Eversource 2003 Annual Report Download - page 61

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O. Materials and Supplies
Materials and supplies include materials purchased primarily for
construction, operation and maintenance (O&M) purposes. Materials
and supplies are valued at the lower of average cost or market.
P. Sale of Customer Receivables
CL&P has an arrangement with a financial institution under which CL&P
can sell up to $100 million of accounts receivable and unbilled revenues.
At December 31, 2003 and 2002, CL&P had sold accounts receivable of
$80 million and $40 million, respectively, to the financial institution with
limited recourse through CL&P Receivables Corporation (CRC), a wholly
owned subsidiary of CL&P. At December 31, 2003 and 2002, the reserve
requirements calculated in accordance with the Receivables Purchase and
Sale Agreement were $29.3 million and $3.8 million, respectively. These
reserve amounts are deducted from the amount of receivables eligible
for sale at the time. 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, 2003
and 2002, amounts sold to CRC by CL&P but not sold to the financial
institution totaling $166.5 million and $178.9 million, respectively, are
included in investments in securitizable assets on the accompanying
consolidated balance sheets. These amounts would be excluded from
CL&P’s assets in the event of CL&P’s bankruptcy. On July 9, 2003, CL&P
renewed this arrangement.
The transfer of receivables to the financial institution under this arrange-
ment qualifies for sale treatment under SFAS No. 140, “Accounting for
Transfers and Servicing of Financial Assets and Extinguishment of
Liabilities — A Replacement of SFAS No. 125.” This agreement expires
on July 7, 2004. Management plans to renew this agreement prior to
its expiration.
Q. Cash and Cash Equivalents
Cash and cash equivalents includes cash on hand and short-term cash
investments that are highly liquid in nature and have original maturities
of three months or less.
R. Restricted Cash — LMP Costs and Unrestricted Cash From
Counterparties
Restricted cash — LMP costs represents incremental LMP cost amounts
that have been collected by CL&P and deposited into an escrow account.
Unrestricted cash on deposit from counterparties represents balances
collected from counterparties resulting from Select Energy’s credit
management activities. An offsetting liability has been recorded in other
current liabilities for the amounts collected.
S. Special Deposits
Special deposits represents amounts Select Energy has on deposit with
brokerage firms in the amount of $17 million, amounts included in
escrow for SESI which have not been spent on its construction projects
of $32 million, and $30.1 million in escrow that PSNH funded to acquire
CVEC on January 1, 2004.
T. Excise Taxes
Certain excise taxes levied by state or local governments are collected by
NU from its customers. These excise taxes are accounted for on a gross
basis with collections in revenues and payments in expenses. For the
years ended December 31, 2003, 2002 and 2001, gross receipts taxes,
franchise taxes and other excise taxes of $94.5 million, $86.7 million and
$90.5 million, respectively, are included in operating revenues and taxes
other than income taxes on the accompanying consolidated statements
of income.
U. Supplemental Cash Flow Information
For the Years Ended December 31,
(Millions of Dollars) 2003 2002 2001
Cash paid during the year for:
Interest, net of amounts capitalized $241.3 $259.9 $275.3
Income taxes $248.3 $114.4 $321.0
V. Other Income/(Loss)
The pre-tax components of NU’s other income/(loss) items are as follows:
For the Years Ended December 31,
(Millions of Dollars) 2003 2002 2001
Seabrook-related gains $ — $38.7 $ —
Investment write-downs (1.4) (18.4) —
Gain related to Millstone sale —— 201.9
Loss on share
repurchase contracts —— (35.4)
Investment income 17.1 25.4 19.3
Charitable donations (8.4) (3.7) (5.8)
Other (7.7) 1.8 7.6
Totals $(0.4) $43.8 $187.6
2. Short-Term Debt
Limits: The amount of short-term borrowings that may be incurred by
NU and its operating companies is subject to periodic approval by either
the SEC under the 1935 Act or by the respective state regulators. On
June 30, 2003, the SEC granted authorization allowing NU, CL&P, PSNH,
WMECO, and Yankee Gas to incur total short-term borrowings up to a
maximum of $400 million, $375 million, $100 million, $200 million, and
$100 million, respectively, through June 30, 2006, with authorization for
borrowings from the NU Money Pool (Pool) granted through June 30, 2004.
The charter of CL&P contains preferred stock provisions restricting the
amount of unsecured debt that CL&P may incur. At meetings in November
2003, CL&P obtained authorization from its stockholders to issue unsecured
indebtedness with a maturity of less than 10 years in excess of the 10
percent of total capitalization limitation in CL&P’s charter, provided that all
unsecured indebtedness would not exceed 20 percent of total capitaliza-
tion for a ten-year period expiring March 2014. As of December 31, 2003,
CL&P is permitted to incur $366 million of additional unsecured debt.
PSNH is authorized by the NHPUC to incur short-term borrowings up to
a maximum of $100 million.