NU maintains a supplemental benefit trust to fund NU's SERP and non-SERP 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 $43.8 million and $41.1 million as of June 30, 2012 and December 31, 2011, respectively, and are included in current Marketable Securities. Net losses on these securities of $0.5 million for the three months ended June 30, 2012 and net gains on these securities of $2.7 million for the six months ended June 30, 2012 and net gains of $0.3 million and $2.2 million for the three and six months ended June 30, 2011, respectively, were recorded in Other Income, Net on the accompanying unaudited condensed consolidated statements of income. Dividend income is recorded when dividends are declared and are recorded in Other Income, Net on the accompanying unaudited condensed 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 unaudited condensed consolidated balance sheets.

		As of June 30, 2012
				Pre-Tax		Pre-Tax
		Amortized		Unrealized		Unrealized
(Millions of Dollars)		Cost		Gains⁽¹⁾		Losses⁽¹⁾		Fair Value
NU
	Debt Securities⁽²⁾	$	256.1	$	10.9	$	(0.3)	$	266.7
	Equity Securities⁽²⁾		134.6		12.0		(5.6)		141.0
WMECO
	Debt Securities		57.5		0.1		(0.1)		57.5

		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

(2) NU's June 30, 2012 amounts include CYAPC's and YAEC's marketable securities held in nuclear decommissioning trusts of $304 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 against the spent nuclear fuel obligation recorded in Other Long-Term Liabilities on the accompanying unaudited condensed consolidated balance sheet. All of the equity securities accounted for as available-for-sale securities are held in these trusts.

Unrealized Losses and Other-than-Temporary Impairment: There have been no significant unrealized losses, other-than-temporary impairments or credit losses for the NU supplemental benefit trust or WMECO spent nuclear fuel trust. 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 the NU supplemental benefit trust and in Other Long-Term Assets for the WMECO spent nuclear fuel trust. NU utilizes the specific identification basis method for the NU supplemental benefit trust securities and the average cost basis method for the WMECO spent nuclear fuel trust and 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 June 30, 2012, the contractual maturities of available-for-sale debt securities are as follows:


	NU				WMECO
	Amortized				Amortized
(Millions of Dollars)	Cost		Fair Value		Cost		Fair Value
Less than one year⁽¹⁾	$	52.9	$	52.9	$	18.5	$	18.5
One to five years		53.8		55.0		23.2		23.2
Six to ten years		51.9		54.9		6.0		6.1
Greater than ten years		97.5		103.9		9.8		9.7
Total Debt Securities	$	256.1	$	266.7	$	57.5	$	57.5

(1) Amounts in the Less than one year category include securities in the nuclear decommissioning trust, which are restricted and are classified in long-term Marketable Securities on the accompanying unaudited condensed consolidated balance sheet.

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:

			NU				WMECO
			As of		As of		As of		As of
(Millions of Dollars)			June 30, 2012		December 31, 2011		June 30, 2012		December 31, 2011
Level 1:
	Mutual Funds and Equity Securities		$	184.8	$	41.1	$	-	$	-
	Money Market Funds			36.3		1.8		3.8		0.1
Total Level 1			$	221.1	$	42.9	$	3.8	$	0.1
Level 2:
	U.S. Government Issued Debt Securities
		(Agency and Treasury)		59.5		11.1		18.7		8.0
	Corporate Debt Securities			31.4		16.5		6.2		9.1
	Asset-Backed Debt Securities			27.4		25.9		6.5		7.9
	Municipal Bonds			96.4		16.1		15.5		15.4
	Other Fixed Income Securities			15.7		18.8		6.8		16.6
Total Level 2			$	230.4	$	88.4	$	53.7	$	57.0
Total Marketable Securities			$	451.5	$	131.3	$	57.5	$	57.1

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.