WeightWatchers 2013 Annual Report Download - page 111

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
The Company’s undistributed earnings of foreign subsidiaries are not considered to be reinvested
permanently. Accordingly, the Company has recorded all taxes, after taking into account foreign tax credits, on
the undistributed earnings of foreign subsidiaries.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
December 28,
2013
December 29,
2012
December 31,
2011
Balance at beginning of year ............................. $5,319 $ 5,040 $ 15,794
Additions based on tax positions related to the current year .... 1,428 1,647 1,537
Additions based on tax positions of prior years .............. 0 0 0
Reductions for tax positions of prior years .................. (963) (1,219) (11,901)
Settlements .......................................... 0 (149) (390)
Balance at end of year .................................. $5,784 $ 5,319 $ 5,040
At December 28, 2013, the total amount of unrecognized tax benefits that, if recognized, would affect our
effective tax rate is $4,824. As of December 28, 2013, 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 within
the next twelve months.
The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense.
The Company had $2,217 and $3,405 of accrued interest and penalties at December 28, 2013 and December 29,
2012, respectively. The Company recognized $(1,188), $823 and $(256) in interest and penalties during the fiscal
years ended December 28, 2013, December 29, 2012 and December 31, 2011, respectively.
The Company or one of its subsidiaries files income tax returns in the US federal jurisdiction, and various
state and foreign jurisdictions. At December 28, 2013, with few exceptions, the Company was no longer subject
to US federal, state or local income tax examinations by tax authorities for years prior to 2010, or non-US
income tax examinations by tax authorities for years prior to 2004.
11. Employee Benefit Plans
The Company sponsors the Second Amended and Restated Weight Watchers Savings Plan (the “Savings
Plan”) for salaried and certain hourly US employees of the Company. The Savings Plan is a defined contribution
plan that provides for employer matching contributions of 100% of the employee’s tax deferred contributions up
to 3% of an employee’s eligible compensation. Expense related to these contributions for the fiscal years ended
December 28, 2013, December 29, 2012 and December 31, 2011 was $2,888, $2,730 and $2,466, respectively.
During fiscal 2011, the Company received a favorable determination letter from the IRS that qualifies the
Savings Plan under Section 401(a) of the Internal Revenue Code.
Pursuant to the Savings Plan, the Company also makes profit sharing contributions for all full-time salaried
US employees who are eligible to participate in the Savings Plan (except for certain management personnel). The
profit sharing contribution is a guaranteed monthly employer contribution on behalf of each participant based on
the participant’s age and a percentage of the participant’s eligible compensation. The Savings Plan also has a
discretionary supplemental profit sharing employer contribution component that is determined annually by the
Compensation and Benefits Committee of the Company’s Board of Directors. Expense related to these
contributions for the fiscal years ended December 28, 2013, December 29, 2012 and December 31, 2011 was
$1,658, $2,779 and $3,704, respectively.
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