SEGMENT INFORMATION

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

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

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

The Electric Transmission segment includes a reduction to Operations and Maintenance expense of $27.5 million in 2016 for costs incurred in previous years that was recovered in transmission rates over the period June 1, 2016 through May 31, 2017. These costs were associated with the merger of Northeast Utilities and NSTAR.

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

Eversource's segment information is as follows:



	For the Year Ended December 31, 2018 ⁽¹⁾
Eversource (Millions of Dollars)	Electric Distribution			Natural Gas Distribution			Electric Transmission			Water Distribution			Other			Eliminations			Total
Operating Revenues	$	6,957.2		$	1,022.2		$	1,286.3		$	212.0		$	936.3		$	(1,965.8	)	$	8,448.2
Depreciation and Amortization	(671.8		)	(75.0		)	(231.8		)	(46.5		)	(49.1		)	2.2			(1,072.0		)
Other Operating Expenses	(5,548.6		)	(787.6		)	(375.5		)	(99.8		)	(831.5		)	1,966.7			(5,676.3		)
Operating Income	736.8			159.6			679.0			65.7			55.7			3.1			1,699.9
Interest Expense	(202.8		)	(44.1		)	(120.6		)	(34.3		)	(129.3		)	32.3			(498.8		)
Interest Income	18.7			—			2.4			—			30.3			(33.3		)	18.1
Other Income/(Loss), Net	67.5			7.1			31.1			(0.4		)	1,185.3			(1,180.3		)	110.3
Income Tax (Expense)/Benefit	(160.2		)	(29.4		)	(161.8		)	(0.1		)	62.5			—			(289.0		)
Net Income	460.0			93.2			430.1			30.9			1,204.5			(1,178.2		)	1,040.5
Net Income Attributable to Noncontrolling Interests	(4.6		)	—			(2.9		)	—			—			—			(7.5		)
Net Income Attributable to Common Shareholders	$	455.4		$	93.2		$	427.2		$	30.9		$	1,204.5		$	(1,178.2	)	$	1,033.0
Total Assets (as of)	$	21,389.1		$	3,904.9		$	10,285.0		$	2,253.0		$	17,874.2		$	(17,464.9	)	$	38,241.3
Cash Flows Used for Investments in Plant	$	961.3		$	351.5		$	929.7		$	102.3		$	178.6		$	—		$	2,523.4



	For the Year Ended December 31, 2017 ⁽²⁾
Eversource (Millions of Dollars)	Electric Distribution			Natural Gas Distribution			Electric Transmission			Water Distribution ⁽³⁾			Other			Eliminations			Total
Operating Revenues	$	5,542.9		$	947.3		$	1,301.7		$	15.9		$	931.0		$	(986.8	)	$	7,752.0
Depreciation and Amortization	(542.6		)	(72.9		)	(209.4		)	(3.7		)	(37.4		)	2.2			(863.8		)
Other Operating Expenses	(4,072.6		)	(716.4		)	(382.8		)	(8.3		)	(806.6		)	986.7			(5,000.0		)
Operating Income	927.7			158.0			709.5			3.9			87.0			2.1			1,888.2
Interest Expense	(186.3		)	(43.1		)	(115.1		)	(3.1		)	(90.0		)	15.8			(421.8		)
Interest Income	7.3			0.1			1.8			0.1			15.7			(16.7		)	8.3
Other Income/(Loss), Net	41.6			3.8			27.3			—			1,113.0			(1,086.0		)	99.7
Income Tax Expense	(288.3		)	(44.2		)	(228.7		)	(2.1		)	(15.5		)	(0.1		)	(578.9		)
Net Income/(Loss)	502.0			74.6			394.8			(1.2		)	1,110.2			(1,084.9		)	995.5
Net Income Attributable to Noncontrolling Interests	(4.6		)	—			(2.9		)	—			—			—			(7.5		)
Net Income/(Loss) Attributable to Common Shareholders	$	497.4		$	74.6		$	391.9		$	(1.2	)	$	1,110.2		$	(1,084.9	)	$	988.0
Total Assets (as of)	$	19,250.4		$	3,595.2		$	9,401.2		$	2,182.9		$	16,220.9		$	(14,430.2	)	$	36,220.4
Cash Flows Used for Investments in Plant	$	1,020.7		$	298.2		$	867.6		$	16.0		$	145.6		$	—		$	2,348.1



	For the Year Ended December 31, 2016 ⁽²⁾
Eversource (Millions of Dollars)	Electric Distribution			Natural Gas Distribution			Electric Transmission			Water Distribution		Other			Eliminations			Total
Operating Revenues	$	5,594.3		$	857.7		$	1,210.0		$	—	$	870.4		$	(893.3	)	$	7,639.1
Depreciation and Amortization	(504.7		)	(65.3		)	(185.8		)	—		(33.5		)	2.2			(787.1		)
Other Operating Expenses	(4,173.0		)	(629.0		)	(321.3		)	—		(779.2		)	891.8			(5,010.7		)
Operating Income	916.6			163.4			702.9			—		57.7			0.7			1,841.3
Interest Expense	(193.1		)	(41.3		)	(110.0		)	—		(63.5		)	6.9			(401.0		)
Interest Income	10.0			0.1			1.2			—		7.0			(7.3		)	11.0
Other Income, Net	22.7			0.7			17.8			—		1,021.2			(1,008.9		)	53.5
Income Tax (Expense)/Benefit	(288.8		)	(45.2		)	(238.2		)	—		16.5			0.7			(555.0		)
Net Income	467.4			77.7			373.7			—		1,038.9			(1,007.9		)	949.8
Net Income Attributable to Noncontrolling Interests	(4.6		)	—			(2.9		)	—		—			—			(7.5		)
Net Income Attributable to Common Shareholders	$	462.8		$	77.7		$	370.8		$	—	$	1,038.9		$	(1,007.9	)	$	942.3
Cash Flows Used for Investments in Plant	$	812.6		$	255.3		$	801.0		$	—	$	108.0		$	—		$	1,976.9

⁽¹⁾

Effective January 1, 2018, upon implementation of the new revenue accounting guidance, the electric distribution segment is presented gross and intercompany transmission billings are presented in the eliminations column, as Eversource believes that the electric distribution segment acts as a principal, rather than an agent, in its contracts with retail customers. Retail customers contract directly with the electric distribution utility and do not differentiate between distribution and transmission services. Therefore, the electric distribution segment revenues, which are derived from retail customer billings, are presented gross of the eliminations. Prior to 2018, the electric distribution segment presented intercompany electric transmission billings net, based on indicators of net presentation prior to the new revenue guidance. See Note 22 "Revenues," to the financial statements regarding accounting for revenues.

⁽²⁾

As a result of the adoption of new accounting guidance, the non-service related components of pension, SERP and PBOP benefit costs are presented as non-operating income and recorded in Other Income, Net on the statements of income. The 2017 and 2016 amounts, which were previously presented within Operations and Maintenance expense on the statements of income, have been retrospectively presented within Other Income, Net for the years ended December 31, 2017 and 2016. See Note 1C, "Summary of Significant Accounting Policies - Accounting Standards" and Note 1N, "Summary of Significant Accounting Policies - Other Income, Net," to the financial statements for further information.


⁽³⁾	The water distribution business was determined to be a reportable segment beginning in 2018. The 2017 segment information has been recast to conform to the current segment reporting structure.