MARKETABLE SECURITIES

Eversource maintains trusts that hold marketable securities to fund certain non-qualified executive benefits. These trusts are not subject to regulatory oversight by state or federal agencies. CYAPC and YAEC maintain legally restricted trusts, each of which holds marketable securities, to fund the spent nuclear fuel removal obligations of their nuclear fuel storage facilities.

Trading Securities: Eversource has elected to record certain equity securities as trading securities, with the changes in fair values recorded in Other Income, Net on the statements of income. As of December 31, 2016 and 2015, these securities were classified as Level 1 in the fair value hierarchy and totaled $9.6 million and $14.2 million, respectively. For the years ended December 31, 2016, 2015 and 2014, net gains on these securities of $0.6 million, $2.0 million and $1.9 million, respectively, were recorded in Other Income, Net on the statements of income. Dividend income is recorded in Other Income, Net when dividends are declared.

Available-for-Sale Securities: The following is a summary of available-for-sale securities, which are recorded at fair value and are included in current and long-term Marketable Securities on the balance sheets.



	As of December 31,
	2016									2015
(Millions of Dollars)	Amortized Cost		Pre-Tax Unrealized Gains		Pre-Tax Unrealized Losses			Fair Value		Amortized Cost		Pre-Tax Unrealized Gains		Pre-Tax Unrealized Losses			Fair Value
Eversource
Debt Securities	$	296.2	$	1.1	$	(2.1	)	$	295.2	$	256.5	$	4.5	$	(0.6	)	$	260.4
Equity Securities	203.3		62.3		(1.2		)	264.4		215.3		59.2		(3.4		)	271.1

Eversource's debt and equity securities include CYAPC's and YAEC's marketable securities held in nuclear decommissioning trusts of $466.7 million and $436.9 million as of December 31, 2016 and 2015, respectively. Unrealized gains and losses for these nuclear decommissioning trusts are recorded in Marketable Securities with the corresponding offset to Other Long-Term Liabilities on the balance sheets, with no impact on the statements of income.

Unrealized Losses and Other-than-Temporary Impairment: There have been no significant unrealized losses, other-than-temporary impairments or credit losses in 2016 or 2015. 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 Eversource's benefit trust and are offset in Other Long-Term Liabilities for CYAPC and YAEC. Eversource utilizes the specific identification basis method for the Eversource benefit trust, and the average cost basis method for 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, 2016, the contractual maturities of available-for-sale debt securities were as follows:



Eversource (Millions of Dollars)	Amortized Cost		Fair Value
Eversource (Millions of Dollars)	Amortized Cost		Fair Value
Less than one year ⁽¹⁾	$	60.5	$	60.3
One to five years	45.4		45.8
Six to ten years	59.7		58.3
Greater than ten years	130.6		130.8
Total Debt Securities	$	296.2	$	295.2


⁽¹⁾	Amounts in the Less than one year 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.

Fair Value Measurements: The following table presents the marketable securities recorded at fair value on a recurring basis by the level in which they are classified within the fair value hierarchy:



Eversource (Millions of Dollars)	As of December 31,
Eversource (Millions of Dollars)	2016		2015
Level 1:
Mutual Funds and Equities	$	274.0	$	285.3
Money Market Funds	54.8		26.9
Total Level 1	$	328.8	$	312.2
Level 2:
U.S. Government Issued Debt Securities (Agency and Treasury)	$	63.0	$	46.6
Corporate Debt Securities	41.1		43.9
Asset-Backed Debt Securities	18.5		20.0
Municipal Bonds	107.5		111.4
Other Fixed Income Securities	10.3		11.6
Total Level 2	$	240.4	$	233.5
Total Marketable Securities	$	569.2	$	545.7

U.S. government issued debt securities are valued using market approaches that incorporate transactions for the same or similar bonds and adjustments for yields and maturity dates. Corporate debt securities are valued using a market approach, utilizing recent trades of the same or similar instrument and also incorporating yield curves, credit spreads and specific bond terms and conditions. Asset-backed debt securities include collateralized mortgage obligations, commercial mortgage backed securities, and securities collateralized by auto loans, credit card loans or receivables. Asset-backed debt securities are valued using recent trades of similar instruments, prepayment assumptions, yield curves, issuance and maturity dates, and tranche information. Municipal bonds are valued using a market approach that incorporates reported trades and benchmark yields. Other fixed income securities are valued using pricing models, quoted prices of securities with similar characteristics, and discounted cash flows.