Southwest Airlines 2006 Annual Report Download - page 58

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par value in the amount of $539 million in the Consol-
idated Balance Sheet as of December 31, 2005. The
Deferred tax asset represents the portion of the
cumulative expense related to stock options expected to
result in a future tax deduction. For further information,
see Note 13.
The following tables summarize the changes within Stockholders’ Equity as of December 31, 2003, 2004, and 2005
from the change in the Company’s method of accounting for airframe maintenance and the adoption of SFAS 123R (in
millions):
As of December 31, 2003 As Originally Reported
Effect of
Maintenance
Change
Effect of
SFAS 123R
Change As Adjusted
Common stock ................... $ 789 $ — $ — $ 789
Capital in excess of par value .......... 258 — 354 612
Retained earnings .................. 3,883 (112) (265) 3,506
Accumulated other comprehensive income
(loss) ........................ 122 — — 122
Treasury stock .................... — — — —
Total stockholders’ equity .......... $5,052 $(112) $ 89 $5,029
As of December 31, 2004 As Originally Reported
Effect of
Maintenance
Change
Effect of
SFAS 123R
Change As Adjusted
Common stock ................... $ 790 $ — $ — $ 790
Capital in excess of par value .......... 299 — 478 777
Retained earnings .................. 4,089 (121) (354) 3,614
Accumulated other comprehensive income
(loss) ........................ 417 — — 417
Treasury stock .................... (71) — — (71)
Total stockholders’ equity .......... $5,524 $(121) $ 124 $5,527
As of December 31, 2005 As Originally Reported
Effect of
Maintenance
Change
Effect of
SFAS 123R
Change As Adjusted
Common stock ................... $ 802 $ — $ — $ 802
Capital in excess of par value .......... 424 — 539 963
Retained earnings .................. 4,557 (130) (409) 4,018
Accumulated other comprehensive income
(loss) ........................ 892 — — 892
Treasury stock .................... — — — —
Total stockholders’ equity .......... $6,675 $(130) $ 130 $6,675
Postretirement Benefits
In September 2006, the FASB issued statement
No. 158, “Employers Accounting for Defined Benefit
Pensions and Other Postretirement Plans (an amend-
ment of FASB Statements No. 87, 88, 106, and 123R,”
(SFAS 158). On December 31, 2006, the Company
adopted the recognition and disclosure provisions of
Statement 158. Statement 158 requires plan sponsors
of defined benefit pension and other postretirement ben-
efit plans (collectively, “postretirement benefit plans”)
to recognize the funded status of their postretirement
benefit plans in the statement of financial position, mea-
sure the fair value of plan assets and benefit obligations as
of the date of the fiscal year-end statement of financial
position, and provide additional disclosures. The effect of
adopting Statement 158 on the Company’s financial
39
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)