ComEd 2006 Annual Report Download - page 203

Exelon Corporation and Subsidiary Companies
Exelon Generation Company, LLC and Subsidiary Companies
Commonwealth Edison Company and Subsidiary Companies
PECO Energy Company and Subsidiary Companies
Combined Notes to Consolidated Financial Statements—(Continued)
(Dollars in millions, except per share data unless otherwise noted)
adopting SFAS No. 123-R, Exelon recognizes ratably throughout the year of grant the entire
compensation cost of new common stock awards in which retirement-eligible employees are fully
vested in the year of grant (non-substantive vesting approach). Prior to the adoption of
SFAS No. 123-R on January 1, 2006, such compensation cost was recognized over the nominal
vesting period of performance with any remaining compensation cost recognized at the date of
retirement. The impact of using the non-substantive vesting approach for retirement-eligible employees
related to performance share awards was $10 million during 2006.
During the twelve months ended December 31, 2006, Exelon settled 436,660 and 407,073
performance share awards in common stock and cash, respectively, related to awards granted prior to
2006. Exelon paid $24 million in cash during 2006 to settle the 407,073 performance share awards.
At December 31, 2006, Exelon had an obligation related to outstanding awards not yet settled of
$95 million, of which $38 million, $27 million and $30 million are included in current liabilities, deferred
credits and other liabilities, and common stock, respectively, in Exelon’s Consolidated Balance Sheet.
At December 31, 2005, Exelon had an obligation related to outstanding awards not yet settled of
$51 million, of which $27 million is included in common stock and $24 million is included in deferred
credits and other liabilities in Exelon’s Consolidated Balance Sheet.
SFAS No. 123-R requires the benefits of tax deductions in excess of the compensation cost
recognized for stock options exercised (excess tax benefits) to be classified as financing cash flows.
There was $7 million of excess tax benefits related to performance share awards exercised included as
a cash inflow in other financing activities in Exelon’s Consolidated Statement of Cash Flows for the
twelve months ended December 31, 2006. Prior to the adoption of SFAS No. 123-R, Exelon presented
these benefits as operating cash flows in the Consolidated Statement of Cash Flows.
Other Stock-Based Awards
Exelon also issues common stock through an employee stock purchase plan and through
restricted stock units and accounts for these awards in accordance with SFAS No. 123-R. The
compensation cost of these types of issuances was immaterial during the twelve months ended
December 31, 2006 and 2005. However, at December 31, 2006 and 2005, Exelon had obligations
related to outstanding restricted stock not yet settled of $13 million and $19 million, respectively, which
are included in common stock in Exelon’s Consolidated Balance Sheets.
Prior to January 1, 2007, directors and executives were able to defer stock awards granted to
them through Exelon’s stock-based compensation programs into the Exelon Corporation Stock
Deferral Plan. At December 31, 2006 and 2005, Exelon had an obligation related to this plan of
$37 million and $30 million, respectively, which are included in common stock in Exelon’s Consolidated
Balance Sheets.
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