Nutrisystem 2009 Annual Report Download - page 61

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of $121,777. The cost of the purchased shares was reflected in the accompanying statement of stockholders’
equity as a reduction of common stock (equal to par value of purchased shares), additional paid-in capital
(“APIC”) (equal to balance in APIC) with the excess recorded as a reduction in retained earnings. As of
December 31, 2009, the Company was authorized to purchase an additional $113,831 under the existing
repurchase programs.
Preferred Stock
The Company has authorized 5,000,000 shares of preferred stock issuable in series upon resolution of the Board
of Directors. Unless otherwise required by law, the Board of Directors can, without stockholder approval, issue
preferred stock in the future with voting and conversion rights that could adversely affect the voting power of the
common stock. The issuance of preferred stock may have the effect of delaying, averting or preventing a change
in control of the Company.
10. INCOME TAXES
The provision for income taxes from continuing operations consists of the following:
Year Ended December 31,
2009 2008 2007
Current:
Federal ....................................................... $12,599 $30,946 $56,815
State ......................................................... 458 2,489 5,838
Foreign ....................................................... 292 (356) 105
13,349 33,079 62,758
Deferred:
Federal ....................................................... 607 (3,230) (1,976)
State ......................................................... 611 (26) 89
Valuation allowance ............................................. (3,749) 3,749 —
(2,531) 493 (1,887)
$10,818 $33,572 $60,871
The income tax benefit attributable to discontinued operation consists of the following:
Year Ended December 31,
2009 2008 2007
Discontinued operation .............................................. $(144) $(102) $(461)
A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows:
Year Ended December 31,
2009 2008 2007
Statutory federal income tax rate .......................................... 35.0% 35.0% 35.0%
State and foreign income taxes, net of federal benefit .......................... 1.4 2.2 2.2
Tax exempt income .................................................... — (0.2) (0.6)
Other ................................................................ (0.2) 0.3 0.1
Valuation allowance .................................................... (9.1) 4.7 —
27.1% 42.0% 36.7%
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