Eversource 2015 Annual Report Download - page 44

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Eversource parent commercial paper program, leaving $351.5 million and $348.9 million of available borrowing capacity as of December 31, 2015
and 2014, respectively. The weighted-average interest rate on these borrowings as of December 31, 2015 and 2014 was 0.72 percent and 0.43
percent, respectively. As of December 31, 2015, there were intercompany loans from Eversource parent of $277.4 million to CL&P, $231.3 million
to PSNH and $143.4 million to WMECO. As of December 31, 2014, there were intercompany loans from Eversource parent of $133.4 million to
CL&P, $90.5 million to PSNH and $21.4 million to WMECO.
NSTAR Electric has a five-year $450 million revolving credit facility. On October 26, 2015, this revolving credit facility was amended and restated
and the termination date was extended to September 4, 2020. The facility serves to backstop NSTAR Electric’s $450 million commercial paper
program. As of December 31, 2015 and 2014, NSTAR Electric had $62.5 million and $302 million, respectively, in short-term borrowings
outstanding under its commercial paper program, leaving $387.5 million and $148 million of available borrowing capacity as of December 31, 2015
and 2014, respectively. The weighted-average interest rate on these borrowings as of December 31, 2015 and 2014 was 0.40 percent and 0.27
percent, respectively.
Cash Flows: Cash flows provided by operating activities totaled $1.4 billion in 2015, compared with $1.6 billion in 2014. The decrease in operating
cash flows in 2015 compared to 2014 was due primarily to the $302 million payment made to fully satisfy the obligation with the DOE, as discussed
below, and an increase in purchased power and congestion costs at NSTAR Electric, WMECO and CL&P that will be recovered in future periods.
Also contributing to the decrease in operating cash flows were DOE Damages proceeds received from the Yankee Companies of $4.7 million in
2015, compared to $132 million in 2014. Partially offsetting these unfavorable cash flow impacts were a decrease of $49.2 million in Pension and
PBOP Plan cash contributions in 2015, as compared to 2014, and lower federal income tax payments of approximately $324 million in 2015, as
compared to 2014, primarily due to the extension of the accelerated depreciation deduction.
In late 2015, CL&P and WMECO made payments of $244.6 million and $57.4 million, respectively, to fully satisfy their obligations with the DOE,
which were classified as long-term debt on the balance sheets as of December 31, 2014, for costs associated with the disposal of spent nuclear fuel
and high-level radioactive waste for all periods prior to 1983 from their previous ownership interest in the Millstone nuclear power station. CL&P
and WMECO divested their ownership interest in Millstone in 2001. These payments included accumulated interest of $178 million and $41.8
million for CL&P and WMECO, respectively. CL&P funded its payment with the issuance of debt, and WMECO liquidated its spent nuclear fuel
trust to satisfy its obligation with the DOE.
On December 18, 2015, the “Protecting Americans from Tax Hikes” Act became law, which extended the accelerated deduction of depreciation to
businesses from 2015 through 2019. This extended stimulus provides us with cash flow benefits in 2016 of approximately $275 million (including
approximately $105 million for CL&P) due to a refund of taxes paid in 2015 and lower expected tax payments in 2016 of approximately $300
million.
In 2015, we paid cash dividends of $529.8 million, or $1.67 per common share, compared with $475.2 million, or $1.57 per share in 2014. Our
quarterly common share dividend payment was $0.4175 per share, in 2015, as compared to $0.3925 per share, in 2014. On February 3, 2016, our
Board of Trustees approved a common share dividend payment of $0.445 per share, payable on March 31, 2016 to shareholders of record as of
March 2, 2016. The 2016 dividend represented an increase of 6.6 percent over the dividend paid in December 2015, and is equivalent to dividends
on common shares of approximately $565 million on an annual basis.
In 2015, CL&P, NSTAR Electric, PSNH, and WMECO paid $196 million, $198 million, $106 million, and $37.2 million, respectively, in common
stock dividends to Eversource parent.
Investments in Property, Plant and Equipment on the statements of cash flows do not include amounts incurred on capital projects but not yet paid,
cost of removal, AFUDC related to equity funds, and the capitalized portions of pension expense. In 2015, investments for Eversource, CL&P,
NSTAR Electric, PSNH, and WMECO were $1.7 billion, $523.8 million, $469.5 million, $308 million, and $134.6 million, respectively.
Each of Eversource, CL&P, NSTAR Electric, PSNH and WMECO use its available capital resources to fund its respective construction expenditures,
meet debt requirements, pay operating costs, including storm-related costs, pay dividends and fund other corporate obligations, such as pension
contributions. The current growth in Eversource’s construction expenditures utilizes a significant amount of cash for projects that have a long-term
return on investment and recovery period. In addition, Eversource’s Regulated companies recover their electric and natural gas distribution
construction expenditures as the related project costs are depreciated over the life of the assets. This impacts the timing of the revenue stream
designed to fully recover the total investment plus a return on the equity and debt used to finance the investments. These factors have resulted in
current liabilities exceeding current assets by approximately $371 million and $82 million at Eversource and WMECO, respectively, as of
December 31, 2015.
As of December 31, 2015, a total of $200 million of Eversource’s long-term debt classified as current liabilities, all at NSTAR Electric, will be paid
in the next 12 months. The remaining $28.9 million of Eversource’s long-term debt classified as current liabilities relates to fair value adjustments
from the merger that will be amortized in the next 12 months and have no cash flow impact. Eversource, 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. Eversource, CL&P,
NSTAR Electric, PSNH and WMECO will reduce their short-term borrowings with operating cash flows or with the issuance of new long-term debt,
determined by considering capital requirements and maintenance of Eversource’s credit rating and profile. We expect the future operating cash flows
of Eversource, CL&P, NSTAR Electric, PSNH and WMECO, along with the access to financial markets, will be sufficient to meet any future
operating requirements and capital investment forecasted opportunities.