Eversource 2015 Annual Report Download - page 96

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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 in the Level 3 category of
Eversource’s Pension and PBOP Plan assets for the years ended December 31, 2015 and 2014:
Pension Plan
Equity Private Fixed Real Estate and Hedge
(Millions of Dollars)
Securities Equity Income Other Assets Funds Total
Balance as of January 1, 2014 $ 255.5 $ 300.3 $ 589.5 $ 288.5 $ 416.9 $ 1,850.7
Actual Return/(Loss) on Plan Assets:
Relating to Assets Still Held as of Year End (2.3) 14.0 45.2 (3.6) 23.5 76.8
Relating to Assets Distributed During the Year - 13.9 (6.2) 28.3 (15.2) 20.8
Purchases, Sales and Settlements 39.0 39.7 93.5 (47.4) 49.8 174.6
Balance as of December 31, 2014 $ 292.2 $ 367.9 $ 722.0 $ 265.8 $ 475.0 $ 2,122.9
Transfer Between Categories 76.5 - - - (76.5) -
Actual Return/(Loss) on Plan Assets:
Relating to Assets Still Held as of Year End 5.3 24.4 (6.7) (7.1) - 15.9
Relating to Assets Distributed During the Year - 27.3 17.0 24.8 (0.9) 68.2
Purchases, Sales and Settlements (68.8) 45.1 52.5 (23.2) (106.8)
(101.2)
Balance as of December 31, 2015 $ 305.2 $ 464.7 $ 784.8 $ 260.3 $ 290.8 $ 2,105.8
PBOP Plan
Equity Private Fixed Real Estate and Hedge
(Millions of Dollars)
Securities Equity Income Other Assets Funds Total
Balance as of January 1, 2014 $ 69.1 $ 17.9 $ 51.5 $ 33.9 $ 57.0 $ 229.4
Actual Return/(Loss) on Plan Assets:
Relating to Assets Still Held as of Year End 6.0 1.3 1.9 (2.8) 1.4 7.8
Relating to Assets Distributed During the Year - 0.1 - (2.2) -
(2.1)
Purchases, Sales and Settlements - 5.6 24.9 (13.9) - 16.6
Balance as of December 31, 2014 $ 75.1 $ 24.9 $ 78.3 $ 15.0 $ 58.4 $ 251.7
Actual Return/(Loss) on Plan Assets:
Relating to Assets Still Held as of Year End (2.0) 2.6 2.1 0.3 (1.5) 1.5
Relating to Assets Distributed During the Year - - (0.3) - -
(0.3)
Purchases, Sales and Settlements 4.7 5.4 1.5 5.1 (4.7) 12.0
Balance as of December 31, 2015 $ 77.8 $ 32.9 $ 81.6 $ 20.4 $ 52.2 $ 264.9
B. Defined Contribution Plans
Effective January 1, 2014, Eversource maintains one defined contribution plan on behalf of eligible participants, the Eversource 401k Plan. The
Eversource 401k Plan provides for employee and employer contributions up to statutory limits. For eligible employees, the Eversource 401k Plan
provides employer matching contributions of either 100 percent up to a maximum of three percent of eligible compensation or 50 percent up to a
maximum of eight percent of eligible compensation. Beginning in 2014 for newly hired employees, the Eversource 401k Plan provides employer
matching contributions of 100 percent up to a maximum of three percent of eligible compensation.
The Eversource 401k Plan also contains a K-Vantage feature for the benefit of eligible participants, which provides an additional annual employer
contribution based on age and years of service. K-Vantage participants are not eligible to actively participate in the Eversource Pension Plan.
The total defined Eversource 401k Plan employer matching contributions, including the K-Vantage contributions, were as follows:
NSTAR
(Millions of Dollars)
Eversource
CL&P
Electric PSNH WMECO
2015 $ 30.4 $ 4.8 $ 6.3 $ 3.4 $ 1.0
2014 29.7 5.0 6.3 3.2 1.0
2013 37.0 5.1 8.5 3.3 1.0
Allocations of Eversource common shares were made from Eversource treasury shares to satisfy a portion of the Eversource 401k Plan obligation,
which provides 100 percent of the matching contribution in Eversource common shares. For treasury shares used to satisfy the Eversource 401k Plan
employer matching contributions, compensation expense is recognized equal to the fair value of shares that have been allocated to participants. Any
difference between the fair value and the average cost of the allocated treasury shares is charged or credited to Capital Surplus, Paid In on the balance
sheet. For the years ended December 31, 2015, 2014 and 2013, Eversource recognized $7 million, $22 million and $9.1 million, respectively, of
compensation expense related to treasury shares used to satisfy the matching contribution.