Eversource 2012 Annual Report Download - page 118

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The Company values assets based on observable inputs when available. Equity securities, exchange traded funds and futures
contracts classified as Level 1 in the fair value hierarchy are priced based on the closing price on the primary exchange as of the
balance sheet date. Commingled funds included in Level 2 equity securities are recorded at the net asset value provided by the asset
manager, which is based on the market prices of the underlying equity securities. Swaps are valued using pricing models that
incorporate interest rates and equity and fixed income index closing prices to determine a net present value of the cash flows. Fixed
income securities, such as government issued securities, corporate bonds and high yield bond funds, are included in Level 2 and are
valued using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. The pricing models utilize
observable inputs such as recent trades for the same or similar instruments, yield curves, discount margins and bond structures.
Hedge funds and investments in opportunistic fixed income funds are recorded at net asset value based on the values of the underlying
assets. The assets in the hedge funds and opportunistic fixed income funds are valued using observable inputs and are classified as
Level 3 within the fair value hierarchy due to redemption restrictions. Private Equity investments and Real Estate and Other Assets are
valued using the net asset value provided by the partnerships, which are based on discounted cash flows of the underlying
investments, real estate appraisals or public market comparables of the underlying investments. These investments are classified as
Level 3 due to redemption restrictions.
Fair Value Measurements Using Significant Unobservable Inputs (Level 3): The following tables present changes for the Level 3
category of Pension and PBOP Plan assets for the years ended December 31, 2012 and 2011:
NU Consolidated Pension Plans
United
Real Estate
States
Private
Fixed
and Other
Hedge
(Millions of Dollars)
Equity
International
Equity
Income
Assets
Funds
Total
Balance as of January 1, 2011
$
266.0
$
-
$
229.5
$
247.6
$
43.7
$
247.1
$
1,033.9
Actual Return/(Loss) on Plan Assets:
Relating to Assets Still Held as of Year End
(6.6)
-
20.0
(1.5)
1.6
(7.1)
6.4
Relating to Assets Distributed During the Year
-
-
19.5
(2.8)
0.3
-
17.0
Purchases, Sales and Settlements -
-
(13.9)
32.9
26.2
-
45.2
Balance as of December 31, 2011
$
259.4
$
-
$
255.1
$
276.2
$
71.8
$
240.0
$
1,102.5
Assets Assumed from Merger with NSTAR -
41.4
-
-
111.0
126.6
279.0
Actual Return/(Loss) on Plan Assets:
Relating to Assets Still Held as of Year End
11.2
10.7
17.0
42.1
5.7
21.8
108.5
Relating to Assets Distributed During the Year
-
-
15.0
0.7
7.6
(0.3)
23.0
Purchases, Sales and Settlements
-
-
(19.2)
(3.9)
39.3
30.8
47.0
Balance as of December 31, 2012
$
270.6
$
52.1
$
267.9
$
315.1
$
235.4
$
418.9
$
1,560.0
NU Consolidated PBOP Plans
United
Real Estate
States
Private
Fixed
and Other
Hedge
(Millions of Dollars)
Equity
Equity
Income
Assets
Funds
Total
Balance as of January 1, 2011
$
10.1
$
0.3
$
23.4
$
-
$
16.4
$
50.2
Actual Return/(Loss) on Plan Assets:
Relating to Assets Still Held as of Year End 0.6
0.6
0.2
(0.1)
(0.3)
1.0
Purchases, Sales and Settlements
-
4.2
2.4
2.6
-
9.2
Balance as of December 31, 2011 $ 10.7
$ 5.1
$ 26.0
$ 2.5
$ 16.1
$ 60.4
Assets Assumed from Merger with NSTAR
19.7
-
-
18.4
21.4
59.5
Actual Return on Plan Assets:
Relating to Assets Still Held as of Year End
5.9
1.6
4.0
3.0
2.1
16.6
Purchases, Sales and Settlements
-
4.6
2.1
2.8
-
9.5
Balance as of December 31, 2012
$
36.3
$
11.3
$
32.1
$
26.7
$
39.6
$
146.0
NSTAR Pension Plan
Real Estate
and Other
(Millions of Dollars)
International
Assets
Hedge Funds
Total
Balance as of January 1, 2011
$
45.1
$
86.8
$
157.9
$
289.8
Actual Return/(Loss) on Plan Assets:
Relating to Assets Still Held as of Year End (3.7)
8.7
(4.8)
0.2
Relating to Assets Distributed During the Year -
-
0.2
0.2
Purchases, Sales and Settlements
-
15.5
(26.7)
(11.2)
Balance as of December 31, 2011
$ 41.4
$ 111.0
$ 126.6
$ 279.0
Actual Return/(Loss) on Plan Assets:
Relating to Assets Still Held as of Year End 10.7
9.9
5.6
26.2
Relating to Assets Distributed During the Year -
-
(0.3)
(0.3)
Purchases, Sales and Settlements
-
6.3
(9.2)
(2.9)
Balance as of December 31, 2012
$ 52.1
$ 127.2
$ 122.7
$ 302.0
B. Defined Contribution Plans
NU maintains two defined contribution plans on behalf of eligible participants. The NUSCO 401(k) Savings Plan covers eligible
employees, including CL&P, PSNH, WMECO, and effective October 1, 2012, certain newly-hired NSTAR Electric & Gas employees.