NU maintains trusts to fund certain non-qualified executive benefits 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. In addition, CYAPC and YAEC maintain legally restricted trusts, each of which holds marketable securities, for settling the decommissioning obligations of their nuclear power plants.

In accordance with applicable accounting guidance, the Company elected to record mutual funds designated as available-for-sale at fair value and certain other equity investments as trading securities, with the changes in fair values recorded in Other Income, Net on the statements of income. As of March 31, 2014, the mutual funds and equity investments were classified as Level 1 in the fair value hierarchy and totaled $57.4 million and $24 million, respectively. As of December 31, 2013, the mutual funds were classified as Level 1, and totaled $57.2 million. Net gains on the mutual funds were $0.2 million and $4.2 million for the three months ended March 31, 2014 and 2013, respectively, and net gains on the equity investments were $0.5 million for the three months ended March 31, 2014. Dividend income is recorded in Other Income, Net on the statements of income when dividends are declared. All other marketable securities are accounted for as available-for-sale.

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

		As of March 31, 2014
				Pre-Tax		Pre-Tax
		Amortized		Unrealized		Unrealized
(Millions of Dollars)		Cost		Gains⁽¹⁾		Losses⁽¹⁾		Fair Value
NU
	Debt Securities⁽²⁾	$	300.6	$	4.8	$	(0.7)	$	304.7
	Equity Securities⁽²⁾		163.3		65.6		-		228.9

WMECO
	Debt Securities		58.0		-		(0.1)		57.9

		As of December 31, 2013
				Pre-Tax		Pre-Tax
		Amortized		Unrealized		Unrealized
(Millions of Dollars)		Cost		Gains⁽¹⁾		Losses⁽¹⁾		Fair Value
NU
	Debt Securities⁽²⁾	$	299.2	$	2.5	$	(2.1)	$	299.6
	Equity Securities⁽²⁾		163.6		60.5		-		224.1

WMECO
	Debt Securities		57.9		-		-		57.9

(2) NU's amounts include CYAPC's and YAEC's marketable securities held in nuclear decommissioning trusts of $435.9 million and $424 million as of March 31, 2014 and December 31, 2013, respectively, 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 in Other Long-Term Liabilities on the balance sheets, with no impact on the statements of income. 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 NU or WMECO. 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 NU's benefit trust, Other Long-Term Assets for WMECO, and offset in Other Long-Term Liabilities for CYAPC and YAEC. NU utilizes the specific identification basis method for the NU benefit trust and the average cost basis method for the WMECO 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 March 31, 2014, 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⁾	$	54.5	$	54.4	$	19.2	$	19.2
One to five years		73.3		73.9		33.2		33.2
Six to ten years		68.1		69.4		1.6		1.6
Greater than ten years		104.7		107.0		4.0		3.9
Total Debt Securities	$	300.6	$	304.7	$	58.0	$	57.9

(1) Amounts in the Less than one year NU 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:

			NU				WMECO
			As of				As of
(Millions of Dollars)			March 31, 2014		December 31, 2013		March 31, 2014		December 31, 2013
Level 1:
	Mutual Funds and Equities		$	310.3	$	281.3	$	-	$	-
	Money Market Funds			22.5		32.9		4.3		10.9
Total Level 1			$	332.8	$	314.2	$	4.3	$	10.9
Level 2:
	U.S. Government Issued Debt Securities
		(Agency and Treasury)	$	56.7	$	61.4	$	-	$	6.8
	Corporate Debt Securities			56.3		53.6		14.1		15.1
	Asset-Backed Debt Securities			35.3		30.4		14.0		9.0
	Municipal Bonds			109.6		105.5		12.3		11.2
	Other Fixed Income Securities			24.3		15.8		13.2		4.9
Total Level 2			$	282.2	$	266.7	$	53.6	$	47.0
Total Marketable Securities			$	615.0	$	580.9	$	57.9	$	57.9

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.