WeightWatchers 2006 Annual Report Download - page 55

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, Weight Watchers International 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,
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.
In May 2006, we entered into a refinancing to reduce our effective interest rate while increasing our
borrowing capacity and extending the maturities of borrowings under the WWI Credit Facility. In connection
with the refinancing, we increased our term loans from $293.4 million to $350.0 million. The additional funds of
$55.6 million were used to pay down the revolving line of credit. Also, in connection with this refinancing,
WWI’s then existing line of credit was repaid and replaced with a new revolving line of credit which increased
borrowing capacity from $350.0 million to $500.0 million. In connection with this refinancing, we incurred
expenses of $1.3 million.
In January 2007, in connection with the tender offer (as discussed in Item 5 herein), we increased our debt
capacity by adding an Additional Term Loan A in the amount of $700 million and a new Term Loan B in the
amount of $500 million. We utilized $185.8 million of these proceeds to pay off the WW.com Credit Facilities.
The Additional Term Loan A and the Term Loan B mature in January 2013 and January 2014, respectively. As
of February 2, 2007, our total debt was $1,857.9 million.
At December 30, 2006, December 31, 2005 and January 1, 2005, our debt consisted entirely of variable-rate
instruments. The average interest rate on our debt was approximately 6.8%, 6.1%, and 4.1% per annum at
December 30, 2006, December 31, 2005 and January 1, 2005, respectively.
The following schedule sets forth our long-term debt obligations (and interest rates) at December 30, 2006
(as existed prior to our January 2007 refinancing):
Long-Term Debt
At December 30, 2006
(Balances in millions)
Balance
Interest
Rate
WWI Revolver due 2011 ............................................ $313,375 6.51%
WWI Term Loan A due 2011 ........................................ 350,000 6.27%
WW.com First Lien Term Loan ...................................... 140,784 7.62%
WW.com Second Lien Term Loan .................................... 45,000 10.36%
Total Debt ............................................... 849,159
Less Current Portion ........................................... 18,922
Total Long-Term Debt ...................................... $830,237
The WWI Term Loan A and the WWI Revolver bear interest at an annual rate equal to LIBOR plus 0.875%
or, at Weight Watchers International’s option, the alternate base rate (as defined in the WWI Credit Facility). In
addition to paying interest on outstanding principal under the WWI Credit Facility, Weight Watchers
42