Comcast 2006 Annual Report Download - page 62

Notes to Consolidated Financial Statements Comcast 2006 Annual Report 60
The following table summarizes the activity of the Restricted Stock
Plan for the year ended December 31, 2006 (adjusted to reflect the
Stock Split):
Number of Nonvested Weighted-
Share Unit Awards Average Grant
(in thousands) Date Fair Value
Class A Common Stock
Nonvested awards as of
January 1, 2006 8,474 $ 21.70
Granted 7,539 $ 19.98
Vested (1,635) $ 21.90
Forfeited (894) $ 20.76
Nonvested awards as of
December 31, 2006 13,484 $ 20.78
Class A Special Common Stock
Nonvested awards as of
January 1, 2006 104 $ 24.46
Vested (103) $ 24.75
Nonvested awards as of
December 31, 2006 1 $ 18.31
As of December 31, 2006, approximately 605,000 and 145,000
shares (adjusted to reflect the Stock Split) of Class A common
stock and Class A Special common stock, respectively, were issu-
able under vested restricted share unit awards, the receipt of which
was irrevocably deferred by Participants pursuant to the Restricted
Stock Plan.
Share-Based Compensation
Effective January 1, 2006, we adopted SFAS No. 123R using the
Modified Prospective Approach. SFAS No. 123R revises SFAS No.
123 and supersedes APB No. 25. SFAS No. 123R requires the
cost of all share-based payments to employees, including grants
of employee stock options, to be recognized in the financial state-
ments based on their fair values at grant date, or the date of later
modification, over the requisite service period. In addition, SFAS No.
123R requires unrecognized cost (based on the amounts previously
disclosed in our pro forma footnote disclosure) related to options
vesting after the date of initial adoption to be recognized in the
financial statements over the remaining requisite service period.
Under the Modified Prospective Approach, the amount of com-
pensation cost recognized includes: (i) compensation cost for all
share-based payments granted prior to, but not yet vested as of
January 1, 2006, based on the grant date fair value estimated in
accordance with the provisions of SFAS No. 123 and (ii) compen-
sation cost for all share-based payments granted subsequent to
January 1, 2006, based on the grant date fair value estimated in
accordance with the provisions of SFAS No. 123R. Prior to the
adoption of SFAS No. 123R, we recognized the majority of our
share-based compensation costs using the accelerated recognition
method. We recognize the cost of previously granted share-based
awards under the accelerated recognition method and recognize
the cost of new share-based awards on a straight-line basis over
the requisite service period. The incremental pretax share-based
compensation expense recognized due to the adoption of SFAS
No. 123R for the year ended December 31, 2006, was $126 million.
Total share-based compensation expense recognized under SFAS
No. 123R, including the incremental pretax share-based compen-
sation expense, was $190 million, with an associated tax benefit
of $66 million for the year ended December 31, 2006. Prior to the
adoption of SFAS No. 123R, we recognized share-based compen-
sation expense of $67 million and $44 million with associated tax
benefits of $25 million and $16 million for the years ended Decem-
ber 31, 2005 and 2004, respectively. The amount of share-based
compensation capitalized or related to discontinued operations
was not material to our consolidated financial statements.
Cash received from option exercises under all share-based pay-
ment arrangements for the year ended December 31, 2006,
was $372 million. The total intrinsic value (market value on date
of exercise less exercise price) of options exercised for the years
ended December 31, 2006, 2005 and 2004, was $180 million,
$59 million and $88 million, respectively. The tax benefit realized
from stock options exercised for the years ended December 31,
2006, 2005 and 2004, was $62 million, $19 million and $30 million,
respectively.
As of December 31, 2006, there was $207 million of total unrec-
ognized, pretax compensation cost related to nonvested stock
options. This cost is expected to be recognized over a weighted-
average period of approximately two and one half years.
The total fair value of restricted share units vested during the years
ended December 31, 2006, 2005 and 2004, was $32 million, $28
million and $7 million, respectively. As of December 31, 2006,
there was $177 million of total unrecognized pretax compensation
cost related to nonvested restricted share unit awards. This cost
is expected to be recognized over a weighted-average period of
approximately two and one half years.
SFAS No. 123R also required us to change the classification, in our
consolidated statement of cash flows, of any tax benefits realized
upon the exercise of stock options or issuance of restricted share
unit awards in excess of that which is associated with the expense
recognized for financial reporting purposes. These amounts are
presented as a financing cash inflow rather than as a reduction of
income taxes paid in our consolidated statement of cash flows.
The excess cash tax benefit classified as a financing cash inflow for
the year ended December 31, 2006, was $33 million.