Frontier Airlines 2007 Annual Report Download - page 74

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The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value
recognition provisions of SFAS 123R to stock-based employee compensation for the year ended December 2005.
For the year ended
December 31,
2005
Net income, as reported $ 60,654
Add: Stock-based employee compensation expense dteremined under the intrinsic value based method, net of
tax of $50 75
Deduct: Stock-based employee compensation expense determined under the fair value based method, net of
tax of $997 (1,496)
Pro forma net income $ 59,233
Pro forma net income per share:
Basic $ 1.65
Diluted $ 1.62
Net Income per Common Share is based on the weighted average number of shares outstanding during the period.
The following is a reconciliation of the weighted average common shares for the basic and diluted per share computations:
For the Years Ended December 31,
2007 2006 2005
Weighted-average common shares outstanding for basic net
income per common share 40,350,256 42,149,668 35,854,249
Effect of dilutive employee stock options and warrants 695,389 1,466,278 694,091
Adjusted weighted-average common shares outstanding and
assumed conversions for diluted net income per common
share
41,045,644 43,615,946 36,548,340
Employee stock options of 1,366,000 were not included in the calculation of diluted net income per common share due to
their anti-dilutive impact for the year ended December 31, 2007. For the years ended December 31, 2006 and 2005, all of the
employee stock options and warrants were included in the calculation of the dilutive net income per common share.
Segment Information—The Company has one reportable operating segment for the scheduled transportation of passengers
and air freight under code-share agreements. The Company’s charter service, slot leasing and aircraft leasing revenues are not
considered material.
New Accounting Standards—In September 2006, the Financial Accounting Standards Board "FASB" issued SFAS No. 157,
Fair Value Measurements (SFAS 157), which defines fair value, establishes a framework for measuring fair value and requires
expanded disclosures about fair value measurements. This statement is effective for fiscal years beginning after November 15, 2007.
The Company will apply the provisions of SFAS 157, as necessary. The adoption did not have a material effect on our statement of
financial position or results of operations.
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities
(SFAS 159). SFAS 159 is effective for fiscal years beginning after November 15, 2007. SFAS 159 allows the Company to choose, at
specified election dates, to measure eligible financial assets and financial liabilities at fair value that are not otherwise required to be
measured at fair value. If a company elects the fair value option for an eligible item, changes to that item's fair value in subsequent
reporting periods must be recognized in current earnings. SFAS 159 also establishes presentation and disclosure requirements
designed to draw comparison between entities that elect different measurement attributes for similar assets and liabilities. The
Company did not elect to fair value any of its financial assets or financial liabilities, therefore, the adoption of SFAS 159 did not have
a material effect on the Company’s consolidated financial statements.
In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations (SFAS 141R). SFAS 141R
establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets
acquired, the liabilities assumed, any non-controlling interest in the acquiree and the goodwill acquired. SFAS 141R also establishes
disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. SFAS 141R is
effective for fiscal years beginning after December 15, 2008. The Company has not yet completed its assessment of the impact of this
statement on its consolidated financial statements.
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Source: REPUBLIC AIRWAYS HOLDINGS INC, 10-K, February 21, 2008 Powered by Morningstar® Document Research℠