Airtran 2005 Annual Report Download - page 43

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The weighted-average fair value of options granted during 2004 and 2003, with option prices less than the market price on the date of grant was $9.52 and $4.35, respectively.
During 2005 and 2004 we granted stock awards to our officers and key employees pursuant to our 2002 Long-Term Incentive Plan. Stock awards are grants that entitle the holder to shares of our common stock as
the award vests. The market value of the stock awards at the date of the grant is recorded as unearned compensation, a component of stockholders’ equity and is being charged on a straight-line basis to expense
over the respective vesting period. During 2005 and 2004 we granted approximately 320,000 and 650,000 stock awards, respectively, with a weighted average fair value of $9.11 and $10.91, respectively. We recorded
deferred compensation related to such awards of $2.9 million and $7. 1 million during 2005 and 2004, respectively. Approximately $3.5 million and $2.5 million of deferred compensation were amortized as compensation
expense during 2005 and 2004, respectively.
: : 11. INCOME TAXES : :
The components of the provision (benefit) for income taxes are as follows (in thousands):
For Year Ended December 31,
2005 2004 2003
Current provision (benefit):
Federal $ — $ — $ —
State —150 255
Total current provision (benefit) —150 255
Deferred provision:
Federal 1,878 4,368 (12,853)
State (678) 3,250 (755)
Total deferred provision 1,200 7,618 (13,608)
Provision (benefit) for income taxes $1,200 $7,768 $(13,353)
A reconciliation of taxes computed at the statutory federal tax rate on income before income taxes to the provision (benefit) for income taxes is as follows (in thousands):
For Year Ended December 31,
2005 2004 2003
Tax computed at federal statutory rate $ 1,023 $ 7,008 $ 30,508
State income tax, net of federal tax benefit 107 820 2,672
Change in state effective tax rate (1,695) 48 —
Reduction state net operating loss carryforwards 910 2,532 —
Debt discount amortization —— 591
Utilization of preacquisition net operating loss carryforwards —— 2,252
Stock grant, nondeductible compensation expense 627 431 —
Other 228 220 331
Valuation allowance, including the effect of changes to
prior year deferred tax assets —(3,291) (49,707)
$ 1,200 $ 7,768 $(13,353)
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