WeightWatchers 2007 Annual Report Download - page 89

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WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
assessment associated with the notices of determination and decisions is approximately $27,000. It is the
Company’s view that the U.K. leaders and other service providers identified by HMRC in its notices and
decisions are self-employed and no withholding by us was required. On September 3, 2007, the Company
appealed HMRC’s notices and decisions as to these classifications and against any amount of PAYE and NIC
liability claimed to be owed by us. The Company intends to vigorously pursue this appeal and, although there can
be no assurances, we believe we will ultimately prevail in our appeal. If such appeal is unsuccessful, it is possible
that our cash flows and results of operations in a particular fiscal quarter may be adversely affected by this
matter. However, it is the opinion of management that the disposition of this matter will not have a material
impact on our financial position, or ongoing results of operations or cash flows.
Due to the nature of its activities, the Company is also, at times, subject to pending and threatened legal
actions that arise out of the normal course of business. The Company has had and continues to have disputes with
certain of its franchisees. In the opinion of management, based in part upon advice of legal counsel, the
disposition of all such matters is not expected to have a material effect on the Company’s results of operations,
financial condition or cash flows.
Lease Commitments:
Minimum rental commitments under non-cancelable operating leases, primarily for office and rental
facilities, at December 29, 2007, consist of the following:
2008 ............................................ $ 27,129
2009 ............................................ 21,849
2010 ............................................ 15,832
2011 ............................................ 10,209
2012 ............................................ 8,154
2013 and thereafter ................................. 23,794
Total ........................................ $106,967
Total rent expense charged to operations under these leases for the fiscal years ended December 29,
2007, December 30, 2006 and December 31, 2005 was $33,016, $29,119 and $27,671, respectively.
14. Segment and Geographic Data
The Company has two operating segments, each of which is a reportable segment: WWI and WW.com.
These are two separate and distinct businesses for which discrete financial information is available. This discrete
financial information is maintained and managed separately and is reviewed regularly by the chief operating
decision maker. All intercompany activity is eliminated in consolidation.
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