WeightWatchers 2005 Annual Report Download - page 51

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Cash used for financing activities totaled $59.5 million. We paid $60.3 million in connection with the
tender offer and repurchase of our 13% Senior Subordinated Notes and the concurrent refinancing of
the WWI Credit Facility and repurchased $28.8 million of stock in accordance with our stock
repurchase plan that began in October 2003. These were partially offset by net proceeds of
$26.6 million from additional debt borrowings arising at the time of The WW Group acquisition at the
end of March 2003.
Long-Term Debt
The WWI Credit Facility consists of Term Loans and a Revolver. The WW.com Credit Facilities
consist of first and second lien term loans. As of December 31, 2005, Weight Watchers International
had debt of $531.1 million and had additional availability under its $350.0 million Revolver of
$112.2 million. As of December 31, 2005, WeightWatchers.com had debt of $215.0 million. Our total
debt outstanding was $746.1 million at December 31, 2005 and $469.1 million at January 1, 2005,
respectively.
In January 2004, we refinanced the WWI Credit Facility, moving a large portion of our Term
Loans to the Revolver. This provided us with a greater degree of flexibility and the ability to more
efficiently manage cash. Under this refinancing, our Term Loans were reduced from $454.2 million to
$150.0 million and our Revolver capacity was increased from $45.0 million to $350.0 million. To
complete the refinancing, we borrowed $310.0 million under the Revolver.
In October 2004, we increased our net borrowing capacity by adding an additional Term Loan to
the 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 to our net borrowing. Additionally, in October 2004, we repurchased and
retired the remaining balance of our 13% Senior Subordinated Notes.
In connection with the refinancing and retirement of debt described above, we incurred expenses
of $4.3 million in fiscal 2004.
On June 24, 2005, WWI amended certain provisions of the WWI Credit Facility to allow for the
December 16, 2005 redemption by WeightWatchers.com of its shares owned by Artal.
On December 16, 2005, WeightWatchers.com borrowed $215.0 million pursuant to two credit
facilities (the WW.com Credit Facilities), consisting of (i) a five year, senior secured first lien term loan
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.
At December 31, 2005 and January 1, 2005, our debt consisted entirely of variable-rate
instruments. At January 3, 2004 fixed-rate debt constituted approximately 3.3% of our total debt. The
average interest rate on our debt was approximately 6.1%, 4.1% and 3.7% per annum at December 31,
2005, January 1, 2005, and January 3, 2004, respectively.
41