AutoNation 2007 Annual Report Download - page 68

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Table of Contents


As of December 31, 2007, there was $31.4 million of total unrecognized compensation cost related to non-vested stock options, which is
expected to be recognized over a period of four years. The total fair value of shares vested during 2007 was $14.2 million.
Prior to the adoption of SFAS No. 123R, we reported all tax benefits resulting from the exercise of common stock options as operating cash
flows in the Consolidated Statements of Cash Flows. In accordance with SFAS No. 123R, tax benefits from the exercise of stock options of
$17.7 million in 2007 and $18.0 million in 2006 are reported as financing cash flows in 2007.
 
The components of the provision for income taxes from continuing operations for the years ended December 31 are as follows:
  
Current:
Federal $142.8 $165.4 $ 178.3
State 23.2 26.9 31.5
Federal and state deferred 10.6 19.7 30.4
Change in valuation allowance, net — (2.3) 2.1
Adjustments and settlements, net (5.3) 0.7 (16.6)
Provision for income taxes $171.3 $ 210.4 $225.7
A reconciliation of the provision for income taxes calculated using the statutory federal income tax rate to our provision for income taxes
from continuing operations for the years ended December 31 is as follows:
  
Provision for income taxes at statutory rate of 35% $ 160.7 35.0 $189.4 35.0 $ 216.4 35.0
Non-deductible expenses 3.6 0.8 3.2 0.6 2.3 0.4
State income taxes, net of federal benefit 12.3 2.6 19.4 3.6 21.5 3.5
176.6 38.4 212.0 39.2 240.2 38.9
Change in valuation allowance, net — — (2.3) (0.4) 2.1 0.3
Adjustments and settlements, net (5.3) (1.1) 0.7 0.1 (16.6) (2.7)
Provision for income taxes $ 171.3 37.3 $ 210.4 38.9 $225.7 36.5
66