WeightWatchers 2007 Annual Report Download - page 81

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 29,
2007
December 30,
2006
December 31,
2005
Numerator:
Net income ........................................... $201,180 $209,825 $174,402
Denominator:
Weighted average shares of common stock outstanding ........ 80,583 98,719 102,747
Effect of dilutive common stock equivalents ................. 524 707 1,456
Weighted average diluted common shares outstanding ......... 81,107 99,426 104,203
EPS:
Basic ................................................ $ 2.50 $ 2.13 $ 1.70
Diluted ............................................... $ 2.48 $ 2.11 $ 1.67
The number of anti-dilutive common stock equivalents excluded from the calculation of weighted average
shares for diluted EPS was 1,095, 1,208 and 281 for the years ended December 29, 2007, December 30, 2006,
and December 31, 2005, respectively.
9. Stock Plans
WWI Incentive Compensation Plans:
On May 12, 2004 and December 16, 1999, respectively, the WWI shareholders approved the 2004 Stock
Incentive Plan (the “2004 Plan”) and the 1999 Stock Purchase and Option Plan (the “1999 Plan”, and together
with the 2004 Plan, the “Stock Plans”). These plans are designed to promote the long-term financial interests and
growth of the Company by attracting, motivating and retaining management with the ability to contribute to the
success of the business and aligning compensation for our management over a multi-year period directly with the
interests of the shareholders of WWI. The Board of Directors or a committee thereof administers the plans.
Under the 2004 Plan, grants may take the following forms at the Board or its committee’s sole discretion:
non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock units (“RSUs”)
and other share-based awards. As of its effective date, the maximum number of shares available for grant under
the 2004 Plan was 2,500.
Under the 1999 Plan, grants may take the following forms at the Board or its committee’s sole discretion:
non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, RSUs, purchase
stock, dividend equivalent rights, performance units, performance shares and other share-based grants. The
maximum number of shares available for grant under the 1999 Plan was 7,058 shares of authorized common
stock.
Under the Stock Plans, the Company also grants fully vested shares of its common stock to certain members
of its Board of Directors. While these shares are fully vested, beginning with stock grants made in the fourth
quarter of 2006, the directors are restricted from selling these shares while they are still serving on the Board.
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