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92
Working Capital: NU, CL&P, NSTAR Electric, PSNH and WMECO use their available capital resources to fund their respective
construction expenditures, meet debt requirements, pay costs, including storm-related costs, pay dividends, and fund other corporate
obligations, such as pension contributions. The current growth in NU’s transmission construction expenditures utilizes a significant
amount of cash for projects that have a long-term return on investment and recovery period. In addition, NU’s Regulated companies
operate in an environment where recovery of its electric and natural gas distribution construction expenditures takes place over an
extended period of time. This impacts the timing of the revenue stream designed to fully recover the total investment plus a return on
the equity portion of the cost and related financing costs. These factors have resulted in NU’s current liabilities exceeding current
assets by approximately $1.4 billion, $268 million, $198 million and $60 million at NU, CL&P, NSTAR Electric and WMECO,
respectively, as of December 31, 2012.
As of December 31, 2012, approximately $730 million of NU's current liabilities relates to long-term debt that will be paid in the next 12
months, consisting of $550 million for NU parent, $55 million for WMECO, and $125 million for CL&P. Approximately $32 million relates
to the amortization of the purchase accounting fair value adjustment that will be amortized in the next twelve months. NU, with its
strong credit ratings, has several options available in the financial markets to repay or refinance these maturities with the issuance of
new long-term debt. NU, CL&P, NSTAR Electric, and WMECO will reduce their short-term borrowings with cash received from
operating cash flows or with the issuance of new long-term debt, as deemed appropriate given capital requirements and maintenance
of NU's credit rating and profile. Management expects the future operating cash flows of NU, CL&P, NSTAR Electric and WMECO
along with the access to financial markets, will be sufficient to meet any future operating requirements and capital investment
forecasted opportunities.
Money Pool: As of December 31, 2011, NU parent, CL&P, PSNH, WMECO, Yankee Gas and certain of NU's other subsidiaries were
members of the Money Pool. Short-term borrowing needs of the member companies were met with available funds of other member
companies, including funds borrowed by NU parent. Investing and borrowing subsidiaries received or paid interest based on the
average daily federal funds rate. In NU's consolidated financial statements, Money Pool amounts payable to or receivable from
members eliminated in consolidation. As of December 31, 2011, Money Pool amounts were as follows:
As of and for the Year Ended December 31, 2011
(Millions of Dollars, except percentages)
CL&P
PSNH
WMECO
Borrowings from/(Lendings to)
$
58.5
$
(55.9)
$
(11.0)
Weighted-Average Interest Rates
0.08
%
0.1
%
0.1
%
The net borrowings from/(lendings to) the Money Pool were recorded in Notes Payable to/Notes Receivable from Affiliated Companies
on the accompanying consolidated balance sheets, respectively.