Eversource 2006 Annual Report Download - page 91

NU 2006 ANNUAL REPORT 89
Prior Spent Nuclear Fuel Trust: During 2004, WMECO established a
trust to fund the amounts due to the DOE for its prior spent nuclear
fuel obligation. These investments having a cost basis of $53.4 million
and $51.1 million for 2006 and 2005, respectively, were recorded at
their fair market value of $53.4 million and $50.8 million at December
31, 2006 and 2005, respectively. For further information regarding
these investments, see Note 10, “Marketable Securities,” to the
consolidated financial statements.
Preferred Stock, Long-Term Debt and Rate Reduction Bonds: The
fair value of NU’s fixed-rate securities is based upon quoted market
prices for those issues or similar issues. Adjustable rate securities are
assumed to have a fair value equal to their carrying value. The carrying
amounts of NU’s financial instruments and the estimated fair values
are as follows:
At December 31, 2006
Carrying Fair
(Millions of Dollars) Amount Value
Preferred stock not subject
to mandatory redemption $116.2 $ 92.4
Long-term debt –
First mortgage bonds 1,240.6 1,268.8
Other long-term debt 1,734.4 1,775.9
Rate reduction bonds 1,177.2 1,235.4
At December 31, 2005
Carrying Fair
(Millions of Dollars) Amount Value
Preferred stock not subject
to mandatory redemption $ 116.2 $ 98.5
Long-term debt –
First mortgage bonds 1,314.8 1,425.7
Other long-term debt 1,744.3 1,791.5
Rate reduction bonds 1,350.5 1,433.6
Other long-term debt includes $280.8 million and $268 million of fees
and interest due for spent nuclear fuel disposal costs at December 31,
2006 and 2005, respectively.
Other Financial Instruments: The carrying value of financial
instruments included in current assets and current liabilities, including
investments in securitizable assets, approximates their fair value.
10. Marketable Securities
The following is a summary of NU’savailable-for-sale securities related
toNU’sSERP and non-SERP assets, WMECO’sprior spent nuclear
fuel trust assets and NU’s investment in Globix, which are recorded at
their fair values and areincluded in current and long-term marketable
securities on the accompanying consolidated balancesheets. Changes
in the fair value of these securities are recorded as unrealized gains
and losses in accumulated other comprehensive income.
At December 31,
(Millions of Dollars) 2006 2005
SERP and non-SERP securities $ 65.0 $ 58.1
WMECO prior spent nuclear fuel trust53.4 50.8
Globix investment —3.7
Totals $118.4 $112.6
For 2005, the decline in the value of the Globix investment was
determined to be other than temporary in nature and recorded pre-tax
charges totaling $6.1 million in other income, net on the accompanying
consolidated statements of income/(loss). This amount is included in
the negative $0.9 million after-tax amount which was reclassified from
accumulated other comprehensive income and recognized in earnings
in 2005. On April 6, 2006, NU sold its investment in Globix. This sale
resulted in net proceeds of approximately $6.7 million and a pre-tax
gain of $3.1 million, which was also included in other income, net on
the accompanying consolidated statements of income/(loss).
At December 31, 2006 and 2005, marketable securities are comprised
of the following:
At December 31, 2006
Pre-Tax Pre-Tax
Gross Gross
Amortized Unrealized Unrealized Estimated
(Millions of Dollars) Cost Gains Losses Fair Value
United States equity securities $ 21.2 $5.0 $(0.3) $ 25.9
Non-United States
equity securities 7.2 0.7 — 7.9
Fixed income securities 84.7 0.4 (0.5) 84.6
Totals $113.1 $6.1 $(0.8) $118.4
At December 31, 2005
Pre-Tax Pre-Tax
Gross Gross
Amortized Unrealized Unrealized Estimated
(Millions of Dollars) Cost Gains Losses Fair Value
United States equity securities $ 23.2 $3.9 $(0.3) $ 26.8
Non-United States
equity securities 6.3 0.9 — 7.2
Fixed income securities 79.3 0.2 (0.9) 78.6
Totals $108.8 $5.0 $(1.2) $112.6