Eversource 2013 Annual Report Download - page 62

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(including information gained from those examinations), developments in case law, settlements of tax positions, changes in tax law and
regulations, rulings by taxing authorities and statute of limitation expirations. Such information or events may have a significant impact
on our financial position, results of operations and cash flows.
Accounting for Environmental Reserves: Environmental reserves are accrued when assessments indicate it is probable that a liability
has been incurred and an amount can be reasonably estimated. Adjustments made to estimates of environmental liabilities could have
a significant impact on earnings. We estimate these liabilities based on findings through various phases of the assessment,
considering the most likely action plan from a variety of available remediation options (ranging from no action required to full site
remediation and long-term monitoring), current site information from our site assessments, remediation estimates from third party
engineering and remediation contractors, and our prior experience in remediating contaminated sites. Our estimates incorporate
currently enacted state and federal environmental laws and regulations and data released by the EPA and other organizations. The
estimates associated with each possible action plan are judgmental in nature partly because there are usually several different
remediation options from which to choose. Our estimates are subject to revision in future periods based on actual costs or new
information from other sources, including the level of contamination at the site, the extent of our responsibility or the extent of
remediation required, recently enacted laws and regulations or a change in cost estimates due to certain economic factors.
For further information, see Note 12A, "Commitments and Contingencies - Environmental Matters," to the financial statements.
Fair Value Measurements: We follow fair value measurement guidance that defines fair value as the price that would be received for
the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit
price). We have applied this guidance to our Company's derivative contracts that are recorded at fair value, marketable securities held
in NU’s supplemental benefit trust and WMECO’s spent nuclear fuel trust, the marketable securities held in CYAPC's and YAEC's
nuclear decommissioning trusts, our valuations of investments in our Pension and PBOP plans, and nonrecurring fair value
measurements of nonfinancial assets such as goodwill and AROs.
Changes in fair value of the regulated company derivative contracts are recorded as Regulatory Assets or Liabilities, as we expect to
recover the costs of these contracts in rates. These valuations are sensitive to the prices of energy and energy-related products in
future years for which markets have not yet developed and assumptions are made.
We use quoted market prices when available to determine fair values of financial instruments. If quoted market prices are not available,
fair value is determined using quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments
that are not active and model-derived valuations. When quoted prices in active markets for the same or similar instruments are not
available, we value derivative contracts using models that incorporate both observable and unobservable inputs. Significant
unobservable inputs utilized in the models include energy and energy-related product prices for future years for long-dated derivative
contracts, future contract quantities under full requirements and supplemental sales contracts, and market volatilities. Discounted cash
flow valuations incorporate estimates of premiums or discounts, reflecting risk adjusted profit that would be required by a market
participant to arrive at an exit price, using available historical market transaction information. Valuations of derivative contracts also
reflect our estimates of nonperformance risk, including credit risk.
For further information on derivative contracts and marketable securities, see Note 1I, "Summary of Significant Accounting Policies -
Derivative Accounting," Note 5, "Derivative Instruments," and Note 6, "Marketable Securities," to the financial statements.
Other Matters
Accounting Standards Recently Adopted: For information regarding new accounting standards, see Note 1C, "Summary of Significant
Accounting Policies - Accounting Standards," to the financial statements.
Contractual Obligations and Commercial Commitments: Information regarding our contractual obligations and commercial
commitments as of December 31, 2013 is summarized annually through 2018 and thereafter as follows:
NU
(Millions of Dollars)
2014
2015
2016
2017
2018
Thereafter
Total
Long-term debt maturities (a)
$
576.7
$
216.7
$
200.0
$
745.0
$
810.0
$
5,031.6
$
7,580.0
Estimated interest payments on existing debt (b)
329.1
309.9
304.1
299.6
247.3
2,124.6
3,614.6
Capital leases (c)
2.6
2.4
2.2
2.1
2.1
5.4
16.8
Operating leases (d)
20.1
18.1
15.4
12.4
8.5
22.3
96.8
Funding of pension obligations (d) (h)
71.6
188.4
173.7
127.9
36.3
-
597.9
Funding of other postretirement benefit obligations (d)
39.7
37.2
18.0
15.2
14.4
-
124.5
Estimated future annual long-term contractual costs (e)
705.4
615.6
538.1
428.7
368.1
2,385.6
5,041.5
Other purchase commitments (d) (g)
1,550.7
-
-
-
-
-
1,550.7
Total (f) (i)
$
3,295.9
$
1,388.3
$
1,251.5
$
1,630.9
$
1,486.7
$
9,569.5
$
18,622.8