Eversource 2013 Annual Report Download - page 109

97
NSTAR Pension Plan
Fair Value Measurements as of December 31,
(Millions of Dollars)
2013
2012
Asset Category:
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Equity Securities:
United States
(1)
$
87.7
$
177.9
$
57.8
$
323.4
$
96.7
$
246.4
$
-
$
343.1
International
(1)
9.6
108.0
18.3
135.9
-
98.3
52.1
150.4
Emerging Markets
(1)
-
63.1
-
63.1
-
55.9
-
55.9
Private Equity
28.7
-
89.4
118.1
-
-
-
-
Fixed Income(2)
3.4
180.0
175.4
358.8
54.9
292.5
-
347.4
Real Estate and Other Assets
-
26.3
85.6
111.9
-
-
127.2
127.2
Hedge Funds
-
-
124.1
124.1
-
-
122.7
122.7
Total Master Trust Assets
$
129.4
$
555.3
$
550.6
$
1,235.3
$
151.6
$
693.1
$
302.0
$
1,146.7
Less: 401(h) PBOP Assets
(3)
(77.6)
Total Pension Assets
$
1,069.1
NU PBOP Plans
Fair Value Measurements as of December 31,
(Millions of Dollars)
2013
2012
Asset Category:
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Cash and Cash Equivalents
$
11.1
$
-
$
-
$
11.1
$
9.7
$
-
$
-
$
9.7
Equity Securities:
United States
(1)
67.0
120.6
69.1
256.7
116.3
57.7
36.3
210.3
International
(1)
28.1
42.8
-
70.9
68.0
29.7
-
97.7
Emerging Markets
(1)
15.2
13.4
-
28.6
7.7
14.0
-
21.7
Private Equity
-
-
17.9
17.9
-
-
11.3
11.3
Fixed Income (2)
-
119.7
51.5
171.2
-
137.7
32.1
169.8
Real Estate and Other Assets
-
14.2
33.9
48.1
-
4.7
26.7
31.4
Hedge Funds
-
-
57.0
57.0
-
-
39.6
39.6
Total
$
121.4
$
310.7
$
229.4
$
661.5
$
201.7
$
243.8
$
146.0
$
591.5
Add: 401(h) PBOP Assets
(3)
165.0
117.6
Total PBOP Assets
$
826.5
$
709.1
(1) United States, International and Emerging Markets equity securities classified as Level 2 include investments in commingled funds.
Level 3 investments include hedge funds that are overlayed with equity index swaps and futures contracts and funds invested in
equities that have redemption restrictions.
(2) Fixed Income investments classified as Level 3 investments include fixed income funds that invest in a variety of opportunistic fixed
income strategies, and hedge funds that are overlayed with fixed income futures.
(3) The assets of the Pension Plans include a 401(h) account that has been allocated to provide health and welfare postretirement
benefits under the PBOP Plans.
Effective January 1, 2013, the NSTAR Pension Plan assets were transferred into the NUSCO Pension Plan master trust. The, NUSCO
Pension Plan is entitled to approximately 66 percent of each asset category in the master trust, the NSTAR Pension Plan is entitled to
approximately 30 percent of each asset category in the master trust and the 401(h) plans are entitled to approximately four percent of
each asset category in the master trust.
CL&P, PSNH and WMECO participate in the NUSCO Pension and PBOP Plans. Each company participating in the plans is allocated a
portion of the total plan assets. As of December 31, 2013 and 2012, the NUSCO Pension Plan had total assets of $2,750.4 million and
$2,342.6 million, respectively. CL&P’s, PSNH’s and WMECO’s portion of these total Pension Plan assets was 37 percent, 19 percent
and 9 percent, respectively, as of December 31, 2013, and 40 percent, 17 percent and 9 percent, respectively, as of December 31,
2012. The NUSCO PBOP Plans had total assets of $391 million and $334.9 million as of December 31, 2013 and 2012, respectively.
CL&P’s, PSNH’s and WMECO’s portion of these total PBOP Plan assets was 39 percent, 21 percent and 9 percent, respectively, as of
December 31, 2013 and 2012.
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.