2008 Annual Report - Hubbell Wiring Device-Kellems

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HUBBELL INCORPORATED AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)The fair value measurements related to these financial assets are summarized as follows:December 31, 2008Quoted Pricesin Active Marketsfor IdenticalAssets (Level 1)Quoted Pricesin Active Marketsfor Similar Assets(Level 2)Available-for-sale securities ............. $35.1 $35.1 $ —Forward exchange contracts ............. 1.9 — 1.9Total . . . ......................... $37.0 $35.1 $1.9Note 16 — Commitments and ContingenciesEnvironmental and LegalThe Company is subject to environmental laws and regulations which may require that it investigate andremediate the effects of potential contamination associated with past and present operations. The Company is alsosubject to various legal proceedings and claims, including those relating to workers’ compensation, product liabilityand environmental matters, including, for each, past production of product containing toxic substances, which havearisen in the normal course of its operations or have been acquired through business combinations. Estimates offuture liability with respect to such matters are based on an evaluation of currently available facts. Liabilities arerecorded when it is probable that costs will be incurred and can be reasonably estimated. Given the nature of mattersinvolved, it is possible that liabilities will be incurred in excess of amounts currently recorded. However, based uponavailable information, including the Company’s past experience, and reserves, management believes that theultimate liability with respect to these matters will not have a material effect on the consolidated financial position,results of operations or cash flows of the Company.The Company accounts for conditional asset retirement obligations in accordance with SFAS No. 143,“Accounting for Asset Retirement Obligations”. FIN 47, “Accounting for Conditional Asset Retirement Obligations”clarifies the term “conditional asset retirement obligation” as used in SFAS No. 143 to refer to a legalobligation to perform an asset retirement activity in which the timing and/or method of settlement are conditional ona future event that may or may not be within the control of the Company. Accordingly, an entity is required torecognize a liability for the fair value of a conditional asset retirement obligation if the fair value of the liability canbe reasonably estimated. The Company identified other legal obligations related to environmental clean up forwhich a settlement date could not be determined. Management does not believe these items were material to theCompany’s results of operations, financial position or cash flows as of December 31, 2008, 2007 and 2006. TheCompany continues to monitor and revalue its liability as necessary and, as of December 31, 2008 the liabilitycontinues to be immaterial.LeasesTotal rental expense under operating leases was $22.4 million in 2008, $20.2 million in 2007 and $19.0 millionin 2006. The minimum annual rentals on non-cancelable, long-term, operating leases in effect at December 31,2008 are expected to approximate $13.0 million in 2009, $10.4 million in 2010, $6.5 million in 2011, $4.2 million in2012, $3.8 million in 2013 and $15.3 million thereafter. The Company accounts for its leases in accordance withSFAS No. 13, “Accounting for Leases”. The Company’s leases consist of operating leases primarily for buildings orequipment. The terms for building leases typically range from 5-25 years with 5-10 year renewal periods.64
Note 17 — Capital StockHUBBELL INCORPORATED AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)Activity in the Company’s common shares outstanding is set forth below for the three years ended December31, 2008, (in thousands):Common StockClass A Class BOutstanding at December 31, 2005 .................................. 9,128 51,963Exercise of stock options .......................................... — 1,223Shares issued under compensation arrangements ......................... — 2Non-vested shares issued under compensation arrangements ................. — 94Acquisition/surrender of shares ...................................... (951) (1,281)Outstanding at December 31, 2006 .................................. 8,177 52,001Exercise of stock options/ stock appreciation rights ....................... — 1,356Shares issued under compensation arrangements ......................... — 2Non-vested shares issued under compensation arrangements ................. — 108Acquisition/surrender of shares ...................................... (799) (2,917)Outstanding at December 31, 2007 .................................. 7,378 50,550Exercise of stock options .......................................... — 258Shares issued under compensation arrangements ......................... — 2Non-vested shares issued under compensation arrangements ................. — 189Acquisition/surrender of shares ...................................... (213) (1,897)Outstanding at December 31, 2008 .................................. 7,165 49,102Repurchased shares are retired when acquired and the purchase price is charged against par value andadditional paid-in capital. Shares may be repurchased through the Company’s stock repurchase program, acquiredby the Company from employees under the Hubbell Incorporated Stock Option Plan for Key Employees (“OptionPlan”) or surrendered to the Company by employees in settlement of their tax liability on vesting of restricted sharesunder the Hubbell Incorporated 2005 Incentive Award Plan, (“the Award Plan”). Voting rights per share: Class ACommon — twenty; Class B Common — one. In addition, the Company has 5.9 million authorized shares ofpreferred stock; no preferred shares are outstanding.The Company has an amended and restated Rights Agreement under which holders of Class A Common Stockhave Class A Rights and holders of Class B Common Stock have Class B Rights (collectively, “Rights”). TheseRights become exercisable after a specified period of time only if a person or group of affiliated persons acquiresbeneficial ownership of 20 percent or more of the outstanding Class A Common Stock of the Company orannounces or commences a tender or exchange offer that would result in the offeror acquiring beneficial ownershipof 20 percent or more of the outstanding Class A Common Stock of the Company. Each Class A Right entitles theholder to purchase from the Company one one-thousandth of a share of Series A Junior Participating PreferredStock (“Series A Preferred Stock”), without par value, at a price of $175.00 per one one-thousandth of a share.Similarly, each Class B Right entitles the holder to purchase one one-thousandth of a share of Series B JuniorParticipating Preferred Stock (“Series B Preferred Stock”), without par value, at a price of $175.00 per one onethousandthof a share. The Rights may be redeemed by the Company for one cent per Right prior to the day a personor group of affiliated persons acquires 20 percent or more of the outstanding Class A Common Stock of theCompany. The Rights Agreement was amended and restated in December 2008 to extend the expiration date fromDecember 31, 2008 to December 31, 2018 and to conform with current practice. No other substantive65
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P O S I T I O N E D F O R T O D A Y
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2008 SALESby Segmentby GeographyPow
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The success of “today” position
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POSITIONED FOR TODAYby consistently
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POWER SEGMENTBrand recognition and
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DRIVINGPERFORMANCETHROUGHPRODUCTIVI
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KURT VERSEN INC,ACQUIRED IN JANUARY
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13THE LIGHTING SOLUTIONSLAB AT HUBB
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THE FUTURE ISELECTRIC WITHOPPORTUNI
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OFFSHORE OIL RIGS AREJUST ONE OF MA
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HUBBELL INCORPORATEDANNUAL REPORT O
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The Company’s annual report on Fo
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Commercial/Institutional and Indust
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Haefely Test, AG based in Switzerla
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A global recession and continued wo
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Item 2. PropertiesHubbell’s manuf
Page 35 and 36: Name. Age(1) Present Position Busin
Page 37 and 38: Purchases of Equity SecuritiesIn Fe
Page 39 and 40: Item 6.Selected Financial DataThe f
Page 41 and 42: • Revenue GrowthOrganic Growth. I
Page 43 and 44: the 2007 rate related to the closin
Page 45 and 46: one in 2007 as well as a higher amo
Page 47 and 48: management, production planning and
Page 49 and 50: Although these facilities are not t
Page 51 and 52: offer retiree medical benefits to a
Page 53 and 54: overhead, maintenance and training
Page 55 and 56: • Changes in strategy, economic c
Page 57 and 58: Item 8.Financial Statements and Sup
Page 59 and 60: REPORT OF INDEPENDENT REGISTERED PU
Page 61 and 62: HUBBELL INCORPORATED AND SUBSIDIARI
Page 65 and 66: Foreign Currency TranslationThe ass
Page 67 and 68: measurement attribute for the finan
Page 81 and 82: Note 12 — DebtHUBBELL INCORPORATE
Page 85: HUBBELL INCORPORATED AND SUBSIDIARI
Page 93 and 94: computation of earnings per dilutiv
Page 95 and 96: Industry Segment DataHUBBELL INCORP
Page 99 and 100: Item 11.Item 12.Executive Compensat
Page 101 and 102: NumberDescription10h† Hubbell Inc
Page 103 and 104: NumberDescription31.1* Certificatio
Page 105 and 106: Schedule IIHUBBELL INCORPORATED AND
Page 107 and 108: Exhibit 31.1I, Timothy H. Powers, c
Page 109 and 110: Exhibit 32.1CERTIFICATION PURSUANT
Page 111 and 112: BOARD OF DIRECTORSE. RICHARD BROOKS
Page 113 and 114: CORPORATEOFFICERSTIMOTHY H. POWERSC
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2008 Annual Report - Hubbell Wiring Device-Kellems

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