JetBlue Airlines 2015 Annual Report Download - page 59

JETBLUE AIRWAYS CORPORATION-2015Annual Report 55
PART II
ITEM 8Financial Statements and Supplementary Data
The following is a summary of stock option activity for the year ended December 31, 2015 (in millions except per share data):
Shares
Weighted Average
Grant Date Fair Value
Outstanding at beginning of year 6.0 $ 12.38
Exercised (4.7) 12.63
Forfeited — —
Expired — —
OUTSTANDING AT END OF YEAR 1.3 $ 11.40
Vested at end of year 1.3 $ 11.40
The total intrinsic value, determined as of the date of exercise, of options
exercised during the years ended December 31, 2015, 2014 and 2013
was $34 million, $5 million and less than $1 million, respectively. Total
cash received from option exercises during the years ended December
31, 2015, 2014 and 2013 was $59 million, $22 million and less than $1
million, respectively. We have not granted any stock options since 2008
and those previously granted became fully expensed in 2012. Following
shareholder approval of the 2011 Plan, we stopped granting new equity
awards under the 2002 Plan
Crewmember Stock Purchase Plan
In May 2011, our shareholders approved the 2011 Crewmember Stock
Purchase Plan, or the CSPP. At inception, the CSPP had 8.0 million shares
of our common stock reserved for issuance. The CSPP, by its terms, will
terminate no later than the last business day of April 2021.
At our Annual Shareholders Meeting held on May 21, 2015, our shareholders
approved amendments to the CSPP increasing the number of shares of
Company common stock that remain available for issuance under the
plan by 15 million.
The CSPP has a series of six month offering periods, with a new offering
period beginning on the first business day of May and November each
year. Crewmembers can only join an offering period on the start date.
Crewmembers may contribute up to 10% of their pay towards the purchase
of common stock via payroll deductions. Purchase dates occur on the
last business day of April and October each year.
Until April 2013, our CSPP was considered non-compensatory as the
purchase price discount was 5% based upon the stock price on the date
of purchase. The plan was amended and restated in May 2013 with the
CSPP purchase price discount increasing to 15% based upon the stock
price on the date of purchase. In accordance with the Compensation-Stock
Compensation topic of the Codification, the CSPP no longer meets the
non-compensatory definition as the terms of the plan are more favorable
than those to all holders of the common stock. For all offering periods
starting after May 1, 2013, the compensation cost relating to the discount
is recognized over the offering period. The total expense recognized
relating to the CSPP for the years ended December 31, 2015, 2014 and
2013 was approximately $5 million, $3 million and $2 million, respectively.
Under this plan, crewmembers purchased 1.3 million, 2.3 million, and 1.6
million new shares for the years ended December 31, 2015, 2014 and
2013, respectively, at weighted average prices of $19.25, $8.04, and
$6.20 per share, respectively.
Should we be acquired by merger or sale of substantially all of our assets or
sale of more than 50% of our outstanding voting securities, all outstanding
purchase rights will automatically be exercised immediately prior to the
effective date of the acquisition at a price equal to 85% of the fair market
value per share immediately prior to the acquisition.
Taxation
The Compensation-Stock Compensation topic of the Codification requires
deferred taxes be recognized on temporary differences that arise with
respect to stock-based compensation attributable to nonqualified stock
options and awards. However, no tax benefit is recognized for stock-
based compensation attributable to incentive stock options, or ISO, or
CSPP shares until there is a disqualifying disposition, if any, for income
tax purposes. A portion of our historical stock-based compensation was
attributable to ISO and CSPP shares; therefore, our effective tax rate was
subject to fluctuation.
LiveTV sale
In June 2014, we sold our subsidiary LiveTV and accelerated the vesting for
all RSUs outstanding for LiveTV employees. The total expense recognized
relating to this acceleration was less than $1 million.
NOTE 8 Income Taxes
The provision for income taxes consisted of the following for the years ended December 31 (in millions):
2015 2014 2013
Deferred:
Federal $ 351 $ 192 $ 95
State 26 20 12
Deferred income tax expense 377 212 107
Current:
Federal 20 2 —
State and other 23 8 4
Current income tax expense 43 10 4
TOTAL INCOME TAX EXPENSE $ 420 $ 222 $ 111