WeightWatchers 2010 Annual Report Download - page 100

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIE
S
NO
TE
S
T
OCO
N
SO
LIDATED FINAN
C
IAL
S
TATEMENT
S
(
IN THOUSANDS, EXCEPT PER SHARE AMOUNTS
)
The deferred tax assets (liabilities) recorded on the Company’s consolidated balance sheets are as follows:
January 1
,
2011
January 2
,
2010
Provision for estimated ex
p
enses ....................................
$
6
,807
$
5,14
3
Operating loss carryforward
s
.......................................
2
9,0
6
8 27,00
7
S
alaries and wages
...............................................
4
,
104 3
,
8
7
0
S
hare-based com
p
ensation
.........................................
8,9
6
0 9,329
Other com
p
rehensive income
.......................................
2
,
811 4
,
834
Othe
r
..........................................................
6
,4
5
1 3,429
L
ess: valuation allowance
.........................................
(24,989) (21,9
6
7)
Tota
ld
e
f
erre
d
tax asset
s
...........................................
$
33
,
212
$
31
,
645
Deprec
i
at
i
o
n
.................................................... $
(
165) $ (2,529)
Prepa
id
expenses
................................................
—
(
187)
De
f
erre
di
ncom
e
.................................................
— (31)
A
mort
i
zat
i
o
n
...................................................
(76,054) (45,280)
T
ota
l
de
f
e
rr
ed ta
xli
ab
ili
t
i
es
........................................
$
(76,219)
$
(48,027)
N
et
d
e
f
erre
d
tax
li
a
bili
t
i
e
s
.........................................
$(
43,007
)$(
16,382
)
Certain forei
g
n operations of the Compan
y
have
g
enerated net operatin
g
loss carr
y
forwards. If it has bee
n
determined that it is more likel
y
than not that the deferred tax assets associated with these net operatin
g
los
s
carr
y
forwards will not be utilized, a valuation allowance has been recorded. As of Januar
y
1, 2011 and Januar
y
2
,
2010, various forei
g
n subsidiaries had net operatin
g
loss carr
y
forwards of approximatel
y
$107,411 and $95,808,
r
espectivel
y
, most of which can be carried forward indefinitel
y.
The Company’s undistributed earnings of foreign subsidiaries are not considered to be reinvested
p
ermanently. Accordingly, the Company has recorded all taxes, after taking into account foreign tax credits, o
n
the undistributed earnings of foreign subsidiaries.
A
reconc
ili
at
i
on o
f
t
h
e
b
e
gi
nn
i
n
g
an
d
en
di
n
g
amount o
f
unreco
g
n
i
ze
d
tax
b
ene
fi
ts
i
sas
f
o
ll
ows:
January
1,
2
01
1
January
2,
2
010
January
3,
2
009
Ba
l
ance at
b
eg
i
nn
i
ng o
f
year
.
...........................
.
$
12
,
897
$
11
,
086
$
9
,
455
Addi
t
i
ons
b
ase
d
on tax pos
i
t
i
ons re
l
ate
d
to t
h
e current yea
r
.....
2
,
115 1
,
811 2
,
169
Addi
t
i
ons
b
ase
d
on tax pos
i
t
i
ons o
f
pr
i
or year
s
.
............. 7
82
—
493
Re
d
uct
i
ons
f
or tax pos
i
t
i
ons o
f
pr
i
or years .................. — —
(
361
)
S
ett
l
ements ..........................................
——
(
670
)
Balance at end of
y
ea
r
..................................
$
15,794 $12,897 $11,086
A
t January 1, 2011, the total amount of unrecognized tax benefits that, if recognized, would affect our
effective tax rate is
$
7,040. As of January 1, 2011, given the nature of the Company’s uncertain tax positions, it
is reasonably possible that there will not be a significant change in the Company’s uncertain tax benefits withi
n
the next twelve months
.
T
h
e Company recogn
i
zes
i
nterest an
d
pena
l
t
i
es re
l
ate
d
to unrecogn
i
ze
d
tax
b
ene
fi
ts
i
n
i
ncome tax expense
.
T
he Company had
$
2,838 and
$
2,059 of accrued interest and penalties at January 1, 2011 and January 2, 2010,
r
espectively. The Company recognized
$
780,
$
403 and
$
431 in interest and penalties during the fiscal years
en
d
e
d
January 1, 2011, January 2, 2010 an
d
January 3, 2009, respect
i
ve
l
y.
F-
20