Eversource 2005 Annual Report Download - page 86

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CL&P has $62 million of tax-exempt PCRBs with bond insurance and
secured by the first mortgage bonds. For financial reporting purposes,
this debt is not considered to be first mortgage bonds unless CL&P
failed to meet its obligations under the PCRBs.
PSNH entered into financing arrangements with the Business Finance
Authority (BFA) of the state of New Hampshire, pursuant to which the
BFA issued five series of PCRBs and loaned the proceeds to PSNH.
At both December 31, 2005 and 2004, $407.3 million of the PCRBs
were outstanding. PSNH’s obligation to repay each series of PCRBs
is secured by bond insurance and by first mortgage bonds. Each such
series of first mortgage bonds contains similar terms and provisions as
the applicable series of PCRBs. For financial reporting purposes, these
first mortgage bonds would not be considered outstanding unless
PSNH failed to meet its obligations under the PCRBs.
NU’s long-term debt agreements provide that certain of its subsidiaries
must comply with certain financial and non-financial covenants as are
customarily included in such agreements, including but not limited to,
debt service coverage ratios and interest coverage ratios. The parties
to these agreements currently are and expect to remain in compliance
with these covenants.
On November 2, 2005, NU entered into an unsecured credit facility,
under which all borrowings will have a maturity of 13 months, with
such borrowings being classified as long-term debt. The new facility
provides a total commitment of $310 million in borrowings and LOCs.
This facility will expire no later than November 30, 2007, although no
advances or LOCs will be available under the facility beyond October
30, 2006. NU may borrow at variable rates plus an applicable margin
based upon certain debt ratings, as rated by the higher of Standard
and Poor’s or Moody’s. Under this facility, NU must comply with certain
financial and non-financial covenants as are customarily included in
such agreements, including but not limited to, consolidated debt ratios.
NU currently is and expects to remain in compliance with these
covenants. At December 31, 2005, there were no borrowings
outstanding under this facility.
Long-term debt – first mortgage bonds on the accompanying consolidated
statements of capitalization at December 31, 2005 include $200 million,
$50 million, and $50 million of long-term debt issued in 2005 related to
CL&P, PSNH and Yankee Gas, respectively.
The weighted-average effective interest rate on PSNH’s variable-rate
pollution control notes was 2.51 percent for 2005 and 1.25 percent for
2004. The pollution control note due in 2031, has an interest rate of
3.35 percent effective through October 1, 2008, at which time the
bonds will be remarketed, and the interest rate will be adjusted.
Other long-term debt – other on the accompanying consolidated
statements of capitalization at December 31, 2005 includes $50 million
of long-term debt issued in 2005 related to WMECO.
Liabilities of assets held for sale at December 31, 2005 includes $82.6
million relating to SESI long-termdebt.
For information regarding fees and interest due for spent nuclear fuel
disposal costs, see Note 9C, “Commitments and Contingencies – Spent
Nuclear Fuel Disposal Costs,” to the consolidated financial statements.
The change in fair value totaling a negative $5.2 million and a positive
$0.1 million at December 31, 2005 and 2004, respectively, on the
accompanying consolidated statements of capitalization, reflects the
NU parent 7.25 percent amortizing note, due 2012 in the amount of
$263 million, and is hedged with a fixed to floating interest rate swap.
The change in fair value of the debt was recorded as an adjustment
to long-term debt with an equal and offsetting adjustment to derivative
assets for the change in fair value of the fixed to floating interest
rate swap.
14. Dividend Restrictions
The Federal Power Act and certain state statutes limit the payment of
dividends by CL&P, PSNH, and WMECO to their respective retained
earnings balances. Yankee Gas is also subject to certain restrictions.
At December 31, 2005, retained earnings available for payment of
dividends totaled $330.4 million.
NGC is subject to certain dividend payment restrictions under its
bond covenants.
15. Accumulated Other Comprehensive Income/(Loss)
The accumulated balance for each other comprehensive income/(loss)
item is as follows:
Current
December 31, Period December 31,
(Millions of Dollars) 2004 Change 2005
Qualified cash flow
hedging instruments $(3.5) $21.7 $18.2
Unrealized gains on securities 3.2 (0.9) 2.3
Minimum supplemental
executive retirement
pension liability adjustments (0.9) 0.4 (0.5)
Accumulated other
comprehensive (loss)/income $(1.2) $21.2 $20.0
Current
December 31, Period December 31,
(Millions of Dollars) 2003 Change 2004
Qualified cash flow
hedging instruments $24.8 $(28.3) $(3.5)
Unrealized gains on securities 2.0 1.2 3.2
Minimum supplemental
executive retirement
pension liability adjustments (0.8) (0.1) (0.9)
Accumulated other
comprehensive income/(loss) $26.0 $(27.2) $(1.2)
The changes in the components of other comprehensive income/(loss)
are reported net of the following income tax effects:
(Millions of Dollars) 2005 2004 2003
Qualified cash flow
hedging instruments $(13.4) $14.4 $(6.4)
Unrealized gains
on securities 0.6 (0.7) (1.4)
Minimum supplemental
executive retirement
pension liability adjustments (0.3) 0.1 0.5
Accumulated other
comprehensive income $(13.1) $13.8 $(7.3)