2.2.0.25falsefalse0208 - Disclosure - Common Stocktruefalsefalse1falsefalseUSDfalsefalse1/1/2010 - 12/31/2010 USD ($) USD ($) / shares $Jan-01-2010_Dec-31-2010http://www.sec.gov/CIK0000092122duration2010-01-01T00:00:002010-12-31T00:00:00USDStandardhttp://www.xbrl.org/2003/iso4217USDiso42170PureStandardhttp://www.xbrl.org/2003/instancepurexbrli0USDEPSDividehttp://www.xbrl.org/2003/iso4217USDiso4217http://www.xbrl.org/2003/instancesharesxbrli0SharesStandardhttp://www.xbrl.org/2003/instancesharesxbrli0USDUSD$2true0us-gaap_StockholdersEquityNoteAbstractus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsefalsefalseOtherxbrli:stringItemTypestringNo definition available.falsefalseCommon Stock [Abstract]3false0so_CommonStockTextBlocksofalsenadurationDisclosures related to common stock issued, common stock reserved, non-qualified stock option plans, diluted earnings per...falsefalsefalsefalsefalsefalsefalsefalsefalsefalseverboselabel1falsefalsefalse00  <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>8. COMMON STOCK</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><b>Stock Issued</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">During 2010, Southern Company issued 19.6 million shares of common stock for $629 million through the Southern Investment Plan and employee and director stock plans. In addition, Southern Company issued 4.1 million shares of common stock through at-the-market issuances pursuant to sales agency agreements related to Southern Company’s continuous equity offering program and received cash proceeds of $143 million, net of $1 million in fees and commissions. In 2009, Southern Company raised $673 million from the issuance of 22.6 million new common shares through the Southern Investment Plan and employee and director stock plans. In 2009, Southern Company issued 19.9 million shares of common stock through at-the-market issuances pursuant to sales agency agreements related to Southern Company’s continuous equity offering program and received cash proceeds of $613 million, net of $6 million in fees and commissions. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Shares Reserved</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">At December 31, 2010, a total of 66 million shares were reserved for issuance pursuant to the Southern Investment Plan, the Employee Savings Plan, the Outside Directors Stock Plan, and the Omnibus Incentive Compensation Plan (which includes stock options and performance shares units as discussed below). Of the total 66 million shares reserved, there were 10 million shares of common stock remaining available for awards under the stock option and performance share plans as of December 31, 2010. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Stock Option Plan</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company provides non-qualified stock options to a large segment of Southern Company system employees ranging from line management to executives. As of December 31, 2010, there were 7,330 current and former employees participating in the stock option plan. The prices of options were at the fair market value of the shares on the dates of grant. These options become exercisable pro rata over a maximum period of three years from the date of grant. Southern Company generally recognizes stock option expense on a straight-line basis over the vesting period which equates to the requisite service period; however, for employees who are eligible for retirement, the total cost is expensed at the grant date. Options outstanding will expire no later than 10 years after the date of grant, unless terminated earlier by the Southern Company Board of Directors in accordance with the stock option plan. For certain stock option awards, a change in control will provide accelerated vesting. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The estimated fair values of stock options granted in 2010, 2009, and 2008 were derived using the Black-Scholes stock option pricing model. Expected volatility was based on historical volatility of Southern Company’s stock over a period equal to the expected term. Southern Company used historical exercise data to estimate the expected term that represents the period of time that options granted to employees are expected to be outstanding. The risk-free rate was based on the U.S. Treasury yield curve in effect at the time of grant that covers the expected term of the stock options. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The following table shows the assumptions used in the pricing model and the weighted average grant-date fair value of stock options granted: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td nowrap="nowrap" align="left"><b>Year Ended December 31</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>2010</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3">2009</td> <td> </td> <td nowrap="nowrap" align="center" colspan="3">2008</td> </tr>   <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Expected volatility </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>17.4</b></td> <td nowrap="nowrap"><b>%</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">15.6</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">13.1</td> <td nowrap="nowrap">%</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Expected term <i>(in years)</i> </div></td> <td> </td> <td> </td> <td align="right"><b>5.0</b></td> <td> </td> <td> </td> <td> </td> <td align="right">5.0</td> <td> </td> <td> </td> <td> </td> <td align="right">5.0</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Interest rate </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>2.4</b></td> <td nowrap="nowrap"><b>%</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">1.9</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">2.8</td> <td nowrap="nowrap">%</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Dividend yield </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>5.6</b></td> <td nowrap="nowrap"><b>%</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">5.4</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">4.5</td> <td nowrap="nowrap">%</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Weighted average grant-date fair value </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>2.23</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1.80</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">2.37</td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company’s activity in the stock option plan for 2010 is summarized below: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Shares Subject</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Weighted Average</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>To Option</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Exercise Price</b></td> </tr>   <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Outstanding at December 31, 2009 </div></td> <td> </td> <td> </td> <td align="right">48,247,319</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">32.10</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Granted </div></td> <td> </td> <td> </td> <td align="right">9,582,288</td> <td> </td> <td> </td> <td> </td> <td align="right">31.22</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Exercised </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(7,024,176</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">28.15</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Cancelled </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(93,845</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">31.02</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Outstanding at December 31, 2010</b> </div></td> <td> </td> <td> </td> <td align="right"><b>50,711,586</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>32.48</b></td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 3px double #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Exercisable at December 31, 2010</b> </div></td> <td> </td> <td> </td> <td align="right"><b>34,564,434</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>32.81</b></td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The number of stock options vested, and expected to vest in the future, as of December 31, 2010 was not significantly different from the number of stock options outstanding at December 31, 2010 as stated above. As of December 31, 2010, the weighted average remaining contractual term for the options outstanding and options exercisable was approximately six years and five years, respectively, and the aggregate intrinsic value for the options outstanding and options exercisable was $292 million and $188 million, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">As of December 31, 2010, there was $5 million of total unrecognized compensation cost related to stock option awards not yet vested. That cost is expected to be recognized over a weighted-average period of approximately 10 months. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">For the years ended December 31, 2010, 2009, and 2008, total compensation cost for stock option awards recognized in income was $22 million, $23 million, and $20 million, respectively, with the related tax benefit also recognized in income of $9 million, $9 million, and $8 million, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The total intrinsic value of options exercised during the years ended December 31, 2010, 2009, and 2008 was $57 million, $9 million, and $45 million, respectively. The actual tax benefit realized by the Company for the tax deductions from stock option exercises totaled $22 million, $4 million, and $17 million for the years ended December 31, 2010, 2009, and 2008, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company has a policy of issuing shares to satisfy share option exercises. Cash received from issuances related to option exercises under the share-based payment arrangements for the years ended December 31, 2010, 2009, and 2008 was $198 million, $19 million, and $113 million, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Performance Share Plan</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In 2010, Southern Company implemented the performance share program under its omnibus incentive compensation plan, which provides performance share award units to a large segment of Southern Company system employees ranging from line management to executives. The performance share units granted under the plan vest at the end of a three-year performance period which equates to the requisite service period. Employees that retire prior to the end of the three-year period receive a pro rata number of shares, issued at the end of the performance period, based on actual months of service prior to retirement. The value of the award units is based on Southern Company’s total shareholder return (TSR) over the three-year performance period which measures Southern Company’s relative performance against a group of industry peers. The performance shares are delivered in common stock following the end of the performance period based on Southern Company’s actual TSR and may range from 0% to 200% of the original target performance share amount. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The fair value of performance share awards is determined as of the grant date using a Monte Carlo simulation model to estimate the TSR of Southern Company’s stock among the industry peers over the performance period. The Company recognizes compensation expense on a straight-line basis over the three-year performance period without remeasurement. Compensation expense for awards where the service condition is met is recognized regardless of the actual number of shares issued. Expected volatility used in the model of 20.7% was based on historical volatility of Southern Company’s stock over a period equal to the performance period. The risk-free rate of 1.4% was based on the U.S. Treasury yield curve in effect at the time of grant that covers the performance period of the award units. The annualized dividend rate at the time of the grant was $1.75. During 2010, 1,050,052 performance share units were granted with a weighted-average grant date fair value of $30.13. During 2010, 141,711 performance share units were forfeited resulting in 908,341 unvested units outstanding at December 31, 2010. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">For the year ended December 31, 2010, total compensation cost for performance share units recognized in income was $9 million, with the related tax benefit also recognized in income of $4 million. As of December 31, 2010, there was $18 million of total unrecognized compensation cost related to performance share award units that will be recognized over the next two years. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Diluted Earnings Per Share</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">For Southern Company, the only difference in computing basic and diluted earnings per share is attributable to awards outstanding under the stock option and performance share plans. The effect of both stock options and performance share award units were determined using the treasury stock method. Shares used to compute diluted earnings per share were as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="11" style="border-bottom: 1px solid #000000"><b>Average Common Stock Shares</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2009</td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2008</td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="11"><i style="font-size: 8pt">(in thousands)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">As reported shares </div></td> <td> </td> <td> </td> <td align="right"><b>832,189</b></td> <td> </td> <td> </td> <td> </td> <td align="right">794,795</td> <td> </td> <td> </td> <td> </td> <td align="right">771,039</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Effect of options </div></td> <td> </td> <td> </td> <td align="right"><b>4,792</b></td> <td> </td> <td> </td> <td> </td> <td align="right">1,620</td> <td> </td> <td> </td> <td> </td> <td align="right">3,809</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Diluted shares </div></td> <td> </td> <td> </td> <td align="right"><b>836,981</b></td> <td> </td> <td> </td> <td> </td> <td align="right">796,415</td> <td> </td> <td> </td> <td> </td> <td align="right">774,848</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Stock options that were not included in the diluted earnings per share calculation because they were anti-dilutive were 13.1 million and 37.7 million at December 31, 2010 and 2009, respectively. Assuming an average stock price of $38.01 (the highest exercise price of the anti-dilutive options outstanding), the effect of options would have increased by 0.8 million and 3.4 million shares for the years ended December 31, 2010 and 2009, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Common Stock Dividend Restrictions</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The income of Southern Company is derived primarily from equity in earnings of its subsidiaries. At December 31, 2010, consolidated retained earnings included $5.9 billion of undistributed retained earnings of the subsidiaries. Southern Power’s credit facility contains potential limitations on the payment of common stock dividends; as of December 31, 2010, Southern Power was in compliance with all such requirements. </div> </div>  <!-- Begin Block Tagged NotefalsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringDisclosures related to common stock issued, common stock reserved, non-qualified stock option plans, diluted earnings per share, and common stock dividend restrictions.No authoritative reference available.falsefalseCOMMON STOCK12Common StockUnKnownUnKnownUnKnownUnKnownfalsetrue