Eversource 2006 Annual Report Download - page 96

94 NU 2006 ANNUAL REPORT
Restricted shares are issued and outstanding on their grant date and
are included in basic common shares outstanding. These shares are
subject to vesting requirements and are excluded from basic shares
outstanding if forfeited.
RSUs are included in basic common shares outstanding when shares
are issued. The dilutive effect of RSUs granted but not issued is
calculated using the treasury stock method. Assumed proceeds of
RSUs under the treasury stock method consist of the remaining
compensation cost to be recognized and a theoretical tax benefit. The
theoretical tax benefit is calculated as the tax impact of the difference
between the market value of RSUs outstanding but not issued using
the average market price during the period and the grant date market
value.
The dilutive effect of stock options is also calculated using the treasury
stock method. Assumed proceeds for stock options consist of remaining
compensation cost to be recognized, cash proceeds that would be
received upon exercise, and a theoretical tax benefit. The theoretical
tax benefit is calculated as the tax impact of the difference between
the intrinsic value of dilutive stock options outstanding and the total
adoption compensation.
Allocated ESOP shares are included in basic common shares outstanding
in the previous table.
16. Segment Information
Presentation: NU is organized between the Utility Group and NU
Enterprises businesses based on a combination of factors, including
the characteristics of each business’ products and services, the
sources of operating revenues and expenses and the regulatory
environment in which theyoperate. Effective in the first quarter of
2006, separate financial information was prepared and used by
management for each of the NU Enterprises merchant energy
businesses that NU is exiting. Accordingly, separate detailed information
is presented for the wholesale and retail marketing and competitive
generation businesses for the year ended December 31, 2006. It is not
practicable to prepare comparable detailed information for any periods
prior to 2006 due to the manner in which the merchant energy busi-
ness operated prior to 2006. Effective January 1, 2005, the portion of
NGS’ business that supported NGC’s and HWP’s generation assets
was reclassified from the services and other segment to the merchant
energy segment within the NU Enterprises segment. Effective January
1, 2004, separate detailed information regarding the Utility Group’s
transmission businesses and NU Enterprises’ merchant energy
business is now included in the following segment information. Cash
flows for total investments in plant included in the segment information
below are cash capital expenditures that do not include cost of
removal, AFUDC related to equity funds, and the capitalized portion of
pension expense or income. Segment information for all periods
presented has been reclassified to conform to the current period
presentation, except as indicated.
The Utility Group segment, including the regulated electric distribution,
generation and transmission businesses, as well as the gas distribution
business comprised of Yankee Gas, represents approximately 87
percent, 74 percent, and 70 percent of NU’s total revenues for the
years ended December 31, 2006, 2005 and 2004, respectively, and
includes the operations of the regulated electric utilities, CL&P, PSNH
and WMECO, whose complete consolidated financial statements (net of
eliminations) are included in NU’s report on Form 10-K. PSNH’s
distribution segment includes generation activities. Also included in
NU’s report on Form 10-K is detailed information regarding CL&P’s,
PSNH’s, and WMECO’s transmission businesses. Utility Group
revenues from the sale of electricity and natural gas are primarily
derived from residential, commercial and industrial customers and
are not dependent on any single customer.
The NU Enterprises merchant energy business segment includes:
1) Select Energy, consisting of the wholesale and retail marketing
businesses; and 2) NGC, Mt. Tom, and a portion of NGS, collectively
referred to as the competitive generation business. The NU
Enterprises services and other business segment includes the remainder
of NGS, SESI, Woods Electrical – Services, Woods Electrical – Other,
SECI-NH, Woods Network, Boulos and SECI-CT, and intercompany
eliminations between the energy services businesses and merchant
energy businesses. The results of NU Enterprises parent are also
included within services and other. Certain of those businesses were
sold during 2006 and 2005.
Other in the tables includes the results for Mode 1 Communications,
Inc., the results of the non-energy-related subsidiaries of Yankee
(Yankee Energy Services Company, Yankee Energy Financial Services
Company, and NorConn Properties, Inc.), the non-generation
operations of HWP, and the results of NU’s parent and service
companies. Interest expense included in other primarily relates to the
debt of NU Parent. Other includes pre-tax investment write-downs
totaling $6.9 million and $13.8 million in 2005 and 2004, respectively.
NU’s consolidated statements of income/(loss) for the years ended
December 31, 2006, 2005 and 2004 present the operations for NGC,
Mt. Tom, SESI, Woods Electrical – Services, SECI-NH and Woods
Network as discontinued operations. For further information and
information regarding the exit from these businesses, see Note 3,
“Assets Held for Sale and Discontinued Operations,” to the consolidated
financial statements.