WeightWatchers 2005 Annual Report Download - page 33

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On August 21, 2003, in connection with the purchase of the majority of our 13% Senior
Subordinated Notes, we refinanced the WWI Credit Facility as follows: Term Loans B and D and the
transferable loan certificate, or TLC, in the aggregate amount of $204.7 million were repaid and
replaced with a new Term Loan B in the amount of $382.9 million and a new TLC in the amount of
$49.1 million. Term Loan A in the amount of $30.0 million remained in place, along with a Revolver
with available borrowings up to $45.0 million. Due to this early extinguishment of debt, we recognized
expenses of $47.4 million in the third quarter of fiscal 2003.
On January 21, 2004, we refinanced the WWI Credit Facility as follows: the Term Loan A, Term
Loan B and the TLC in the aggregate amount of $454.2 million were repaid and replaced with a new
Term Loan B in the amount of $150.0 million and borrowings under the Revolver of $310.0 million. In
connection with this refinancing, available borrowings under the Revolver increased from $45.0 million
to $350.0 million. Due to the early extinguishment of the Term Loans resulting from this refinancing,
we recognized expenses of $3.3 million in the first quarter of fiscal 2004.
On October 1, 2004, we repurchased and retired the remaining balance of our 13% Senior
Subordinated Notes in the amounts of $5.1 million U.S. dollar denominated and A8.4 million euro
denominated. Due to this early extinguishment of debt, we recognized expenses of $1.0 million in the
third quarter of fiscal 2004 related to the tender premiums associated with this redemption.
On October 19, 2004, we increased our net borrowing capacity by adding an Additional Term Loan
B to our existing WWI Credit Facility in the amount of $150.0 million. Coterminous with the previously
existing WWI Credit Facility, these funds were initially used to reduce borrowings under our Revolver,
resulting in no increase in our net borrowing.
On June 24, 2005, Weight Watchers International amended certain provisions of the WWI Credit
Facility to allow for the December 16, 2005 redemption by WeightWatchers.com of shares held by
Artal.
On December 16, 2005, WeightWatchers.com borrowed $215.0 million pursuant to two credit
facilities, or the WW.com Credit Facilities, consisting of (i) a five year, senior secured first lien term
loan facility in an aggregate principal amount of $170.0 million and (ii) a five and one-half year, senior
secured second lien term loan facility in an aggregate principal amount of $45.0 million.
Franchise Acquisitions
Acquisitions of Washington, D.C. and Fort Worth. On May 9, 2004, we acquired certain assets of
our Washington, D.C. area franchisee for a purchase price of $30.5 million. On August 22, 2004, we
acquired certain assets of our Fort Worth franchisee for a purchase price of $30.0 million. These
acquisitions were financed through cash from operations. The acquisitions were accounted for as
purchases and, accordingly, earnings from these franchises have been included in our consolidated
operating results since the respective dates of the acquisitions.
Acquisitions of The WW Group and Dallas/New Mexico. On March 30, 2003, we acquired certain
assets of eight of the fifteen franchises of The WW Group, Inc. and its affiliates, or The WW Group,
for an aggregate purchase price of $180.7 million. The acquisition was financed through cash and
additional borrowings of $85 million. On November 30, 2003, we acquired certain assets of our
franchises in Dallas and New Mexico for a total purchase price of $27.2 million. This acquisition was
financed through cash from operations. The acquisition was accounted for as a purchase and,
accordingly, earnings from these franchises have been included in our consolidated operating results
since the date of acquisition.
Acquisitions of North Jersey, San Diego and Eastern North Carolina. On January 18, 2002, we
acquired the franchise territory and certain business assets of our franchise in North Jersey for an
aggregate purchase price of $46.5 million. The acquisition was financed through additional borrowings
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