Eversource 2014 Annual Report Download - page 116

104
The pre-tax financial impacts of the Connecticut and Massachusetts merger settlement agreements that were recognized in 2012 by NU, CL&P,
NSTAR Electric, and WMECO are summarized as follows:
 NU CL&P NSTAR Electric WMECO
Customer Rate Credits $46 $25 $15 $ 3
Storm Costs Deferral Reduction 40 40 - -
Establishment of Energy Efficiency Fund 15 - - -
Total Pre-Tax Settlement Agreement Impacts $ 101 $ 65 $15 $ 3
22. GOODWILL
In accordance with the accounting standards, goodwill is not subject to amortization. However, goodwill is subject to fair value-based rules for
measuring impairment, and resulting write-downs, if any, are charged to Operating Expenses. These accounting standards require that goodwill be
reviewed at least annually for impairment and whenever facts or circumstances indicate that there may be an impairment. NU uses October 1st as the
annual goodwill impairment testing date.
On April 10, 2012, upon consummation of the merger with NSTAR, NU recorded approximately $3.2 billion of goodwill. With the completion of
the merger, NU reviewed its management structure and determined that the reporting units for the purpose of testing goodwill for impairment are
Electric Distribution, Electric Transmission and Natural Gas Distribution. NU's reporting units are consistent with the operating segments underlying
the reportable segments identified in Note 20, "Segment Information," to the financial statements. Accordingly, the goodwill resulting from the
merger was allocated to the Electric Distribution, Electric Transmission and Natural Gas Distribution reporting units based on the estimated fair
values of the reporting units as of the merger date.
Prior to the merger with NSTAR, the only reporting unit that maintained goodwill was the Natural Gas Distribution reportable segment related to the
acquisition of the parent of Yankee Gas in 2000. This goodwill was recorded at Yankee Gas. The goodwill balance at Yankee Gas as of
December 31, 2014and 2013was $0.3 billion.
NU completed its annual goodwill impairment test for each of its reporting units as of October 1, 2014 and determined that no impairment exists.
There were no events subsequent to October 1, 2014 that indicated impairment of goodwill.
There were no changes to the goodwill balance or the allocation of goodwill as of December 31, 2014 or 2013. The allocation of goodwill to NU's
reporting units as of both December 31, 2014 and 2013 was as follows:
Electric Electric Natural Gas
 Distribution Transmission Distribution Total
Goodwill Allocation $2.5 $0.6 $0.4 $3.5
23. VARIABLE INTEREST ENTITIES
The Company's variable interests outside of the consolidated group are not material and consist of contracts that are required by regulation and
provide for regulatory recovery of contract costs and benefits through customer rates. NU, CL&P and NSTAR Electric hold variable interests in
variable interest entities (VIEs) through agreements with certain entities that own single renewable energy or peaking generation power plants and
with other independent power producers. NU, CL&P and NSTAR Electric do not control the activities that are economically significant to these
VIEs or provide financial or other support to these VIEs. Therefore, NU, CL&P and NSTAR Electric do not consolidate any power plant VIEs.
24. QUARTERLY FINANCIAL DATA (UNAUDITED)
NU Consolidated Statements of Quarterly Financial Data Quarter Ended
 March 31, June 30, September 30, December 31,
2014
Operating Revenues $2,290.6 $1,677.6 $1,892.5 $1,881.2
Operating Income 467.7 294.0 440.9 430.2
Net Income 237.8129.2 236.5 223.6
Net Income Attributable to Controlling Interest 236.0 127.4 234.6 221.5
Basic EPS (a) $0.75 $0.40 $0.74 $0.69
Diluted EPS (a) $0.74 $0.40 $0.74 $0.69
2013
Operating Revenues $1,995.0 $1,635.9 $1,892.6 $1,777.7
Operating Income 418.9 350.6 399.3 360.6
Net Income 230.0 173.1 211.4 179.2
Net Income Attributable to Controlling Interest 228.1 171.0 209.5 177.4
Basic and Diluted EPS (a) $0.72 $0.54 $0.66 $0.56
(a) The summation of quarterly EPS data may not equal annual data due to rounding.