N-23M12835 Exhibit N-2 Att 3 2025 Managements Discussion AnalysisHIGHLIGHTED
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Significant changes in the Consolidated Balance Sheets between December 31, 2025 and December 31, 2024 include: Increase millions of dollars (Decrease) Explanation Assets Receivables, net $ 140 Increased due to timing of billing and receip...
AI summary The Consolidated Balance Sheets show significant changes between December 31, 2025 and December 31, 2024, including increases in receivables, income taxes receivable, and regulatory assets, as well as changes in liabilities and equity due to factors like timing of payments, capital investments, and regulatory deferrals.
The Company generates internally sourced cash primarily through the generation, transmission and distribution of electricity. NSPl's customer base is diversified by both sales volumes and rates among customer classes. Circumstances that co...
AI summary NSPI generates cash through electricity generation, transmission, and distribution. Its future liquidity needs include working capital, rate base investment, and debt servicing. In 2026, NSPI plans to invest $720 million, including AFUDC, in capital projects for power system reliability. It has access to $800 million in credit facilities.
Cash Flow from Financing Activities Net cash provided by financing activities increased $1,027 million to $513 million in 2025 compared to net cash used in financing activities of $514 million in 2024 primarily due to net borrowings under...
AI summary Net cash provided by financing activities increased significantly in 2025 compared to 2024, mainly due to net borrowings under a revolving credit facility, issuance of short-term debt, and higher proceeds from long-term debt, partially offset by capital returns and debt retirements.
As at December 31, 2025, contractual commitments for each of the next five years and in aggregate thereafter consisted of the following: millions of dollars 2026 2027 2028 2029 2030 Thereafter Total Purchased ~ower(1} $ 344 $ 360 $ 347 $ 3...
AI summary The document outlines contractual commitments as of December 31, 2025, including purchased power, long-term debt, interest payments, asset retirement obligations, transportation costs, and other financial commitments over the next five years and beyond.
Forecast 2026 and actual 2025 and 2024 capital investment, including AFUDC, is shown below: 2026 2025 2024 millions of dollars Forecast Actual Actual Distribution $ 195 $ 174 $ 175 Generation 183 216 151 Transmission 247 242 107 General pl...
AI summary The text provides a forecast of 2026 and actual capital investment figures for 2025 and 2024, categorized by distribution, generation, transmission, and general plant and other. It also references a section on debt management.
Credit Available millions of dollars Maturity Facility Utilized Capacity Revolving credit facility June 2029 $ 800 578 $ $ 222 Non-revolving term facility May 2026 500 500 NSPI has debt covenants associated with its credit facilities. Cove...
AI summary NSPI has credit facilities with associated debt covenants, and the company is in compliance with these covenants as of December 31, 2025. A key covenant is the debt to capital ratio, which was 0.68:1, below the required limit of 0.70:1.
Defeasance Upon privatization of the former provincially owned Nova Scotia Power Corporation ("NSPC"} in 1992, NSPI was appointed to manage and administer a portfolio of defeasance securities. The securities provide principal and interest...
AI summary This section discusses the defeasance securities managed by NSPI following the privatization of NSPC in 1992. The securities, held in trust for NSPFC, provide principal and interest to match defeased debt totaling $200 million as of December 31, 2025. NSPI administers these cash flows under a Management and Administration Agreement, with NSPFC bank accounts integrated into NSPI's pool under a mirror netting agreement.
Physical Risk: Changes in climate may negatively impact the Company's operations as a result of increased frequency and intensity of weather events and related physical risks, any of which could result in a Material Adverse Effect (for mor...
AI summary The text discusses how climate change may increase physical risks to the Company's operations, leading to potential material adverse effects. It also highlights the impact on insurance costs, credit ratings, and liquidity due to increased physical risks associated with climate change.
Liquidity and Capital Market Risk Liquidity risk relates to NSPl's ability to ensure sufficient funds are available to meet its financial obligations. NSPl's access to capital and cost of borrowing is subject to several risk factors, inclu...
AI summary The text discusses liquidity and capital market risks faced by NSPI, including the impact of financial market conditions, credit ratings, and interest rate changes on its ability to access capital and fund operations. A decrease in credit ratings could lead to higher borrowing costs and the need to post collateral for derivative instruments.
Interest Rate Risk: NSPI utilizes a combination of fixed and floating rate debt financing for operations and capital expenditures, resulting in an exposure to interest rate risk. The allowed range of ROE will generally follow the direction...
AI summary NSPI uses a mix of fixed and floating rate debt, exposing it to interest rate risk. The allowed ROE range follows interest rate trends with a lag. 75% of NSPI's debt is fixed rate with an average maturity of 17 years. Inflation may increase operating costs and fuel expenses beyond customer rate revenues.
Future Employee Benefit Plan Performance and Funding Risk NSPI has both defined benefit and defined contribution employee benefit plans that cover both employees and retirees. The defined benefit plan is closed to new entrants. The cost of...
AI summary NSPI manages defined benefit and contribution employee plans, with the defined benefit plan closed to new entrants. The cost of the defined benefit plan is influenced by investment performance, interest rates, inflation, and actuarial assumptions. Future contributions may increase due to changes in these factors, potentially leading to a Material Adverse Effect.