Eversource 2013 Annual Report Download - page 95

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83
The Company elects to record mutual funds purchased by the NU supplemental benefit trust at fair value. As such, any change in fair
value of these mutual funds is reflected in Net Income. These mutual funds, classified as Level 1 in the fair value hierarchy, totaled
$57.2 million and $47 million as of December 31, 2013 and 2012, respectively, and were included in Prepayments and Other Current
Assets on the accompanying balance sheets. Net gains on these securities of $10.2 million and $5.9 million and net losses of $1.1
million for the years ended December 31, 2013, 2012 and 2011, respectively, were recorded in Other Income, Net on the statements of
income. Dividend income is recorded in Other Income, Net on the statements of income when dividends are declared. All other
marketable securities are accounted for as available-for-sale.
Available-for-Sale Securities: The following is a summary of NU's available-for-sale securities held in the NU supplemental benefit
trust, WMECO's spent nuclear fuel trust and CYAPC’s and YAEC's nuclear decommissioning trusts. These securities are recorded at
fair value and included in current and long-term Marketable Securities on the balance sheets.
As of December 31, 2013
Pre-Tax
Pre-Tax
Amortized
Unrealized
Unrealized
(Millions of Dollars)
Cost
Gains(1)
Losses(1)
Fair Value
NU
Debt Securities (2)
$
299.2
$
2.5
$
(2.1)
$
299.6
Equity Securities (2)
163.6
60.5
-
224.1
WMECO
Debt Securities
57.9
-
-
57.9
As of December 31, 2012
Pre-Tax
Pre-Tax
Amortized
Unrealized
Unrealized
(Millions of Dollars)
Cost
Gains(1)
Losses(1)
Fair Value
NU
Debt Securities (2)
$
266.6
$
13.3
$
(0.1)
$
279.8
Equity Securities (2)
145.5
20.0
-
165.5
WMECO
Debt Securities
57.7
0.1
(0.1)
57.7
(1) Unrealized gains and losses on debt securities for the NU supplemental benefit trust and WMECO spent nuclear fuel trust are
recorded in AOCI and Other Long-Term Assets, respectively, on the balance sheets.
(2) NU's amounts include CYAPC's and YAEC's marketable securities held in nuclear decommissioning trusts of $424 million and
$340.4 million as of December 31, 2013 and 2012, respectively, the majority of which are legally restricted and can only be used
for the decommissioning of the nuclear power plants owned by these companies. In the first quarter of 2013, CYAPC and YAEC
received cash from the DOE related to the litigation of storage costs for spent nuclear fuel, which was invested in the nuclear
decommissioning trusts. Unrealized gains and losses for the nuclear decommissioning trusts are offset in Other Long-Term
Liabilities on the balance sheets, with no impact on the statement of income. All of the equity securities accounted for as available-
for-sale securities are held in these trusts.
Unrealized Losses and Other-than-Temporary Impairment: There have been no significant unrealized losses, other-than-temporary
impairments or credit losses for the NU supplemental benefit trust, the WMECO spent nuclear fuel trust, and the trusts held by CYAPC
and YAEC. Factors considered in determining whether a credit loss exists include the duration and severity of the impairment, adverse
conditions specifically affecting the issuer, and the payment history, ratings and rating changes of the security. For asset-backed debt
securities, underlying collateral and expected future cash flows are also evaluated.
Realized Gains and Losses: Realized gains and losses on available-for-sale securities are recorded in Other Income, Net for the NU
supplemental benefit trust, Other Long-Term Assets for the WMECO spent nuclear fuel trust, and offset in Other Long-Term Liabilities
for CYAPC and YAEC. NU utilizes the specific identification basis method for the NU supplemental benefit trust securities and the
average cost basis method for the WMECO spent nuclear fuel trust and the CYAPC and YAEC nuclear decommissioning trusts to
compute the realized gains and losses on the sale of available-for-sale securities.
Contractual Maturities: As of December 31, 2013, the contractual maturities of available-for-sale debt securities are as follows:
NU
WMECO
Amortized
Amortized
(Millions of Dollars)
Cost
Fair Value
Cost
Fair Value
Less than one year (1)
$
72.4
$
72.3
$
26.5
$
26.6
One to five years
62.1
62.7
25.6
25.5
Six to ten years
59.4
59.3
1.7
1.7
Greater than ten years
105.3
105.3
4.1
4.1
Total Debt Securities
$
299.2
$
299.6
$
57.9
$
57.9
(1) Amounts in the Less than one year NU category include securities in the CYAPC and YAEC nuclear decommissioning trusts,
which are restricted and are classified in long-term Marketable Securities on the balance sheets.