Eversource 2002 Annual Report Download - page 57

These amounts are included on the consolidated balance sheets as
goodwill and other purchased intangible assets, net. A summary of
NU’s goodwill balances at December 31, 2002 and 2001, by reportable
segment and reporting unit is as follows:
At December 31,
(Millions of Dollars) 2002 2001
Regulated Utilities – Gas:
Yankee Gas $287.6 $287.6
Competitive Energy Subsidiaries:
Services 30.2 25.4
Wholesale and Retail Marketing 3.2 —
Totals $321.0 $313.0
At December 31, 2002 and December 31, 2001, NU’s intangible assets
and related accumulated amortization consisted of the following:
At December 31, 2002
Gross Accumulated Net
(Millions of Dollars) Balance Amortization Balance
Intangible assets subject to amortization:
Exclusivity agreement $17.7 $4.6 $13.1
Customer list 6.6 1.7 4.9
Customer backlog and
employment related agreements 0.1 — 0.1
Totals $24.4 $6.3 $18.1
Intangible assets not subject
to amortization:
Customer relationships $3.8
Trade names 3.0
Totals $6.8
At December 31, 2001
Gross Accumulated Net
(Millions of Dollars) Balance Amortization Balance
Intangible assets subject to amortization:
Exclusivity agreement $17.7 $3.1 $14.6
Customer list 6.6 1.1 5.5
Totals $24.3 $4.2 $20.1
NU recorded amortization expense of $2.1 million and $1.6 million for
the years ended December 31, 2002 and 2001, respectively, related to
these intangible assets. Based on the current amount of intangible
assets subject to amortization, the estimated annual amortization
expense for each of the succeeding 5 years from 2003 through 2007
is $3.7 million in 2003 and $3.6 million in subsequent years. These
amounts may vary as purchase price allocations are finalized and
acquisitions and dispositions occur in the future.
The results for the years ended December 31, 2001 and 2000, on a
historical basis, do not reflect the provisions of SFAS No. 142. Had NU
adopted SFAS No. 142 on January 1, 2000, historical income before the
cumulative effect of an accounting change and extraordinary loss, net
income and basic and fully diluted EPS amounts would have been
adjusted as follows:
Net Basic Fully
(Millions of Dollars, except share information) Income EPS Diluted EPS
Year Ended December 31, 2002 $152.1 $1.18 $1.18
Year Ended December 31, 2001:
Reported income before cumulative
effect of accounting change $ 265.9 $ 1.97 $ 1.96
Add back: goodwill amortization 9.0 0.07 0.07
Adjusted income before cumulative
effect of accounting change $ 274.9 $ 2.04 $ 2.03
Reported net income $ 243.5 $ 1.80 $ 1.79
Add back: goodwill amortization 9.0 0.07 0.07
Adjusted net income $ 252.5 $ 1.87 $ 1.86
Year Ended December 31, 2000:
Reported income before
extraordinary loss $ 205.3 $ 1.45 $ 1.45
Add back: goodwill amortization 7.5 0.05 0.05
Adjusted income before
extraordinary loss $ 212.8 $ 1.50 $ 1.50
Reported net loss $ (28.6) $(0.20) $(0.20)
Add back: goodwill amortization 7.5 0.05 0.05
Adjusted net loss $ (21.1) $(0.15) $(0.15)
6. Sale of Customer Receivables
At December 31, 2002, CL&P had sold accounts receivable of $40 million
to a subsidiary of Citigroup, Inc. with limited recourse through the CL&P
Receivables Corporation (CRC), a wholly owned subsidiary of CL&P.
Additionally, at December 31, 2002, $3.8 million of assets were designated
as collateral and restricted under the agreement with the CRC and
included in the consolidated balance sheets as cash and cash equivalents.
Concentrations of credit risk to the purchaser under this agreement with
respect to the receivables are limited due to CL&P’s diverse customer
base within its service territory. At December 31, 2002, amounts sold to
CRC from CL&P but not sold to the Citgroup, Inc. subsidiary totaling
$178.9 million are included in investments in securitizable assets on the
consolidated balance sheets. No amounts were sold in 2001.
7. Nuclear Generation Asset Divestitures
Seabrook: On November 1, 2002, CL&P and NAEC consummated the
sale of their 40.04 percent combined ownership interest in Seabrook to
a subsidiary of FPL. CL&P, NAEC and certain other of the joint owners
collectively sold 88.2 percent of Seabrook to FPL. NU received approximately
$367 million of total cash proceeds from the sale of Seabrook and another
approximately $17 million from Baycorp Holdings, Ltd. (Baycorp), as a
result of the sale of its 15 percent interest in Seabrook. A portion of this
cash was used to repay all $90 million of NAEC’s outstanding debt and
other short-term debt, to return a portion of NAEC’s equity to NU and
will be used to pay approximately $95 million in taxes. The remaining
proceeds received by NAEC were refunded to PSNH through the
Seabrook Power Contracts. As part of the sale, FPL assumed responsibility
for decommissioning Seabrook. In connection with the sale, NAEC and
CL&P recorded a gain in the amount of approximately $187 million,
which was primarily used to offset stranded costs.
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