SHARE-BASED COMPENSATION - SCEG

12 Months Ended

Dec. 31, 2011

SHARE-BASED COMPENSATION

9.             SHARE-BASED COMPENSATION

The Plan provides for grants of nonqualified and incentive stock options, stock appreciation rights, restricted stock, performance shares, performance units and restricted stock units to certain key employees and non-employee directors. The Plan currently authorizes the issuance of up to five million shares of SCANA’s common stock, no more than one million of which may be granted in the form of restricted stock.

Compensation costs related to share-based payment transactions are required to be recognized in the financial statements. With limited exceptions, including those liability awards discussed below, compensation cost is measured based on the grant-date fair value of the instruments issued and is recognized over the period that an employee provides service in exchange for the award.

Liability Awards

The 2009-2011, 2010-2012, and 2011-2013 performance cycles provide for performance measurement and award determination on an annual basis, with payment of awards being deferred until after the end of the three-year performance cycle.  In each of the performance cycles, 20% of the performance award was granted in the form of restricted share units, which are liability awards payable in cash and are subject to forfeiture in the event of retirement or termination of employment prior to the end of the cycle, subject to exceptions for death, disability or change in control.  The remaining 80% of the award was made in performance shares. Each performance share has a value that is equal to, and changes with, the value of a share of SCANA common stock, and dividend equivalents are accrued on the performance shares. Payout of performance share awards was determined by SCANA’s performance against pre-determined measures of TSR as compared to a peer group of utilities (weighted 50%) and growth in “GAAP-adjusted net earnings per share from operations” (weighted 50%).  Payouts under the 2009-2011 performance cycle were earned for each year that performance goals were met during the three-year cycle.  Awards were designated as target shares of SCANA common stock and were paid in cash at SCANA’s discretion in February 2012.

Compensation cost of all these liability awards is recognized over their respective three-year performance periods based on the estimated fair value of the award, which is periodically updated based on expected ultimate cash payout, and is reduced by estimated forfeitures. Cash-settled liabilities related to similar prior programs were paid totaling $13.6 million in 2011, $12.1 million in 2010, and $9.1 million in 2009.

Fair value adjustments for performance awards resulted in compensation expense recognized in the statements of income totaling $6.1 million in 2011, $14.2 million in 2010 and $7.2 million in 2009. Fair value adjustments resulted in capitalized compensation costs of $0.9 million in 2011, $2.4 million in 2010 and $0.9 million in 2009.

Equity Awards

In the 2008-2010 performance cycle, 20% of the performance award was granted in the form of restricted (nonvested) shares rather than restricted share units.  A summary of activity related to these nonvested shares follows:

Nonvested Shares	Shares		Weighted Average Grant-Date Fair Value
Nonvested at January 1, 2009	74,588		$	37.33
Forfeited	(2,399	)	37.33
Nonvested at December 31, 2009	72,189		37.33
Vested	(72,189	)	37.33
Nonvested at December 31, 2010	—

Nonvested shares were granted at a price corresponding to the opening price of SCANA common stock on the date of the grant. As of December 31, 2010 all compensation cost related to nonvested share-based compensation arrangements under the Plan had been recognized.  The Company expensed compensation costs for nonvested shares of $0.7 million in each of 2010 and 2009 and recognized related tax benefits of $0.3 million in each of 2010 and 2009.  The Company capitalized compensation costs of $0.1 million in each of 2010 and 2009.

A summary of activity related to nonqualified stock options follows:

Stock Options	Number of Options		Weighted Average Exercise Price
Outstanding-January 1, 2009	106,464		$	27.44
Exercised	(2,875	)	27.50
Outstanding-December 31, 2009	103,589		27.44
Exercised	(53,246	)	27.40
Outstanding-December 31, 2010	50,343		27.49
Exercised	(40,267	)	27.48
Outstanding-December 31, 2011	10,076		27.52

No stock options were granted or forfeited and all options were fully vested during the periods presented.  The options expire ten years after their respective grant dates, and all options currently outstanding will expire in 2012.  At December 31, 2011, all outstanding options were currently exercisable at a price of $27.52, and had a weighted-average remaining contractual life of less than one year.

The exercise of stock options during the periods presented were satisfied using original issue shares.  For the years ended December 31, 2011, 2010 and 2009, cash realized upon the exercise of options and related tax benefits were not significant.

SOUTH CAROLINA ELECTRIC AND GAS COMPANY

SHARE-BASED COMPENSATION

9.SHARE-BASED COMPENSATION

SCE&G participates in the Plan which provides for grants of nonqualified and incentive stock options, stock appreciation rights, restricted stock, performance shares, performance units and restricted stock units to certain key employees and non-employee directors. The Plan currently authorizes the issuance of up to five million shares of SCANA’s common stock, no more than one million of which may be granted in the form of restricted stock.

Compensation costs related to share-based payment transactions are required to be recognized in the financial statements. With limited exceptions, including those liability awards discussed below, compensation cost is measured based on the grant-date fair value of the instruments issued and is recognized over the period that an employee provides service in exchange for the award.

Liability Awards

The 2009-2011, 2010-2012, and 2011-2013 performance cycles provide for performance measurement and award determination on an annual basis, with payment of awards being deferred until after the end of the three-year performance cycle.  In each of the performance cycles, 20% of the performance award was granted in the form of restricted share units, which are liability awards payable in cash and are subject to forfeiture in the event of retirement or termination of employment prior to the end of the cycle, subject to exceptions for death, disability or change in control.  The remaining 80% of the award was made in performance shares. Each performance share has a value that is equal to, and changes with, the value of a share of SCANA common stock, and dividend equivalents are accrued on the performance shares. Payout of performance share awards was determined by SCANA’s performance against pre-determined measures of TSR as compared to a peer group of utilities (weighted 50%) and growth in “GAAP-adjusted net earnings per share from operations” (weighted 50%).  Payouts under the 2009-2011 performance cycle were earned for each year that performance goals were met during the three-year cycle.  Awards were designated as target shares of SCANA common stock and were paid in cash at SCANA’s discretion in February 2012.

Compensation cost of all these liability awards is recognized over their respective three-year performance periods based on the estimated fair value of the award, which is periodically updated based on expected ultimate cash payout, and is reduced by estimated forfeitures. Cash-settled liabilities related to similar prior programs were paid totaling $2.5 million in 2011, $2.4 million in 2010 and $1.7 million in 2009.

Fair value adjustments for performance awards resulted in compensation expense recognized in the statements of income totaling $4.0 million in 2011, $9.0 million in 2010 and $4.5 million in 2009. Fair value adjustments resulted in capitalized compensation costs of $0.2 million in 2011, $2.2 million in 2010 and $0.9 million in 2009.

Equity Awards

In the 2008-2010 performance cycle, 20% of the performance award was granted in the form of restricted (nonvested) shares rather than restricted share units.  A summary of activity related to these nonvested shares follows:

Nonvested Shares	Shares		Weighted Average Grant-Date Fair Value
Nonvested at January 1, 2009	74,588		$	37.33
Forfeited	(2,399	)	37.33
Nonvested at December 31, 2009	72,189		37.33
Vested	(72,189		37.33
Nonvested at December 31, 2010	—

Nonvested shares were granted at a price corresponding to the opening price of SCANA common stock on the date of the grant. As of December 31, 2010 all compensation cost related to nonvested share-based compensation arrangements under the Plan had been recognized.  SCE&G expensed compensation costs for nonvested shares of $0.1 million in each of 2010 and 2009.  Tax benefits and capitalized compensation costs in 2010 and 2009 were not significant.

A summary of activity related to nonqualified stock options follows:

Stock Options	Number of Options		Weighted Average Exercise Price
Outstanding-January 1, 2009	106,464		$	27.44
Exercised	(2,875	)	27.50
Outstanding-December 31, 2009	103,589		27.44
Exercised	(53,246	)	27.40
Outstanding-December 31, 2010	50,343		27.49
Exercised	(40,267	)	27.48
Outstanding-December 31, 2011	10,076		27.52

No stock options were granted or forfeited and all options were fully vested during the periods presented.  The options expire ten years after their respective grant dates and all options currently outstanding will expire in 2012.  At December 31, 2011, all outstanding options were currently exercisable at a price of $27.52, and had a weighted-average remaining contractual life of less than one year.

The exercise of stock options during the periods presented were satisfied using original issue shares.  For the years ended December 31, 2011, 2010 and 2009, cash realized upon the exercise of options and related tax benefits were not significant.