WeightWatchers 2005 Annual Report Download - page 99

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WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
8. Earnings Per Share
Basic earnings per share (‘‘EPS’’) computations are calculated utilizing the weighed average
number of common shares outstanding during the periods presented. Diluted EPS is calculated utilizing
the weighted average number of common shares outstanding adjusted for the effect of dilutive common
stock equivalents.
The following table sets forth the computation of basic and diluted EPS for the fiscal years ended:
December 31, January 1, January 3,
2005 2005 2004
Numerator:
Income available to common shareholders before cumulative
effect of accounting change .......................... $174,402 $195,025 $143,941
Cumulative effect of accounting change, net of tax ........... — (11,941) —
Net income available to common shareholders .............. $174,402 $183,084 $143,941
Denominator:
Weighted average common shares outstanding .............. 102,747 104,704 106,676
Effect of dilutive stock options ......................... 1,456 2,281 3,048
Weighted average diluted common shares outstanding ........ 104,203 106,985 109,724
Basic EPS:
Income available to common shareholders before cumulative
effect of accounting change .......................... $ 1.70 $ 1.86 $ 1.35
Cumulative effect of accounting change, net of tax ........... — (0.11) —
Net income available to common shareholders .............. $ 1.70 $ 1.75 $ 1.35
Diluted EPS:
Income available to common shareholders before cumulative
effect of accounting change .......................... $ 1.67 $ 1.82 $ 1.31
Cumulative effect of accounting change, net of tax ........... — (0.11) —
Net income available to common shareholders .............. $ 1.67 $ 1.71 $ 1.31
For the fiscal 2005, 2004 and 2003 computations 281, 410 and 391 stock options, respectively, were
excluded from the calculation of weighted average shares for diluted EPS because their effects were
anti-dilutive.
F-23