Nautilus 2005 Annual Report Download - page 59
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Table of Contents
A reconciliation of the U.S. statutory federal income tax rate with the Company’s effective income tax rate is as follows:
The Company has a federal U.S. net operating loss carryforward (“NOL”) totaling $354, which will expire in 2025.
As of December 31, 2005, the Company did not provide for United States income taxes or foreign withholding taxes on a cumulative
total of $5 of undistributed losses from certain non-U.S. subsidiaries that will be permanently reinvested outside the United States. Should the
Company repatriate foreign earnings, the Company would have to adjust the income tax provision in the period management determined that
the Company would repatriate earnings.
The Company has studied the impact of the one-time favorable foreign dividend provision enacted on October 22, 2004 as part of the
American Jobs Creation Act of 2004, and it has decided not to repatriate earnings of its foreign subsidiaries.
12. EARNINGS PER SHARE
2005
2004
2003
U.S. statutory income tax rate
35.0
%
35.0
%
35.0
%
State tax, net of federal benefit
1.7
1.2
1.8
Tax benefit related to U.S. export sales
(0.5
)
(0.3
)
(0.5
)
Qualified domestic production activity deduction
(0.5
)
—
—
Penalties
0.9
—
—
Impact of foreign results
0.6
—
—
Nondeductible operational expenses
0.4
0.3
0.2
Tax exempt interest
(1.1
)
(0.8
)
(0.3
)
Research and development credit
(0.9
)
(0.4
)
(0.3
)
Change in deferred tax measurement rate
0.8
—
—
Reduction in tax contingency reserve
(1.0
)
(0.9
)
—
Other
(0.6
)
0.2
0.1
Total
34.8
%
34.3
%
36.0
%
Basic earnings per share is computed on the basis of the weighted average number of common shares outstanding. Diluted earnings per
share is computed on the basis of the weighted average number of common shares outstanding plus the effect of outstanding stock options
calculated using the treasury stock method. Net income for the calculation of both basic and diluted earnings per share is the same as reported
net income for all periods.
The calculation of weighted-average outstanding shares for the three years ended December 31, 2005 is as follows:
58
2005
2004
2003
Basic shares outstanding
33,303,383
32,756,766
32,579,533
Dilutive effect of stock options
553,513
637,394
439,161
Diluted shares outstanding
33,856,896
33,394,160
33,018,694
Antidilutive stock options*
703,850
860,620
1,164,194
*
Stock options not included in the calculation of diluted earnings per share for each respective year because they would be antidilutive.