Travelzoo 2006 Annual Report Download - page 73

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estimated payments of these amounts during the year. The deferred tax provision results from changes in the
Company’s deferred tax assets (future deductible amounts) and tax liabilities (future taxable amounts), which are
presented in the last table of this footnote.
Current Deferred Total
(In thousands)
2006:
Federal ............................................ $11,372 $(866) $10,506
State ............................................. 3,759 (63) 3,696
$15,131 $(929) $14,202
2005:
Federal ............................................ $ 6,536 $(595) $ 5,941
State ............................................. 1,993 (81) 1,912
$ 8,529 $(676) $ 7,853
2004:
Federal ............................................ $ 4,117 $(349) $ 3,768
State ............................................. 1,367 (13) 1,354
$ 5,484 $(362) $ 5,122
During 2005 and 2004, an income tax benefit of $435,000 and $1.9 million was recorded in stockholders’
equity for the tax benefit of stock option exercises.
Income tax expense for the years ended December 31, 2006, 2005 and 2004 differed from the amounts
computed by applying the U.S. federal statutory tax rate applicable to the Company’s level of pretax income as a
result of the following (in thousands):
2006 2005 2004
Federal tax at statutory rates ............................... $10,852 $5,536 $3,794
State taxes, net of federal income tax benefit ................... 2,402 1,243 894
Foreign loss ........................................... 767 397 —
Non-deductible expenses and other .......................... 181 677 434
Total income tax expense ................................. $14,202 $7,853 $5,122
Losses incurred in the foreign subsidiaries were treated as having no recognizable tax benefit.
46
TRAVELZOO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)