packaging corporation of america notes to consolidated financial statements ( continued ) december 31 , 2006 4 . stock-based compensation ( continued ) same period was $ 1988000 lower , than if it had continued to account for share-based compensation under apb no . 25 . basic and diluted earnings per share for the year ended december 31 , 2006 were both $ 0.02 lower than if the company had continued to account for share-based compensation under apb no . 25 . prior to the adoption of sfas no . 123 ( r ) , the company presented all tax benefits of deductions resulting from share-based payment arrangements as operating cash flows in the statements of cash flows . sfas no . 123 ( r ) requires the cash flows resulting from the tax benefits from tax deductions in excess of the compensation cost recognized for those share awards ( excess tax benefits ) to be classified as financing cash flows . the excess tax benefit of $ 2885000 classified as a financing cash inflow for the year ended december 31 , 2006 would have been classified as an operating cash inflow if the company had not adopted sfas no . 123 ( r ) . as a result of adopting sfas no 123 ( r ) , unearned compensation previously recorded in stockholders 2019 equity was reclassified against additional paid in capital on january 1 , 2006 . all stock-based compensation expense not recognized as of december 31 , 2005 and compensation expense related to post 2005 grants of stock options and amortization of restricted stock will be recorded directly to additional paid in capital . compensation expense for stock options and restricted stock recognized in the statements of income for the year ended december 31 , 2006 , 2005 and 2004 was as follows : year ended december 31 , ( in thousands ) 2006 2005 2004 .
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Year Ended December 31,
<i>(In thousands)</i> 2006 2005 2004
Stock options $(3,273) $— $—
Restricted stock (2,789) (1,677) (663)
Impact on income before income taxes (6,062) (1,677) (663)
Income tax benefit 2,382 661 260
Impact on net income $(3,680) $(1,016) $(403)
( in thousands ) year ended december 31 , 2006 year ended december 31 , 2005 year ended december 31 , 2004
stock options $ -3273 ( 3273 ) $ 2014 $ 2014
restricted stock -2789 ( 2789 ) -1677 ( 1677 ) -663 ( 663 )
impact on income before income taxes -6062 ( 6062 ) -1677 ( 1677 ) -663 ( 663 )
income tax benefit 2382 661 260
impact on net income $ -3680 ( 3680 ) $ -1016 ( 1016 ) $ -403 ( 403 )