Eversource 2015 Annual Report Download - page 55

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We use quoted market prices when available to determine the fair value of financial instruments. If quoted market prices are not available, fair value
is determined using quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments that are not active and
model-derived valuations. When quoted prices in active markets for the same or similar instruments are not available, we value derivative contracts
using models that incorporate both observable and unobservable inputs. Significant unobservable inputs utilized in the models include energy and
energy-related product prices for future years for long-dated derivative contracts and market volatilities. Discounted cash flow valuations incorporate
estimates of premiums or discounts, reflecting risk adjusted profit that would be required by a market 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.
Other Matters
Accounting Standards: For information regarding new accounting standards, see Note 1C, “Summary of Significant Accounting Policies -
Accounting Standards,” to the financial statements.
Contractual Obligations and Commercial Commitments: Information regarding our contractual obligations and commercial commitments as of
December 31, 2015 is summarized annually through 2020 and thereafter as follows:
Eversource
(Millions of Dollars)
2016 2017 2018 2019 2020 Thereafter Total
Long-term debt maturities
(a)
$ 200.0 $ 745.0 $ 960.0 $ 800.0 $ 295.0 $ 5,736.6 $ 8,736.6
Estimated interest payments on existing debt
(b)
371.2 366.6 313.1 284.2 245.8 2,849.6 4,430.5
Capital leases
(c)
2.2 2.1 2.1 2.0 2.0 1.4 11.8
Operating leases
(d)
16.4 13.8 10.4 8.5 6.8 15.4 71.3
Funding of pension obligations
(d) (e)
146.0 167.5 114.5 70.6 20.2 - 518.8
Funding of PBOP obligations
(d)
9.5 9.2 9.4 9.6 - - 37.7
Estimated future annual long-term contractual costs
(f)
684.5 590.6 442.3 376.2 344.9 2,371.7 4,810.2
Total
(g)
$ 1,429.8 $ 1,894.8 $ 1,851.8 $ 1,551.1 $ 914.7 $ 10,974.7 $ 18,616.9
CL&P
(Millions of Dollars)
2016 2017 2018 2019 2020 Thereafter Total
Long-term debt maturities
(a)
$ - $ 250.0 $ 300.0 $ 250.0 $ - $ 1,990.3 $ 2,790.3
Estimated interest payments on existing debt
(b)
140.0 136.0 117.8 102.4 95.5 1,402.7 1,994.4
Capital leases
(c)
1.9 1.9 2.0 2.0 2.0 1.4 11.2
Operating leases
(d)
2.9 2.0 1.3 1.0 0.7 1.7 9.6
Funding of pension obligations
(d) (e)
0.4 15.5 26.3 21.1 6.1 - 69.4
Estimated future annual long-term contractual costs
(f)
279.4 207.9 159.5 126.9 114.5 711.6 1,599.8
Total
(g)
$ 424.6 $ 613.3 $ 606.9 $ 503.4 $ 218.8 $ 4,107.7 $ 6,474.7
(a)
Long-term debt maturities exclude the CYAPC pre-1983 spent nuclear fuel obligation, net unamortized premiums, discounts and debt issuance costs, and other
fair value adjustments.
(b)
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 end of 2015 floating-rate reset 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.
(c)
The capital lease obligations include interest.
(d)
Amounts are not included on our balance sheets.
(e)
These amounts represent Eversource’s estimated pension contributions to its qualified Pension Plan. Contributions in 2017 through 2020 and thereafter will vary
depending on many factors, including the performance of existing plan assets, valuation of the plan’s liabilities and long-term discount rates, and are subject to
change.
(f)
Other than certain derivative contracts held by the Regulated companies, these obligations are not included on our balance sheets.
(g)
Does not include other long-term liabilities recorded on our balance sheet, such as environmental reserves, employee medical insurance, workers compensation
and long-term disability insurance reserves, ARO liability reserves and other reserves, as we cannot make reasonable estimates of the timing of payments. Also
does not include amounts not included on our balance sheets for future funding of the Access Northeast project or for a contingent commitment of approximately
$20 million to an energy investment fund, which would be invested under certain conditions, as we cannot make reasonable estimates of the periods or the
investment contributions.
For further information regarding our contractual obligations and commercial commitments, see Note 6, “Asset Retirement Obligations,” Note 7,
“Short-Term Debt,” Note 8, “Long-Term Debt,” Note 9A, “Employee Benefits - Pension Benefits and Postretirement Benefits Other Than Pensions,”
Note 11, “Commitments and Contingencies,” and Note 12, “Leases,” to the financial statements.