Eversource 2013 Annual Report Download - page 125

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113
Other Financial Instruments: Investments in marketable securities are carried at fair value. For further information, see Note 1H,
"Summary of Significant Accounting Policies - Fair Value Measurements," and Note 6, "Marketable Securities," to the financial
statements. The carrying value of other financial instruments included in current assets and current liabilities, including cash and cash
equivalents and special deposits, approximates their fair value due to the short-term nature of these instruments.
15. ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS)
The changes in accumulated other comprehensive income/(loss) by component, net of tax effect, is as follows:
For the Year Ended December 31, 2013
Unrealized
Qualified Cash
Gains/(Losses) on
Pension, SERP
Flow Hedging
Available-for-Sale
and PBOP
(Millions of Dollars)
Instruments
Securities
Benefit Plans
Total
AOCI as of January 1, 2013
$
(16.4)
$
1.3
$
(57.8)
$
(72.9)
Other Comprehensive Income Before Reclassifications
-
(0.9)
19.4
18.5
Amounts Reclassified from AOCI
2.0
-
6.4
8.4
Net Other Comprehensive Income
2.0
(0.9)
25.8
26.9
AOCI as of December 31, 2013
$
(14.4)
$
0.4
$
(32.0)
$
(46.0)
NU's qualified cash flow hedging instruments represent interest rate swap agreements on debt issuances that were settled in prior
years. The settlement amount was recorded in AOCI and is being amortized into Net Income over the term of the underlying debt
instrument. CL&P, PSNH and WMECO continue to amortize interest rate swaps settled in prior years from AOCI into Interest Expense
over the remaining life of the associated long-term debt, which are not material to their respective financial statements.
The tax effects of Pension, SERP and PBOP Benefit Plan actuarial gains and losses that arose during 2013, 2012 and 2011 were
recognized in AOCI as a net deferred tax liability of $11.4 million in 2013 and net deferred tax assets of $6.2 million and $10.2 million in
2012 and 2011, respectively. In addition, the tax effect of the loss on qualified cash flow hedging instrument settlements that arose
during 2011 was recognized in AOCI as a deferred tax asset of $10.2 million in 2011. The tax effects of unrealized gains and losses on
available-for-sale securities that arose during 2013, 2012 and 2011 were not material.
The following table sets forth the amount reclassified from AOCI by component and the impacted line item on the statements of income:
For the Years Ended December 31,
2013
2012
2011
Amount
Amount
Amount
Reclassified
Reclassified
Reclassified
Statements of Income
(Millions of Dollars)
from AOCI
from AOCI
from AOCI
Line Item Impacted
Qualified Cash Flow Hedging Instruments
$
(3.4)
$
(3.3)
$
(1.3)
Interest Expense
Tax Effect
1.4
1.3
0.6
Income Tax Expense
Qualified Cash Flow Hedging Instruments, Net of Tax
$
(2.0)
$
(2.0)
$
(0.7)
Pension, SERP and PBOP Benefit Plan Costs:
Amortization of Actuarial Losses
$
(10.5)
$
(8.9)
$
(5.7)
Operations and Maintenance (1)
Amortization of Prior Service Cost
(0.2)
(0.2)
(0.3)
Operations and Maintenance (1)
Amortization of Transition Obligation
-
(0.2)
(0.2)
Operations and Maintenance (1)
Total Pension, SERP and PBOP Benefit Plan Costs
(10.7)
(9.3)
(6.2)
Operations and Maintenance (1)
Tax Effect
4.3
3.5
2.3
Income Tax Expense
Pension, SERP and PBOP Benefit Plan Costs,
Net of Tax
$
(6.4)
$
(5.8)
$
(3.9)
Total Amount Reclassified from AOCI, Net of Tax
$
(8.4)
$
(7.8)
$
(4.6)
(1) These amounts are included in the computation of net periodic Pension, SERP and PBOP costs. See Note 10A, "Employee
Benefits - Pension Benefits and Postretirement Benefits Other Than Pensions," for further information.
As of December 31, 2013, it is estimated that a pre-tax amount of $3.4 million ($0.7 million for CL&P, $2 million for PSNH and $0.5
million for WMECO) will be reclassified from AOCI as a decrease to Net Income over the next 12 months as a result of the amortization
of the interest rate swap agreements, which have been settled. In addition, it is estimated that a pre-tax amount of $6.5 million will be
reclassified from AOCI as a decrease to Net Income over the next 12 months as a result of the amortization of Pension, SERP and
PBOP costs.