Travelzoo 2007 Annual Report Download - page 80

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Income tax expense (benefit) for the years ended December 31, 2007, 2006, and 2005 consisted of the
following current and deferred components categorized by federal and state jurisdictions. The current provision is
generally that portion of income tax expense that is currently payable to the taxing authorities. The Company makes
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 second to last table of this footnote.
Current Deferred Total
(In thousands)
2007:
Federal ............................................ $ 9,395 $ 483 $ 9,878
State ............................................. 3,023 101 3,124
$12,418 $ 584 $13,002
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
During 2005, an income tax benefit of $435,000 was recorded in stockholders’ equity for the tax benefit of
stock option exercises.
Income tax expense for the years ended December 31, 2007, 2006 and 2005 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):
2007 2006 2005
Federal tax at statutory rates .............................. $ 7,739 $10,852 $5,536
State taxes, net of federal income tax benefit .................. 2,028 2,402 1,243
Foreign losses not benefited ............................... 3,073 767 397
Non-deductible expenses and other.......................... 162 181 677
Total income tax expense................................. $13,002 $14,202 $7,853
Losses incurred in the foreign subsidiaries were treated as having no recognizable tax benefit.
48
TRAVELZOO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)