Thrifty Car Rental 2011 Annual Report Download - page 64

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Earnings Per Share – Basic earnings per share (“EPS”) is computed by dividing net income by
the weighted average number of common shares outstanding during the period. Diluted EPS is
based on the combined weighted average number of common shares and dilutive potential
common shares outstanding which include, where appropriate, the assumed exercise of
options. In computing diluted EPS, the Company utilizes the treasury stock method.
Stock-Based Compensation – The Company uses the fair value-based method of accounting
for stock-based compensation. All performance share, restricted stock and stock option
awards are accounted for using the fair value-based method for the 2011, 2010 and 2009
periods. The fair value of these common shares is determined based on the closing market
price of the Company’s common shares at the specific date on which the shares were granted.
In 2011 and 2010, the Company did not issue any stock options. In 2009, the Company issued
approximately 1,120,000 stock options at a weighted average grant-date fair value per share of
$4.44.
New Accounting Standards –
In January 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting
Standards Update (“ASU”) ASU 2010-06, “Fair Value Measurements and Disclosures (ASC
Topic 820): Improving Disclosures about Fair Value Measurements” which amends Accounting
Standards Codification (“ASC”) Subtopic 820, “Fair Value Measurements and Disclosures”
(“ASU 2010-06”) to add new requirements for disclosures about transfers into and out of
Levels 1 and 2 and separate disclosures about purchases, sales, issuances, and settlements
relating to Level 3 measurements. ASU 2010-06 also clarifies existing fair value disclosures
about the level of disaggregation and about inputs and valuation techniques used to measure
fair value. The Company adopted the provisions of ASU 2010-06 regarding disclosures about
transfers into and out of Levels 1 and 2 as required on January 1, 2010 and adopted the
remaining provisions of ASU 2010-06 regarding separate disclosures about purchases, sales,
issuances, and settlements relating to Level 3 measurements as required on January 1, 2011.
The adoption of this latest provision had no impact on the Company’s financial statements as
the Company has no Level 3 measurements.
In May 2011, the FASB issued ASU 2011-04, “Fair Value Measurement (Topic 820):
Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in
U.S. GAAP and IFRS” (“ASU 2011-04”), which amends U.S. GAAP to converge U.S. GAAP
and International Financial Reporting Standards (“IFRS”) by changing the wording used to
describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing
information about fair value measurements. ASU 2011-04 is effective for interim and annual
periods beginning after December 15, 2011; early adoption is not permitted. The Company
adopted ASU 2011-04 on January 1, 2012, as required, but does not believe this guidance will
have a significant impact on the Company’s consolidated financial statements.
In June 2011, the FASB issued ASU 2011-05, “Comprehensive Income - Presentation of
Comprehensive Income” (“ASU 2011-05”). ASU 2011-05 eliminates the option to present the
components of other comprehensive income as part of the statement of stockholders’ equity. It
requires an entity to present the total of comprehensive income, the components of net
income, and the components of other comprehensive income either in a single continuous
statement of comprehensive income or in two separate but consecutive statements. In
December 2011, the FASB issued ASU 2011-12, “Comprehensive Income - Deferral of the
Effective Date for Amendments to the Presentation of Reclassifications of Items Out of
Accumulated Other Comprehensive Income in ASU 2011-05,” to defer the effective date of the
specific requirement to present items that are reclassified out of accumulated other
comprehensive income to net income alongside their respective components of net income
and other comprehensive income. All other provisions of this update, which are to be applied
retrospectively, are effective for fiscal years, and interim periods within those years, beginning