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90 NU 2006 ANNUAL REPORT
At December 31, 2006 and 2005, NU evaluated the securities in an unrealized loss position and has determined that none of the related unrealized
losses are deemed to be other-than-temporary in nature. At December 31, 2006 and 2005, the gross unrealized losses and fair value of NU’s
investments that have been in a continuous unrealized loss position for less than 12 months and 12 months or greater were as follows:
At December 31, 2006
Less than 12 Months 12 Months or Greater Total
Pre-Tax Pre-Tax Pre-Tax
Gross Gross Gross
Estimated Unrealized Estimated Unrealized Estimated Unrealized
(Millions of Dollars) Fair Value Losses Fair Value Losses Fair Value Losses
United States equity securities $ 1.8 $(0.1) $0.2 $ — $ 2.0 $(0.1)
Non-United States equity securities ——————
Fixed income securities 23.0 (0.5) 9.1 (0.2) 32.1 (0.7)
Totals $24.8 $(0.6) $9.3 $(0.2) $34.1 $(0.8)
AtDecember 31, 2005
Less than 12 Months 12 Months or Greater Total
Pre-Tax Pre-Tax Pre-Tax
Gross Gross Gross
Estimated Unrealized Estimated Unrealized Estimated Unrealized
(Millions of Dollars) Fair Value Losses Fair Value Losses Fair Value Losses
United States equity securities $ 2.9 $(0.2) $0.4 $(0.1) $ 3.3 $(0.3)
Non-United States equity securities — — — — — —
Fixed income securities 39.8 (0.7) 5.7 (0.2) 45.5 (0.9)
Totals $42.7 $(0.9) $6.1 $(0.3) $48.8 $(1.2)
For information related to the change in net unrealized holding gains
and losses included in accumulated other comprehensive income, see
Note 14, “Accumulated Other Comprehensive Income/(Loss),” to the
consolidated financial statements.
For the years ended December 31, 2006, 2005, and 2004, realized gains
and losses recognized on the sale of available-for-sale securities are
as follows:
Realized Realized Net Realized
(Millions of Dollars) Gains Losses Gains/(Losses)
2006 $5.2 $(1.3) $3.9
2005 1.3 (7.1) (5.8)
2004 0.9 (0.3) 0.6
For the years ended December 31, 2006 and 2005, net realized losses
of $0.3 million and $0.4 million, respectively, relating to the WMECO
spent nuclear fuel trust are included in fuel, purchased and net
interchange power on the accompanying consolidated statements of
income/(loss). There were no realized losses relating to the WMECO
spent nuclear fuel trust in 2004. For the years ended December 31,
2006, 2005 and 2004, all other net realized gains/(losses) of $4.2
million, $(5.4) million and $0.6 million, respectively, are included in
other income, net on the accompanying consolidated statements of
income/(loss).
NU utilizes the specific identification basis method for SERP and non-
SERP securities and the average cost basis method for the WMECO
prior spent nuclear fuel trust to compute the realized gains and losses
on the sale of available-for-sale securities.
Proceeds from the sale of these securities, including proceeds from
short-term investments, totaled $193.5 million, $137.1 million and
$106.2 million for the years ended December 31, 2006, 2005 and 2004,
respectively.
At December 31, 2006, the contractual maturities of the available-for-
sale securities are as follows:
Amortized Estimated
(Millions of Dollars) Cost Fair Value
Less than one year $ 33.7 $ 33.8
One to five years 23.2 23.2
Six to ten years 7.8 7.7
Greater than ten years 20.1 20.0
Subtotal 84.8 84.7
Equity securities 28.3 33.7
Total $113.1 $118.4
For further information regarding marketable securities, see Note 1T,
“Summary of Significant Accounting Policies – Marketable Securities”
to the consolidated financial statements.
11. Leases
Various NU subsidiaries have entered into lease agreements, some of
which arecapital leases, for the use of data processing and office
equipment, vehicles, and office space. The provisions of these lease
agreements generally provide for renewal options. Certain lease
agreements contain contingent lease payments. The contingent lease
payments are based on various factors, such as the commercial paper
rate plus a credit spread or the consumer price index.
Capital lease rental payments were $3.3 million in 2006, $3.4 million in
2005 and $3.3 million in 2004. Interest included in capital lease rental
payments was $1.9 million in 2006, $1.9 million in 2005 and $2 million
in 2004. Capital lease asset amortization was $0.9 million in 2006, $0.8
million in 2005 and $0.7 million in 2004.
Operating lease rental payments charged to expense were $10.9 million
in 2006, $15.6 million in 2005 and $16.3 million in 2004. These amounts
include $0.7 million, $1.1 million, and $1.1 million included in income
from discontinued operations on the accompanying consolidated
statements of income/(loss) for the years ended December 31, 2006,