Company: CNLHP
Filing Date: 2025-02-14
Form Type: 10-K
Source: 0000072741-25-000007
Chunk: 215

Company: CONNECTICUT LIGHT & POWER CO
Filing Date: 2025-02-14
Form: 10-K
Item: Item 7
Chunk 215
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 the fair value of the reporting units, including general, macroeconomic and market conditions, and entity-specific assumptions that affect the future cash flows of the reporting units.  Key considerations include discount rates, utility sector market performance and merger transaction multiples, the Company's share price and credit ratings, analyst reports, financial performance, cost and risk factors, internal estimates and projections of future cash flows and net income, long-term strategy, the timing and outcome of rate cases, and recent regulatory and legislative proceedings.

In the fourth quarter of 2024, we concluded that the likely sale of Aquarion at a loss resulted in the requirement to perform an interim goodwill impairment test for Water Distribution goodwill.  We compared the estimated fair value of the business from the anticipated transaction to its carrying value.  Assumptions used in the valuation were the future cash flows from the sale, including the estimated income tax impacts as a result of the transaction.  Based on the interim impairment test, we recorded a goodwill impairment of $297 million to write down the carrying value of the water distribution reporting unit to its estimated fair value.   

We did not identify any events or conditions that make it more likely than not that an impairment may have occurred at our other reporting units.  For these remaining reporting units, we believe that the fair value was substantially in excess of carrying value.  Adverse regulatory actions, changes in the regulatory and political environment, or changes in significant assumptions could potentially result in future goodwill impairment indicators.

Long-Lived Assets:  Impairment evaluations of long-lived assets, including property, plant and equipment and other assets, involve a significant degree of estimation and judgment, including identifying circumstances that indicate an impairment may exist.  An impairment analysis is required when events or changes in circumstances indicate that the carrying value of a long-lived asset may not be recoverable.  Indicators of potential impairment include a deteriorating business climate, unfavorable regulatory action, decline in value that is other than temporary in nature, plans to dispose of a long-lived asset significantly before the end of its useful life, and accumulation of costs that are in excess of amounts allowed for recovery.  The review of long-lived assets for impairment utilizes significant assumptions about operating strategies and external developments, including assessment of current and projected market conditions that can impact future cash flows.  If indicators are present for a long-lived asset or asset group, a comparison of the undiscounted expected future cash flows to the carrying value is performed.  No significant impairments occurred during the year 2024. 

Equity Method