WeightWatchers 2006 Annual Report Download - page 87

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WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
10. Income Taxes
Prior to December 16, 2005 WWI and WeightWatchers.com were separate tax paying entities. Effective
with the completion of the Redemption (see Note 3) WW.com has been included in WWI’s consolidated federal
tax return. The following tables summarize the consolidated provision for U.S. federal, state and foreign taxes on
income:
December 30,
2006
December 31,
2005
January 1,
2005
Current:
U.S. federal ............................................. $ 63,319 $ 61,871 $41,043
State ................................................... 12,395 8,811 5,075
Foreign ................................................. 17,916 23,047 26,381
$ 93,630 $ 93,729 $72,499
Deferred:
U.S. federal ............................................. $ 24,389 $ 10,380 $20,705
State ................................................... 2,787 1,642 1,900
Foreign ................................................. 11 (838) (582)
$ 27,187 $ 11,184 $22,023
Total tax provision ........................................ $120,817 $104,913 $94,522
The components of the Company’s consolidated income before income taxes and the cumulative effect of
accounting change consist of the following:
December 30,
2006
December 31,
2005
January 1,
2005
Domestic ........................................ $260,130 $212,085 $208,553
Foreign ......................................... 70,512 67,230 80,994
$330,642 $279,315 $289,547
The difference between the U.S. federal statutory tax rate and the Company’s consolidated effective tax rate
are as follows:
December 30,
2006
December 31,
2005
January 1,
2005
U.S. federal statutory rate ........................... 35.0% 35.0% 35.0%
Federal and state tax reserve reversal .................. (3.0) (0.2) (2.5)
States income taxes (net of federal benefit) ............. 3.4 2.8 2.7
Increase (reduction) in valuation allowance ............. 1.2 (0.3) (3.5)
Other ........................................... (0.1) 0.3 0.9
Effective tax rate .............................. 36.5% 37.6% 32.6%
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