Redbox 2005 Annual Report Download - page 59

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COINSTAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
YEARS ENDED DECEMBER 31, 2005, 2004, AND 2003
under this plan is 600,000. Eligible employees may participate through payroll deductions in amounts related to
their basic compensation. At the end of each six-month offering period, shares are purchased by the participants
at 85% of the lower of the fair market value at the beginning of the offering period or the end of a purchase
period. During 2005, 2004 and 2003 stock purchases totaling $989,000, $770,000 and $960,000, respectively,
were made as a result of payroll deductions from employees. Actual shares purchased by participating employees
in 2005, 2004 and 2003 totaled 82,454, 66,126 and 70,728 at an average price of $11.99, $11.65 and $13.58,
respectively. As of December 31, 2005, we no longer have an Employee Stock Purchase Plan, as the plan period
ended July 31, 2005 and was not renewed.
NOTE 12: INCOME TAXES
The components of income (loss) before income taxes were as follows:
December 31,
2005 2004 2003
(in thousands)
U.S. operations .......................................... $36,903 $27,480 $28,087
Foreign operations ....................................... (404) 3,057 3,041
Total income before income taxes ....................... $36,499 $30,537 $31,128
The components of income tax expense (benefit) were as follows:
December 31,
2005 2004 2003
(in thousands)
Current:
U.S. Federal ........................................ $ 506 $ 382 $ 600
State and local ...................................... 37 170 400
Foreign ............................................ (631) 1,020 15
Total current .................................... (88) 1,572 1,015
Deferred:
U.S. Federal ........................................ 11,899 7,817 9,883
State and local ...................................... 2,059 1,360 675
Foreign ............................................ 357 (580) —
Total deferred ................................... 14,315 8,597 10,558
Total tax expense ........................................ $14,227 $10,169 $11,573
The income tax expense differs from the amount that would result by applying the U.S. statutory rate to
income before income taxes. A reconciliation of the difference follows:
December 31,
2005 2004 2003
U.S. federal tax expense at the statutory rate ................ 35.0% 35.0% 35.0%
State income taxes, net of federal benefit ................... 3.7% 3.4% 3.6%
Non-deductible foreign expenses ......................... — — 0.5%
Other ............................................... 0.3% 0.2% 0.9%
Change in valuation allowance for deferred tax asset ......... — (1.9)% (1.8)%
Recognition of net deferred tax assets at an adjusted rate ...... — (3.4)% (1.0)%
39.0% 33.3% 37.2%
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