated debt to total capitalization ratio. As of December 31, 2015 and 2014, Eversource and its subsidiaries were in compliance with these covenants. If Eversource or its subsidiaries were not in compliance with these covenants, an event of default would occur requiring all outstanding borrowings by such borrower to be repaid and additional borrowings by such borrower would not be permitted under its respective credit facility.

LONG-TERM DEBT

Details of long-term debt outstanding are as follows:


CL&P		As of December 31,
(Millions of Dollars)		2015		2014
First Mortgage Bonds:
	7.875% 1994 Series D due 2024	$	139.8	$	139.8
	5.750% 2004 Series B due 2034		130.0		130.0
	5.000% 2005 Series A due 2015		-		100.0
	5.625% 2005 Series B due 2035		100.0		100.0
	6.350% 2006 Series A due 2036		250.0		250.0
	5.375% 2007 Series A due 2017		150.0		150.0
	5.750% 2007 Series B due 2037		150.0		150.0
	5.750% 2007 Series C due 2017		100.0		100.0
	6.375% 2007 Series D due 2037		100.0		100.0
	5.650% 2008 Series A due 2018		300.0		300.0
	5.500% 2009 Series A due 2019		250.0		250.0
	2.500% 2013 Series A due 2023		400.0		400.0
	4.300% 2014 Series A due 2044		250.0		250.0
	4.150% 2015 Series A due 2045		350.0		-
Total First Mortgage Bonds			2,669.8		2,419.8
Pollution Control Revenue Bonds:
	4.375% Fixed Rate Tax Exempt due 2028		120.5		120.5
	1.550% Fixed Rate Tax Exempt due 2031		-		62.0
Total Pollution Control Revenue Bonds			120.5		182.5
Pre-1983 Spent Nuclear Fuel Obligation			-		244.5
Less Amounts due Within One Year			-		(162.0)
Unamortized Premiums and Discounts, Net			(10.7)		(4.8)
Unamortized Debt Issuance Costs(1)			(15.9)		(15.8)
CL&P Long-Term Debt(1)		$	2,763.7	$	2,664.2


NSTAR Electric		As of December 31,
(Millions of Dollars)		2015		2014
Debentures:
	5.750% due 2036	$	200.0	$	200.0
	5.625% due 2017		400.0		400.0
	5.500% due 2040		300.0		300.0
	2.375% due 2022		400.0		400.0
	Variable Rate due 2016 (0.6036% and 0.4721% as of December 31, 2015 and 2014)		200.0		200.0
	4.400% due 2044		300.0		300.0
	3.250% due 2025		250.0		-
Total Debentures			2,050.0		1,800.0
Bonds:
	7.375% Tax Exempt Sewage Facility Revenue Bonds, due 2015		-		4.7
Less Amounts due Within One Year			(200.0)		(4.7)
Unamortized Premiums and Discounts, Net			(8.5)		(7.3)
Unamortized Debt Issuance Costs(1)			(11.7)		(11.2)
NSTAR Electric Long-Term Debt(1)		$	1,829.8	$	1,781.5

PSNH		As of December 31,
(Millions of Dollars)		2015		2014
First Mortgage Bonds:
	5.60% Series M due 2035	$	50.0	$	50.0
	6.15% Series N due 2017		70.0		70.0
	6.00% Series O due 2018		110.0		110.0
	4.50% Series P due 2019		150.0		150.0
	4.05% Series Q due 2021		122.0		122.0
	3.20% Series R due 2021		160.0		160.0
	3.50% Series S due 2023		325.0		325.0
Total First Mortgage Bonds			987.0		987.0
Pollution Control Revenue Bonds:
	Adjustable Rate Tax Exempt Series A due 2021 (0.193% and 0.175% as of December 31, 2015 and 2014)		89.3		89.3
Unamortized Premiums and Discounts, Net			0.1		-
Unamortized Debt Issuance Costs(1)			(5.4)		(6.3)
PSNH Long-Term Debt(1)		$	1,071.0	$	1,070.0


WMECO		As of December 31,
(Millions of Dollars)		2015		2014
Notes:
	5.90% Senior Notes Series B, due 2034	$	50.0	$	50.0
	5.24% Senior Notes Series C, due 2015		-		50.0
	6.70% Senior Notes Series D, due 2037		40.0		40.0
	5.10% Senior Notes Series E, due 2020		95.0		95.0
	3.50% Senior Notes Series F, due 2021		250.0		250.0
	3.88% Senior Notes Series G, due 2023		80.0		80.0
Total Notes			515.0		565.0
Pre-1983 Spent Nuclear Fuel Obligation			-		57.4
Less Amounts due Within One Year			-		(50.0)
Unamortized Premiums and Discounts, Net			5.2		6.1
Unamortized Debt Issuance Costs (1)			(2.9)		(3.3)
WMECO Long-Term Debt (1)		$	517.3	$	575.2

OTHER		As of December 31,
(Millions of Dollars)		2015			2014
Yankee Gas - First Mortgage Bonds:
	8.48% Series B due 2022	$	20.0	$	20.0
	5.26% Series H due 2019		50.0		50.0
	5.35% Series I due 2035		50.0		50.0
	6.90% Series J due 2018		100.0		100.0
	4.87% Series K due 2020		50.0		50.0
	4.82% Series L due 2044		100.0		100.0
	3.35% Series M due 2025		75.0		-
Total First Mortgage Bonds			445.0		370.0
Unamortized Premium			0.4		0.6
Unamortized Debt Issuance Costs (1)			(1.7)		(1.5)
Yankee Gas Long-Term Debt (1)			443.7		369.1

NSTAR Gas - First Mortgage Bonds:
	9.95% Series J due 2020		25.0		25.0
	7.11% Series K due 2033		35.0		35.0
	7.04% Series M due 2017		25.0		25.0
	4.46% Series N due 2020		125.0		125.0
	4.35% Series O due 2045		100.0		-
Total First Mortgage Bonds			310.0		210.0
Unamortized Debt Issuance Costs (1)			(0.8)		(0.6)
NSTAR Gas Long-Term Debt (1)			309.2		209.4

Eversource Parent - Notes and Debentures:
	4.50% Debentures due 2019		350.0		350.0
	1.45% Senior Notes Series E due 2018		300.0		300.0
	2.80% Senior Notes Series F due 2023		450.0		450.0
	1.60% Senior Notes Series G due 2018		150.0		-
	3.15% Senior Notes Series H due 2025		300.0		-
	Eversource Parent Commercial Paper Borrowings		-		446.3
Total Eversource Parent Notes and Debentures			1,550.0		1,546.3
Pre-1983 Spent Nuclear Fuel Obligation (CYAPC)			179.5		179.4
Fair Value Adjustment (2)			173.5		202.3
Less Fair Value Adjustment - Current Portion (2)			(28.9)		(28.9)
Unamortized Premiums and Discounts, Net			(1.3)		(1.2)
Unamortized Debt Issuance Costs (1)			(1.9)		1.1
Total Other Long-Term Debt (1)		$	2,623.8	$	2,477.5

Total Eversource Long-Term Debt (1)		$	8,805.6	$	8,568.4

(1)

Effective December 31, 2015, the carrying amount of Long-Term Debt includes unamortized debt issuance costs presented as a direct reduction from the carrying amount of the debt liability, in accordance with new accounting guidance. The December 31, 2014 carrying amount of Long-Term Debt was retrospectively adjusted to conform to the current year presentation. See Note 1C, "Summary of Significant Accounting Policies – Accounting Standards," for further information.

(2)

The fair value adjustment amount is the purchase price adjustment, net of amortization, required to record the NSTAR long-term debt at fair value on the date of the merger.

Long-Term Debt Issuances: On January 15, 2015, Eversource parent issued $150 million of 1.60 percent Series G Senior Notes, due to mature in 2018, and $300 million of 3.15 percent Series H Senior Notes, due to mature in 2025. As the debt proceeds, net of issuance costs, refinanced short-term debt, the short-term debt was classified as Long-Term Debt as of December 31, 2014. On May 20, 2015 and December 1, 2015, CL&P issued $300 million and $50 million, respectively, of 4.15 percent 2015 Series A First and Refunding Mortgage Bonds due to mature in 2045. On September 10, 2015, Yankee Gas issued $75 million of 3.35 percent 2015 Series M First Mortgage Bonds due to mature in 2025. On November 18, 2015, NSTAR Electric issued $250 million of 3.25 percent debentures, due to mature in 2025. On December 8, 2015, NSTAR Gas issued $100

million of 4.35 percent Series O First Mortgage Bonds due to mature in 2045. The proceeds of all debt issuances, net of issuance costs, were used to repay short-term borrowings and fund capital expenditures and working capital.

Long-Term Debt Repayments: On April 1, 2015, CL&P repaid at maturity the $100 million 5.00 percent 2005 Series A First and Refunding Mortgage Bonds and also redeemed the $62 million 1996A Series 1.55 percent PCRBs that were subject to mandatory tender using short-term borrowings. On August 3, 2015, WMECO repaid at maturity the $50 million 5.24 percent Series C Senior Notes, using short-term borrowings.

Long-Term Debt Issuance Authorizations: On November 25, 2015, PURA approved Yankee Gas’ request to extend the authorization period for issuance of up to $125 million in long-term debt from December 31, 2015 to December 31, 2016. On December 4, 2015, the DPU authorized WMECO to issue up to $100 million in long-term debt for the period through December 31, 2016. On December 4, 2015, the DPU approved NSTAR Electric’s request to extend the authorization period for issuance of up to $250 million in long-term debt from December 31, 2015 to December 31, 2016.

Long-Term Debt Provisions: The utility plant of CL&P, PSNH, Yankee Gas and NSTAR Gas is subject to the lien of each company's respective first mortgage bond indenture. The Eversource parent, NSTAR Electric and WMECO debt is unsecured. Additionally, the long-term debt agreements provide that Eversource and certain of its subsidiaries must comply with certain covenants as are customarily included in such agreements, including a minimum equity requirement for NSTAR Gas. Under the minimum equity requirement, the outstanding long-term debt of NSTAR Gas must not exceed equity.

CL&P's obligation to repay the PCRBs is secured by first mortgage bonds. The first mortgage bonds contain similar terms and provisions as the applicable series of PCRBs. If CL&P fails to meet its obligations under the first mortgage bonds, then the holder of the first mortgage bonds (the issuer of the PCRBs) would have rights under the first mortgage bonds. CL&P's $120.5 million tax-exempt PCRBs will be subject to redemption at par on or after September 1, 2021. All other long-term debt securities are subject to make-whole provisions.

PSNH's obligation to repay the PCRBs is secured by first mortgage bonds and bond insurance. The first mortgage bonds contain similar terms and provisions as the PCRBs. If PSNH fails to meet its obligations under the first mortgage bonds, then the holder of the first mortgage bonds (the issuer of the PCRBs) would have rights under the first mortgage bonds. The PSNH Series A tax-exempt PCRBs are currently callable at 100 percent of par. The PCRBs bear interest at a rate that is periodically set pursuant to auctions. PSNH is not obligated to purchase these PCRBs, which mature in 2021, from the remarketing agent.

Yankee Gas has certain long-term debt agreements that contain cross-default provisions. No other debt issuances contain cross-default provisions as of December 31, 2015.

Pre-1983 Spent Nuclear Fuel Obligation: Under the Nuclear Waste Policy Act of 1982, CL&P and WMECO were obligated to pay the DOE for the costs of disposal of pre-1983 spent nuclear fuel and high-level radioactive waste for the period prior to the sale of their ownership shares in the Millstone nuclear power stations, which were sold in March 2001. The DOE is responsible for the selection and development of repositories for, and the disposal of, spent nuclear fuel and high-level radioactive waste. After the sale of the Millstone nuclear power stations in March 2001, CL&P and WMECO remained responsible for their share of the disposal costs for nuclear fuel used to generate electricity prior to April 7, 1983 (pre-1983 Spent Nuclear Fuel) and recorded an accrual for the full liability thereof to the DOE. This liability accrued interest costs at the 3-month Treasury bill yield rate. As of December 31, 2014, CL&P and WMECO's pre-1983 Spent Nuclear Fuel obligation was $244.5 million and $57.4 million, respectively, which included accumulated interest costs of $178 million for CL&P and $41.8 million for WMECO.

In late 2015, CL&P and WMECO made payments of $244.6 million and $57.4 million, respectively, to fully satisfy their pre-1983 Spent Nuclear Fuel obligations to the DOE, which included accumulated interest of $178 million and $41.8 million, respectively. CL&P issued debt to fund its payment while WMECO liquidated its spent nuclear fuel trust.

In addition, as a result of consolidating CYAPC, Eversource has consolidated $179.5 million and $179.4 million, respectively, in additional pre-1983 spent nuclear fuel obligations to the DOE, which include accumulated interest costs of $130.7 million and $130.6 million as of December 31, 2015 and 2014, respectively. CYAPC maintains a trust to fund amounts due to the DOE for the disposal of pre-1983 spent nuclear fuel. For further information, see Note 5, "Marketable Securities," to the financial statements.

Long-Term Debt Maturities: Long-term debt maturities on debt outstanding for the years 2016 through 2020 and thereafter are shown below. These amounts exclude the CYAPC pre-1983 spent nuclear fuel obligation, net unamortized premiums, discounts and debt issuance costs, and other fair value adjustments as of December 31, 2015:


(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		WMECO
2016	$	200.0	$	-	$	200.0	$	-	$	-
2017		745.0		250.0		400.0		70.0		-
2018		960.0		300.0		-		110.0		-
2019		800.0		250.0		-		150.0		-
2020		295.0		-		-		-		95.0
Thereafter		5,736.6		1,990.3		1,450.0		746.3		420.0
Total	$	8,736.6	$	2,790.3	$	2,050.0	$	1,076.3	$	515.0

EMPLOYEE BENEFITS

Pension Benefits and Postretirement Benefits Other Than Pensions

As of December 31, 2014, Eversource Service sponsored two defined benefit retirement plans that covered eligible employees, including, among others, employees of CL&P, NSTAR Electric, PSNH and WMECO. Effective January 1, 2015, these two pension plans were merged into one plan, sponsored by Eversource Service (Pension Plan). The Pension Plan is subject to the provisions of ERISA, as amended by the PPA of 2006. Eversource’s policy is to annually fund the Pension Plan in an amount at least equal to an amount that will satisfy all federal funding requirements. In addition to the Pension Plan, Eversource maintains non-qualified defined benefit retirement plans sponsored by Eversource Service (herein collectively referred to as the SERP Plans), which provide benefits in excess of Internal Revenue Code limitations to eligible current and retired participants.

As of December 31, 2014, Eversource Service also sponsored defined benefit postretirement plans that provided certain retiree benefits, primarily medical, dental and life insurance, to retired employees that met certain age and service eligibility requirements, including, among others, employees of CL&P, NSTAR Electric, PSNH and WMECO. Effective January 1, 2015, these postretirement plans were merged into one plan, sponsored by Eversource Service (PBOP Plan). Under certain circumstances, eligible retirees are required to contribute to the costs of postretirement benefits. The benefits provided under the PBOP Plan are not vested and the Company has the right to modify any benefit provision subject to applicable laws at that time. Eversource annually funds postretirement costs through tax deductible contributions to external trusts.

Because the Regulated companies recover the retiree benefit costs from customers through rates, regulatory assets are recorded in lieu of recording an adjustment to Accumulated Other Comprehensive Income/(Loss) for the funded status of the Pension, SERP and PBOP Plans. Regulatory accounting is also applied to the portions of the Eversource Service costs that support the Regulated companies, as these costs are also recovered from customers. Adjustments to the Pension and PBOP Plans funded status for the unregulated companies are recorded on an after-tax basis to Accumulated Other Comprehensive Income/(Loss). For further information, see Note 2, "Regulatory Accounting," and Note 14, "Accumulated Other Comprehensive Income/(Loss)," to the financial statements.

For the year ended December 31, 2015, the difference between the actual return and calculated expected return on plan assets for the Pension and PBOP Plans are reflected as a component of unrecognized actuarial gains or losses, which are recorded in Regulatory Assets or Accumulated Other Comprehensive Income/(Loss). Unrecognized actuarial gains or losses are amortized as a component of pension and PBOP expense over the estimated average future employee service period.

Pension and SERP Plans: On January 1, 2014, NSTAR Electric & Gas was merged into Eversource Service (service company merger) and, concurrently, all employees were transferred to the company they predominantly provide services for: Eversource Service, NSTAR Electric or NSTAR Gas. As a result of these employee transfers, the pension and SERP assets and liabilities of NSTAR Electric & Gas were attributed by participant and transferred to the applicable operating company's balance sheets. This change had no impact on the income statement or net assets of NSTAR Electric or Eversource.

The Pension and SERP Plans are accounted for under the multiple-employer approach, with each operating company's balance sheet reflecting its share of the funded status of the plans. Although Eversource maintains marketable securities in a benefit trust, the SERP Plans do not contain any assets. For further information, see Note 5, "Marketable Securities," to the financial statements. The following tables provide information on the Pension and SERP Plan benefit obligations, fair values of Pension Plan assets, and funded status:


	Pension and SERP
Eversource	As of December 31,
(Millions of Dollars)	2015		2014
Change in Benefit Obligation
Benefit Obligation as of Beginning of Year	$	(5,486.2)	$	(4,676.5)
Service Cost		(91.4)		(79.9)
Interest Cost		(227.0)		(225.7)
Actuarial Gain/(Loss)		331.5		(739.6)
Benefits Paid - Pension		238.5		230.3
Benefits Paid - Lump Sum		149.5		-
Benefits Paid - SERP		5.0		5.2
Benefit Obligation as of End of Year	$	(5,080.1)	$	(5,486.2)
Change in Pension Plan Assets
Fair Value of Pension Plan Assets as of Beginning of Year	$	4,126.5	$	3,985.9
Employer Contributions		154.6		171.6
Actual Return on Pension Plan Assets		12.3		199.3
Benefits Paid		(238.5)		(230.3)
Benefits Paid - Lump Sum		(149.5)		-
Fair Value of Pension Plan Assets as of End of Year	$	3,905.4	$	4,126.5
Funded Status as of December 31st	$	(1,174.7)	$	(1,359.7)


	Pension and SERP
	As of December 31, 2015								As of December 31, 2014
			NSTAR								NSTAR
(Millions of Dollars)	CL&P		Electric		PSNH		WMECO		CL&P		Electric		PSNH		WMECO
Change in Benefit Obligation
Benefit Obligation as of Beginning of Year	$	(1,230.1)	$	(982.6)	$	(580.7)	$	(249.4)	$	(1,083.4)	$	(1,353.3)	$	(529.0)	$	(223.9)
Change due to transfer of employees		(4.6)		6.2		(1.9)		(1.3)		26.4		479.9		32.2		6.2
Service Cost		(24.7)		(14.9)		(12.1)		(4.3)		(20.2)		(13.6)		(9.7)		(3.5)
Interest Cost		(51.1)		(40.2)		(24.3)		(10.4)		(50.5)		(41.3)		(23.8)		(10.3)
Actuarial Gain/(Loss)		77.8		34.1		38.9		12.6		(161.0)		(107.0)		(73.3)		(29.8)
Benefits Paid - Pension		60.2		47.6		23.2		12.7		58.3		52.4		22.8		11.9
Benefits Paid - Lump Sum		14.5		-		9.1		2.5		-		-		-		-
Benefits Paid - SERP		0.4		0.1		0.2		-		0.3		0.3		0.1		-
Benefit Obligation as of End of Year	$	(1,157.6)	$	(949.7)	$	(547.6)	$	(237.6)	$	(1,230.1)	$	(982.6)	$	(580.7)	$	(249.4)
Change in Pension Plan Assets
Fair Value of Pension Plan Assets as of Beginning of Year	$	980.8	$	879.0	$	498.4	$	234.0	$	1,016.3	$	1,235.3	$	528.6	$	240.4
Change due to transfer of employees		4.6		(6.2)		1.9		1.3		(26.4)		(441.4)		(32.2)		(6.2)
Employer Contributions		-		5.0		1.0		-		-		101.0		-		-
Actual Return on Pension Plan Assets		2.8		2.7		1.5		0.7		49.2		36.5		24.8		11.7
Benefits Paid		(60.2)		(47.6)		(23.2)		(12.7)		(58.3)		(52.4)		(22.8)		(11.9)
Benefits Paid - Lump Sum		(14.5)		-		(9.1)		(2.5)		-		-		-		-
Fair Value of Pension Plan Assets as of End of Year	$	913.5	$	832.9	$	470.5	$	220.8	$	980.8	$	879.0	$	498.4	$	234.0
Funded Status as of December 31st	$	(244.1)	$	(116.8)	$	(77.1)	$	(16.8)	$	(249.3)	$	(103.6)	$	(82.3)	$	(15.4)

In August 2015, Eversource made a total lump-sum payout of $149.5 million, which reduced the projected benefit obligation and Pension Plan assets by a corresponding amount. Therefore, the lump-sum payment had no impact on the net Accrued Pension Liability reflected on the Eversource, CL&P, PSNH and WMECO balance sheets as of December 31, 2015.

During 2014, the Society of Actuaries released a series of updated mortality tables resulting from studies that measured mortality rates for various groups of individuals. The updated mortality tables released in 2014 increased the life expectancy of plan participants by three to five years and had the effect of increasing the estimated benefits to be provided to plan participants. The impact of adopting the updated mortality tables on Eversource's liability as of December 31, 2014 was an increase of approximately $340 million. In 2015, a revised scale for the mortality table was released having the effect of decreasing the estimate of benefits to be provided to plan participants. The impact of the adoption of the new mortality scale resulted in a decrease of $48 million on Eversource's liability as of December 31, 2015.

The increase in the discount rate used to calculate the funded status resulted in a decrease on Eversource's liability of approximately $267 million as of December 31, 2015. Decreases in the discount rates resulted in an increase on Eversource's liability of approximately $530 million as of December 31, 2014.

The pension and SERP Plans' funded status includes the current portion of the SERP liability, which is included in Other Current Liabilities on the accompanying balance sheets.


As of December 31, 2015 and 2014, the accumulated benefit obligation for the Pension and SERP Plans is as follows:

(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		WMECO
2015	$	4,733.2	$	1,062.7	$	888.8	$	506.4	$	222.3
2014		5,000.1		1,101.4		910.4		524.5		226.4

The following actuarial assumptions were used in calculating the Pension and SERP Plans' year end funded status:


	Pension and SERP
	As of December 31,
	2015					2014
Discount Rate	4.21	%	-	4.60	%	4.20	%
Compensation/Progression Rate	3.50%					3.50	%

Pension and SERP Expense: Eversource charges net periodic pension expense to its subsidiaries based on the actual participant demographic data for each subsidiary's participants. The actual investment return in the trust is allocated to each of the subsidiaries annually in proportion to the investment return expected to be earned during the year. For the year ended December 31, 2013 (prior to the service company merger), the net periodic pension expense recorded at NSTAR Electric represented the full cost of the plan with a portion of the costs allocated to affiliated companies based on participant demographic data.

The components of net periodic benefit expense for the Pension and SERP Plans are shown below. The net periodic benefit expense and the intercompany allocations less the capitalized portion of pension and SERP amounts are included in Operations and Maintenance expense on the statements of income. Capitalized pension amounts relate to employees working on capital projects and are included in Property, Plant and Equipment, Net on the balance sheets. Pension and SERP expense reflected in the statements of cash flows for CL&P, NSTAR Electric, PSNH and WMECO does not include the intercompany allocations or the corresponding capitalized portion, as these amounts are cash settled on a short-term basis.


	Pension and SERP
	For the Year Ended December 31, 2015
					NSTAR
(Millions of Dollars)	Eversource (1)		CL&P		Electric		PSNH (1)		WMECO
Service Cost	$	91.4	$	24.7	$	14.9	$	12.1	$	4.3
Interest Cost		227.0		51.1		40.2		24.3		10.4
Expected Return on Pension Plan Assets		(335.9)		(78.9)		(70.0)		(40.4)		(18.9)
Actuarial Loss		148.5		32.2		35.8		11.6		6.4
Prior Service Cost/(Credit)		3.7		1.5		(0.1)		0.5		0.3
Total Net Periodic Benefit Expense	$	134.7	$	30.6	$	20.8	$	8.1	$	2.5
Intercompany Allocations		N/A	$	22.5	$	13.6	$	6.7	$	4.4
Capitalized Pension Expense	$	41.0	$	18.8	$	11.4	$	3.5	$	1.9

	Pension and SERP
	For the Year Ended December 31, 2014
					NSTAR
(Millions of Dollars)	Eversource		CL&P		Electric		PSNH		WMECO
Service Cost	$	79.9	$	20.2	$	13.6	$	9.7	$	3.5
Interest Cost		225.7		50.5		41.3		23.8		10.3
Expected Return on Pension Plan Assets		(310.8)		(75.4)		(63.0)		(38.1)		(17.9)
Actuarial Loss		128.4		33.7		23.5		11.6		6.9
Prior Service Cost		4.4		1.8		-		0.7		0.4
Total Net Periodic Benefit Expense	$	127.6	$	30.8	$	15.4	$	7.7	$	3.2
Intercompany Allocations		N/A	$	26.7	$	10.4	$	7.6	$	5.1
Capitalized Pension Expense	$	35.2	$	17.6	$	7.9	$	3.0	$	2.4

	Pension and SERP
	For the Year Ended December 31, 2013
					NSTAR
(Millions of Dollars)	Eversource		CL&P		Electric (2)		PSNH		WMECO
Service Cost	$	102.3	$	24.9	$	33.1	$	13.1	$	4.7
Interest Cost		206.7		48.3		58.0		23.6		10.0
Expected Return on Pension Plan Assets		(278.1)		(73.8)		(84.4)		(35.4)		(17.4)
Actuarial Loss		210.5		55.9		58.1		21.6		11.8
Prior Service Cost/(Credit)		4.0		1.8		(0.3)		0.7		0.4
Total Net Periodic Benefit Expense	$	245.4	$	57.1	$	64.5	$	23.6	$	9.5
Intercompany Allocations		N/A	$	44.9	$	(8.4)	$	10.5	$	8.0
Capitalized Pension Expense	$	73.2	$	28.0	$	28.9	$	7.3	$	5.2

(1)

Amounts exclude $3.2 million for the year ended December 31, 2015 that represent amounts included in other deferred debits.

(2)

NSTAR Electric's allocated expense associated with the NSTAR SERP was $3.2 million for the year ended December 31, 2013 and was not included in the NSTAR Electric amounts in the table above. For the years ended December 31, 2015 and 2014, the SERP amount is now allocated to NSTAR Electric due to the service company merger.


The following actuarial assumptions were used to calculate Pension and SERP expense amounts:

	Pension and SERP
	For the Years Ended December 31,
	2015	2014					2013
Discount Rate	4.20%	4.85	%	-	5.03	%	4.13	%	-	4.24	%
Expected Long-Term Rate of Return	8.25 %	8.25 %					8.25%
Compensation/Progression Rate	3.50 %	3.50	%	-	4.00	%	3.50	%	-	4.00	%


The following is a summary of the changes in plan assets and benefit obligations recognized in Regulatory Assets and Other Comprehensive Income (OCI) as well as amounts in Regulatory Assets and OCI that were reclassified as net periodic benefit expense during the years presented:


	Regulatory Assets				OCI
	For the Years Ended December 31,
(Millions of Dollars)	2015		2014		2015		2014
Actuarial (Gains)/Losses Arising During the Year	$	(2.0)	$	797.3	$	(6.2)	$	55.9
Actuarial Losses Reclassified as Net Periodic Benefit Expense		(142.3)		(122.8)		(6.2)		(5.6)
Prior Service Cost Reclassified as Net Periodic Benefit Expense		(3.5)		(4.2)		(0.2)		(0.2)


The following is a summary of the remaining Regulatory Assets and Accumulated Other Comprehensive Loss amounts that have not been recognized as components of net periodic benefit expense as of December 31, 2015 and 2014, as well as the amounts that are expected to be recognized as components in 2016:



	Regulatory Assets as of				Expected		AOCI as of				Expected
	December 31,				2016		December 31,				2016
(Millions of Dollars)	2015		2014		Expense		2015		2014		Expense
Actuarial Loss	$	1,667.6	$	1,811.9	$	120.6	$	81.1	$	93.5	$	5.4
Prior Service Cost		9.7		13.2		3.4		0.6		0.8		0.2

PBOP Plan: On January 1, 2014, concurrent with the service company merger, the PBOP assets and liabilities of NSTAR Electric & Gas were attributed by participant and transferred to the applicable operating company's balance sheets. This change had no impact on the income statements or net assets of NSTAR Electric or Eversource. The PBOP Plan is accounted for under the multiple-employer approach, with each operating company's balance sheet reflecting its share of the funded status of the plan. The following tables provide information on the PBOP Plan benefit obligations, fair values of plan assets, and funded status:


	PBOP
Eversource	As of December 31,
(Millions of Dollars)	2015		2014
Change in Benefit Obligation
Benefit Obligation as of Beginning of Year	$	(1,147.9)	$	(1,038.0)
Service Cost		(16.3)		(12.5)
Interest Cost		(47.2)		(49.5)
Actuarial Gain/(Loss)		106.0		(95.5)
Benefits Paid		54.0		47.6
Benefit Obligation as of End of Year	$	(1,051.4)	$	(1,147.9)
Change in Plan Assets
Fair Value of Plan Assets as of Beginning of Year	$	862.6	$	826.5
Actual Return on Plan Assets		(4.3)		43.7
Employer Contributions		7.9		40.0
Benefits Paid		(54.0)		(47.6)
Fair Value of Plan Assets as of End of Year	$	812.2	$	862.6
Funded Status as of December 31st	$	(239.2)	$	(285.3)


	PBOP
	As of December 31,
	2015								2014
			NSTAR								NSTAR
(Millions of Dollars)	CL&P		Electric		PSNH		WMECO		CL&P		Electric		PSNH		WMECO
Change in Benefit Obligation
Benefit Obligation as of Beginning of Year	$	(173.9)	$	(468.7)	$	(91.8)	$	(36.6)	$	(180.4)	$	-	$	(93.5)	$	(38.7)
Change due to transfer of employees		0.1		2.3		(0.3)		-		3.7		(395.5)		4.3		1.0
Service Cost		(2.1)		(5.4)		(1.4)		(0.4)		(2.2)		(3.1)		(1.3)		(0.4)
Interest Cost		(7.2)		(19.0)		(3.9)		(1.5)		(8.1)		(19.4)		(4.3)		(1.7)
Actuarial Gain/(Loss)		7.2		59.1		3.6		1.5		3.5		(68.6)		(1.1)		1.3
Benefits Paid		11.9		18.9		5.3		2.6		9.6		17.9		4.1		1.9
Benefit Obligation as of End of Year	$	(164.0)	$	(412.8)	$	(88.5)	$	(34.4)	$	(173.9)	$	(468.7)	$	(91.8)	$	(36.6)
Change in Plan Assets
Fair Value of Plan Assets as of Beginning of Year	$	149.0	$	336.5	$	80.9	$	34.4	$	151.3	$	-	$	81.8	$	35.3
Change due to transfer of employees		-		0.6		0.2		-		(3.2)		316.7		(3.1)		(1.0)
Actual Return on Plan Assets		(0.4)		(2.8)		-		(0.1)		6.3		18.4		3.8		1.6
Employer Contributions		-		4.9		-		-		4.2		19.3		2.5		0.4
Benefits Paid		(11.9)		(18.9)		(5.3)		(2.6)		(9.6)		(17.9)		(4.1)		(1.9)
Fair Value of Plan Assets as of End of Year	$	136.7	$	320.3	$	75.8	$	31.7	$	149.0	$	336.5	$	80.9	$	34.4
Funded Status as of December 31st	$	(27.3)	$	(92.5)	$	(12.7)	$	(2.7)	$	(24.9)	$	(132.2)	$	(10.9)	$	(2.2)

During 2014, the Society of Actuaries released a series of updated mortality tables resulting from studies that measured mortality rates for various groups of individuals. The updated mortality tables released in 2014 increased the life expectancy of plan participants by three to five years and had the effect of increasing the estimated benefits to be provided to plan participants. The impact of adopting the updated mortality tables on Eversource's liability as of December 31, 2014 was an increase of approximately $82 million. In 2015, a revised scale for the mortality table was released having the effect of decreasing the estimate of benefits to be provided to plan participants. The impact of the adoption of the new mortality scale resulted in a decrease of $23 million on Eversource's liability as of December 31, 2015.

The increase in the discount rate used to calculate the funded status resulted in a decrease on Eversource's liability of approximately $60 million as of December 31, 2015. Decreases in the discount rates resulted in an increase on Eversource's liability of approximately $110 million as of December 31, 2014.


The following actuarial assumptions were used in calculating the PBOP Plan's year end funded status:

	PBOP
	As of December 31,
	2015		2014
Discount Rate	4.62	%	4.22	%
Health Care Cost Trend Rate	6.25	%	6.50	%

PBOP Expense: Eversource charges net periodic postretirement benefits expense to its subsidiaries based on the actual participant demographic data for each subsidiary's participants. The actual investment return in the trust each year is allocated to each of the subsidiaries annually in proportion to the investment return expected to be earned during the year. For the year ended December 31, 2013 (prior to the service company merger), the net periodic postretirement expense of the NSTAR PBOP Plan allocated to NSTAR Electric was $4.6 million.

The components of net periodic benefit expense for the PBOP Plan are shown below. The net periodic benefit expense and the intercompany allocations less the capitalized portion of PBOP are included in Operations and Maintenance on the statements of income. Capitalized PBOP amounts relate to employees working on capital projects and are included in Property, Plant and Equipment, Net on the balance sheets. PBOP expense reflected in the statements of cash flows for CL&P, NSTAR Electric, PSNH and WMECO does not include the intercompany allocations or the corresponding capitalized portion, as these amounts are cash settled on a short-term basis.


		PBOP
	For the Year Ended December 31, 2015
					NSTAR
(Millions of Dollars)	Eversource		CL&P		Electric		PSNH		WMECO
Service Cost	$	16.3	$	2.1	$	5.4	$	1.4	$	0.4
Interest Cost		47.2		7.2		19.0		3.9		1.5
Expected Return on Plan Assets		(67.4)		(11.1)		(27.3)		(6.0)		(2.5)
Actuarial Loss		6.8		0.7		2.3		0.5		-
Prior Service Credit		(0.5)		-		(0.2)		-		-
Total Net Periodic Benefit Expense/(Income)	$	2.4	$	(1.1)	$	(0.8)	$	(0.2)	$	(0.6)
Intercompany Allocations		N/A	$	1.9	$	0.8	$	0.4	$	0.3
Capitalized PBOP Expense/(Income)	$	0.1	$	(0.2)	$	(0.2)	$	0.2	$	(0.2)

	PBOP
	For the Year Ended December 31, 2014
					NSTAR
(Millions of Dollars)	Eversource		CL&P		Electric		PSNH		WMECO
Service Cost	$	12.5	$	2.2	$	3.1	$	1.3	$	0.4
Interest Cost		49.5		8.1		19.4		4.3		1.7
Expected Return on Plan Assets		(63.3)		(10.5)		(25.9)		(5.4)		(2.3)
Actuarial Loss/(Gain)		12.2		4.2		(0.5)		2.2		0.5
Prior Service Credit		(2.8)		-		(1.9)		-		-
Total Net Periodic Benefit Expense/(Income)	$	8.1	$	4.0	$	(5.8)	$	2.4	$	0.3
Intercompany Allocations		N/A	$	3.8	$	0.8	$	1.0	$	0.7
Capitalized PBOP Expense/(Income)	$	1.4	$	1.8	$	(2.3)	$	0.8	$	0.2

	PBOP
	For the Year Ended December 31, 2013
(Millions of Dollars)	Eversource		CL&P		PSNH		WMECO
Service Cost	$	16.9	$	3.4	$	2.3	$	0.7
Interest Cost		47.2		7.9		4.0		1.7
Expected Return on Plan Assets		(55.4)		(10.1)		(5.2)		(2.3)
Actuarial Loss		26.0		7.4		3.6		1.1
Prior Service Credit		(2.1)		-		-		-
Total Net Periodic Benefit Expense	$	32.6	$	8.6	$	4.7	$	1.2
Intercompany Allocations		N/A	$	7.1	$	1.6	$	1.3
Capitalized PBOP Expense	$	8.8	$	3.9	$	1.3	$	0.6


The following actuarial assumptions were used to calculate PBOP expense amounts:

	PBOP
	For the Years Ended December 31,
	2015		2014					2013
Discount Rate	4.22	%	4.78	%	-	5.10	%	4.04	%	-	4.35	%
Expected Long-Term Rate of Return	8.25	%	8.25 %					8.25%

As of December 31, 2015 and 2014, the health care cost trend rate assumptions used to determine the PBOP Plan's funded status was 6.25 percent and 6.5 percent, respectively, subsequently decreasing to an ultimate rate of 4.5 percent in 2023. The health care cost trend rate assumption used to calculate the PBOP expense amount was 6.5 percent for the year ended December 31, 2015.

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. The effect of changing the assumed health care cost trend rate by one percentage point for the year ended December 31, 2015 would have the following effects:


	One Percentage		One Percentage
(Millions of Dollars)	Point Increase		Point Decrease
Effect on PBOP Obligation	$	115.3	$	(90.8)
Effect on Total Service and Interest Cost Components		8.5		(6.3)


The following is a summary of the changes in plan assets and benefit obligations recognized in Regulatory Assets and OCI as well as amounts recognized in Regulatory Assets and OCI that were reclassified as net periodic benefit (expense)/income during the years presented:



	Regulatory Assets					OCI
	For the Years Ended December 31,
(Millions of Dollars)	2015		2014		2015			2014
Actuarial (Gains)/Losses Arising During the Year	$	(34.1)	$	115.1	$		0.7	$	0.4
Actuarial Losses Reclassified as Net Periodic Benefit Expense		(6.4)		(11.6)			(0.4)		(0.6)
Prior Service Credit Reclassified as Net Periodic Benefit Income		0.5		2.8			-		-


The following is a summary of the remaining Regulatory Assets and Accumulated Other Comprehensive Loss amounts that have not been recognized as components of net periodic benefit expense as of December 31, 2015 and 2014, as well as the amounts that are expected to be recognized as components in 2016:


		Regulatory Assets as of			Expected			AOCI as of			Expected
	December 31,				2016			December 31,			2016
(Millions of Dollars)	2015		2014		Expense		2015		2014		Expense
Actuarial Loss	$	152.2	$	192.7	$	4.0	$	6.3	$	6.0	$	0.4
Prior Service Credit		(1.3)		(1.8)		(0.2)		-		-		-


Estimated Future Benefit Payments: The following benefit payments, which reflect expected future service, are expected to be paid by the Pension, SERP and PBOP Plans:

(Millions of Dollars)	2016		2017		2018		2019		2020		2021-2025
Pension and SERP	$	253.5	$	272.9	$	273.9	$	283.7	$	292.7	$	1,604.3
PBOP		60.8		61.2		61.4		61.8		62.4		315.4

Eversource Contributions: Eversource contributed $154.6 million to the Pension Plan in 2015, of which $5 million was contributed by NSTAR Electric, $1 million by PSNH and the remainder by other Eversource subsidiaries, primarily Eversource Service. Based on the current status of the Pension Plan and federal pension funding requirements, although not required to make a minimum pension contribution in 2016, Eversource currently expects to make contributions of approximately $146 million in 2016, of which $21 million will be contributed by NSTAR Electric and $17 million by PSNH. The remaining $108 million is expected to be contributed by other Eversource subsidiaries, primarily Eversource Service.

Eversource contributed $7.9 million to the PBOP Plan in 2015, of which $4.9 million was contributed by NSTAR Electric. Eversource expects to make approximately $9.5 million in contributions in 2016.

Fair Value of Pension and PBOP Plan Assets: Pension and PBOP funds are held in external trusts. Trust assets, including accumulated earnings, must be used exclusively for Pension and PBOP payments. Eversource's investment strategy for its Pension and PBOP Plans is to maximize the long-term rates of return on these plans' assets within an acceptable level of risk. The investment strategy for each asset category includes a diversification of asset types, fund strategies and fund managers and it establishes target asset allocations that are routinely reviewed and periodically rebalanced. PBOP assets are comprised of assets held in the PBOP Plan as well as specific assets within the defined benefit pension plan trust (401(h) assets). The investment policy and strategy of the 401(h) assets is consistent with that of the defined benefit pension plan. Eversource's expected long-term rates of return on Pension and PBOP Plan assets are based on target asset allocation assumptions and related expected long-term rates of return. In developing its expected long-term rate of return assumptions for the Pension and PBOP Plans, Eversource evaluated input from consultants, as well as long-term inflation assumptions and historical returns. For the year ended December 31, 2015, management has assumed long-term rates of return of 8.25 percent for the Pension and PBOP Plan assets. These long-term rates of return are based on the assumed rates of return for the target asset allocations as follows:


		As of December 31, 2015		As of December 31, 2014
		Pension Plan and Tax-Exempt Assets Within PBOP Plan		Pension Plan and Tax-Exempt Assets Within PBOP Plan
		Target Asset Allocation	Assumed Rate of Return	Target Asset Allocation	Assumed Rate of Return
Equity Securities:
	United States	22%	8.5%	24%	9%
	International	13%	8.5%	10%	9%
	Emerging Markets	5%	10%	6%	10%
	Private Equity	12%	12%	10%	13%
Debt Securities:
	Fixed Income	12%	4.5%	15%	5%
	High Yield Fixed Income	13%	8.5%	9%	7.5%
	Emerging Markets Debt	5%	7.5%	6%	7.5%
Real Estate and Other Assets		10%	7.5%	9%	7.5%
Hedge Funds		8%	7%	11%	7%

The taxable assets within the PBOP Plan have a target asset allocation of 70 percent equity securities and 30 percent fixed income securities.

The following table presents, by asset category, the Pension and PBOP Plan assets recorded at fair value on a recurring basis by the level in which they are classified within the fair value hierarchy:


		Pension Plan
		Fair Value Measurements as of December 31,
(Millions of Dollars)		2015								2014
Asset Category:		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Equity Securities (1)		$	396.5	$	985.7	$	305.2	$	1,687.4	$	414.7	$	1,035.0	$	292.2	$	1,741.9
Private Equity			7.6		-		464.7		472.3		18.8		-		367.9		386.7
Fixed Income (2)			-		432.0		784.8		1,216.8		10.2		561.4		722.0		1,293.6
Real Estate and Other Assets			-		117.5		260.3		377.8		-		132.0		265.8		397.8
Hedge Funds			-		49.7		290.8		340.5		-		20.0		475.0		495.0
Total		$	404.1	$	1,584.9	$	2,105.8	$	4,094.8	$	443.7	$	1,748.4	$	2,122.9	$	4,315.0
	Less: 401(h) PBOP Assets (3)								(189.4)								(188.5)
Total Pension Assets								$	3,905.4							$	4,126.5

		PBOP Plan
		Fair Value Measurements as of December 31,
(Millions of Dollars)		2015								2014
Asset Category:		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Equity Securities (1)		$	109.7	$	121.6	$	77.8	$	309.1	$	104.1	$	172.8	$	75.1	$	352.0
Private Equity			-		-		32.9		32.9		-		-		24.9		24.9
Fixed Income (2)			9.7		99.9		81.6		191.2		16.1		110.0		78.3		204.4
Real Estate and Other Assets			-		17.0		20.4		37.4		-		19.4		15.0		34.4
Hedge Funds			-		-		52.2		52.2		-		-		58.4		58.4
Total		$	119.4	$	238.5	$	264.9	$	622.8	$	120.2	$	302.2	$	251.7	$	674.1
	Add: 401(h) PBOP Assets (3)								189.4								188.5
Total PBOP Assets								$	812.2							$	862.6

(1)

United States, International and Emerging Markets equity securities classified as Level 2 include investments in commingled funds. Level 3 investments include hedge funds that are overlayed with equity index swaps and futures contracts and funds invested in equities that have redemption restrictions.

(2)

Fixed Income investments classified as Level 3 investments include fixed income funds that invest in a variety of opportunistic fixed income strategies, and hedge funds that are overlayed with fixed income futures.

(3)

The assets of the Pension Plan include a 401(h) account that has been allocated to provide health and welfare postretirement benefits under the PBOP Plan.

The Company values assets based on observable inputs when available. Equity securities, exchange traded funds and futures contracts classified as Level 1 in the fair value hierarchy are priced based on the closing price on the primary exchange as of the balance sheet date. Commingled funds included in Level 2 equity securities are recorded at the net asset value provided by the asset manager, which is based on the market prices of the underlying equity securities. Swaps are valued using pricing models that incorporate interest rates and equity and fixed income index closing prices to determine a net present value of the cash flows. Fixed income securities, such as government issued securities, corporate bonds and high yield bond funds, are included in Level 2 and are valued using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. The pricing models utilize observable inputs such as recent trades for the same or similar instruments, yield curves, discount margins and bond structures. Hedge funds and investments in opportunistic fixed income funds are recorded at net asset value based on the values of the underlying assets. The assets in the hedge funds and opportunistic fixed income funds are valued using observable inputs and are classified as Level 3 within the fair value hierarchy due to redemption restrictions. Private Equity investments and Real Estate and Other Assets are valued using the net asset value provided by the partnerships, which are based on discounted cash flows of the underlying investments, real estate appraisals or public market comparables of the underlying investments. These investments are classified as Level 3 due to redemption restrictions.

Fair Value Measurements Using Significant Unobservable Inputs (Level 3): The following tables present changes in the Level 3 category of Eversource's Pension and PBOP Plan assets for the years ended December 31, 2015 and 2014:


		Pension Plan
		Equity		Private		Fixed		Real Estate and		Hedge
(Millions of Dollars)		Securities		Equity		Income		Other Assets		Funds		Total
Balance as of January 1, 2014		$	255.5	$	300.3	$	589.5	$	288.5	$	416.9	$	1,850.7
Actual Return/(Loss) on Plan Assets:
	Relating to Assets Still Held as of Year End		(2.3)		14.0		45.2		(3.6)		23.5		76.8
	Relating to Assets Distributed During the Year		-		13.9		(6.2)		28.3		(15.2)		20.8
Purchases, Sales and Settlements			39.0		39.7		93.5		(47.4)		49.8		174.6
Balance as of December 31, 2014		$	292.2	$	367.9	$	722.0	$	265.8	$	475.0	$	2,122.9
	Transfer Between Categories		76.5		-		-		-		(76.5)		-
Actual Return/(Loss) on Plan Assets:
	Relating to Assets Still Held as of Year End		5.3		24.4		(6.7)		(7.1)		-		15.9
	Relating to Assets Distributed During the Year		-		27.3		17.0		24.8		(0.9)		68.2
Purchases, Sales and Settlements			(68.8)		45.1		52.5		(23.2)		(106.8)		(101.2)
Balance as of December 31, 2015		$	305.2	$	464.7	$	784.8	$	260.3	$	290.8	$	2,105.8

		PBOP Plan
		Equity		Private		Fixed		Real Estate and		Hedge
(Millions of Dollars)		Securities		Equity		Income		Other Assets		Funds		Total
Balance as of January 1, 2014		$	69.1	$	17.9	$	51.5	$	33.9	$	57.0	$	229.4
Actual Return/(Loss) on Plan Assets:
	Relating to Assets Still Held as of Year End		6.0		1.3		1.9		(2.8)		1.4		7.8
	Relating to Assets Distributed During the Year		-		0.1		-		(2.2)		-		(2.1)
Purchases, Sales and Settlements			-		5.6		24.9		(13.9)		-		16.6
Balance as of December 31, 2014		$	75.1	$	24.9	$	78.3	$	15.0	$	58.4	$	251.7
Actual Return/(Loss) on Plan Assets:
	Relating to Assets Still Held as of Year End		(2.0)		2.6		2.1		0.3		(1.5)		1.5
	Relating to Assets Distributed During the Year		-		-		(0.3)		-		-		(0.3)
Purchases, Sales and Settlements			4.7		5.4		1.5		5.1		(4.7)		12.0
Balance as of December 31, 2015		$	77.8	$	32.9	$	81.6	$	20.4	$	52.2	$	264.9

Defined Contribution Plans

Effective January 1, 2014, Eversource maintains one defined contribution plan on behalf of eligible participants, the Eversource 401k Plan. The Eversource 401k Plan provides for employee and employer contributions up to statutory limits. For eligible employees, the Eversource 401k Plan provides employer matching contributions of either 100 percent up to a maximum of three percent of eligible compensation or 50 percent up to a maximum of eight percent of eligible compensation. Beginning in 2014 for newly hired employees, the Eversource 401k Plan provides employer matching contributions of 100 percent up to a maximum of three percent of eligible compensation.

The Eversource 401k Plan also contains a K-Vantage feature for the benefit of eligible participants, which provides an additional annual employer contribution based on age and years of service. K-Vantage participants are not eligible to actively participate in the Eversource Pension Plan.

The total defined Eversource 401k Plan employer matching contributions, including the K-Vantage contributions, were as follows:


					NSTAR
(Millions of Dollars)	Eversource		CL&P		Electric		PSNH		WMECO
2015	$	30.4	$	4.8	$	6.3	$	3.4	$	1.0
2014		29.7		5.0		6.3		3.2		1.0
2013		37.0		5.1		8.5		3.3		1.0

Allocations of Eversource common shares were made from Eversource treasury shares to satisfy a portion of the Eversource 401k Plan obligation, which provides 100 percent of the matching contribution in Eversource common shares. For treasury shares used to satisfy the Eversource 401k Plan employer matching contributions, compensation expense is recognized equal to the fair value of shares that have been allocated to participants. Any difference between the fair value and the average cost of the allocated treasury shares is charged or credited to Capital Surplus, Paid In on the balance sheet. For the years ended December 31, 2015, 2014 and 2013, Eversource recognized $7 million, $22 million and $9.1 million, respectively, of compensation expense related to treasury shares used to satisfy the matching contribution.

Share-Based Payments

Share-based compensation awards are recorded using a fair-value-based method at the date of grant. Eversource, CL&P, NSTAR Electric, PSNH and WMECO record compensation expense related to these awards, as applicable, for shares issued or sold to their respective employees and officers, as well as for the allocation of costs associated with shares issued or sold to Eversource's service company employees and officers that support CL&P, NSTAR Electric, PSNH and WMECO.

Eversource Incentive Plans: Eversource maintains long-term equity-based incentive plans in which Eversource, CL&P, NSTAR Electric, PSNH and WMECO employees, officers and board members are eligible to participate. The incentive plans authorize Eversource to grant up to 8,000,000 new shares for various types of awards, including RSUs and performance shares, to eligible employees, officers, and board members. As of December 31, 2015 and 2014, Eversource had 3,005,010 and 3,112,020 common shares, respectively, available for issuance under these plans.

Eversource accounts for its various share-based plans as follows:

RSUs - Eversource records compensation expense, net of estimated forfeitures, on a straight-line basis over the requisite service period based upon the fair value of Eversource's common shares at the date of grant. The par value of RSUs is reclassified to Common Stock from APIC as RSUs become issued as common shares.

Performance Shares - Eversource records compensation expense, net of estimated forfeitures, on a straight-line basis over the requisite service period. Performance shares vest based upon the extent to which Company goals are achieved. Vesting of outstanding performance shares is based upon both the Company’s EPS growth over the requisite service period and the total shareholder return as compared to the Edison Electric Institute (EEI) Index during the requisite service period. The fair value of performance shares is determined at the date of grant using a lattice model.

Stock Options - Stock options currently outstanding are fully vested.

ESPP Shares - For shares sold under the ESPP, no compensation expense was recorded as the ESPP qualified as a non-compensatory plan. The ESPP ended as of February 1, 2016.

RSUs: Eversource granted RSUs under the annual long-term incentive programs that are subject to three-year graded vesting schedules for employees, and one-year graded vesting schedules, or immediate vesting, for board members. RSUs are paid in shares, reduced by amounts sufficient to satisfy withholdings for income taxes, subsequent to vesting. A summary of RSU transactions is as follows:


			Weighted Average
	RSUs		Grant-Date
	(Units)		Fair Value
Outstanding as of December 31, 2014		1,380,747	$	35.67
Granted		266,230	$	54.57
Shares issued		(888,495)	$	33.94
Forfeited		(29,174)	$	46.68
Outstanding as of December 31, 2015		729,308	$	43.45

The weighted average grant-date fair value of RSUs granted for the years ended December 31, 2015, 2014 and 2013 was $54.57, $42.27 and $39.56, respectively. As of December 31, 2015 and 2014, the number and weighted average grant-date fair value of unvested RSUs was 469,772 and $48.58 per share, and 1,024,729 and $38.14 per share, respectively. During 2015, there were 784,376 RSUs at a weighted average grant-date fair value of $37.21 per share that vested and were either paid or deferred. As of December 31, 2015, 259,536 RSUs were fully vested and deferred and an additional 446,283 are expected to vest.

Performance Shares: Eversource granted performance shares under the annual long-term incentive programs that vest based upon the extent to which Company goals are achieved at the end of three-year performance measurement periods. Performance shares are paid in shares, after the performance measurement period. A summary of performance share transactions is as follows:


	Performance		Weighted Average
	Shares		Grant-Date
	(Units)		Fair Value
Outstanding as of December 31, 2014		375,644	$	42.20
Granted		172,543	$	55.04
Shares issued		(4,604)	$	42.23
Forfeited		(15,155)	$	45.33
Outstanding as of December 31, 2015		528,428	$	46.30

The weighted average grant-date fair value of Performance Shares granted for the years ended December 31, 2015, 2014 and 2013 was $55.04, $43.40 and $40.96, respectively. As of December 31, 2015, all outstanding performance shares are unvested.

The total compensation expense and associated future income tax benefits recognized by Eversource, CL&P, NSTAR Electric, PSNH and WMECO for share-based compensation awards were as follows:


Eversource	For the Years Ended December 31,
(Millions of Dollars)	2015		2014		2013
Compensation Expense	$	23.1	$	24.6	$	27.0
Future Income Tax Benefit		9.4		10.3		10.7


	For the Years Ended December 31,
	2015								2014								2013
			NSTAR								NSTAR								NSTAR
(Millions of Dollars)	CL&P		Electric		PSNH		WMECO		CL&P		Electric		PSNH		WMECO		CL&P		Electric		PSNH		WMECO
Compensation Expense	$	9.3	$	5.8	$	3.2	$	1.7	$	8.1	$	7.4	$	3.0	$	1.3	$	6.8	$	7.5	$	2.3	$	1.3
Future Income Tax Benefit		3.8		2.4		1.3		0.7		3.4		3.1		1.3		0.5		2.7		3.0		0.9		0.5

As of December 31, 2015, there was $14.9 million of total unrecognized compensation expense related to nonvested share-based awards for Eversource, including $6.1 million for CL&P, $3.8 million for NSTAR Electric, $2.2 million for PSNH and $1.2 million for WMECO. This cost is expected to be recognized ratably over a weighted-average period of 1.74 years for Eversource, and 1.73 years for each CL&P, NSTAR Electric, PSNH and WMECO.

For each of the years ended December 31, 2015 and 2014, changes in excess tax benefits totaling $9.5 million increased cash flows from financing activities. For the year ended December 31, 2013, changes in excess tax benefits totaling $5.5 million decreased cash flows from financing activities.

Stock Options: Stock options currently outstanding were granted under the NSTAR Incentive Plan, expire ten years from the date of grant and are fully vested. The weighted average remaining contractual lives for the options outstanding as of December 31, 2015 is 2.6 years. A summary of stock option transactions is as follows:


		Weighted Average		Intrinsic Value
	Options	Exercise Price		(Millions)
Outstanding and Exercisable - December 31, 2014	351,616	$	26.69	$	9.4
Exercised	(179,744)	$	26.90	$	4.4
Outstanding and Exercisable - December 31, 2015	171,872	$	26.47	$	4.2

Cash received for options exercised during the year ended December 31, 2015 totaled $4.8 million. The tax benefit realized from stock options exercised totaled $1.9 million for the year ended December 31, 2015.

Employee Share Purchase Plan: Eversource maintained an ESPP for eligible employees, which allowed for Eversource common shares to be purchased by employees at the end of successive six-month offering periods at 95 percent of the closing market price on the last day of each six-month period. Employees were permitted to purchase shares having a value not exceeding 25 percent of their compensation as of the beginning of the offering period up to a specified limit. The ESPP qualified as a non-compensatory plan under accounting guidance for share-based payments, and no compensation expense was recorded for ESPP purchases.

During 2015, employees purchased 33,715 shares at discounted prices of $52.80 and $47.23. Employees purchased 40,779 shares in 2014 at discounted prices of $41.61 and $41.71. As of December 31, 2015 and 2014, 743,260 and 776,975 shares, respectively, remained available for future issuance under the ESPP. The ESPP ended as of February 1, 2016.

An income tax rate of 40 percent is used to estimate the tax effect on total share-based payments determined under the fair value-based method for all awards. The Company generally settles stock option exercises and fully vested RSUs and performance shares with the issuance of common shares purchased in the open market.

Other Retirement Benefits

Eversource provides retirement and other benefits for certain current and past company officers. These benefits are accounted for on an accrual basis and expensed over a period equal to the service lives of the employees. The actuarially-determined liability for these benefits, which is included in Other Long-Term Liabilities on the balance sheets, as well as the related expense included in Operations and Maintenance on the income statements, are as follows:



Eversource	As of and For the Years Ended December 31,
(Millions of Dollars)	2015		2014		2013
Actuarially-Determined Liability	$	55.2	$	57.5	$	51.3
Other Retirement Benefits Expense		3.9		4.5		4.4


	As of and For the Years Ended December 31,
	2015								2014								2013
(Millions of Dollars)	CL&P		NSTAR Electric		PSNH		WMECO		CL&P		NSTAR Electric		PSNH		WMECO		CL&P		PSNH		WMECO
Actuarially-Determined Liability	$	0.4	$	-	$	2.4	$	0.2	$	0.4	$	-	$	2.6	$	0.2	$	0.4	$	2.3	$	0.1
Other Retirement Benefits Expense		1.5		1.0		0.7		0.3		2.1		0.3		0.9		0.4		2.5		1.0		0.5

10.

INCOME TAXES

The components of income tax expense are as follows:


Eversource	For the Years Ended December 31,
(Millions of Dollars)	2015		2014		2013
Current Income Taxes:
Federal	$	6.2	$	4.4	$	8.8
State		45.7		24.5		(9.4)
Total Current		51.9		28.9		(0.6)
Deferred Income Taxes, Net:
Federal		436.1		406.8		386.2
State		55.6		36.5		45.4
Total Deferred		491.7		443.3		431.6
Investment Tax Credits, Net		(3.6)		(3.9)		(4.1)
Income Tax Expense	$	540.0	$	468.3	$	426.9


		For the Years Ended December 31,
		2015								2014								2013
				NSTAR								NSTAR								NSTAR
(Millions of Dollars)		CL&P		Electric		PSNH		WMECO		CL&P		Electric		PSNH		WMECO		CL&P		Electric		PSNH		WMECO
Current Income Taxes:
	Federal	$	26.9	$	36.3	$	(16.7)	$	(3.5)	$	(0.2)	$	75.0	$	(22.6)	$	1.9	$	20.1	$	95.8	$	(8.2)	$	(53.4)
	State		15.8		19.8		6.0		1.6		4.3		20.2		(0.1)		1.8		(6.7)		29.6		3.6		4.2
Total Current			42.7		56.1		(10.7)		(1.9)		4.1		95.2		(22.7)		3.7		13.4		125.4		(4.6)		(49.2)
Deferred Income Taxes, Net:
	Federal		135.8		147.5		74.5		33.4		138.0		88.0		79.6		28.1		114.9		49.8		64.5		84.7
	State		0.2		25.7		9.3		6.0		(7.1)		20.1		15.2		6.0		15.1		(1.0)		11.2		2.3
Total Deferred			136.0		173.2		83.8		39.4		130.9		108.1		94.8		34.1		130.0		48.8		75.7		87.0
Investment Tax Credits, Net			(1.3)		(1.3)		-		(0.5)		(1.5)		(1.3)		-		(0.5)		(1.7)		(1.3)		-		(0.4)
Income Tax Expense		$	177.4	$	228.0	$	73.1	$	37.0	$	133.5	$	202.0	$	72.1	$	37.3	$	141.7	$	172.9	$	71.1	$	37.4


A reconciliation between income tax expense and the expected tax expense at the statutory rate is as follows:

Eversource		For the Years Ended December 31,
(Millions of Dollars, except percentages)		2015		2014		2013
Income Before Income Tax Expense		$	1,425.9	$	1,295.4	$	1,220.6

Statutory Federal Income Tax Expense at 35%			499.1		453.4		427.2
Tax Effect of Differences:
	Depreciation		(4.6)		(5.6)		(7.4)
	Investment Tax Credit Amortization		(3.6)		(3.9)		(4.1)
	Other Federal Tax Credits		(3.8)		(3.5)		(3.7)
	State Income Taxes, Net of Federal Impact		61.1		42.5		27.6
	Dividends on ESOP		(8.1)		(8.0)		(8.0)
	Tax Asset Valuation Allowance/Reserve Adjustments		4.7		(2.9)		(4.3)
	Other, Net		(4.8)		(3.7)		(0.4)
Income Tax Expense		$	540.0	$	468.3	$	426.9
Effective Tax Rate			37.9%		36.2%		35.0%


		For the Years Ended December 31,
		2015								2014								2013
(Millions of Dollars,				NSTAR								NSTAR								NSTAR
	except percentages)	CL&P		Electric		PSNH		WMECO		CL&P		Electric		PSNH		WMECO		CL&P		Electric		PSNH		WMECO
Income Before Income Tax Expense		$	476.8	$	572.6	$	187.5	$	93.5	$	421.2	$	505.1	$	186.1	$	95.1	$	421.1	$	441.4	$	182.5	$	97.8

Statutory Federal Income Tax Expense at 35%			166.9		200.4		65.6		32.7		147.4		176.8		65.1		33.3		147.4		154.5		63.9		34.2
Tax Effect of Differences:
	Depreciation		(1.7)		(1.4)		0.5		(0.3)		(3.6)		(1.3)		0.3		(0.2)		(7.0)		0.1		0.6		-
	Investment Tax Credit Amortization		(1.3)		(1.3)		-		(0.5)		(1.5)		(1.3)		-		(0.5)		(1.7)		(1.3)		-		(0.4)
	Other Federal Tax Credits		-		-		(3.8)		-		-		-		(3.5)		-		-		-		(3.7)		-
	State Income Taxes, Net of Federal Impact		9.2		29.6		9.9		4.9		4.4		26.2		9.8		5.0		5.0		18.6		9.6		4.2
	Tax Asset Valuation Allowance/Reserve Adjustments		1.2		-		-		-		(6.3)		-		-		-		0.4		-		-		-
	Other, Net		3.1		0.7		0.9		0.2		(6.9)		1.6		0.4		(0.3)		(2.4)		1.0		0.7		(0.6)
Income Tax Expense		$	177.4	$	228.0	$	73.1	$	37.0	$	133.5	$	202.0	$	72.1	$	37.3	$	141.7	$	172.9	$	71.1	$	37.4
Effective Tax Rate			37.2%		39.8%		39.0%		39.6%		31.7%		40.0%		38.7%		39.2%		33.6%		39.2%		39.0%		38.2%

Eversource, CL&P, NSTAR Electric, PSNH and WMECO file a consolidated federal income tax return and unitary, combined and separate state income tax returns. These entities are also parties to a tax allocation agreement under which taxable subsidiaries do not pay any more taxes than they would have otherwise paid had they filed a separate company tax return, and subsidiaries generating tax losses, if any, are paid for their losses when utilized.

Deferred tax assets and liabilities are recognized for the future tax effects of temporary differences between the carrying amounts and the tax basis of assets and liabilities. The tax effect of temporary differences is accounted for in accordance with the rate-making treatment of the applicable regulatory commissions and relevant accounting authoritative literature. The tax effects of temporary differences that give rise to the net accumulated deferred income tax obligations are as follows:


Eversource			As of December 31,
(Millions of Dollars)			2015		2014
Deferred Tax Assets:
	Employee Benefits		$	637.5	$	632.2
	Derivative Liabilities			172.7		199.6
	Regulatory Deferrals - Liabilities			243.5		366.7
	Allowance for Uncollectible Accounts			60.5		60.5
	Tax Effect - Tax Regulatory Liabilities			9.7		10.0
	Federal Net Operating Loss Carryforwards			5.4		59.1
	Purchase Accounting Adjustment			119.3		126.2
	Other			197.1		198.7
Total Deferred Tax Assets				1,445.7		1,653.0
	Less: Valuation Allowance			3.7		5.1
Net Deferred Tax Assets			$	1,442.0	$	1,647.9
Deferred Tax Liabilities:
	Accelerated Depreciation and Other Plant-Related Differences		$	4,602.6	$	4,215.9
	Property Tax Accruals			76.7		109.6
	Regulatory Amounts:
		Regulatory Deferrals - Assets		1,289.1		1,277.9
		Tax Effect - Tax Regulatory Assets		249.3		240.2
		Goodwill Regulatory Asset - 1999 Merger		194.9		203.2
		Derivative Assets		17.7		32.6
		Other		159.4		196.3
Total Deferred Tax Liabilities			$	6,589.7	$	6,275.7


			As of December 31,
			2015								2014
					NSTAR								NSTAR
(Millions of Dollars)			CL&P		Electric		PSNH		WMECO		CL&P		Electric		PSNH		WMECO
Deferred Tax Assets:
	Employee Benefits		$	126.1	$	91.3	$	37.1	$	10.0	$	129.0	$	39.9	$	46.8	$	9.2
	Derivative Liabilities			165.7		0.6		-		-		193.0		1.8		-		-
	Regulatory Deferrals - Liabilities			36.0		109.4		42.1		6.1		73.9		181.3		46.5		11.4
	Allowance for Uncollectible Accounts			30.4		8.5		3.6		4.5		32.3		13.8		3.2		3.8
	Tax Effect - Tax Regulatory Liabilities			3.1		1.5		2.3		2.4		3.1		1.8		2.1		2.5
	Federal Net Operating Loss Carryforwards			-		-		2.4		0.4		-		-		32.1		4.5
	Other			55.5		3.4		61.1		5.0		53.8		19.9		48.9		4.9
Total Deferred Tax Assets				416.8		214.7		148.6		28.4		485.1		258.5		179.6		36.3
	Less: Valuation Allowance			3.1		-		-		-		4.0		-		-		-
Net Deferred Tax Assets			$	413.7	$	214.7	$	148.6	$	28.4	$	481.1	$	258.5	$	179.6	$	36.3
Deferred Tax Liabilities:
	Accelerated Depreciation and Other Plant-Related Differences		$	1,545.6	$	1,387.1	$	655.3	$	416.1	$	1,378.6	$	1,296.9	$	596.6	$	385.8
	Property Tax Accruals			27.3		22.8		7.3		10.6		58.1		25.0		7.4		12.8
	Regulatory Amounts:
		Regulatory Deferrals - Assets		456.8		339.7		137.9		60.5		502.3		276.0		147.6		60.4
		Tax Effect - Tax Regulatory Assets		168.7		36.0		15.4		9.0		166.9		35.5		15.9		9.3
		Goodwill Regulatory Asset - 1999 Merger		-		167.4		-		-		-		174.4		-		-
		Derivative Assets		17.7		-		-		-		32.6		-		-		-
		Other		18.5		22.0		38.6		2.7		19.4		33.5		35.6		2.8
Total Deferred Tax Liabilities			$	2,234.6	$	1,975.0	$	854.5	$	498.9	$	2,157.9	$	1,841.3	$	803.1	$	471.1


Carryforwards: The following tables provide the amounts and expiration dates of state tax credit and loss carryforwards and federal tax credit and net operating loss carryforwards:

	As of December 31, 2015
					NSTAR
(Millions of Dollars)	Eversource		CL&P		Electric		PSNH		WMECO		Expiration Range
Federal Net Operating Loss	$	15.5	$	-	$	-	$	7.0	$	1.0	2032
Federal Tax Credit		26.1		0.1		0.2		15.0		-	2031 - 2035
Federal Charitable Contribution		14.9		-		-		-		-	2016 - 2018
State Tax Credit		101.2		73.8		-		-		-	2015 - 2020
State Charitable Contribution		3.0		-		-		-		-	2015 - 2019

	As of December 31, 2014
					NSTAR
(Millions of Dollars)	Eversource		CL&P		Electric		PSNH		WMECO		Expiration Range
Federal Net Operating Loss	$	168.8	$	-	$	-	$	91.8	$	12.7	2031 - 2032
Federal Tax Credit		16.3		0.1		0.2		11.1		-	2031 - 2034
Federal Charitable Contribution		19.4		-		-		-		-	2016 - 2018
State Tax Credit		99.7		71.0		-		-		-	2014 - 2019
State Loss Carryforwards		40.6		-		-		-		-	2014 - 2034
State Charitable Contribution		2.1		-		-		-		-	2015 - 2018

In 2015, the Company decreased its valuation allowance reserve for state credits and state loss carryforwards by $1.3 million (CL&P $0.9 million), net of tax, to reflect an update for expired state tax credits and loss carryforwards.

In 2014, the Company recorded a reduction to its state credit carryforwards of $11 million (CL&P $10.1 million), net of tax, as a result of an update to reflect the amounts expired. Further, the Company decreased its valuation allowance reserve for state credits by $19.2 million at CL&P, net of tax, to reflect an update for expired state credits and latest estimate of usage.

For 2015 and 2014, state credit and state loss carryforwards have been partially reserved by a valuation allowance of $3.1 million and $4.4 million (net of tax), respectively.

Unrecognized Tax Benefits: A reconciliation of the activity in unrecognized tax benefits, all of which would impact the effective tax rate if recognized, is as follows:


(Millions of Dollars)		Eversource		CL&P
Balance as of January 1, 2013		$	83.1	$	49.0
	Gross Increases - Current Year		8.2		2.1
	Gross Decreases - Prior Year		(1.1)		(0.3)
	Settlements		(49.8)		(39.4)
	Lapse of Statute of Limitations		(2.2)		-
Balance as of December 31, 2013			38.2		11.4
	Gross Increases - Current Year		9.3		2.7
	Gross Increases - Prior Year		0.3		0.2
	Lapse of Statute of Limitations		(1.6)		-
Balance as of December 31, 2014			46.2		14.3
	Gross Increases - Current Year		9.9		2.6
	Gross Increases - Prior Year		0.1		-
	Lapse of Statute of Limitations		(8.2)		(3.4)
Balance as of December 31, 2015		$	48.0	$	13.5

Interest and Penalties: Interest on uncertain tax positions is recorded and generally classified as a component of Other Interest Expense on the statements of income. However, when resolution of uncertainties results in the Company receiving interest income, any related interest benefit is recorded in Other Income, Net on the statements of income. No penalties have been recorded. The amount of interest expense/(income) on uncertain tax positions recognized and the related accrued interest payable/(receivable) are as follows:


	Other Interest Expense/(Income)						Accrued Interest Expense
	For the Years Ended December 31,						As of December 31,
(Millions of Dollars)	2015		2014		2013		2015		2014
Eversource	$	0.1	$	0.4	$	(8.6)	$	2.0	$	1.9
CL&P		-		-		(4.0)		-		-

Tax Positions: During 2015 and 2014, Eversource did not resolve any of its uncertain tax positions.

Open Tax Years: The following table summarizes Eversource, CL&P, NSTAR Electric, PSNH and WMECO's tax years that remain subject to examination by major tax jurisdictions as of December 31, 2015:


Description		Tax Years
Federal		2015
Connecticut		2012 - 2015
Massachusetts		2012 - 2015
New Hampshire		2012 - 2015

Eversource estimates that during the next twelve months, differences of a non-timing nature could be resolved, resulting in a zero to $2.3 million decrease in unrecognized tax benefits by Eversource. These estimated changes are not expected to have a material impact on the earnings of Eversource. Other companies' impacts are not expected to be material.

2015 Federal Legislation: On December 18, 2015, the "Protecting Americans from Tax Hikes" Act became law, which extended the accelerated deduction of depreciation to businesses from 2015 through 2019. This extended stimulus provides Eversource with cash flow benefits in 2016 of approximately $275 million (including approximately $105 million for CL&P, $72 million for NSTAR Electric, $46 million for PSNH, and $25 million for WMECO) due to a refund of taxes paid in 2015 and lower expected tax payments in 2016 of approximately $300 million.

2015 Connecticut Legislation: In 2015, the state of Connecticut enacted several changes to its corporate tax laws. Among the changes, commencing as of January 1, 2015, is the reduction in the amount of tax credits that corporations can utilize against its tax liability in a year and a continuation of the corporate income tax surcharge through 2018, which effectively increases the state corporate tax rate to 9 percent for the years 2016 and 2017 and 8.25 percent for 2018. Also, effective January 1, 2016, all Connecticut companies have a mandatory unitary tax filing requirement. Management continues to review the tax law changes and their impact on the effective tax rates of Eversource and CL&P.

2014 Federal Legislation: On December 19, 2014, the "Tax Increase Prevention Act of 2014" became law, which extended the accelerated deduction of depreciation to businesses through 2014. This extended stimulus provided Eversource with cash flow benefits of approximately $250 million (approximately $86 million at CL&P, $64 million at NSTAR Electric, $44 million at PSNH, and $21 million at WMECO) in 2015.

11.

COMMITMENTS AND CONTINGENCIES

Environmental Matters

General: Eversource, CL&P, NSTAR Electric, PSNH and WMECO 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, PSNH and WMECO have an active environmental auditing and training program and believe that they are substantially in compliance with all enacted laws and regulations.

Environmental reserves are accrued when assessments indicate it is probable that a liability has been incurred and an amount can be reasonably estimated. The approach used estimates the liability based on the most likely action plan from a variety of available remediation options, including no action required or several different remedies ranging from establishing institutional controls to full site remediation and monitoring. These liabilities are estimated on an undiscounted basis and do not assume that the amounts are recoverable from insurance companies or other third parties. The environmental reserves include sites at different stages of discovery and remediation and do not include any unasserted claims.

These 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, CL&P, NSTAR Electric, PSNH and WMECO'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 related environmental matters. As this information becomes available, management will continue to assess the potential exposure and adjust the reserves accordingly.

The amounts recorded as environmental reserves included in Other Current Liabilities and Other Long-Term Liabilities on the balance sheets represent management's best estimate of the liability for environmental costs, and take into consideration site assessment, remediation and long-term monitoring costs. The environmental reserves also take into account recurring costs of managing hazardous substances and pollutants, mandated expenditures to remediate previously contaminated sites and any other infrequent and non-recurring clean-up costs. A reconciliation of the activity in the environmental reserves is as follows:


(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		WMECO
Balance as of January 1, 2014	$	35.4	$	3.4	$	1.2	$	5.4	$	0.4
Additions		12.7		1.0		-		0.1		0.2
Payments/Reductions		(4.8)		(0.6)		(0.1)		(0.3)		(0.1)
Balance as of December 31, 2014		43.3		3.8		1.1		5.2		0.5
Additions		13.5		1.3		2.0		2.3		0.2
Payments/Reductions		(5.7)		(0.5)		(0.7)		(3.0)		(0.1)
Balance as of December 31, 2015	$	51.1	$	4.6	$	2.4	$	4.5	$	0.6

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


	As of December 31, 2015				As of December 31, 2014
			Reserve				Reserve
	Number of Sites		(in millions)		Number of Sites		(in millions)
Eversource		64	$	51.1		65	$	43.3
CL&P		14		4.6		16		3.8
NSTAR Electric		15		2.4		13		1.1
PSNH		12		4.5		13		5.2
WMECO		4		0.6		4		0.5

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 $45.5 million and $38.8 million as of December 31, 2015 and 2014, respectively, and related primarily to the natural gas business segment.

As of December 31, 2015, for 9 environmental sites (3 for CL&P, 1 for WMECO) that are included in the Company's reserve for environmental costs, the information known and the nature of the remediation options allow for the Company to estimate the range of losses for environmental costs. As of December 31, 2015, $24.7 million (including $1.7 million for CL&P and $0.3 million for WMECO) had been accrued as a liability for these sites, which represents the low end of the range of the liabilities for environmental costs. Management believes that additional losses of up to approximately $33.9 million (approximately $1.4 million for CL&P, and $0.1 million for WMECO) may be incurred in remediating these sites.

As of December 31, 2015, for 12 environmental sites (3 for CL&P and 2 for NSTAR Electric) that are included in the Company’s reserve for environmental costs, management cannot reasonably estimate the exposure to loss in excess of the reserve, or range of loss, as these sites are under investigation and/or there is significant uncertainty as to what remedial actions, if any, the Company may be required to undertake. As of December 31, 2015, $13.7 million (including $2 million for CL&P) had been accrued as a liability for these sites. As of December 31, 2015, for the remaining 43 environmental sites (including 8 for CL&P, 13 for NSTAR Electric, 12 for PSNH, and 3 for WMECO) that are included in the Company’s reserve for environmental costs, the $12.7 million accrual (including $0.9 million for CL&P, $2.4 million for NSTAR Electric, $4.5 million for PSNH, and $0.3 million for WMECO) represents management’s best estimate of the potential liability and no additional loss is anticipated at this time.

CERCLA: Of the total environmental sites, nine sites (four for NSTAR Electric and three for PSNH) are superfund sites under the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) and its amendments or state equivalents for which the Company has been notified that it is a potentially responsible party but for which the site assessment and remediation are not being managed by the Company. As of December 31, 2015, a liability of $0.8 million accrued on these sites represents management's best estimate of its potential remediation costs with respect to these superfund sites.

Environmental Rate Recovery: PSNH, NSTAR Gas and Yankee Gas have rate recovery mechanisms for MGP related environmental costs, therefore, changes in their respective environmental reserves do not impact Net Income. CL&P recovers a certain level of environmental costs currently in rates. CL&P, NSTAR Electric and WMECO do not have a separate environmental cost recovery regulatory mechanism.


B.	Long-Term Contractual Arrangements
Estimated Future Annual Costs: The estimated future annual costs of significant long-term contractual arrangements as of December 31, 2015 are as follows:

Eversource
(Millions of Dollars)		2016		2017		2018		2019		2020		Thereafter		Total
Supply and Stranded Cost		$	177.4	$	110.1	$	81.5	$	51.1	$	34.9	$	80.6	$	535.6
Renewable Energy			246.6		273.3		238.3		237.4		237.0		2,174.7		3,407.3
Peaker CfDs			55.8		41.1		20.4		7.8		4.0		3.6		132.7
Natural Gas Procurement			137.9		123.8		78.4		57.8		46.9		99.7		544.5
Coal, Wood and Other			45.4		23.3		3.4		1.9		1.9		13.1		89.0
Transmission Support Commitments			21.4		19.0		20.3		20.2		20.2		-		101.1
Total		$	684.5	$	590.6	$	442.3	$	376.2	$	344.9	$	2,371.7	$	4,810.2


CL&P
(Millions of Dollars)	2016		2017		2018		2019		2020		Thereafter		Total
Supply and Stranded Cost	$	145.0	$	87.2	$	58.2	$	38.0	$	29.3	$	47.6	$	405.3
Renewable Energy		70.1		71.7		72.1		72.3		72.4		649.7		1,008.3
Peaker CfDs		55.8		41.1		20.4		7.8		4.0		3.6		132.7
Transmission Support Commitments		8.4		7.5		8.0		8.0		8.0		-		39.9
Yankee Companies Billings		0.1		0.4		0.8		0.8		0.8		10.7		13.6
Total	$	279.4	$	207.9	$	159.5	$	126.9	$	114.5	$	711.6	$	1,599.8

NSTAR Electric
(Millions of Dollars)	2016		2017		2018		2019		2020		Thereafter		Total
Supply and Stranded Cost	$	14.1	$	4.8	$	5.5	$	5.5	$	3.1	$	28.1	$	61.1
Renewable Energy		99.0		117.0		80.4		78.5		76.6		489.8		941.3
Transmission Support Commitments		6.6		5.9		6.3		6.2		6.2		-		31.2
Yankee Companies Billings		0.1		0.2		0.3		0.3		0.3		3.6		4.8
Total	$	119.8	$	127.9	$	92.5	$	90.5	$	86.2	$	521.5	$	1,038.4

PSNH
(Millions of Dollars)	2016		2017		2018		2019		2020		Thereafter		Total
Supply and Stranded Cost	$	18.3	$	18.1	$	17.8	$	7.6	$	2.5	$	4.9	$	69.2
Renewable Energy		67.9		69.0		70.1		70.7		72.0		860.4		1,210.1
Coal, Wood and Other		45.4		23.3		3.4		1.9		1.9		13.1		89.0
Transmission Support Commitments		4.6		4.0		4.3		4.3		4.3		-		21.5
Yankee Companies Billings		0.1		0.2		0.3		0.3		0.3		4.2		5.4
Total	$	136.3	$	114.6	$	95.9	$	84.8	$	81.0	$	882.6	$	1,395.2

WMECO
(Millions of Dollars)	2016		2017		2018		2019		2020		Thereafter		Total
Renewable Energy	$	9.6	$	15.6	$	15.7	$	15.9	$	16.0	$	174.8	$	247.6
Transmission Support Commitments		1.8		1.6		1.7		1.7		1.7		-		8.5
Yankee Companies Billings		-		0.1		0.2		0.2		0.2		2.7		3.4
Total	$	11.4	$	17.3	$	17.6	$	17.8	$	17.9	$	177.5	$	259.5

Supply and Stranded Cost: CL&P, NSTAR Electric and PSNH have various IPP contracts or purchase obligations for electricity, including payment obligations resulting from the buydown of electricity purchase contracts. Such contracts extend through 2024 for CL&P, 2031 for NSTAR Electric and 2023 for PSNH.

In addition, CL&P, along with UI, has four capacity CfDs for a total of approximately 787 MW of capacity consisting of three generation projects and one demand response project. The capacity CfDs 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 contractual capacity price and the capacity market prices received by the generation facilities in the ISO-NE capacity markets. CL&P has a sharing agreement with UI, whereby UI will share 20 percent of the costs and benefits of these contracts. CL&P's portion of the costs and benefits of these contracts will be paid by or refunded to CL&P's customers.

The contractual obligations table above does not include CL&P's, NSTAR Electric’s or WMECO’s default service contracts, the amounts of which vary with customers' energy needs. The contractual obligations table also does not include PSNH's short-term power supply management.

Renewable Energy: Renewable energy contracts include non-cancellable commitments under contracts of CL&P, NSTAR Electric, PSNH, and WMECO for the purchase of energy and capacity from renewable energy facilities. Such contracts extend through 2035 for CL&P, 2031 for NSTAR Electric, 2033 for PSNH and 2031 for WMECO.

The contractual obligations table above does not include long-term commitments signed by CL&P, NSTAR Electric and WMECO, as required by the PURA and DPU, for the purchase of renewable energy and related products that are contingent on the future construction of energy facilities.

Peaker CfDs: In 2008, CL&P entered into three CfDs with developers of peaking generation units approved by PURA (Peaker CfDs). These units have a total of approximately 500 MW of peaking capacity. As directed by PURA, CL&P and UI have entered into a sharing agreement, whereby CL&P is responsible for 80 percent and UI for 20 percent of the net costs or benefits of these CfDs. The Peaker CfDs pay the generation facility owner the difference between capacity, forward reserve and energy market revenues and a cost-of-service payment stream for 30 years. The ultimate cost or benefit to CL&P under these contracts will depend on the costs of plant operation and the prices that the projects receive for capacity and other products in the ISO-NE markets. CL&P's portion of the amounts paid or received under the Peaker CfDs will be recoverable from or refunded to CL&P's customers.

Natural Gas Procurement: In the normal course of business, Eversource’s natural gas distribution businesses have long-term contracts for the purchase, transportation and storage of natural gas as part of its portfolio of supplies. These contracts extend through 2029.

Coal, Wood and Other: PSNH has entered into various arrangements for the purchase of coal, wood and the transportation services for fuel supply for its electric generating assets. Also included in the contractual obligations table above is a contract for capacity on the Portland Natural Gas Transmission System (PNGTS) pipeline that extends through 2018. The costs of this contract of $4.5 million are not recoverable from customers.

Transmission Support Commitments: Along with other New England utilities, CL&P, NSTAR Electric, PSNH and WMECO entered into agreements in 1985 to support transmission and terminal facilities that were built to import electricity from the Hydro-Québec system in Canada. CL&P, NSTAR Electric, PSNH and WMECO are obligated to pay, over a 30-year period ending in 2020, their proportionate shares of the annual operation and maintenance expenses and capital costs of those facilities.

Yankee Companies Billings: CL&P, NSTAR Electric, PSNH and WMECO have decommissioning and plant closure 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. For further information on the Yankee Companies, see Note 11C, "Commitments and Contingencies - Contractual Obligations - Yankee Companies," to the financial statements.

The total costs incurred under these agreements were as follows:


Eversource	For the Years Ended December 31,
(Millions of Dollars)	2015		2014		2013
Supply and Stranded Cost	$	147.6	$	99.2	$	141.0
Renewable Energy		144.3		114.4		91.3
Peaker CfDs		42.7		18.1		51.9
Natural Gas Procurement		428.6		482.5		349.8
Coal, Wood and Other		95.9		120.5		112.6
Transmission Support Commitments		25.3		25.0		24.9


	For the Years Ended December 31,
	2015								2014								2013
			NSTAR								NSTAR								NSTAR
(Millions of Dollars)	CL&P		Electric		PSNH		WMECO		CL&P		Electric		PSNH		WMECO		CL&P		Electric		PSNH		WMECO
Supply and Stranded Cost	$	120.3	$	6.5	$	20.8	$	-	$	63.0	$	7.0	$	26.0	$	3.2	$	77.6	$	32.4	$	29.0	$	2.0
Renewable Energy		20.0		86.7		37.2		0.4		0.7		87.4		26.3		-		-		84.9		6.4		-
Peaker CfDs		42.7		-		-		-		18.1		-		-		-		51.9		-		-		-
Coal, Wood and Other		-		-		95.9		-		-		-		120.5		-		-		-		112.6		-
Transmission Support Commitments		10.0		7.8		5.4		2.1		9.9		7.7		5.3		2.1		9.8		7.7		5.3		2.1

Contractual Obligations - Yankee Companies

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

CL&P, NSTAR Electric, PSNH and WMECO's percentage share of the obligations to support the Yankee Companies under FERC-approved rate tariffs is the same as their respective ownership percentages in the Yankee Companies. For further information on the ownership percentages, see Note 1J, "Summary of Significant Accounting Policies - Equity Method Investments," to the financial statements.

Spent Nuclear Fuel Litigation:

DOE Phase I Damages – In 2013, CYAPC, YAEC and MYAPC received proceeds of $39.6 million, $38.3 million, and $81.7 million, respectively, based on a final court judgment awarding damages for separate complaints filed by the Yankee Companies in 1998 against the DOE seeking monetary damages resulting from the DOE's failure to begin accepting spent nuclear fuel for disposal pursuant to the terms of the 1983 spent fuel and high level waste disposal contracts between the Yankee Companies and the DOE (DOE Phase I Damages). Phase I covered damages for the period 1998 through 2002. In 2013, CYAPC, YAEC and MYAPC reduced rates in their wholesale power contracts through the application of the DOE proceeds for the benefit of customers. CL&P, NSTAR Electric, PSNH and WMECO began receiving the benefit of the Phase I DOE proceeds in 2013, and the benefits are being passed on to customers.

In accordance with MYAPC's three-year refund plan of the DOE Phase I Damages proceeds, in September 2014, MYAPC returned the second portion of the proceeds to the member companies, including CL&P, NSTAR Electric, PSNH, and WMECO, in the amount of $3.2 million, $1.1 million, $1.4 million and $0.8 million, respectively. On September 28, 2015, MYAPC returned the remaining DOE Phase I Damages proceeds to the member companies, including CL&P, NSTAR Electric, PSNH, and WMECO, in the amount of $2.3 million, $0.8 million, $1 million and $0.6 million, respectively. These amounts reduced receivables at CL&P, NSTAR Electric, PSNH and WMECO.

DOE Phase II Damages - In 2014, CYAPC, YAEC and MYAPC received proceeds of $126.3 million, $73.3 million and $35.8 million, respectively, based on a final court judgment awarding damages for separate lawsuits filed by the Yankee Companies in 2007 against the DOE seeking recovery of actual damages incurred related to the alleged failure of the DOE to provide for a permanent facility to store spent nuclear fuel generated in years 2001 through 2008 for CYAPC and YAEC, and from 2002 through 2008 for MYAPC (DOE Phase II Damages). The Yankee Companies returned the DOE Phase II Damages proceeds to the member companies, including CL&P, NSTAR Electric, PSNH, and WMECO, for the benefit of their respective customers in June 2014.

As of December 31, 2014, CL&P's refund obligation to customers of $65.4 million was recorded as an offset to the deferred storm restoration costs regulatory asset, as directed by PURA. NSTAR Electric's, PSNH's and WMECO's refund obligation to customers of $29.1 million, $13.1 million and $18.1 million, respectively, was recorded as a regulatory liability in each company's respective regulatory tracker mechanisms. Refunds to customers for these Phase II DOE proceeds were completed in 2015.

DOE Phase III Damages – In August 2013, the Yankee Companies each filed subsequent lawsuits against the DOE seeking recovery of actual damages incurred in the years 2009 through 2012. The DOE Phase III trial concluded on July 1, 2015, with a post-trial briefing that concluded on October 14, 2015. The parties are awaiting a decision from the court.

Guarantees and Indemnifications

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

Eversource parent issued a declining balance guaranty on behalf of a wholly-owned subsidiary to guarantee the payment of the subsidiary's capital contributions for its investment in the Access Northeast project. The guarantee will not exceed $206 million and will decrease as capital contributions are made. The guaranty will expire upon the earlier of the full performance of the guaranteed obligations or December 31, 2021.

Eversource parent issued a guaranty on behalf of its subsidiary, NPT, under which, beginning at the time the Northern Pass Transmission line goes into commercial operation, Eversource parent will 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 guaranteed certain indemnification and other obligations as a result of the sales of former unregulated subsidiaries and the termination of an unregulated business, with maximum exposures either not specified or not material.

Management does not anticipate a material impact to Net Income as a result of these various guarantees and indemnifications.

The following table summarizes Eversource parent's exposure to guarantees and indemnifications of its subsidiaries, including CL&P, NSTAR Electric, PSNH and WMECO, and guarantees to external parties, as of December 31, 2015:


			Maximum Exposure
Company		Description	(in millions)		Expiration Dates
On behalf of subsidiaries:
	Various	Surety Bonds (1)	$	32.7	2016 - 2018
	Eversource Service and Rocky River Realty Company	Lease Payments for Vehicles and Real Estate	$	11.4	2019 and 2024

On behalf of external parties:
	Algonquin Gas Transmission, LLC	Access Northeast project
	(owner of Access Northeast assets)	capital contributions guarantee	$	204.8	2021

(1)

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 are downgraded.

FERC ROE Complaints

Three separate complaints have been filed at FERC by combinations of New England state attorneys general, state regulatory commissions, consumer advocates, consumer groups, municipal parties and other parties (the "Complainants"). In the first complaint, filed in 2011, the Complainants alleged that the NETOs' base ROE that had been utilized since 2006 was unjust and unreasonable, asserted that the rate was excessive due to changes in the capital markets, and sought an order to reduce it prospectively from the date of the final FERC order and for the 15-month period beginning October 1, 2011 to December 31, 2012. In the second and third complaints, filed in 2012 and 2014, the Complainants challenged the NETOs' base ROE and sought refunds for the respective 15-month periods beginning December 27, 2012 and July 31, 2014.

As a result of the actions taken by the FERC and other developments in the first complaint matter, the Company recorded additional reserves at its electric subsidiaries in 2015 and 2014. In 2015, Eversource recognized a pre-tax charge to earnings (excluding interest) of $20 million, of which $12.5 million was recorded at CL&P, $2.4 million at NSTAR Electric, $1 million at PSNH, and $4.1 million at WMECO. The pre-tax charge was recorded as a regulatory liability and as a reduction to Operating Revenues. In 2014, the net aggregate pre-tax charge to earnings (excluding interest) totaled $37 million, of which $20.7 million was recorded at CL&P, $7.9 million at NSTAR Electric, $2.8 million at PSNH and $5.6 million at WMECO. In 2013, the net aggregate pre-tax charge to earnings (excluding interest) totaled $23.7 million, of which $12.8 million was recorded at CL&P, $5.7 million at NSTAR Electric, $2.3 million at PSNH and $2.9 million at WMECO.

The second and third complaint proceedings are ongoing and a final FERC order is expected in late 2016 or early 2017. Although management is uncertain on the final outcome of the second and third complaints regarding the ROE, management believes the current reserves established are appropriate to reflect probable and reasonably estimable refunds.

NSTAR Electric and NSTAR Gas Comprehensive Settlement Agreement

On March 2, 2015, the DPU approved the comprehensive settlement agreement between NSTAR Electric, NSTAR Gas and the Massachusetts Attorney General (the "Settlement") as filed with the DPU on December 31, 2014. The Settlement resolved the outstanding NSTAR Electric CPSL program filings for 2006 through 2011, the NSTAR Electric and NSTAR Gas PAM and energy efficiency-related customer billing adjustments reported in 2012, and the recovery of LBR related to NSTAR Electric_'_s energy efficiency programs for 2009 through 2011 (11 dockets in total). In

the first quarter of 2015, as a result of the DPU order, NSTAR Electric and NSTAR Gas commenced refunding a combined $44.7 million to customers, which was recorded as a regulatory liability. Refunds to customers will continue through December 2016. As a result of the Settlement, NSTAR Electric increased its operating revenues and decreased its amortization expense in 2015, resulting in the recognition of a $21.7 million pre-tax benefit in 2015.

NSTAR Electric Basic Service Bad Debt Adder

On January 7, 2015, the DPU issued an order concluding that NSTAR Electric had removed energy-related bad debt costs from base distribution rates effective January 1, 2006. As a result of the DPU order, in the first quarter of 2015, NSTAR Electric increased its regulatory assets and reduced its operations and maintenance expense by an under recovered amount of $24.2 million for energy-related bad debt costs through 2014, resulting in a pre-tax benefit in 2015. NSTAR Electric filed for recovery of the energy-related bad debt costs regulatory asset from customers and on November 20, 2015the DPU approved NSTAR Electric’s proposed rate increase, to recover these costs over a 12-month period, effective January 1, 2016.

PSNH Generation Restructuring

On June 10, 2015, Eversource and PSNH entered into the 2015 Public Service Company of New Hampshire Restructuring and Rate Stabilization Agreement (the Agreement) with the New Hampshire Office of Energy and Planning, certain members of the NHPUC staff, the Office of Consumer Advocate, two State Senators, and several other parties. The Agreement was filed with the NHPUC on the same day. Under the terms of the Agreement, PSNH has agreed to divest its generation assets upon NHPUC approval. The Agreement is designed to provide a resolution of issues pertaining to PSNH's generation assets in pending regulatory proceedings before the NHPUC. The Agreement provided for the Clean Air Project prudence proceeding to be resolved and all remaining Clean Air Project costs to be included in rates effective January 1, 2016. As part of the Agreement, PSNH has agreed to forego recovery of $25 million of the deferred equity return related to the Clean Air Project. In addition, PSNH will not seek a general distribution rate increase effective before July 1, 2017 and will contribute $5 million to create a clean energy fund, which will not be recoverable from its customers. In 2015, PSNH recorded the $5 million contribution as a long-term liability and an increase to Operations and Maintenance expense on the statements of income.

Upon completion of the divestiture process, all remaining stranded costs will be recovered via bonds that will be secured by a non-bypassable charge or through other recoveries in rates billed to PSNH customers.

On January 26, 2016, Advisory Staff of the NHPUC and the parties to the Agreement filed a stipulation with the NHPUC agreeing that near-term divestiture of PSNH’s generation was in the public interest and that the Agreement should be approved. Implementation of the Agreement is subject to NHPUC approval, which is expected in early 2016.

If the NHPUC approves the settlements and the sale of the plants, then management expects to sell the plants in the first half of 2017. The sales price of the generating assets could be less than the carrying value, but we believe that full recovery of PSNH's generation assets is probable through a combination of cash flows during the remaining operating period, sales proceeds upon divestiture, and recovery of stranded costs in future rates.

Litigation and Legal Proceedings

Eversource, including CL&P, NSTAR Electric, PSNH and WMECO, are involved in legal, tax and regulatory proceedings regarding matters arising in the ordinary course of business, which involve management's assessment to determine the probability of whether a loss will occur and, if probable, its best estimate of probable loss. The Company records and discloses losses when these losses are probable and reasonably estimable, and discloses matters when losses are probable but not estimable or when losses are reasonably possible. Legal costs related to the defense of loss contingencies are expensed as incurred.

12.

LEASES

Eversource, including CL&P, NSTAR Electric, PSNH and WMECO, has entered into lease agreements, some of which are capital leases, for the use of data processing and office equipment, vehicles, service centers, and office space. In addition, CL&P, NSTAR Electric, PSNH and WMECO incur costs associated with leases entered into by Eversource Service and Rocky River Realty Company, which are included below in their respective operating lease rental expenses and future minimum rental payments. These intercompany lease amounts are eliminated on an Eversource consolidated basis. The provisions of the Eversource, CL&P, NSTAR Electric, PSNH, and WMECO lease agreements generally contain renewal options. Certain lease agreements contain payments impacted by the commercial paper rate plus a credit spread or the consumer price index.

Operating lease rental payments charged to expense are as follows:


					NSTAR
(Millions of Dollars)	Eversource		CL&P		Electric		PSNH		WMECO
2015	$	12.1	$	12.5	$	9.6	$	2.8	$	2.2
2014		14.3		6.0		7.8		1.5		1.2
2013		16.3		8.1		6.7		1.7		2.9

The 2015 rental payments above for CL&P, NSTAR Electric, PSNH, and WMECO include an intercompany rate of return, property tax and operational expense component paid to Rocky River Realty Company.

Future minimum rental payments, excluding executory costs, such as property taxes, state use taxes, insurance, and maintenance, under long-term noncancelable leases, as of December 31, 2015 are as follows:


Operating Leases					NSTAR
(Millions of Dollars)	Eversource		CL&P		Electric		PSNH		WMECO
2016	$	16.4	$	2.9	$	9.7	$	0.8	$	0.8
2017		13.8		2.0		8.5		0.7		0.7
2018		10.4		1.3		6.5		0.5		0.6
2019		8.5		1.0		5.3		0.4		0.5
2020		6.8		0.7		4.3		0.3		0.5
Thereafter		15.4		1.7		9.0		0.7		1.8
Future minimum lease payments	$	71.3	$	9.6	$	43.3	$	3.4	$	4.9


Capital Leases
(Millions of Dollars)	Eversource		CL&P		PSNH
2016	$	2.2	$	1.9	$	0.3
2017		2.1		1.9		0.2
2018		2.1		2.0		0.1
2019		2.0		2.0		-
2020		2.0		2.0		-
Thereafter		1.4		1.4		-
Future minimum lease payments		11.8		11.2		0.6
Less amount representing interest		3.6		3.6		-
Present value of future minimum lease payments	$	8.2	$	7.6	$	0.6

CL&P 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 included in the tables above. However, such contracts have been included in the contractual obligations table in Note 11B, "Commitments and Contingencies - Long-Term Contractual Arrangements," to the financial statements.

13.

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 and Long-Term Debt: 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 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 tables below are classified as Level 2 within the fair value hierarchy. Carrying amounts and estimated fair values are as follows:


	As of December 31,
	2015				2014
Eversource	Carrying		Fair		Carrying		Fair
(Millions of Dollars)	Amount		Value		Amount		Value
Preferred Stock Not Subject to Mandatory Redemption	$	155.6	$	157.9	$	155.6	$	153.6
Long-Term Debt		9,034.5		9,425.9		8,814.0		9,451.2


	As of December 31, 2015
	CL&P				NSTAR Electric				PSNH				WMECO
	Carrying		Fair		Carrying		Fair		Carrying		Fair		Carrying		Fair
(Millions of Dollars)	Amount		Value		Amount		Value		Amount		Value		Amount		Value
Preferred Stock Not Subject to Mandatory Redemption	$	116.2	$	114.9	$	43.0	$	43.0	$	-	$	-	$	-	$	-
Long-Term Debt		2,763.7		3,031.6		2,029.8		2,182.4		1,071.0		1,121.2		517.3		551.8

	As of December 31, 2014
	CL&P				NSTAR Electric				PSNH				WMECO
	Carrying		Fair		Carrying		Fair		Carrying		Fair		Carrying		Fair
(Millions of Dollars)	Amount		Value		Amount		Value		Amount		Value		Amount		Value
Preferred Stock Not Subject to Mandatory Redemption	$	116.2	$	112.0	$	43.0	$	41.6	$	-	$	-	$	-	$	-
Long-Term Debt		2,826.2		3,214.5		1,786.2		1,993.5		1,070.0		1,137.9		625.2		689.4

Derivative Instruments: Derivative instruments are carried at fair value. For further information, see Note 4, "Derivative Instruments," to the financial statements.

Other Financial Instruments: Investments in marketable securities are carried at fair value. For further information, see Note 5, "Marketable Securities," to the financial statements. The carrying value of other financial instruments included in current assets and current liabilities on the balance sheets, including cash and cash equivalents and special deposits, approximates their fair value due to their short-term nature.

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

14.

ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS)

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


		For the Year Ended December 31, 2015								For the Year Ended December 31, 2014
		Qualified		Unrealized						Qualified		Unrealized
		Cash Flow		Gains/(Losses)		Defined				Cash Flow		Gains on		Defined
Eversource		Hedging		on Marketable		Benefit				Hedging		Marketable		Benefit
(Millions of Dollars)		Instruments		Securities		Plans		Total		Instruments		Securities		Plans		Total
Balance as of January 1st		$	(12.4)	$	0.7	$	(62.3)	$	(74.0)	$	(14.4)	$	0.4	$	(32.0)	$	(46.0)

OCI Before Reclassifications			-		(2.6)		3.5		0.9		-		0.3		(34.2)		(33.9)
Amounts Reclassified from AOCI			2.1		-		4.2		6.3		2.0		-		3.9		5.9
	Net OCI		2.1		(2.6)		7.7		7.2		2.0		0.3		(30.3)		(28.0)
Balance as of December 31st		$	(10.3)	$	(1.9)	$	(54.6)	$	(66.8)	$	(12.4)	$	0.7	$	(62.3)	$	(74.0)

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, PSNH and WMECO 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.

The amortization expense of actuarial gains and losses and prior service cost on the defined benefit plans is amortized from AOCI into Operations and Maintenance over the average future employee service period, and is reflected in amounts reclassified from AOCI.

Defined benefit plan OCI amounts before reclassifications relate to actuarial gains and losses that arose during the year and were recognized in AOCI. The related tax effects recognized in AOCI during 2015 and 2013 were net deferred tax liabilities of $2 million in 2015 and $11.4 million in 2013, respectively, and net deferred tax assets of $22.3 million in 2014.

The following table sets forth the amounts reclassified from AOCI by component and the impacted line item on the statements of income:


	Amounts Reclassified from AOCI
Eversource	For the Years Ended December 31,						Statements of Income
(Millions of Dollars)	2015		2014		2013		Line Item Impacted
Qualified Cash Flow Hedging Instruments	$	(3.5)	$	(3.4)	$	(3.4)	Interest Expense
Tax Effect		1.4		1.4		1.4	Income Tax Expense
Qualified Cash Flow Hedging Instruments, Net of Tax	$	(2.1)	$	(2.0)	$	(2.0)

Defined Benefit Plan Costs:
Amortization of Actuarial Losses	$	(6.6)	$	(6.2)	$	(10.5)	Operations and Maintenance (1)
Amortization of Prior Service Cost		(0.2)		(0.2)		(0.2)	Operations and Maintenance (1)
Total Defined Benefit Plan Costs		(6.8)		(6.4)		(10.7)
Tax Effect		2.6		2.5		4.3	Income Tax Expense
Defined Benefit Plan Costs, Net of Tax	$	(4.2)	$	(3.9)	$	(6.4)

Total Amounts Reclassified from AOCI, Net of Tax	$	(6.3)	$	(5.9)	$	(8.4)

(1)

These amounts are included in the computation of net periodic Pension, SERP and PBOP costs. See Note 9A, "Employee Benefits - Pension Benefits and Postretirement Benefits Other Than Pensions," for further information.

As of December 31, 2015, it was estimated that a pre-tax amount of $3.6 million (including $0.7 million for CL&P, $2 million for PSNH and $0.7 million for WMECO) will be reclassified from AOCI as a decrease to Net Income over the next 12 months as a result of the amortization of the interest rate swap agreements which have been settled. In addition, it is estimated that a pre-tax amount of $6 million will be reclassified from AOCI as a decrease to Net Income over the next 12 months as a result of the amortization of Pension, SERP and PBOP costs.

15.

DIVIDEND RESTRICTIONS

Eversource parent's ability to pay dividends may be affected by certain state statutes, the ability of its subsidiaries to pay common dividends and the leverage restriction tied to its consolidated total debt to total capitalization ratio requirement in its revolving credit agreement.

CL&P, NSTAR Electric, PSNH and WMECO are subject to Section 305 of the Federal Power Act that makes it unlawful for a public utility to make or pay a dividend from any funds "properly included in its capital account." Management believes that this Federal Power Act restriction, as applied to CL&P, NSTAR Electric, PSNH and WMECO, would not be construed or applied by the FERC to prohibit the payment of dividends from retained earnings for lawful and legitimate business purposes. In addition, certain state statutes may impose additional limitations on such companies and on

Yankee Gas and NSTAR Gas. Such state law restrictions do not restrict the payment of dividends from retained earnings or net income. Pursuant to the joint revolving credit agreement of Eversource, CL&P, PSNH, WMECO, Yankee Gas and NSTAR Gas, and to the NSTAR Electric revolving credit agreement, each company is required to maintain consolidated total debt to total capitalization ratio of no greater than 65 percent at the end of each fiscal quarter. As of December 31, 2015, all companies were in compliance with such covenant. The Retained Earnings balances subject to these restrictions were $2.8 billion for Eversource, $1.2 billion for CL&P, $1.6 billion for NSTAR Electric, $494.9 million for PSNH and $198.1 million for WMECO as of December 31, 2015. As of December 31, 2015, Eversource, CL&P, NSTAR Electric, PSNH, WMECO, Yankee Gas and NSTAR Gas were in compliance with all such provisions of the revolving credit agreements that may restrict the payment of dividends. PSNH is further required to reserve an additional amount under its FERC hydroelectric license conditions. As of December 31, 2015, $13.4 million of PSNH's Retained Earnings was subject to restriction under its FERC hydroelectric license conditions and PSNH was in compliance with this provision.

16.

COMMON SHARES

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


			Shares
			Authorized	Issued
	Per Share		as of December 31,	as of December 31,
	Par Value		2015 and 2014	2015		2014
Eversource	$	5	380,000,000		333,862,615		333,359,172
CL&P	$	10	24,500,000		6,035,205		6,035,205
NSTAR Electric	$	1	100,000,000		100		100
PSNH	$	1	100,000,000		301		301
WMECO	$	25	1,072,471		434,653		434,653

As of December 31, 2015 and 2014, there were 16,671,366 and 16,375,835 Eversource common shares held as treasury shares, respectively. As of December 31, 2015 and 2014, Eversource common shares outstanding were 317,191,249 and 316,983,337, respectively. In May 2015, the Company repurchased 532,521 Eversource common shares at a share price of $47.94. Such shares are included in Treasury Stock on the consolidated balance sheet at their weighted average original average cost of $26.02 per share.

17.

PREFERRED STOCK NOT SUBJECT TO MANDATORY REDEMPTION

The CL&P and NSTAR Electric preferred stock is not subject to mandatory redemption and is presented as a noncontrolling interest of a subsidiary in Eversource’s financial statements.

CL&P is authorized to issue up to 9,000,000 shares of preferred stock, par value $50 per share, and NSTAR Electric is authorized to issue 2,890,000 shares of preferred stock, par value $100 per share. Holders of preferred stock of CL&P and NSTAR Electric are entitled to receive cumulative dividends in preference to any payment of dividends on the common stock. Upon liquidation, holders of preferred stock of CL&P and NSTAR Electric are entitled to receive a liquidation preference before any distribution to holders of common stock in an amount equal to the par value of the preferred stock plus accrued and unpaid dividends. If the net assets were to be insufficient to pay the liquidation preference in full, then the net assets would be distributed ratably to all holders of preferred stock. The preferred stock of CL&P and NSTAR Electric is subject to optional redemption by the CL&P and NSTAR Electric Board of Directors at any time.

Details of preferred stock not subject to mandatory redemption are as follows (in millions except in redemption price and shares):


				Redemption Price			Shares Outstanding as of	As of December 31,
Series				Per Share		December 31, 2015 and 2014	2015		2014
CL&P
$	1.90		Series of 1947	$	52.50		163,912	$	8.2	$	8.2
$	2.00		Series of 1947	$	54.00		336,088		16.8		16.8
$	2.04		Series of 1949	$	52.00		100,000		5.0		5.0
$	2.20		Series of 1949	$	52.50		200,000		10.0		10.0
	3.90	%	Series of 1949	$	50.50		160,000		8.0		8.0
$	2.06		Series E of 1954	$	51.00		200,000		10.0		10.0
$	2.09		Series F of 1955	$	51.00		100,000		5.0		5.0
	4.50	%	Series of 1956	$	50.75		104,000		5.2		5.2
	4.96	%	Series of 1958	$	50.50		100,000		5.0		5.0
	4.50	%	Series of 1963	$	50.50		160,000		8.0		8.0
	5.28	%	Series of 1967	$	51.43		200,000		10.0		10.0
$	3.24		Series G of 1968	$	51.84		300,000		15.0		15.0
	6.56	%	Series of 1968	$	51.44		200,000		10.0		10.0
Total CL&P							2,324,000	$	116.2	$	116.2

NSTAR Electric
	4.25	%	Series	$	103.625		180,000	$	18.0	$	18.0
	4.78	%	Series	$	102.80		250,000		25.0		25.0
Total NSTAR Electric							430,000	$	43.0	$	43.0
Fair Value Adjustment due to Merger with NSTAR									(3.6)		(3.6)
Total Eversource - Preferred Stock of Subsidiaries								$	155.6	$	155.6

18.

COMMON SHAREHOLDERS' EQUITY AND NONCONTROLLING INTERESTS

Dividends on the preferred stock of CL&P and NSTAR Electric totaled $7.5 million, $7.5 million and $7.7 million for the years ended December 31, 2015, 2014 and 2013. 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 December 31, 2015 and 2014. Common Shareholders' Equity was fully attributable to the parent and Noncontrolling Interest – Preferred Stock of Subsidiaries was fully attributable to the noncontrolling interest on the Eversource balance sheets.

For the years ended December 31, 2015, 2014 and 2013, there was no change in ownership of the common equity of CL&P and NSTAR Electric.

19.

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 during each period plus the potential dilutive effect of certain share-based compensation awards as if they were converted into common shares. For the years ended December 31, 2015, 2014 and 2013, there were 1,474, 3,643 and 1,575 antidilutive share awards excluded from the computation of diluted EPS, respectively.

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


Eversource		For the Years Ended December 31,
(Millions of Dollars, except share information)		2015		2014		2013
Net Income Attributable to Common Shareholders		$	878.5	$	819.5	$	786.0

Weighted Average Common Shares Outstanding:
	Basic		317,336,881		316,136,748		315,311,387
	Dilutive Effect		1,095,806		1,280,666		899,773
	Diluted		318,432,687		317,417,414		316,211,160
Basic EPS		$	2.77	$	2.59	$	2.49
Diluted EPS		$	2.76	$	2.58	$	2.49

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. The dilutive effect of unvested RSU and performance share awards is calculated using the treasury stock method. Assumed proceeds of these awards under the treasury stock method consist of the remaining compensation cost to be recognized and a theoretical tax benefit. The theoretical tax benefit is calculated as the tax impact of the intrinsic value of the awards (the difference between the market value of the average awards outstanding for the period, using the average market price during the period, and the grant date market value).

The dilutive effect of stock options to purchase common shares is also calculated using the treasury stock method. Assumed proceeds for stock options consist of cash proceeds that would be received upon exercise, and a theoretical tax benefit. The theoretical tax benefit is calculated as the tax impact of the intrinsic value of the stock options (the difference between the market value of the average stock options outstanding for the period, using the average market price during the period, and the exercise price).

20.

SEGMENT INFORMATION

Presentation: Eversource is organized between the Electric Distribution, Electric Transmission and Natural Gas Distribution reportable segments and Other based on a combination of factors, including the characteristics of each segments' products and 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 and natural gas primarily are derived from residential, commercial and industrial customers and are not dependent on any single customer. The Electric Distribution reportable segment includes the generation activities of PSNH and WMECO.

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) the results of Eversource Gas Transmission LLC and 5) the results of other unregulated subsidiaries, which are not part of its core business.

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 expense.

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. Each of Eversource's subsidiaries, including CL&P, NSTAR Electric, PSNH and WMECO, has one reportable segment. Eversource's operating segments and reporting units are consistent with its reportable business segments.

Eversource's segment information is as follows:


	For the Year Ended December 31, 2015
Eversource	Electric		Natural Gas		Electric
(Millions of Dollars)	Distribution		Distribution		Transmission		Other		Eliminations		Total
Operating Revenues	$	5,903.6	$	995.5	$	1,069.1	$	863.6	$	(877.0)	$	7,954.8
Depreciation and Amortization		(425.2)		(70.5)		(165.6)		(29.0)		2.1		(688.2)
Other Operating Expenses		(4,470.2)		(776.7)		(314.9)		(817.9)		877.3		(5,502.4)
Operating Income		1,008.2		148.3		588.6		16.7		2.4		1,764.2
Interest Expense		(186.3)		(36.9)		(105.8)		(48.0)		4.6		(372.4)
Interest Income		5.7		0.1		1.6		4.4		(5.1)		6.7
Other Income, Net		7.2		0.8		14.5		977.8		(972.8)		27.5
Income Tax (Expense)/Benefit		(322.8)		(40.1)		(191.6)		14.5		-		(540.0)
Net Income		512.0		72.2		307.3		965.4		(970.9)		886.0
Net Income Attributable to Noncontrolling Interests		(4.7)		-		(2.8)		-		-		(7.5)
Net Income Attributable to Common Shareholders	$	507.3	$	72.2	$	304.5	$	965.4	$	(970.9)	$	878.5
Total Assets (as of)	$	17,981.3	$	3,104.5	$	8,019.3	$	13,256.7	$	(11,781.5)	$	30,580.3
Cash Flows Used for Investments in Plant	$	718.9	$	182.2	$	749.1	$	73.9	$	-	$	1,724.1


	For the Year Ended December 31, 2014
Eversource	Electric		Natural Gas		Electric
(Millions of Dollars)	Distribution		Distribution		Transmission		Other		Eliminations		Total
Operating Revenues	$	5,663.4	$	1,007.3	$	1,018.2	$	790.9	$	(737.9)	$	7,741.9
Depreciation and Amortization		(384.6)		(68.1)		(150.5)		(42.1)		19.9		(625.4)
Other Operating Expenses		(4,366.2)		(786.7)		(302.1)		(748.0)		719.3		(5,483.7)
Operating Income		912.6		152.5		565.6		0.8		1.3		1,632.8
Interest Expense		(191.6)		(34.0)		(104.1)		(36.6)		4.2		(362.1)
Interest Income		5.1		-		0.9		3.6		(3.6)		6.0
Other Income, Net		10.7		0.2		10.3		916.0		(918.6)		18.6
Income Tax (Expense)/Benefit		(269.7)		(46.4)		(174.5)		22.3		-		(468.3)
Net Income		467.1		72.3		298.2		906.1		(916.7)		827.0
Net Income Attributable to Noncontrolling Interests		(4.7)		-		(2.8)		-		-		(7.5)
Net Income Attributable to Common Shareholders	$	462.4	$	72.3	$	295.4	$	906.1	$	(916.7)	$	819.5
Total Assets (as of)	$	17,536.9	$	3,029.3	$	7,615.6	$	12,664.9	$	(11,106.3)	$	29,740.4
Cash Flows Used for Investments in Plant	$	645.2	$	176.7	$	731.6	$	50.2	$	-	$	1,603.7


	For the Year Ended December 31, 2013
Eversource	Electric		Natural Gas		Electric
(Millions of Dollars)	Distribution		Distribution		Transmission		Other		Eliminations		Total
Operating Revenues	$	5,362.3	$	855.8	$	978.7	$	777.5	$	(673.1)	$	7,301.2
Depreciation and Amortization		(604.8)		(66.7)		(136.2)		(62.2)		10.2		(859.7)
Other Operating Expenses		(3,927.7)		(659.4)		(281.8)		(715.0)		671.8		(4,912.1)
Operating Income		829.8		129.7		560.7		0.3		8.9		1,529.4
Interest Expense		(175.0)		(33.1)		(100.3)		(35.5)		5.2		(338.7)
Interest Income		4.1		-		0.7		5.4		(5.6)		4.6
Other Income, Net		12.9		0.8		10.9		858.9		(858.2)		25.3
Income Tax (Expense)/Benefit		(240.0)		(36.5)		(182.1)		31.9		(0.2)		(426.9)
Net Income		431.8		60.9		289.9		861.0		(849.9)		793.7
Net Income Attributable to Noncontrolling Interests		(4.8)		-		(2.9)		-		-		(7.7)
Net Income Attributable to Common Shareholders	$	427.0	$	60.9	$	287.0	$	861.0	$	(849.9)	$	786.0
Cash Flows Used for Investments in Plant	$	639.0	$	168.1	$	618.5	$	31.2	$	-	$	1,456.8

21.

GOODWILL

Eversource recorded approximately $3.2 billion of goodwill in connection with the 2012 merger with NSTAR and $0.3 billion of goodwill related to the acquisition of the parent of Yankee Gas in 2000.

Goodwill is not subject to amortization, however is subject to a fair value based assessment for impairment at least annually and whenever facts or circumstances indicate that there may be an impairment. A resulting write-down, if any, would be charged to Operating Expenses. Eversource's reporting units for the purpose of testing goodwill for impairment are Electric Distribution, Electric Transmission and Natural Gas Distribution. These reporting units are consistent with the operating segments underlying the reportable segments identified in Note 20, "Segment Information," to the financial statements.

The annual goodwill assessment included an evaluation of the Company's share price and credit ratings, analyst reports, financial performance, cost and risk factors, long-term strategy, growth and future projections, as well as macroeconomic, industry and market conditions. Eversource completed its annual goodwill impairment test for each of its reporting units as of October 1, 2015 and determined that no impairment existed. There were no events subsequent to October 1, 2015 that indicated impairment of goodwill.

There were no changes to the goodwill balance or the allocation of goodwill as of December 31, 2015 or 2014. The following table presents goodwill by reportable segment:


	As of December 31, 2015 and 2014
	Electric		Electric		Natural Gas
(Billions of Dollars)	Distribution		Transmission		Distribution		Total
Goodwill	$	2.5	$	0.6	$	0.4	$	3.5

22.

VARIABLE INTEREST ENTITIES

The Company's variable interests outside of the consolidated group are not material and consist of contracts that are required by regulation and provide for regulatory recovery of contract costs and benefits through customer rates. Eversource, CL&P and NSTAR Electric hold variable interests in variable interest entities (VIEs) through agreements with certain entities that own single renewable energy or peaking generation power plants and with other independent power producers. Eversource, CL&P and NSTAR Electric do not control the activities that are economically significant to these VIEs or provide financial or other support to these VIEs. Therefore, Eversource, CL&P and NSTAR Electric do not consolidate any power plant VIEs.

23.

QUARTERLY FINANCIAL DATA (UNAUDITED)


Eversource	Quarter Ended
(Millions of Dollars, except per share information)	2015												2014
March 31,			June 30,			September 30,			December 31,			March 31,			June 30,			September 30,			December 31,
Operating Revenues	$	2,513.4		$	1,817.1		$	1,933.1		$	1,691.2		$	2,290.6		$	1,677.6		$	1,892.5		$	1,881.2
Operating Income		497.5			412.0			469.2			385.5			467.7			294.0			440.9			430.2
Net Income		255.1			209.4			237.8			183.7			237.8			129.2			236.5			223.6
Net Income Attributable to Common Shareholders		253.3			207.5			235.9			181.8			236.0			127.4			234.6			221.5
Basic EPS (a)	$	0.80		$	0.65		$	0.74		$	0.57		$	0.75		$	0.40		$	0.74		$	0.69
Diluted EPS (a)	$	0.80		$	0.65		$	0.74		$	0.57		$	0.74		$	0.40		$	0.74		$	0.69

(a) The summation of quarterly EPS data may not equal annual data due to rounding.

	Quarter Ended
	2015												2014
(Millions of Dollars)	March 31,			June 30,			September 30,			December 31,			March 31,			June 30,			September 30,			December 31,
CL&P
Operating Revenues	$	804.9		$	666.6		$	704.3		$	626.9		$	734.6		$	587.3		$	695.6		$	675.1
Operating Income		141.8			154.0			161.1			154.2			158.0			92.1			146.2			159.0
Net Income		69.2			78.8			80.2			71.2			79.3			37.4			83.9			87.2

NSTAR Electric
Operating Revenues	$	766.8		$	617.2		$	750.7		$	546.6		$	666.2		$	561.5		$	727.9		$	581.1
Operating Income		159.5			151.4			214.2			117.7			118.4			121.5			206.6			132.0
Net Income		83.6			82.0			118.6			60.3			58.1			60.1			115.6			69.3

PSNH
Operating Revenues	$	284.8		$	241.9		$	234.4		$	211.1		$	299.8		$	211.6		$	223.7		$	224.4
Operating Income		63.2			54.1			63.6			49.3			64.0			49.0			56.4			60.0
Net Income		32.0			27.9			32.5			22.0			32.6			24.1			28.2			29.0

WMECO
Operating Revenues	$	152.9		$	125.2		$	125.1		$	114.9		$	137.4		$	108.3		$	118.1		$	129.6
Operating Income		28.6			28.9			30.0			28.0			34.7			17.7			31.2			34.0
Net Income		13.2			14.2			15.0			14.1			18.1			7.0			14.7			18.0

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