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78
NU completed its impairment analysis of the NSTAR and Yankee Gas goodwill balances as of October 1, 2012 and determined that no
impairment exists. In completing this analysis, the fair value of the reporting units was estimated using a discounted cash flow
methodology and a market method utilizing comparable company information and market transactions.
The allocation of goodwill to NU's reporting units is as follows:
Electric
Electric
Natural Gas
Distribution
Transmission
Distribution
Total
Balance as of December 31, 2011
$
-
$
-
$
0.3
$
0.3
Merger with NSTAR
2.5
0.6
0.1
3.2
Balance as of December 31, 2012
$
2.5
$
0.6
$
0.4
$
3.5
3. REGULATORY ACCOUNTING
On April 10, 2012, NSTAR's regulated utility subsidiaries, NSTAR Electric and NSTAR Gas, became subsidiaries of NU. For NSTAR
Electric, certain regulatory asset and liability balances as of December 31, 2011 have been reclassified to the current year presentation
in order to align the reporting of regulatory activities subsequent to the closing of the merger.
NU's Regulated companies continue to be rate-regulated on a cost-of-service basis; therefore, the accounting policies of the Regulated
companies apply GAAP applicable to rate-regulated enterprises and reflect the effects of the rate-making process.
Management believes it is probable that the Regulated companies will recover their respective investments in long-lived assets,
including regulatory assets. If management determined that it could no longer apply the accounting guidance applicable to rate-
regulated enterprises to the Regulated companies' operations, or that management could not conclude it is probable that costs would
be recovered in future rates, the costs would be charged to net income in the period in which the determination is made.
Regulatory Assets: The components of regulatory assets are as follows:
NU
As of December 31,
(Millions of Dollars)
2012
2011
Benefit Costs
$
2,452.1
$
1,360.5
Regulatory Assets Offsetting Derivative Liabilities
885.6
939.6
Goodwill
537.6
-
Storm Restoration Costs
547.7
356.0
Income Taxes, Net
516.2
425.4
Securitized Assets
232.6
101.8
Contractual Obligations
217.6
100.9
Power Contracts Buy Out Agreements
92.9
8.6
Regulatory Tracker Deferrals
190.1
45.9
Asset Retirement Obligations
88.8
47.5
Other Regulatory Assets
76.2
136.6
Total Regulatory Assets
$
5,837.4
$
3,522.8
Less: Current Portion
$
705.0
$
255.1
Total Long-Term Regulatory Assets $
5,132.4 $ 3,267.7
As of December 31,
2012
2011
NSTAR
NSTAR
(Millions of Dollars)
CL&P
Electric
PSNH
WMECO
CL&P
Electric(1)
PSNH
WMECO
Benefit Costs
$
563.2
$
781.2
$
223.7
$
116.0
$
572.8
$
813.7
$
200.0
$
118.9
Regulatory Assets Offsetting
Derivative Liabilities
866.2
14.9
-
3.0
932.0
3.4
-
7.3
Goodwill
-
461.5
-
-
-
478.9
-
-
Storm Restoration Costs
413.9
55.8
34.5
43.5
268.3
30.6
44.0
43.7
Income Taxes, Net
367.5
47.1
36.2
31.0
339.6
48.8
38.0
17.8
Securitized Assets
-
205.1
19.7
7.8
-
368.5
76.4
25.4
Contractual Obligations
64.0
22.8
-
14.9
80.9
30.8
-
20.0
Power Contracts Buy Out Agreements
-
85.9
7.0
-
-
109.5
8.6
-
Regulatory Tracker Deferrals
12.2
71.4
49.3
31.9
5.5
61.1
11.9
22.1
Asset Retirement Obligations
29.4
29.4
14.2
3.5
27.9
24.5
13.5
3.2
Other Regulatory Assets
27.9
16.9
29.4
12.6
47.0
34.7
35.7
10.3
Total Regulatory Assets
$
2,344.3
$
1,792.0
$
414.0
$
264.2
$
2,274.0
$
2,004.5
$
428.1
$
268.7
Less: Current Portion
$
185.9
$
347.1
$
62.9
$
42.4
$
170.2
$
323.9
$
34.2
$
35.5
Total Long-Term Regulatory Assets $
2,158.4
$ 1,444.9
$ 351.1
$ 221.8
$ 2,103.8
$ 1,680.6
$
393.9
$
233.2
(1) NSTAR Electric amounts are not included in NU consolidated as of December 31, 2011.
Regulatory Costs Not Yet Approved: Additionally, the Regulated companies had $69.9 million ($3.9 million for CL&P, $25.4 million for
NSTAR Electric, $35.7 million for PSNH, and $1.4 million for WMECO) and $32.4 million ($5 million for CL&P, $22.4 million for PSNH,
and $1.6 million for WMECO) of regulatory costs as of December 31, 2012 and 2011, respectively, which were included in Other Long-
Term Assets on the accompanying consolidated balance sheets. For comparative purposes, NSTAR Electric had $9.5 million of such