Company: CNLHP
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001628280-25-050033
Chunk: 116

Company: CONNECTICUT LIGHT & POWER CO
Filing Date: 2025-11-06
Form: 10-Q
Item: Item 8
Chunk 116
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 lease that is expected to commence late 2025.  The lease contains a purchase option that the Company has determined is probable of being executed.  In accordance with the accounting guidance for leases, the Company will recognize the right-of-use asset and corresponding lease liability, and will assess the purchase option as part of the lease fair value upon commencement.  As of September 30, 2025, the lease agreement totaled $18.7 million and the estimated purchase option was $19.0 million.

10.    INCOME TAXES

Eversource maintains a valuation allowance recorded on deferred tax assets associated with the loss recorded from the offshore wind investments, which totaled $427.0 million as of December 31, 2024.  In the third quarter of 2025, as part of filing its 2024 tax return to provision process, Eversource partially reversed this valuation allowance and recorded a benefit of $165 million as it reconciled the positions on the tax return to what was estimated as of December 31, 2024.  The adjustment to the valuation allowance was required based on the reconciling of previously recorded tax losses to amounts included in applicable partnership income tax returns.  The adjustment resulted from changes in tax estimates based on information from the partnership tax returns received in the third quarter of 2025.  Eversource also recognized state tax benefits and certain tax credits of $118 million as part of the 2024 tax return to provision process.  These adjustments totaling $283 million were recorded as a reduction to income tax expense on the statement of income in the third quarter of 2025.

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11.    FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value of each of the following financial instruments:Preferred Stock, Long-Term Debt and Rate Reduction Bonds:  The fair value of CL&P's and NSTAR Electric's preferred stock is based upon pricing models that incorporate interest rates and other market factors, valuations or trades of similar securities and cash flow projections.  The fair value of long-term debt and RRB debt securities is based upon pricing models that incorporate quoted market prices for those issues or similar issues adjusted for market conditions, credit ratings of the respective companies and treasury benchmark yields.  The fair values provided in the table below are classified as Level 2 within the fair value hierarchy.  Carrying amounts and estimated fair values are as follows: Evers