Eversource 2009 Annual Report Download - page 152

FS-67
Exercise Price Per Share
Options Range
Weighted
Average
Intrinsic
Value
(Millions)
Outstanding and exercisable - December 31, 2006 771,848 $14.9375 -$22.2500 $18.4245
Exercised (372,168) $18.5005 $4.8
Forfeited and cancelled (2,500) $21.0300
Outstanding and exercisable - December 31, 2007 397,180 $14.9375 -$21.0300 $18.3369
Exercised (76,260) $16.2473 $0.6
Forfeited and cancelled - -
Outstanding and exercisable - December 31, 2008 320,920 $14.9375 -$21.0300 $18.8335
Exercised (95,704) $18.5418 $0.6
Forfeited and cancelled - -
Outstanding and exercisable - December 31, 2009 225,216 $17.4000 -$21.0300 $18.9574 $1.6
Cash received for options exercised during the year ended December 31, 2009 totaled $1.8 million. The tax benefit realized from stock
options exercised totaled $0.2 million for the year ended December 31, 2009.
Employee Share Purchase Plan: NU maintains an ESPP for all eligible NU, CL&P, PSNH, and WMECO employees, which allows for
NU common shares to be purchased by employees at six-month intervals at 95 percent of the closing market price on the last day of
each six-month period. Employees are permitted to purchase shares having a value not exceeding 25 percent of their compensation as
of the beginning of the purchase period up to a limit of $25,000 per annum. The ESPP qualifies as a non-compensatory plan under
accounting guidance for share-based payments, and no compensation expense will be recorded for ESPP purchases.
During 2009 and 2008, employees purchased 39,264 and 31,250 shares, respectively, at discounted prices of $22.61 and $21.86 in
2009 and $26.40 and $23.90 in 2008. As of December 31, 2009 and 2008, 970,850 and 1,010,114 shares, respectively, remained
available for future issuance under the ESPP.
An income tax rate of 40 percent is used to estimate the tax effect on total share-based payments determined under the fair value-
based method for all awards. The Company generally settles stock option exercises and fully vested RSUs and performance shares
with the issuance of new common shares.
E. Other Retirement Benefits
NU provides benefits for retirement and other benefits for certain current and past company officers of NU, including CL&P, PSNH and
WMECO. The actuarially-determined liability for these benefits, which is included in Deferred credits and other liabilities - other on the
accompanying consolidated balance sheets, was $47.9 million ($0.4 million for CL&P, $2.4 million for PSNH and $0.2 million for
WMECO) and $45.4 million ($0.3 million for CL&P, $2.5 million for PSNH and $0.2 million for WMECO) as of December 31, 2009 and
2008, respectively. During 2009, 2008 and 2007, $3.9 million ($2.2 million for CL&P, $0.9 million for PSNH and $0.4 million for
WMECO), $3.8 million ($2.2 million for CL&P, $0.8 million for PSNH and $0.4 million for WMECO) and $8.4 million ($4.6 million for
CL&P, $2 million for PSNH and $0.8 million for WMECO), respectively, was expensed related to these benefits. These benefits are
accounted for on an accrual basis and expensed over the service lives of the employees in accordance with accounting guidance for
deferred compensation contracts.
6. Goodwill and Other Intangible Assets (Yankee Gas)
In accordance with GAAP, goodwill and intangible assets deemed to have indefinite useful lives are reviewed for impairment at least
annually by applying a fair value-based test. NU uses October 1st as the annual goodwill impairment testing date. However, if an event
occurs or circumstances change that would indicate that goodwill might be impaired, NU management would test the goodwill between
the annual testing dates. Goodwill impairment is deemed to exist if the net book value of a reporting unit exceeds its estimated fair
value and if the implied fair value of goodwill based on the estimated fair value of the reporting unit is less than the carrying amount.
NU's reporting units are consistent with the operating segments underlying the reportable segments identified in Note 17, "Segment
Information," to the consolidated financial statements. The only reporting unit that maintains goodwill is the Yankee Gas reporting unit,
which is classified under the Regulated companies - gas reportable segment and related to the acquisition of Yankee Energy System,
Inc., parent of Yankee Gas. Such goodwill is not being recovered from the customers of Yankee Gas. The goodwill balance held by the
Yankee Gas reporting unit as of December 31, 2009 and 2008 is $287.6 million.
NU completed its impairment analysis of the Yankee Gas goodwill balance as of October 1, 2009 and determined that no impairment
exists. In completing this analysis, the fair value of the reporting unit was estimated using a discounted cash flow methodology and
analyses of comparable companies and transactions.