WeightWatchers 2005 Annual Report Download - page 103

Download and view the complete annual report

Please find page 103 of the 2005 WeightWatchers annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 128

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
The components of the Company’s consolidated income before income taxes and the cumulative
effect of accounting change consist of the following:
December 31, January 1, January 3,
2005 2005 2004
Domestic .................................... $212,085 $208,553 $170,196
Foreign ..................................... 67,230 80,994 62,033
$279,315 $289,547 $232,229
The difference between the U.S. federal statutory tax rate and the Company’s consolidated
effective tax rate are as follows:
December 31, January 1, January 3,
2005 2005 2004
U.S. federal statutory rate ........................ 35.0% 35.0% 35.0%
Federal and state tax reserve reversal ................ (0.2) (2.5) (0.2)
States income taxes (net of federal benefit) ........... 2.8 2.7 4.0
Reduction in valuation allowance ................... (0.3) (3.5) —
Other ....................................... 0.3 0.9 (0.8)
Effective tax rate ............................. 37.6% 32.6% 38.0%
The deferred tax assets (liabilities) recorded on the Company’s consolidated balance sheet are as
follows:
December 31, January 1,
2005 2005
Amortization ................................... $54,622 $75,449
Provision for estimated expenses ..................... 5,741 1,872
Operating loss carryforwards ........................ 11,385 5,811
Salaries and Wages .............................. 3,317 —
Other ........................................ 5,034 2,194
Less: valuation allowance .......................... (3,420) (1,593)
Total deferred tax assets ........................... $76,679 $83,733
Depreciation/amortization ......................... $ (6,168) $ (2,109)
Prepaid expenses ................................ (820) (1,061)
Deferred income ................................ (198) (85)
Other ........................................ (3,974) (3,756)
Total deferred tax liabilities ........................ $(11,160) $(7,011)
Net deferred tax assets ............................ $65,519 $76,722
As of December 31, 2005 and January 1, 2005, various foreign subsidiaries of WWI had net
operating loss carry forwards of approximately $20,572 and $7,956, respectively, most of which can be
carried forward indefinitely.
F-27