Frontier Airlines 2004 Annual Report Download - page 56

The fair value of options granted were estimated on the date of the grant using the Black - Scholes option pricing model with the following assumptions: no dividend yield; risk - free interest
rates ranging from 4.84% to 6.70%; volatility of 50%; and an expected life of 6.5 years. The pro forma amounts are not representative of the effects on reported earnings for future years.
Net Income Available for Common Stockholders Per Share
is based on the weighted average number of shares outstanding during the period. On June 4, 2002, the board of
directors declared a 200,000:1 stock split. Common stock, additional paid - in capital, and all per share amounts, number of shares and options outstanding in the consolidated financial statements
have been adjusted for the stock split.
The following is a reconciliation of the weighted average common shares for the basic and diluted per share computations:
Employee stock options and warrants of 2,927,400, 2,640,000 and 1,620,000 are not included in the calculation of diluted net income available for common stockholder per share due
to their anti - dilutive impact for the years ended December 31, 2004, 2003 and 2002, respectively.
Segment Information—
The Company has one operating segment for the scheduled transportation of passengers and air freight under code - share agreements.
New Accounting Standards—
In December 2004, SFAS No. 123(R), Share - Based Payment , a replacement of SFAS No. 123, Accounting for Stock - Based Compensation , and
a rescission of APB Opinion No. 25, Accounting for Stock Issued to Employees , was issued. This statement requires compensation costs related to share - based payment transactions to be
recognized in the financial statements. With limited exceptions, the amount of compensation cost will be measured based upon the grant date fair value of the equity or liability issued. In addition,
liability awards will be remeasured each reporting period and compensation costs will be recognized over the period that an employee provides service in exchange for the award. This statement
is effective for public companies as of the first interim or annual reporting period beginning after June 15, 2005. The Company has not yet completed its assessment of the impact of this statement
on its financial condition and results of operations.
For the years ended December 31,
2004
2003
2002
Net income available for common stockholders, as reported
$
44,771
$
33,879
$
16,590
Add: Stock - based employee compensation expense determined under the intrinsic value based method, net of
tax
129
128
128
Deduct: Stock - based employee compensation expense determined under the fair value based method, net of
tax
(326
)
(338
)
(458
)
Pro forma net income available for common
stockholders
$
44,574
$
33,669
$
16,260
Pro forma net income available for common stockholders per share:
Basic
$
1.91
$
1.68
$
0.81
Diluted
$
1.86
$
1.62
$
0.78
For the Years Ended December 31,
2004
2003
2002
Weighted - average common shares outstanding for basic net income available for common stockholders per
share
23,349,613
20,000,000
20,000,000
Effect of dilutive employee stock options
557,150
841,415
832,750
Adjusted weighted - average common shares outstanding and assumed conversions for diluted net income
available for common stockholders per share
23,906,763
20,841,415
20,832,750
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