Eversource 2006 Annual Report Download - page 93

NU 2006 ANNUAL REPORT 91
2005 and 2004, respectively. The capitalized portion of operating lease
payments was approximately $10 million, $9.4 million and $8.2 million
for the years ended December 31, 2006, 2005 and 2004, respectively.
Future minimum rental payments excluding executory costs, such as
property taxes, state use taxes, insurance, and maintenance, under
long-term noncancelable leases, at December 31, 2006 are as follows:
Capital Operating
(Millions of Dollars) Leases Leases
2007 $ 2.8 $ 31.0
2008 2.4 27.8
2009 2.2 24.8
2010 1.7 21.4
2011 1.7 16.6
Thereafter 15.7 65.3
Future minimum lease payments 26.5 $186.9
Less amount representing interest (12.1)
Present value of future minimum lease payments $14.4
12. Long-Term Debt
Long-term debt maturities and cash sinking fund requirements on
debt outstanding at December 31, 2006, for the years 2007 through
2011 and thereafter, which include fees and interest due for spent
nuclear fuel disposal costs, net unamortized premiums or discounts
and other fair value adjustments at December 31, 2006, are as follows
(millions of dollars):
Year
2007 $ 4.9
2008 154.3
2009 54.3
2010 4.3
2011 4.3
Thereafter 2,472.0
Fees and interest due for spent nuclear fuel
disposal costs 280.8
Net unamortized premiums and discounts and
other fair value adjustments (9.6)
Total $2,965.3
Essentially all utility plant of CL&P, PSNH and Yankee Gas is subject to
the liens of each company’s respective first mortgage bond indenture.
CL&P has $315.5 million of tax-exempt Pollution Control Revenue
Bonds (PCRBs) secured by second mortgage liens on transmission
assets, junior to the liens of its first mortgage bond indentures.
CL&P has $62 million of tax-exempt PCRBs secured by bond
insuranceand 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, 2006 and 2005, $407.3 million of the PCRBs were
outstanding. PSNH’s obligation to repay each series of PCRBs is
secured by bond insurance and by PSNH’s 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 had a maturity of 13 months, with such
borrowings being classified as long-term debt. The new facility provided
atotal commitment of $310 million in borrowings and LOCs. This
facility was terminated on June 29, 2006.
The weighted average effective interest rate on PSNH’s Series A
variable-rate pollution control notes was 3.50 percent for 2006 and
2.51 percent for 2005. PSNH’s Series B variable-rate pollution control
notes were converted to a fixed rate of 4.75 percent in June of 2006.
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.
Long-term debt – first mortgage bonds on the accompanying
consolidated statements of capitalization at December 31, 2006
includes $250 million of long-term debt issued in 2006 related
to CL&P.
Liabilities held for sale at December 31, 2005 includes $82.6 million
relating toSESI long-term debt.
For information regarding fees and interest due for spent nuclear fuel
disposal costs, see Note 8C, “Commitments and Contingencies –
Spent Nuclear Fuel Disposal Costs,” to the consolidated financial
statements.
The change in fair value totaling a negative$6.5 million and $5.2
million at December 31, 2006 and 2005, 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 that is hedged with a fixed tofloating 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
liabilities for the change in fair value of the fixed to floating interest
rate swap.
13. Dividend Restrictions
NU’s ability to pay dividends is not regulated under the Federal
Power Act, but may be affected by certain state statutes, the
leverage restrictions in its revolving credit agreement and the ability
of its subsidiaries to pay dividends to it. The Federal Power Act limits
the payment of dividends by CL&P, PSNH and WMECO to their
retained earnings balances, and PSNH is required to reserve an
additional amount under its FERC hydroelectric license conditions. In
addition, certain state statutes may impose additional limitations on
such companies and on Yankee Gas. CL&P, PSNH, WMECO and
Yankee Gas also have a revolving credit agreement that imposes
leverage restrictions.