WeightWatchers 2015 Annual Report Download - page 104

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
January 2,
2016
January 3,
2015
December 28,
2013
Balance at beginning of year ............................. $6,268 $5,784 $5,319
Additions based on tax positions related to the current year .... 2,106 1,304 1,428
Reductions for tax positions of prior years .................. (676) (820) (963)
Balance at end of year .................................. $7,698 $6,268 $5,784
At January 2, 2016, the total amount of unrecognized tax benefits that, if recognized, would affect our
effective tax rate is $6,948. As of January 2, 2016, 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 $1,229 and $2,300 of accrued interest and penalties at January 2, 2016 and January 3, 2015,
respectively. The Company recognized $(266), $83, and $(1,188) in interest and penalties during the fiscal years
ended January 2, 2016, January 3, 2015 and December 28, 2013, respectively.
The Company or one of its subsidiaries files income tax returns in the US federal jurisdiction, and various
state and foreign jurisdictions. At January 2, 2016, 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 2012, or non-US income
tax examinations by tax authorities for years prior to 2009.
12. Employee Benefit Plans
The Company sponsors the Third 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 for the fiscal years ended January 2, 2016, January 3, 2015 and
December 28, 2013. Expense related to these contributions for the fiscal years ended January 2, 2016, January 3,
2015 and December 28, 2013 was $2,454, $2,525, and $2,888, respectively.
During fiscal 2014, 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 January 2, 2016, January 3, 2015 and December 28, 2013 was
$733, $266, and $1,658, respectively.
For certain US management personnel, the Company sponsors the Second Amended and Restated Weight
Watchers Executive Profit Sharing Plan (“EPSP”). Under the IRS definition, the EPSP is considered a
Nonqualified Deferred Compensation Plan. There is a promise of payment by the Company made on the
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