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88
wholesale marketing sales contract as Level 3 under the highest and best use valuation premise. These contracts are now classified
within Level 2 of the fair value hierarchy.
(Millions of Dollars)
NU
CL&P
NSTAR Electric(1)
WMECO
Derivatives, Net:
Fair Value as of January 1, 2011
$
(840.2)
$
(806.1)
$
(2.4)
$
-
Net Realized/Unrealized Gains/(Losses) Included in:
Net Income
0.5
-
-
-
Regulatory Assets
(161.0)
(153.6)
(4.3)
(7.3)
Settlements
38.5
28.1
3.3
-
Fair Value as of December 31, 2011
$
(962.2)
$
(931.6)
$
(3.4)
$
(7.3)
Liabilities Assumed due to Merger with NSTAR
(5.4)
-
-
-
Transfer to Level 2
32.2
-
-
-
Net Realized/Unrealized Gains/(Losses) Included in:
Net Income (2)
10.9
-
-
-
Regulatory Assets
(29.2)
(21.6)
(15.2)
4.3
Settlements
75.1
87.0
3.7
-
Fair Value as of December 31, 2012
$
(878.6)
$
(866.2)
$
(14.9)
$
(3.0)
(1) NSTAR Electric amounts are included in NU consolidated from the date of the merger, April 10, 2012, through December 31, 2012.
NSTAR Electric amounts are not included in NU consolidated for the year ended December 31, 2011.
(2) The Net Income impact for the year ended December 31, 2012 relates to the unregulated wholesale marketing sales contract and
is offset by the gains/(losses) on the unregulated sourcing contracts classified as Level 2 in the fair value hierarchy, resulting in
total net losses of $0.7 million.
6. MARKETABLE SECURITIES (NU, WMECO)
NU maintains a supplemental benefit trust to fund certain of NU’s non-qualified executive retirement benefit obligations and WMECO
maintains a spent nuclear fuel trust to fund WMECO’s prior period spent nuclear fuel liability, each of which hold marketable securities.
These trusts are not subject to regulatory oversight by state or federal agencies. As of April 10, 2012, upon consummation of the
merger with NSTAR and consolidation of CYAPC and YAEC, NU's marketable securities also includes legally restricted trusts for the
decommissioning of nuclear power plants.
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 $47
million and $41.1 million as of December 31, 2012 and 2011, respectively, and are included in current Marketable Securities. Net gains
on these securities of $5.9 million and net losses of $1.1 million for the years ended December 31, 2012 and 2011, respectively, were
recorded in Other Income, Net on the accompanying consolidated statements of income. Dividend income is recorded when dividends
are declared and is recorded in Other Income, Net on the accompanying consolidated statements of income. 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 and YAEC's nuclear decommissioning trusts. These securities are recorded at fair
value and included in current and long-term Marketable Securities on the accompanying consolidated balance sheets.
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
As of December 31, 2011
Pre-Tax
Pre-Tax
Amortized
Unrealized
Unrealized
(Millions of Dollars)
Cost
Gains(1)
Losses(1)
Fair Value
NU
$
88.4
$
2.0
$
(0.2)
$
90.2
WMECO
57.3
-
(0.2)
57.1
(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 accompanying consolidated balance sheets.
(2) NU's December 31, 2012 amounts include CYAPC's and YAEC's marketable securities held in nuclear decommissioning trusts of
$340.4 million, the majority of which are legally restricted and can only be used for the decommissioning of the nuclear power
plants owned by these companies. Unrealized gains and losses for the nuclear decommissioning trusts are offset in Other Long-