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Employee incentive programs
 6 Months Ended
Jun. 30, 2013
Employee incentive programs  
Employee incentive programs

9. Employee incentive programs

  • Long-Term Incentive Program

        The following table summarizes the changes in LTIP notional units during the six months ended June 30, 2013:

(Units in thousands)
  Units   Grant Date
Weighted-Average
Price per Unit		  

Outstanding at December 31, 2012

     492,535   $ 13.9  

Granted

     587,201     4.9  

Additional shares from dividends

     27,151     10.0  

Forfeited

     (42,000 )   12.3  

Vested

     (202,696 )   13.5  
           

Outstanding at June 30, 2013

     862,191   $ 7.8  
           

        Certain awards have a market condition based on our total shareholder return during the performance period compared to a group of peer companies and, in some cases, Project Adjusted EBITDA per common share compared to budget. Compensation expense for notional units granted in 2013 is recorded net of estimated forfeitures. See Note 14 to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2012 for further details. Cash payments made for vested notional units for the six months ended June 30, 2013 was $0.9 million. Compensation expense for LTIP was $0.8 million and $1.2 million for the three and six months end June 30, 2013, respectively.

        The calculation of simulated total shareholder return under the Monte Carlo model for the remaining time in the performance period for awards with market conditions included the following assumptions as of June 30, 2013 and December 31, 2012:

 
   June 30, 2013   December 31, 2012  

Weighted average risk free rate of return

     0.1 – 0.6%     0.1 – 0.3%  

Dividend yield

     9.7%     10.1%  

Expected volatility—Atlantic Power

     37.9 – 62.1%     22.5%  

Expected volatility—peer companies

     14.7 – 82.7%     11.9 – 97.1%  

Weighted average remaining measurement period

     2.2 years     1.4 years