WeightWatchers 2005 Annual Report Download - page 94

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WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
4. Goodwill and Other Intangible Assets
In accordance with SFAS No. 142, the Company no longer amortizes goodwill or other indefinite
lived intangible assets. The Company performed fair value impairment testing as of December 31, 2005
and January 1, 2005 on its goodwill and other indefinite-lived intangible assets and determined that no
impairment existed. Unamortized goodwill is due mainly to the acquisition of the Company by Heinz in
1978 and the aforementioned transactions with WW.com. For the year ended December 31, 2005,
goodwill increased primarily due to WWI’s increased ownership interest in WW.com (see Note 3).
Franchise rights acquired are due mainly to acquisitions of the Company’s franchised territories. For
the year ended December 31, 2005, franchise rights acquired decreased due to foreign currency
fluctuations. The balance in goodwill increased during the year ended January 1, 2005 primarily due to
the Company’s purchase of the minority interest in one of its foreign subsidiaries.
Also, in accordance with SFAS No. 142, aggregate amortization expense for finite lived intangible
assets was recorded in the amounts of $4,206, (including $2,710 for amortization of intangible assets of
WeightWatchers.com), $2,274 (including $1,061 for amortization of intangible assets of
WeightWatchers.com) and $1,062 for the fiscal years ended December 31, 2005, January 1, 2005 and
January 3, 2004, respectively.
The carrying amount of amortized intangible assets as of December 31, 2005 and January 1, 2005
was as follows:
December 31, 2005 January 1, 2005
Gross Gross
Carrying Accumulated Carrying Accumulated
Amount Amortization Amount Amortization
Deferred software costs .................. $ 7,435 $ 4,280 $ 5,050 $ 3,035
Trademarks ........................... 8,112 7,352 7,811 7,098
Non-compete agreement ................. 1,200 1,200 1,200 1,175
Web site development costs ............... 9,998 6,661 6,815 4,624
Other ............................... 5,382 3,797 4,108 3,331
$32,127 $23,290 $24,984 $19,263
Estimated amortization expense of existing finite lived intangible assets for the next five fiscal years
is as follows:
2006 .......................................... $4,342
2007 .......................................... $2,029
2008 .......................................... $ 746
2009 .......................................... $ 154
2010 .......................................... $ 92
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