General: NU, 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. NU, 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 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 NU, CL&P, NSTAR Electric, PSNH and WMECO's responsibility or the extent of remediation required, recently enacted laws and regulations or a change in cost estimates due to certain economic factors.

The amounts recorded as environmental liabilities 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 liability also takes 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:

These liabilities are estimated on an undiscounted basis and do not assume that any 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.

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

Included in the NU 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. The reserve balance related to these former MGP sites was $38.8 million and $31.4 million as of December 31, 2014 and 2013, respectively, and relates primarily to the natural gas business segment. The increase in the reserve balance for the MGP sites was due to the completion of the site assessment at three sites. The assessments provided new information related to the extent and nature of the contamination and the costs of required remediation.

As of December 31, 2014, for 5 environmental sites (1 for CL&P, and 1 for WMECO) that are included in the Company's reserve for environmental costs, the information known and nature of the remediation options at those sites allow for the Company to estimate the range of losses for environmental costs. As of December 31, 2014, $17.7 million ($1 million for CL&P and $0.3 million for WMECO) had been accrued as a liability for these sites, which represent management's best estimates of the liabilities for environmental costs. These amounts are the best estimates with estimated ranges of additional losses from zero to $24 million.

As of December 31, 2014, for 15 environmental sites (3 for CL&P, 3 for NSTAR Electric and 2 for PSNH) 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, 2014, $13.4 million ($1.4 million for CL&P, $0.2 million for PSNH) had been accrued as a liability for these sites. As of December 31, 2014, for the remaining 45 environmental sites (12 for CL&P, 10 for NSTAR Electric, 11 for PSNH, and 3 for WMECO) that are included in the Company's reserve for environmental costs, the $12.2 million accrual ($1.4 million for CL&P, $1.1 million for NSTAR Electric, $5 million for PSNH, and $0.2 million for WMECO) represents management's best estimate of the liability and no additional loss is anticipated.

CERCLA: Of the total environmental sites, 9 sites (1 for CL&P, 3 for NSTAR Electric and 3 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, 2014, a liability of $0.7 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. CL&P recovers a certain level of environmental costs currently in rates but does not have an environmental cost recovery tracking mechanism. Accordingly, changes in CL&P's environmental reserves impact CL&P's Net Income. NSTAR Electric and WMECO do not have a separate regulatory mechanism to recover environmental costs from its customers, and changes in NSTAR Electric's and WMECO's environmental reserves impact Net Income.

B.	Long-Term Contractual Arrangements
Estimated Future Annual Costs: The estimated future annual costs of significant long-term contractual arrangements as of December 31, 2014 are as follows:

NU
(Millions of Dollars)		2015		2016		2017		2018		2019		Thereafter		Total
Supply and Stranded Cost		$	196.6	$	169.2	$	101.9	$	65.3	$	38.1	$	82.4	$	653.5
Renewable Energy			204.3		240.5		239.6		204.2		202.9		1,994.6		3,086.1
Peaker CfDs			26.3		25.4		10.5		-		-		-		62.2
Natural Gas Procurement			133.7		116.3		45.6		31.9		25.8		85.1		438.4
Coal, Wood and Other			99.0		25.2		5.0		5.0		1.9		15.0		151.1
Transmission Support Commitments			25.9		21.6		19.0		21.2		21.3		21.3		130.3
Total		$	685.8	$	598.2	$	421.6	$	327.6	$	290.0	$	2,198.4	$	4,521.6

CL&P
(Millions of Dollars)		2015		2016		2017		2018		2019		Thereafter		Total
Supply and Stranded Cost		$	134.3	$	136.8	$	79.0	$	42.0	$	25.0	$	43.6	$	460.7
Renewable Energy			61.2		70.3		71.3		72.1		72.1		715.9		1,062.9
Peaker CfDs			26.3		25.4		10.5		-		-		-		62.2
Transmission Support Commitments			10.2		8.5		7.5		8.4		8.4		8.4		51.4
Yankee Billings			1.4		0.8		0.8		0.9		0.9		11.8		16.6
Total		$	233.4	$	241.8	$	169.1	$	123.4	$	106.4	$	779.7	$	1,653.8

NSTAR Electric
(Millions of Dollars)		2015		2016		2017		2018		2019		Thereafter		Total
Supply and Stranded Cost		$	34.3	$	14.1	$	4.8	$	5.5	$	5.5	$	31.4	$	95.6
Renewable Energy			85.4		99.9		96.9		59.6		57.7		319.8		719.3
Transmission Support Commitments			8.1		6.7		5.9		6.6		6.6		6.6		40.5
Yankee Billings			0.5		0.3		0.3		0.3		0.3		4.0		5.7
Total		$	128.3	$	121.0	$	107.9	$	72.0	$	70.1	$	361.8	$	861.1

PSNH
(Millions of Dollars)		2015		2016		2017		2018		2019		Thereafter		Total
Supply and Stranded Cost		$	28.0	$	18.3	$	18.1	$	17.8	$	7.6	$	7.4	$	97.2
Renewable Energy			57.7		67.9		69.0		70.1		70.7		932.4		1,267.8
Coal, Wood and Other			99.0		25.2		5.0		5.0		1.9		15.0		151.1
Transmission Support Commitments			5.5		4.6		4.0		4.5		4.5		4.5		27.6
Yankee Billings			0.4		0.3		0.3		0.3		0.3		4.7		6.3
Total		$	190.6	$	116.3	$	96.4	$	97.7	$	85.0	$	964.0	$	1,550.0

WMECO
(Millions of Dollars)		2015		2016		2017		2018		2019		Thereafter		Total
Renewable Energy		$	-	$	2.4	$	2.4	$	2.4	$	2.4	$	26.5	$	36.1
Transmission Support Commitments			2.1		1.8		1.6		1.7		1.8		1.8		10.8
Yankee Billings			0.3		0.2		0.2		0.2		0.2		3.0		4.1
Total		$	2.4	$	4.4	$	4.2	$	4.3	$	4.4	$	31.3	$	51.0

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, 2030 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 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 does not include CL&P's SS or LRS, or 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, 2030 for NSTAR Electric, 2033 for PSNH and 2030 for WMECO.

The contractual obligations table 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 the PURA (Peaker CfDs). These units have a total of approximately 500 MW of peaking capacity. As directed by the 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: NU's natural gas distribution businesses have long-term contracts for the purchase, transportation and storage of natural gas in the normal course of business 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 table above is a contract for capacity on the Portland Natural Gas Transmission System (PNGTS) pipeline that extends through 2018. The costs on this contract of $11.4 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.

	For the Years Ended December 31,
	2014								2013								2012
			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	$	63.0	$	7.0	$	26.0	$	3.2	$	77.6	$	32.4	$	29.0	$	2.0	$	158.2	$	36.3	$	30.5	$	0.9
Renewable Energy		0.7		87.4		26.3		-		-		84.9		6.4		-		-		60.2		4.1		-
Peaker CfDs		18.1		-		-		-		51.9		-		-		-		59.3		-		-		-
Coal, Wood and Other		-		-		120.5		-		-		-		112.6		-		-		-		105.2		-
Transmission Support Commitments		9.9		7.7		5.3		2.1		9.8		7.7		5.3		2.1		9.6		7.6		5.2		2.0

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. The Yankee Companies collect decommissioning and closure 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.

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.

The Yankee Companies have collected or are currently collecting amounts that management believes are adequate to recover the remaining decommissioning and closure cost estimates for the respective plants. Management believes CL&P, NSTAR Electric and WMECO will recover their shares of these decommissioning and closure obligations from their customers. PSNH has already recovered its share of these costs from its customers.

DOE Phase I Damages – In 1998, the Yankee Companies filed separate complaints against the DOE in the Court of Federal Claims seeking monetary damages resulting from the DOE's failure to begin accepting spent nuclear fuel for disposal by January 31, 1998 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. Following multiple appeals and cross-appeals, in December 2012, the judgment awarding CYAPC $39.6 million, YAEC $38.3 million and MYAPC $81.7 million became final.

In January 2013, the proceeds from the DOE Phase I Damages Claim were received by the Yankee Companies and transferred to each Yankee Company's respective decommissioning trust. As a result of NU's consolidation of CYAPC and YAEC, the financial statements reflected an increase of $77.9 million in marketable securities for CYAPC and YAEC's Phase I Damage awards that were invested in the nuclear decommissioning trusts in 2013.

In June 2013, FERC approved CYAPC, YAEC and MYAPC to reduce rates in their wholesale power contracts through the application of the DOE proceeds for the benefit of customers. Changes to the terms of the wholesale power contracts became effective on July 1, 2013. In accordance with the FERC order, CL&P, NSTAR Electric, PSNH and WMECO began receiving the benefit of the DOE proceeds, and the benefits have been passed on to customers.

On September 17, 2014, in accordance with the MYAPC refund plan, MYAPC returned a portion of the DOE Phase I Damages 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. These amounts reduced receivables at CL&P, NSTAR Electric, PSNH and WMECO.

DOE Phase II Damages - In December 2007, the Yankee Companies each filed subsequent lawsuits 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). In November 2013, the court issued a final judgment awarding CYAPC $126.3 million, YAEC $73.3 million, and MYAPC $35.8 million. On January 14, 2014, the Yankee Companies received a letter from the U.S. Department of Justice stating that the DOE will not appeal the court's final judgment.

In March and April 2014, CYAPC, YAEC and MYAPC received payment of $126.3 million, $73.3 million and $35.8 million, respectively, of the DOE Phase II Damages proceeds and made the required informational filing with FERC in accordance with the process and methodology outlined in the 2013 FERC order. 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, on June 1, 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 DOE proceeds began in the third quarter of 2014. For further information, see Note 2, "Regulatory Accounting," to the financial statements.

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 presiding judge issued a Pre-Trial Scheduling Order on September 3, 2014 that set the case for trial from June 30 to July 2, 2015.

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

NU provided guarantees and various indemnifications on behalf of external parties as a result of the sales of former subsidiaries of NU Enterprises and the termination of an unregulated business, with maximum exposures either not specified or not material.

NU also issued a guaranty under which, beginning at the time the Northern Pass Transmission line goes into commercial operation, NU will guarantee the financial obligations of NPT under the TSA in an amount not to exceed $25 million. NU's obligations under the guaranty expire upon the full, final and indefeasible payment of the guaranteed obligations.

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

The following table summarizes NU's guarantees of its subsidiaries, including CL&P, NSTAR Electric, PSNH and WMECO, as of December 31, 2014:

(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 NU parent to post collateral in the event that the unsecured debt credit ratings of NU are downgraded.

Beginning in 2011, several New England state attorneys general, state regulatory commissions, consumer advocates, consumer groups, municipal parties and other parties (the "Complainants") jointly filed three separate complaints at FERC. In the first complaint, filed in 2011, the Complainants alleged that the NETOs' base ROE of 11.14 percent that was 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 (the "first complaint refund period"). In the pursuant second and third complaints, filed in 2012 and 2014, respectively, the Complainants challenged the NETOs' base ROE and sought refunds for the 15-month periods beginning December 27, 2012 and July 31, 2014, respectively.

In 2014, the FERC determined that the base ROE should be set at 10.57 percent for the first complaint refund period and that a utility's total or maximum ROE should not exceed the top of the new zone of reasonableness (7.03 percent to 11.74 percent). The FERC ordered the NETOs to provide refunds to customers for the first complaint refund period and set the new base ROE of 10.57 percent prospectively from October 16, 2014. In late 2014, the NETOs made a compliance filing, and began refunding amounts from the first complaint period, inclusive of incentive ROE adders that exceeded the 11.74 percent as compared to the total company transmission ROE. Complainants have challenged the compliance filing.

As a result of the actions taken by the FERC and other developments in this matter, NU recorded reserves in 2013 and 2014 to recognize the potential financial impacts of the first and second complaints. The Company is unable to determine any amount related to the third complaint. The following is a summary of the cumulative pre-tax reserves (excluding interest) established by the Company in 2013 and 2014:

	NU
	For the Years Ended December 31,
(Millions of Dollars)	2013		2014		Total
1^st Complaint - Base ROE	$	23.7	$	1.2	$	24.9
2^nd Complaint - Base ROE		-		27.4		27.4
Incentive ROE (1^st and 2^nd Complaint)		-		8.4		8.4
Cumulative Reserve	$	23.7	$	37.0	$	60.7

	CL&P						NSTAR Electric
	For the Years Ended December 31,						For the Years Ended December 31,
(Millions of Dollars)	2013		2014		Total		2013		2014		Total
1^st Complaint - Base ROE	$	12.8	$	0.5	$	13.3	$	5.7	$	0.4	$	6.1
2^nd Complaint - Base ROE		-		13.5		13.5		-		7.5		7.5
Incentive ROE (1^st and 2^nd Complaint)		-		6.7		6.7		-		-		-
Cumulative Reserve	$	12.8	$	20.7	$	33.5	$	5.7	$	7.9	$	13.6

	PSNH						WMECO
	For the Years Ended December 31,						For the Years Ended December 31,
(Millions of Dollars)	2013		2014		Total		2013		2014		Total
1^st Complaint - Base ROE	$	2.3	$	0.1	$	2.4	$	2.9	$	0.2	$	3.1
2^nd Complaint - Base ROE		-		2.7		2.7		-		3.7		3.7
Incentive ROE (1^st and 2^nd Complaint)		-		-		-		-		1.7		1.7
Cumulative Reserve	$	2.3	$	2.8	$	5.1	$	2.9	$	5.6	$	8.5

As of December 31, 2014, the cumulative reserves above do not reflect refunds totaling $4.8 million at NU, $2.7 million at CL&P, $1 million at NSTAR Electric, $0.5 million at PSNH and $0.6 million at WMECO for the first complaint refund period.

The aggregate after-tax net charge to 2014 earnings resulting from the 2014 FERC orders totaled $22.4 million at NU, $12.4 million at CL&P, $4.9 million at NSTAR Electric, $1.7 million at PSNH and $3.4 million at WMECO. In 2013, the aggregate after-tax charge to earnings totaled $14.3 million at NU, $7.7 million at CL&P, $3.4 million at NSTAR Electric, $1.4 million at PSNH and $1.8 million at WMECO.

Although management is uncertain on the final outcome on the second and third complaints regarding the base ROE and the incentive ROE adder, management believes the current reserves established are appropriate to reflect probable and reasonably estimable refunds.

On December 31, 2014, NSTAR Electric, NSTAR Gas and the Massachusetts Attorney General filed a comprehensive settlement agreement with the DPU. The comprehensive settlement agreement included resolution of the outstanding NSTAR Electric CPSL program filings for the periods 2006 through 2011, the NSTAR Electric and NSTAR Gas PAM and energy efficiency-related customer billing adjustments reported in 2012, and the NSTAR Electric energy efficiency program filings regarding LBR for the periods 2008 through 2011. If approved by the DPU, NSTAR Electric and NSTAR Gas will be required to refund a total of $44.7 million to their respective customers, which was included in regulatory liabilities as of December 31, 2014. Upon the DPU's approval, NSTAR Electric will adjust its regulatory liabilities, which it expects will result in a benefit of $23 million in the first quarter of 2015. Management expects a response from the DPU in the first quarter of 2015.

In accordance with a generic 2005 DPU order, electric utilities in Massachusetts recover the energy-related portion of bad debt costs in their Basic Service rates. In 2007, NSTAR Electric filed its 2006 Basic Service reconciliation with the DPU proposing an adjustment related to the increase of its Basic Service bad debt charge-offs. The DPU issued an order approving the implementation of a revised Basic Service rate but instructed NSTAR Electric to reduce distribution rates by an amount equal to the increase in its Basic Service bad debt charge-offs. This adjustment to NSTAR Electric's distribution rates would eliminate the fully reconciling nature of the Basic Service bad debt adder.

In 2010, NSTAR Electric filed an appeal of the DPU's order with the SJC. NSTAR Electric's position was that it had fully removed the collection of energy-related bad debt costs from its distribution rates effective January 1, 2006. Therefore, no further adjustment to distribution rates was warranted. In 2012, the SJC vacated the DPU order and remanded the matter to the DPU for further review.

As of December 31, 2014, NSTAR Electric has a total deferred regulatory asset of approximately $33 million of costs associated with energy-related bad debt.

On January 7, 2015, the DPU issued an order on remand stating that NSTAR Electric had, in fact, removed energy-related bad debt costs from distribution rates effective January 1, 2006. The DPU order approved NSTAR Electric's 2005 and 2006 reconciliation filings and ordered NSTAR Electric and the Massachusetts Attorney General to collaborate on the submission of a proposal for the reconciliation of energy-related bad debt costs for the open years of 2007 through 2014 by April 7, 2015. Management expects to present a proposal to the Attorney General in the first quarter of 2015 with a decision from the DPU later in 2015.

NU, 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.