WeightWatchers 2006 Annual Report Download - page 57

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initial quarterly dividend was paid on April 7, 2006 to shareholders of record at the close of business on
March 24, 2006. On May 25, 2006, our Board of Directors declared a dividend of $0.175 per share for the second
quarter of fiscal 2006, which was paid on July 14, 2006 to shareholders of record as of June 30, 2006. On
August 29, 2006, our Board of Directors declared a dividend of $0.175 per share for the third quarter of fiscal
2006, which was paid on October 13, 2006 to shareholders of record as of September 29, 2006. On December 14,
2006 our Board of Directors declared a dividend of $0.175 per share for the fourth quarter of fiscal 2006, which
was paid on January 12, 2007 to shareholders of record as of December 29, 2006.
The WWI Credit Facility provides that we are permitted to pay dividends and extraordinary dividends so
long as we are not in default under our credit agreement. However, payment of extraordinary dividends shall not
exceed $150 million in any fiscal year if net debt to EBITDA is greater than 2.5:1 and investment grade rating
date (as defined in the credit agreement) has not occurred. We do not expect this restriction to impair our ability
to pay dividends, but it could do so.
Contractual Obligations
We are obligated under non-cancelable operating leases primarily for office and rent facilities. Consolidated
rent expense charged to operations under all our leases for fiscal 2006 was approximately $29.1 million.
The impact that our contractual obligations as of December 30, 2006 are expected to have on our
consolidated liquidity and cash flow in future periods is as follows:
Payment Due by Period
Total
Less than
1 Year 1-3 Years 3-5 Years
More than
5 Years
(in millions)
Long-Term Debt(1)
Principal .................................... $ 849.2 $ 18.9 $ 90.4 $739.9 $ —
Interest ..................................... $ 234.8 $ 58.0 $110.2 $ 66.6 $ —
Operating Leases ................................. $ 92.9 $ 24.4 $ 30.0 $ 16.0 $22.5
Total ....................................... $1,176.9 $101.3 $230.6 $822.5 $22.5
(1) Due to the fact that all of our debt is variable rate based, we have assumed for purposes of this table that the
interest rate on all of our debt as of December 30, 2006 remains constant for all periods presented.
The following schedule sets forth our pro forma long-term debt obligations, assuming our January 2007
refinancing had been completed as of December 30, 2006.
Payment Due by Period
Total
Less than
1 Year 1-3 Years 3-5 Years
More than
5 Years
(in millions)
Long-Term Debt
Principal ................................... $1,863.4 $ 22.5 $202.5 $ 883.4 $755.0
Interest .................................... 634.2 127.1 244.4 181.4 81.3
$2,497.6 $149.6 $446.9 $1,064.8 $836.3
Debt obligations due to be repaid in the next 12 months are expected to be satisfied with operating cash
flows. We believe that cash flows from operating activities, together with borrowings available under our
Revolver, will be sufficient for the next 12 months to fund currently anticipated capital expenditure requirements,
debt service requirements and working capital requirements.
44