Eversource 2002 Annual Report Download - page 31

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HEC/Tobyhanna’s activities are limited to those related to the project
and HEC/Tobyhanna, including the Certificates, is included in the
accompanying consolidated financial statements.
For further information regarding these types of activities, see Note 1,
“Summary of Significant Accounting Policies,” Note 3, “Derivative
Instruments, Market Risk and Risk Management,” Note 4, “Employee
Benefits,” Note 5, “Goodwill and Other Intangible Assets,” Note 6,
“Sale of Customer Receivables,” and Note 8B, “Commitments and
Contingencies – Environmental Matters,” to the consolidated
financial statements.
Other Matters
Other Commitments and Contingencies: For further information regarding
other commitments and contingencies, see Note 8, “Commitments and
Contingencies,” to the consolidated financial statements.
Contractual Obligations and Commercial Commitments: Information
regarding NU’s contractual obligations and commercial commitments
at December 31, 2002, is summarized through 2007 as follows:
(Millions of Dollars) 2003 2004 2005 2006 2007
Notes payable to banks $ 56.0 $ — $ — $ — $ —
Long-term debt 56.9 61.7 88.7 26.6 8.3
Capital leases 3.1 3.0 2.8 2.7 2.6
Operating leases 23.1 20.6 18.4 16.2 9.8
Long-term contractual arrangements 567.8 551.3 533.0 517.1 364.2
Select Energy purchase agreements 3,302.0 612.6 290.1 68.7 69.2
Totals $4,008.9 $1,249.2 $933.0 $631.3 $454.1
Select Energy’s purchase agreement amounts can exceed the amount
expected to be reported in fuel, purchased and net interchange power
because energy trading purchases are classified in revenues.
Rate reduction bond amounts are not included in this table. For further
information regarding NU’s contractual obligations and commercial
commitments, see the Consolidated Statements of Capitalization and
related footnotes, and Note 2, “Short-Term Debt,” Note 10, “Leases,”
and Note 8E, “Long-Term Contractual Arrangements,” to the consolidated
financial statements.
Forward Looking Statements: This discussion and analysis includes forward
looking statements, which are statements of future expectations and
not facts including, but not limited to, statements regarding future
earnings, refinancings, the use of proceeds from restructuring, and the
recovery of operating costs. Words such as estimates, expects, anticipates,
intends, plans, and similar expressions identify forward looking statements.
Actual results or outcomes could differ materially as a result of further
actions by state and federal regulatory bodies, competition and industry
restructuring, changes in economic conditions, changes in weather patterns,
changes in laws, developments in legal or public policy doctrines,
technological developments, volatility in electric and natural gas commodity
markets, and other presently unknown or unforeseen factors.
Results of Operations
The components of significant income statement variances for the past two years are provided in the table below.
Income Statement Variances 2002 over/(under) 2001 2001 over/(under) 2000
(Millions of Dollars) Amount Percent Amount Percent
Operating Revenues $(752) (13)% $ 92 2%
Operating Expenses:
Fuel, purchased and net interchange power (610) (17) 332 10
Other operation (21) (3) (93) (11)
Maintenance 5231
Depreciation 42(39) (16)
Amortization (521) (53) 706 (a)
Taxes other than income taxes 84(19) (8)
Gain on sale of utility plant 455 71 (642) (100)
Total operating expenses (680) (13) 248 5
Operating Income (72) (13) (156) (22)
Interest expense, net (9) (3) (19) (7)
Other income/(loss), net (144) (77) 202 (a)
Income before tax expense (207) (46) 65 17
Income tax expense (92) (53) 12 8
Preferred dividends of subsidiaries (2) (23) (7) (49)
Income before extraordinary loss and accounting change (113) (43) 60 30
Extraordinary loss, net of tax benefit ——234 100
Cumulative effect of accounting change, net of tax benefit 22 100 (22) (100)
Net income/(loss) $(91) (38)% $272 (a)
(a) Percent greater than 100.