Eversource 2008 Annual Report Download - page 42

to nonrecurring fair value measurements of non-financial assets and liabilities beginning
in 2009, including asset retirement obligations (ARO) and goodwill and other impairment
analyses. Implementation of SFAS No. 157 to non-financial assets and liabilities is not
expected to have a material impact on our consolidated financial statements.
Contractual Obligations and Commercial Commitments:
Information regarding our contractual obligations and commercial commitments at
December 31, 2008 is summarized annually through 2013 and thereafter as follows:
(Millions of Dollars) 2009 2010 2011 2012 2013 Thereafter Totals
Long-term debt
maturities
(a) (b)
$ 54.3 $ 4.3 $ 4.3 $ 267.3 $ 305.0 $3,207.8 $ 3,843.0
Estimated interest
payments on existing
debt
(c)
222.7 219.2 218.9 210.1 194.4 2,114.8 3,180.1
Capital leases
(d)
2.4 2.4 2.5 2.6 2.4 15.5 27.8
Operating leases
(e)
24.6 18.9 7.1 6.1 5.9 23.9 86.5
Required funding of
pension obligations
(e) (f)
- 150.0 - - - - 150.0
Required funding
of other postretirement
benefit obligations
(e)
37.3 38.7 40.9 42.8 29.3 N/A 189.0
Estimated future annual
regulated company
costs
(g)
791.6 723.9 779.7 715.0 523.6 2,855.2 6,389.0
Estimated future
annual NU
Enterprises costs
(g)
40.3 41.9 42.9 38.8 44.7 - 208.6
Other purchase
commitments
(e) (h)
3,162.3 - - - - - 3,162.3
Totals
(i) (j)
$4,335.5 $1,199.3 $1,096.3 $1,282.7 $1,105.3 $8,217.2 $17,236.3
(a) Included in our debt agreements are usual and customary positive, negative and financial
covenants. Non-compliance with certain covenants, for example timely payment of principal
and interest, may constitute an event of default, which could cause an acceleration of principal
payments in the absence of receipt by us of a waiver or amendment. Such acceleration
would change the obligations outlined in the table of contractual obligations and commercial
commitments.
(b) Long-term debt maturities exclude $298.6 million of fees and interest due for spent nuclear fuel
disposal costs, a positive $20.8 million of net changes in fair value and a negative $4.9 million of
net unamortized premium and discount as of December 31, 2008.
(c) Estimated interest payments on fixed-rate debt are calculated by multiplying the coupon rate
on the debt by its scheduled notional amount outstanding for the period of measurement.
Estimated interest payments on floating-rate debt are calculated by multiplying the average
of the 2008 floating-rate resets on the debt by its scheduled notional amount outstanding for
the period of measurement. This same rate is then assumed for the remaining life of the debt.
Interest payments on debt that have an interest rate swap in place are estimated using the
eective cost of debt resulting from the swap rather than the underlying interest cost on the
debt, subject to the fixed and floating methodologies.
(d) The capital lease obligations include imputed interest of $14.4 million as of December 31, 2008.
(e) Amounts are not included on our consolidated balance sheets.
(f) The fair value of Pension Plan assets declined significantly during 2008. This decline resulted in
a required contribution for the 2008 Pension Plan year. This contribution would be made just
prior to the 2009 federal income tax return filing, which will likely be filed in the third quarter of
2010. We cannot determine at this time the amount of contributions that would be required for
the 2009 Pension Plan year or future years.
(g) Other than the net mark-to-market changes on respective derivative contracts held by both
the regulated companies and NU Enterprises, these obligations are not included on our
consolidated balance sheets. For further information on these estimated future annual costs,
see Note 7D, “Commitments and Contingencies - Long-Term Contractual Arrangements,” to the
consolidated financial statements.
(h) Excludes FIN 48 unrecognized tax benefits of $156.3 million as of December31, 2008, as we
cannot make reasonable estimates of the periods or the potential amounts of cash settlement
with the respective taxing authorities.
(i) Amount represents open purchase orders, excluding those obligations that are included in
the capital leases, operating leases, estimated future annual regulated company costs and the
estimated future annual NU Enterprises costs. These payments are subject to change as certain
purchase orders include estimates based on projected quantities of material and/or services
that are provided on demand, the timing of which cannot be determined. Because payment
timing cannot be determined, we include all open purchase order amounts in 2009.
(j) Excludes other long-term liabilities, including a significant portion of the FIN 48 unrecognized
tax benefits described above, environmental reserves ($26.8 million), various injuries and
damages reserves ($35.4 million), employee medical insurance reserves ($6.6 million), long-
term disability insurance reserves ($12 million) and the ARO liability reserves ($50.6 million) as
we cannot make reasonable estimates of the periods.
RRB amounts are non-recourse to us, have no required payments over the next five
years and are not included in this table. The regulated companies’ standard oer service
contracts and default service contracts also are not included in this table. The estimated
payments under interest rate swap agreements are not included in this table as the
estimated payment amounts are not determinable. For further information regarding our
contractual obligations and commercial commitments, see the consolidated statements
of capitalization and Note 2, “Short-Term Debt,” Note 5A, “Employee Benefits - Pension
Benefits and Postretirement Benefits Other Than Pensions,” Note 7D, “Commitments and
Contingencies - Long-Term Contractual Arrangements,” Note 10, “Leases,” and Note 11,
“Long-Term Debt,” to the consolidated financial statements.
Forward Looking Statements: This discussion and analysis includes statements
concerning our expectations, beliefs, plans, objectives, goals, strategies, assumptions of
future events, future financial performance or growth or other statements that are not
historical facts. These statements are “forward looking statements” within the meaning
of the Private Securities Litigation Reform Act of 1995. You can generally identify these
“forward looking statements” through the use of words or phrases such as “estimate,”
“expect,” “anticipate,” “intend,” “plan,” “project,” “believe,” “forecast,” “should,” “could,”
and other similar expressions. Forward looking statements involve risks and uncertainties
that may cause actual results or outcomes to dier materially from those included in the
forward looking statements. Factors that may cause actual results to dier materially from
those included in the forward looking statements include, but are not limited to, actions or
inactions by local, state and federal regulatory bodies; changes in business and economic
conditions, including their impact on interest rates, bad debt expense and demand for
our products and services; changes in weather patterns; changes in laws, regulations
or regulatory policy; changes in levels and timing of capital expenditures; disruptions in
the capital markets or events that make our access to necessary capital more dicult
or costly; developments in legal or public policy doctrines; technological developments;
changes in accounting standards and financial reporting regulations; fluctuations in the
value of our remaining competitive electricity positions; actions of rating agencies; and
other presently unknown or unforeseen factors. Other risk factors are detailed from
time to time in our reports to the Securities and Exchange Commission. We undertake
no obligation to update the information contained in any forward looking statements to
reflect events or circumstances after the date on which such statements are made or to
reflect the occurrence of unanticipated events.
Web Site: Additional financial information is available through our web site at
www.nu.com.
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