Nutrisystem 2008 Annual Report Download - page 59

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11. INCOME TAXES
The provision for income taxes from continuing operations consist of the following:
Year Ended December 31,
2008 2007 2006
Current:
Federal ....................................................... $30,946 $56,815 $42,174
State ......................................................... 2,489 5,838 5,565
Foreign ....................................................... (356) 105 —
33,079 62,758 47,739
Deferred:
Federal ....................................................... (3,230) (1,976) 2,835
State ......................................................... (26) 89 520
Valuation allowance ............................................. 3,749 — (125)
493 (1,887) 3,230
$33,572 $60,871 $50,969
The income tax benefit attributable to discontinued operation consists of the following:
Year Ended December 31,
2008 2007 2006
Discontinued operation .............................................. $(102) $(461) $(326)
A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows:
Year Ended December 31,
2008 2007 2006
Statutory federal income tax rate ....................................... 35.0% 35.0% 35.0%
State and foreign income taxes, net of federal benefit ....................... 2.2 2.2 3.0
Tax exempt income ................................................. (0.2) (0.6) (0.7)
Other ............................................................. 0.3 0.1 0.1
Valuation allowance ................................................. 4.7 — (0.1)
42.0% 36.7% 37.3%
The Company recognized a tax benefit of $2,581, $7,317 and $17,939 in 2008, 2007 and 2006, respectively, from
the exercise of certain stock options and restricted stock and recorded these amounts as increases to additional
paid-in capital in the accompanying consolidated statements of stockholders’ equity.
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