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CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
66
Position FAS 123(R)-3, “Transition Election Related to Accounting for Tax Effects of Share-Based
Awards” (“FSP FAS 123 (R)-3”), the “short-cut method” to determine its pool of windfall tax benefits as of
January 1, 2006. The following table illustrates the effect on net income and earnings per share had the
Company applied SFAS No. 123R for the year ended December 31, 2005 (in thousands, except per share
amounts).
2005
Income from continuing operations – as reported ........................................... $ 44,821
Deduct: Stock-based compensation expense (a) .............................................. 65
Income from continuing operations – pro forma............................................. $ 44,756
Net income – as reported................................................................................. $ 45,018
Deduct: Stock-based employee compensation expense (a).............................. 65
Net income – pro forma................................................................................... $ 44,953
Net income per share –
Basic:
Income from continuing operations – as reported ..................................... $ 1.53
Income from continuing operations – pro forma ....................................... $ 1.53
Net income – as reported........................................................................... $ 1.54
Net income – pro forma............................................................................. $ 1.54
Diluted:
Income from continuing operations – as reported ..................................... $ 1.48
Income from continuing operations – pro forma ....................................... $ 1.48
Net income – as reported........................................................................... $ 1.49
Net income – pro forma............................................................................. $ 1.48
(a) Determined under fair value based method for all awards, net of related tax effects. “All
awards” refers to awards granted, modified, or settled in fiscal periods beginning after
December 15, 1994, that is, options for which the fair value was required to be measured under
SFAS 123.
Net Income Per Share x Basic net income per share is computed by dividing net income by the weighted
average number of common shares outstanding during the year. Diluted net income per share is calculated
by giving effect to the potential dilution that could occur if securities or other contracts to issue common
shares were exercised and converted into common shares during the year. Units issued under the
Company’s restricted stock awards are included in diluted shares upon the granting of the awards even
though the vesting of shares will occur over time.