Eversource 2008 Annual Report Download - page 81

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year ended December31, 2006 related to NU’s
investment in Globix Corporation (Globix), which was
sold on April6, 2006.
NU utilizes the specific identification basis method for
the supplemental benefit trust securities and the average
cost basis method for the spent nuclear fuel trust to
compute the realized gains and losses on the sale of
available-for-sale securities.
Proceeds from the sale of these securities, including
proceeds from short-term investments, totaled $259.4
million, $254.8 million and $193.5 million for the years
ended December 31, 2008, 2007 and 2006, respectively.
At December 31, 2008, the contractual maturities of the
available-for-sale securities are as follows:
Amortized Estimated
(Millions of Dollars) Cost Fair Value
Less than one year $ 49.2 $ 49.9
One to five years 11.9 12.0
Six to ten years 4.3 4.5
Greater than ten years 13.6 14.2
Subtotal 79.0 80.6
Equity securities 27.5 28.6
Total $106.5 $109.2
For further information regarding marketable securities,
see Note 1U, “Summary of Significant Accounting Policies
- Marketable Securities,” to the consolidated financial
statements.
10. Leases
Various NU subsidiaries have entered into lease
agreements, some of which are capital leases, for the use
of data processing and oce equipment, vehicles, and
oce space. The provisions of these lease agreements
generally contain renewal options. Certain lease
agreements contain contingent lease payments. The
contingent lease payments are based on various factors,
such as the commercial paper rate plus a credit spread or
the consumer price index.
Capital lease rental payments were $2.5 million in 2008,
$2.9 million in 2007, and $3.3 million in 2006. Interest
included in capital lease rental payments was $1.8 million
in 2008, $2 million in 2007, and $1.9 million in 2006.
Capital lease asset amortization was $0.7 million in 2008,
and $0.9 million in both 2007 and 2006.
Operating lease rental payments charged to expense
were $19.1 million, $19.6 million and $10.9 million in 2008,
2007 and 2006, respectively. The 2006 amount includes
$0.7 million included in income from discontinued
operations on the accompanying consolidated
statements of income. The capitalized portion of
operating lease payments was approximately $10.8
million, $10.5 million and $10 million for the years ended
December31, 2008, 2007 and 2006, respectively.
Future minimum rental payments excluding executory
costs, such as property taxes, state use taxes, insurance,
and maintenance, under long-term noncancelable leases,
at December 31, 2008 are as follows:
Capital Leases
(Millions of Dollars)
2009 $ 2.4
2010 2.4
2011 2.5
2012 2.6
2013 2.4
Thereafter 15.5
Future minimum lease payments $27.8
Less amount representing interest 14.4
Present value of future minimum
lease payments $13.4
Operating Leases
(Millions of Dollars)
2009 $24.6
2010 18.9
2011 7.1
2012 6.1
2013 5.9
Thereafter 23.9
Future minimum lease payments $86.5
In November 2008, the lessor of NU’s vehicle/equipment
master lease agreements notified the company that
it was electing to terminate the lease agreements
as permitted under the termination clause of the
agreements. The remaining payments under the
agreements will be made through January 2011. See
Note 7D, “Commitments and Contingencies - Long-Term
Contractual Arrangements,” for obligations relating to
the termination.
CL&P entered into certain contracts for the purchase
of energy that qualify as leases under EITF No. 01-8,
“Determining Whether an Arrangement Contains a
Lease.” These contracts do not have minimum lease
payments and therefore are not included in the tables
above. See Note 7D, “Commitments and Contingencies
- Long-Term Contractual Arrangements,” for further
information regarding these contracts.
11. Long-Term Debt
Long-term debt maturities and cash sinking fund
requirements on debt outstanding at December 31,
2008, for the years 2009 through 2013 and thereafter,
which include fees and interest due for spent nuclear fuel
disposal costs, net unamortized premiums or discounts
and other fair value adjustments at December 31, 2008,
are as follows:
(Millions of Dollars)
2009 $ 54.3
2010 4.3
2011 4.3
2012 267.3
2013 305.0
Thereafter 3,207.8
Fees and interest due for
spent nuclear fuel disposal costs 298.6
Net unamortized premiums and discounts
and other fair value adjustments 15.9
Total $ 4,157.5
There are annual renewal and replacement fund
requirements equal to 2.25 percent of the average of net
depreciable utility property owned by PSNH in 1992, plus
cumulative gross property additions thereafter. PSNH
expects to meet these future fund requirements by
certifying property additions. Any deficiency would need
to be satisfied by the deposit of cash or bonds.
Essentially all utility plant of CL&P, PSNH and Yankee Gas
is subject to the liens of each company’s respective first
mortgage bond indenture.
NU and its subsidiaries’ tax-exempt bonds contain call
provisions ranging between 100 percent and 102 percent
of par. All other securities are subject to make-whole
provisions.
CL&P has $423.9 million of tax-exempt Pollution Control
Revenue Bonds (PCRBs), $315.5 million of which is
secured by second mortgage liens on transmission
assets, junior to the liens of its first mortgage bond
indentures and the remaining $108.4 million of which
is secured by its first mortgage bonds. One series of
PCRBs, in the aggregate principal amount of $62 million,
had a fixed interest rate for a five-year period that
expired on September30, 2008. As a result of poor
liquidity in the tax-exempt market, CL&P chose to acquire
this series of PCRBs on October1, 2008. These PCRBs,
which mature in 2031, have not been retired and are
temporarily held by CL&P in a flexible rate mode with one
day resets.
At December 31, 2008 PSNH had $407.3 million in
outstanding PCRBs. PSNH’s obligation to repay each
series of PCRBs is secured by first mortgage bonds and
three series, the 2001 Series A, B and C, also carry bond
insurance. Each such series of first mortgage bonds
contains similar terms and provisions as the applicable
series of PCRBs. For financial reporting purposes,
these first mortgage bonds would not be considered
outstanding unless PSNH failed to meet its obligations
under the PCRBs. The 2001 Series B PCRBs, in the
aggregate principal amount of $89.3 million, bears
interest at a rate that is periodically set pursuant to
auctions. Since March 2008, a significant majority of this