WeightWatchers 2006 Annual Report Download - page 79

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WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
considered to be a transaction between entities under common control. Therefore, the redemption was recorded
as a Dividend to Artal in the stockholders’ equity section of the balance sheet.
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 its annual impairment review as of December 30, 2006 and
December 31, 2005 and determined that no impairment existed. Unamortized goodwill is due mainly to the
acquisition of the Company by Heinz in 1978 and the aforementioned acquisition of WW.com. For the year
ended December 30, 2006, the change in goodwill is due to foreign currency fluctuations. Franchise rights
acquired are due mainly to acquisitions of the Company’s franchised territories. For the year ended December 30,
2006, franchise rights acquired increased due to the franchise acquisitions described in Note 3.
Also, in accordance with SFAS No. 142, aggregate amortization expense for finite lived intangible assets
was recorded in the amounts of $5,025, $4,206 and $2,274 for the fiscal years ended December 30, 2006,
December 31, 2005 and January 1, 2005, respectively.
The carrying amount of amortized intangible assets as of December 30, 2006 and December 31, 2005 was as
follows:
December 30, 2006 December 31, 2005
Gross
Carrying
Amount
Accumulated
Amortization
Gross
Carrying
Amount
Accumulated
Amortization
Deferred software costs .................... $19,361 $ 6,372 $ 7,435 $ 4,280
Trademarks .............................. 8,393 7,647 8,112 7,352
Website development costs ................. 15,081 8,900 9,998 6,661
Other ................................... 5,317 4,206 5,382 3,797
$48,152 $27,125 $30,927 $22,090
Estimated amortization expense of existing finite lived intangible assets for the next five fiscal years is as
follows:
2007 .............................................. $7,206
2008 .............................................. $6,726
2009 .............................................. $4,871
2010 .............................................. $ 291
2011 .............................................. $ 80
5. Property and Equipment
The components of property and equipment were:
December 30,
2006
December 31,
2005
Leasehold improvements ...................................... $11,240 $ 14,887
Equipment ................................................. 56,050 43,754
67,290 58,641
Less: Accumulated depreciation and amortization .................. (36,257) (37,866)
$ 31,033 $ 20,775
Depreciation and amortization expense of property and equipment for the fiscal years ended December 30,
2006, December 31, 2005 and January 1, 2005 was $8,326, $8,611 and $6,661, respectively.
F-16