Thrifty Car Rental 2008 Annual Report Download - page 61

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3. EARNINGS PER SHARE
The computation of weighted average common and common equivalent shares used in the
calculation of basic and diluted EPS is shown below:
2008 2007 2006
(In Thousands, Except Share and Per Share Data)
Net income (loss) (340,422)$ 1,215$ 51,692$
Basic EPS:
Weighted average common shares 21,375,589 22,580,298 24,195,933
Basic EPS (15.93)$ 0.05$ 2.14$
Diluted EPS:
Weighted average common shares 21,375,589 22,580,298 24,195,933
Shares contingently issuable:
Stock options - 168,075 264,098
Performance awards - 283,161 419,313
Employee compensation shares deferred - 414,518 270,085
Director compensation shares deferred - 179,560 169,370
Shares applicable to diluted 21,375,589 23,625,612 25,318,799
Diluted EPS (15.93)$ 0.05$ 2.04$
Year Ended December 31,
At December 31, 2008, 1,049,778 outstanding common stock equivalents that were anti-dilutive
were excluded from the computation of diluted EPS. At December 31, 2007 and 2006, all options to
purchase shares of common stock were included in the computation of diluted EPS because no
exercise price was greater than the average market price of the common shares.
4. ACQUISITIONS
During 2008, the Company did not acquire any new locations from franchisees; however, it
distributed $2.1 million previously held in escrow to former franchisees in final settlement of
acquisitions made in previous periods. During 2007, the Company added seven locations by
acquiring its former franchisee in Seattle, Washington and Portland, Oregon and also acquired
certain assets and assumed certain liabilities relating to 29 locations from former franchisees. During
2006, the Company acquired certain assets and assumed certain liabilities relating to 35 locations
from former franchisees. In 2007 and 2006, total cash paid, net of cash acquired, for these
acquisitions were $30.3 million and $34.5 million, respectively.
The Company adopted the provisions of EITF No. 04-1 in 2005 that impacted the way in which the
Company accounts for certain business combination transactions through establishing identifiable
intangibles, other than goodwill, such as reacquired franchise rights through the Company’s
acquisitions of franchisee operations. The Company did not have any settlement gain or loss related
to these preexisting relationships for the years ended December 31, 2008, 2007 and 2006. Based
on the Company’s reacquired franchise right impairment assessment at March 31, 2008,
management concluded that reacquired franchise rights were impaired, and the Company recorded
a $69.0 million non-cash charge (pre-tax) related to the impairment of the entire reacquired
franchise rights ($42.2 million after-tax) (Note 8).
The Company did not recognize any goodwill related to acquisition transactions during 2008 or
2006; however, in 2007 the Company recognized $0.1 million in goodwill related to acquisition
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