WeightWatchers 2002 Annual Report Download - page 31

The following schedule sets forth our long-term debt obligations (and interest rates) as of
December 28, 2002.
Long-Term Debt
As of December 28, 2002
(in millions)
Interest
Balance Rate
EURO 100.0 million 13% Senior Subordinated Notes Due 2009 . . . $104.4 13.00%
US $150.0 million 13% Senior Subordinated Notes Due 2009 ..... 150.0 13.00%
Term A Loan due 2005 ................................ 44.8 3.15%
Term B Loan due 2007 ................................ 97.6 4.31%
Transferable Loan Certificate due 2007 ..................... 57.9 4.32%
Total Debt ........................................ 454.7
Less Current Portion .................................. (18.4)
Total Long-Term Debt ................................ $436.3
The term loan A facility, the term loan B facility, the transferable loan certificate facility and the
revolving credit facility bear interest at a rate equal to (a) in the case of the term loan A facility and
the revolving credit facility, LIBOR plus 1.75% or, at our option, the alternate base rate (as defined in
the senior credit facilities) plus 0.75%, (b) in the case of the term loan B facility and the transferable
loan certificate facility, LIBOR plus 2.50% or, at our option, the alternate base rate plus 1.50%. In
addition to paying interest on outstanding principal under the senior credit facilities, we are required to
pay a commitment fee to the lenders under the revolving credit facility with respect to the unused
commitments at a rate equal to 0.50% per year.
Our senior credit facilities contain covenants that restrict our ability to incur additional
indebtedness, pay dividends on and redeem capital stock, make other restricted payments, including
investments, sell our assets and enter into consolidations, mergers and transfers of all or substantially
all of our assets. Our senior credit facilities also require us to maintain specified financial ratios and
satisfy financial condition tests.
Our obligations under the notes are subordinate and junior in right of payment to all of our
existing and future senior indebtedness, including all indebtedness under the senior credit facilities. The
indentures, pursuant to which the notes were issued, restrict our ability to incur additional
indebtedness, issue preferred stock, pay dividends on and redeem capital stock, make other restricted
payments, including investments, sell our assets and enter into consolidations, mergers and transfers of
all or substantially all of our assets. We or our affiliates, including entities related to Artal Luxembourg,
may from time to time, depending on market conditions, purchase the notes in the open market or by
other means.
Subsequent to December 28, 2002, our credit ratings were upgraded by both Moody’s and
Standard and Poors. Our credit ratings by Moody’s at December 28, 2002 for the credit facilities and
senior subordinated notes were ‘‘Ba1’’ and ‘‘Ba3’’, respectively. On March 20, 2003, Moody’s upgraded
its ratings for the senior subordinated notes to ‘‘Ba2’’, raised our Senior Implied rating to ‘‘Ba1’’ and
confirmed its ‘‘Ba1’’ ratings for the credit facilities. Our credit ratings by Standard & Poor’s at
December 28, 2002 for the senior credit facilities and senior subordinated notes were ‘‘BB-’’ and ‘‘B’’,
respectively. On March 11, 2003, Standard & Poor’s upgraded its corporate credit and senior credit
facility ratings to ‘‘BB’’ and upgraded its rating for the senior subordinated notes to ‘‘B+’’.
We are obligated under non-cancelable operating leases primarily for office and rent facilities. We
guarantee the performance of part of WeightWatchers.com’s lease of its office space at 888 Seventh
Avenue, New York, New York. The annual rent rate for this WeightWatchers.com lease is $0.5 million
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