WeightWatchers 2004 Annual Report Download - page 82

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WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
9. Earnings Per Share (Continued)
The following table sets forth the computation of basic and diluted EPS.
January 1, January 3, December 28,
2005 2004 2002
Numerator:
Income before cumulative effect of accounting change ........ $195,025 $143,941 $143,694
Preferred stock dividends ............................. — — 254
Income available to common shareholders before cumulative
effect of accounting change .......................... 195,025 143,941 143,440
Cumulative effect of accounting change, net of tax ........... (11,941) — —
Net income available to common shareholders .............. $183,084 $143,941 $143,440
Denominator:
Weighted average common shares outstanding .............. 104,704 106,676 105,959
Effect of dilutive stock options ......................... 2,281 3,048 3,704
Weighted average diluted common shares outstanding ........ 106,985 109,724 109,663
Basic EPS:
Income available to common shareholders before cumulative
effect of accounting change .......................... $ 1.86 $ 1.35 $ 1.35
Cumulative effect of accounting change, net of tax ........... (0.11) — —
Net income available to common shareholders .............. $ 1.75 $ 1.35 $ 1.35
Diluted EPS:
Income available to common shareholders before cumulative
effect of accounting change .......................... $ 1.82 $ 1.31 $ 1.31
Cumulative effect of accounting change, net of tax ........... (0.11) — —
Net income available to common shareholders .............. $ 1.71 $ 1.31 $ 1.31
For the fiscal 2004, 2003 and 2002 computations 410, 391 and 10 stock options, respectively, were
excluded from the calculation of weighted average shares for diluted EPS because their effects were
anti-dilutive.
10. Stock Plans
WWI Incentive Compensation Plans:
On May 12, 2004 and December 16, 1999, respectively, the WWI stockholders approved the 2004
Stock Incentive Plan (the ‘‘2004 Plan’’) and the 1999 Stock Purchase and Option Plan (the ‘‘1999
Plan’’) of WWI. These plans are designed to promote the long-term financial interests and growth of
WWI by attracting and retaining management with the ability to contribute to the success of the
business. The Board of Directors or a committee thereof administers the plans.
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