Eversource 2015 Annual Report Download - page 98

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86
The total compensation expense and associated future income tax benefits recognized by Eversource, CL&P, NSTAR Electric, PSNH and WMECO
for share-based compensation awards were as follows:
Eversource
For the Years Ended December 31,
(Millions of Dollars) 2015 2014 2013
Compensation Expense
$
23.1 $
24.6
$
27.0
Future Income Tax Benefit 9.4 10.3
10.7
For the Years Ended December 31,
2015
2014
2013
NSTAR
NSTAR
NSTAR
(Millions of Dollars)
CL&P
Electric PSNH WMECO
CL&P Electric PSNH WMECO
CL&P Electric PSNH WMECO
Compensation Expense
$
9.3 $
5.8
$
3.2
$
1.7 $
8.1
$
7.4
$
3.0
$
1.3 $
6.8 $
7.5
$
2.3
$
1.3
Future Income Tax Benefit 3.8
2.4
1.3
0.7
3.4
3.1
1.3
0.5
2.7
3.0
0.9
0.5
As of December 31, 2015, there was $14.9 million of total unrecognized compensation expense related to nonvested share-based awards for
Eversource, including $6.1 million for CL&P, $3.8 million for NSTAR Electric, $2.2 million for PSNH and $1.2 million for WMECO. This cost is
expected to be recognized ratably over a weighted-average period of 1.74 years for Eversource, and 1.73 years for each CL&P, NSTAR Electric,
PSNH and WMECO.
For each of the years ended December 31, 2015 and 2014, changes in excess tax benefits totaling $9.5 million increased cash flows from financing
activities. For the year ended December 31, 2013, changes in excess tax benefits totaling $5.5 million decreased cash flows from financing activities.
Stock Options: Stock options currently outstanding were granted under the NSTAR Incentive Plan, expire ten years from the date of grant and are
fully vested. The weighted average remaining contractual lives for the options outstanding as of December 31, 2015 is 2.6 years. A summary of
stock option transactions is as follows:
Weighted Average Intrinsic Value
Options
Exercise Price (Millions)
Outstanding and Exercisable - December 31, 2014
351,616 $
26.69
$
9.4
Exercised (179,744) $
26.90
$
4.4
Outstanding and Exercisable - December 31, 2015 171,872 $
26.47
$
4.2
Cash received for options exercised during the year ended December 31, 2015 totaled $4.8 million. The tax benefit realized from stock options
exercised totaled $1.9 million for the year ended December 31, 2015.
Employee Share Purchase Plan: Eversource maintained an ESPP for eligible employees, which allowed for Eversource common shares to be
purchased by employees at the end of successive six-month offering periods at 95 percent of the closing market price on the last day of each six-
month period. Employees were permitted to purchase shares having a value not exceeding 25 percent of their compensation as of the beginning of
the offering period up to a specified limit. The ESPP qualified as a non-compensatory plan under accounting guidance for share-based payments, and
no compensation expense was recorded for ESPP purchases.
During 2015, employees purchased 33,715 shares at discounted prices of $52.80 and $47.23. Employees purchased 40,779 shares in 2014 at
discounted prices of $41.61 and $41.71. As of December 31, 2015 and 2014, 743,260 and 776,975 shares, respectively, remained available for future
issuance under the ESPP. The ESPP ended as of February 1, 2016.
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 common shares
purchased in the open market.
D. Other Retirement Benefits
Eversource provides retirement and other benefits for certain current and past company officers. These benefits are accounted for on an accrual basis
and expensed over a period equal to the service lives of the employees. The actuarially-determined liability for these benefits, which is included in
Other Long-Term Liabilities on the balance sheets, as well as the related expense included in Operations and Maintenance on the income statements,
are as follows:
Eversource As of and For the Years Ended December 31,
(Millions of Dollars) 2015 2014 2013
Actuarially-Determined Liability
$
55.2
$
57.5 $
51.3
Other Retirement Benefits Expense 3.9
4.5 4.4
As of and For the Years Ended December 31,
2015
2014
2013
(Millions of Dollars) CL&P
NSTAR
Electric
PSNH
WMECO
CL&P
NSTAR
Electric
PSNH
WMECO
CL&P
PSNH
WMECO
Actuarially-Determined Liability
$
0.4 $
-
$
2.4
$
0.2 $
0.4
$
-
$
2.6 $
0.2 $
0.4 $
2.3 $
0.1
Other Retirement Benefits Expense
1.5
1.0
0.7
0.3
2.1
0.3
0.9
0.4
2.5
1.0
0.5