WeightWatchers 2007 Annual Report Download - page 93

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WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Derivative Instruments and Hedging:
The Company enters into interest rate swaps to hedge a substantial portion of its variable rate debt. As of
December 29, 2007 and December 30, 2006, the Company held contracts for interest rate swaps with notional
amounts totaling $1,050,000 and $257,500, respectively. The Company is hedging forecasted transactions for
periods not exceeding the next five years. At December 29, 2007, given the current configuration of its debt, the
Company estimates that no derivative gains or losses reported in accumulated other comprehensive income (loss)
will be reclassified to the Statement of Operations within the next twelve months.
As of December 29, 2007, cumulative losses for qualifying hedges were reported as a component of
accumulated other comprehensive income (loss) in the amount of $14,994 ($24,582 before taxes). As of
December 30, 2006, cumulative gains for qualifying hedges were reported as a component of accumulated other
comprehensive income (loss) in the amount of $955 ($1,566 before taxes).
For the fiscal years ended December 29, 2007, December 30, 2006 and December 31, 2005, there were no
fair value adjustments recorded in the statement of operations since all hedges were considered qualifying.
16. Quarterly Financial Information (Unaudited)
The following is a summary of the unaudited quarterly consolidated results of operations for the fiscal years
ended December 29, 2007 and December 30, 2006.
For the Fiscal Quarters Ended
March 31,
2007
June 30,
2007
September 29,
2007
December 29,
2007
Fiscal year ended December 29, 2007
Revenues, net ..................................... $399,401 $386,277 $337,450 $344,039
Gross profit ....................................... 226,107 219,616 187,927 180,286
Operating income .................................. 115,745 123,291 106,499 90,072
Net income ....................................... 53,826 58,023 49,511 39,820
Basic EPS ........................................ 0.63 0.74 0.63 0.50
Diluted EPS ....................................... 0.63 0.73 0.62 0.50
For the Fiscal Quarters Ended
April 1,
2006
July 1,
2006
September 30,
2006
December 30,
2006
Fiscal year ended December 30, 2006
Revenues, net ..................................... $342,048 $321,059 $284,753 $285,465
Gross profit ....................................... 192,493 180,491 155,723 147,453
Operating income .................................. 104,075 105,423 92,289 78,261
Net income ....................................... 56,997 57,917 50,615 44,296
Basic EPS ........................................ 0.57 0.58 0.52 0.45
Diluted EPS ....................................... 0.56 0.58 0.52 0.45
F-31