Eversource 2010 Annual Report Download - page 62

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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 see Item 7A, "Quantitative and Qualitative Disclosures about Market Risk," included in this Annual Report on
Form 10-K for a sensitivity analysis of how changes in the prices of energy and energy related products would impact earnings.
For further information on derivative contracts and marketable securities, see Note 1J, "Summary of Significant Accounting Policies -
Derivative Accounting," Note 4, "Derivative Instruments," and Note 5, "Marketable Securities," to the consolidated financial statements.
Other Matters
Environmental Matter: HWP, a subsidiary of NU, continues to investigate the potential need for additional remediation at a river site in
Massachusetts containing tar deposits associated with an MGP site that HWP sold to HG&E, a municipal utility, in 1902. As of
December 31, 2010, HWP has a $2.9 million reserve for estimated costs that HWP considers probable over the remaining life of the
project. Although a material increase to the reserve is not presently anticipated, management cannot reasonably estimate potential
additional investigation or remediation costs because these costs would depend, among other things, on the nature, extent and timing
of additional investigation and remediation that may be required by the MA DEP.
For further information, see Note 12A, "Commitments and Contingencies - Environmental Matters," to the consolidated financial
statements.
Contractual Obligations and Commercial Commitments: Information regarding our contractual obligations and commercial
commitments as of December 31, 2010 is summarized annually through 2015 and thereafter as follows:
NU
(Millions of Dollars) 2011 2012 2013 2014 2015 Thereafter Total
Long-term debt maturities
(
a
)
(b)
$ 66.3 $ 267.3 $ 305.0 $ 275.0 $ 150.0 $ 3,327.9 $ 4,391.5
Estimated interest payments on existing debt
(
c
)
236.2 231.8 220.6 208.9 194.8 1,871.4 2,963.7
Capital leases
(d)
2.5 2.6 2.4 2.0 2.0 11.4 22.9
Operating leases
(
e
)
7.9 7.0 6.8 4.9 4.5 19.1 50.2
Funding of pension obligations
(
e
)
(j)
145.0 160.0 100.0 90.0 40.0 - 535.0
Funding of other postretirement benefit obligations
(
e
)
42.8 41.9 24.2 21.7 20.2 - 150.8
Estimated future annual companies costs
(f)
641.2 719.4 596.9 550.5 478.6 3,404.1 6,390.7
Other purchase commitments
(
e
)
(h)
1,570.4 - - - - - 1,570.4
Total
(
g
)
(i)
$ 2,712.3 $ 1,430.0 $ 1,255.9 $ 1,153.0 $ 890.1 $ 8,633.9 $ 16,075.2
CL&P
(Millions of Dollars) 2011 2012 2013 2014 2015 Thereafter Total
Long-term debt maturities
(
a
)
(b)
$ 62.0 $ - $ -$ 150.0 $ 100.0 $ 2,031.7 $ 2,343.7
Estimated interest payments on existing debt
(
c
)
133.8 133.8 133.8 133.8 124.1 1,381.7 2,041.0
Capital leases
(d)
1.9 2.0 2.0 1.8 1.8 11.3 20.8
Operating leases
(
e
)
7.2 6.8 6.7 6.5 6.5 23.0 56.7
Funding of other postretirement benefit obligations
(
e
)
17.0 16.6 8.1 7.3 6.8 6.4 62.2
Estimated future annual long-term contractual costs
(f)
284.2 415.1 436.5 451.5 397.7 3,129.5 5,114.5
Other purchase commitments
(
e
)
(h)
598.2 - - - - - 598.2
Total
(
g
)
(i)
$ 1,104.3 $ 574.3 $ 587.1 $ 750.9 $ 636.9 $ 6,583.6 $ 10,237.1
(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 $301 million and $243.8 million for NU and CL&P, respectively, of fees and interest due for
spent nuclear fuel disposal costs, a positive $11.8 million for NU of net changes in fair value of hedged debt and a negative $5.1
million and $4.4 million for NU and CL&P, respectively, of net unamortized premium and discount as of December 31, 2010.
(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 2010 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 effective 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 $10.7 million and $10.2 million for NU and CL&P, respectively, as of
December 31, 2010.
(e) Amounts are not included on our consolidated balance sheets.