WeightWatchers 2008 Annual Report Download - page 40

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As of December 16, 2005, WeightWatchers.com became a wholly-owned subsidiary of Weight Watchers
International, Inc. In connection with the acquisition of WeightWatchers.com, described more fully in Item 1 of
this Annual Report on Form 10-K, we recognized $46.4 million of expenses during fiscal 2005.
Debt Refinancing
On January 21, 2004, we refinanced WWI’s then-existing credit facility. The credit facility consisted of a
term loan facility consisting of two tranche A facilities (Term Loan A and Additional Term Loan A), and a
tranche B facility (Term Loan B), in an aggregate amount of $1,550.0 million, and a revolving line of credit in an
amount of up to $500.0 million.
We repaid and replaced the Term Loan A, Term Loan B and the transferable loan certificate, or TLC, in the
aggregate amount of $454.2 million with a new Term Loan B in the amount of $150.0 million and borrowings
under the then-existing revolving line of credit of $310.0 million. In connection with this refinancing, available
borrowings under the revolving line of credit increased from $45.0 million to $350.0 million. Due to the early
extinguishment of debt resulting from this refinancing, we recognized expenses of $3.3 million in the first quarter
of fiscal 2004.
On October 1, 2004, we repurchased and retired the remaining balance of our 13% senior subordinated
notes in the amounts of $5.1 million U.S. dollar denominated and €8.4 million euro denominated. Due to this
early extinguishment of debt, we recognized expenses of $1.0 million in the third quarter of fiscal 2004 related to
the repurchase premiums associated with this redemption.
On October 19, 2004, we increased our net borrowing capacity by adding a tranche B facility (Additional
Term Loan B) to our then-existing credit facility in the amount of $150.0 million. Coterminous with WWI’s
previously existing credit facility, these funds were initially used to reduce borrowings under our then-existing
revolving line of credit, resulting in no increase in our net borrowing.
On June 24, 2005, Weight Watchers International, Inc. amended certain provisions of WWI’s then-existing
credit facility to allow for the December 16, 2005 redemption by WeightWatchers.com of its shares held by
Artal.
On December 16, 2005, WeightWatchers.com borrowed $215.0 million pursuant to two credit facilities, or
the WW.com Credit Facilities, consisting of (i) a five year, senior secured first lien term loan facility 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.
On May 8, 2006, we entered into a refinancing to reduce our effective interest rate while increasing our
borrowing capacity and extending the maturities of borrowings under WWI’s then-existing credit facility. In
connection with the refinancing, WWI’s then-existing tranche B facilities in the aggregate amount of $294.4
million were repaid and replaced with a new Term Loan A in the amount of $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 revolving 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.
On January 26, 2007, in connection with our Tender Offer and share repurchase described under “Item 1.
Business—History—Tender Offer and Share Repurchase” in Part II of this Annual Report on Form 10-K, we
increased our borrowing capacity by adding an Additional Term Loan A in the amount of $700.0 million and a
new Term Loan B in the amount of $500.0 million. We utilized (a) $185.8 million of these proceeds to pay off
the WW.com Credit Facilities, (b) $461.6 million to repurchase approximately 8.5 million of our shares in the
Tender Offer and (c) $567.6 million to repurchase approximately 10.5 million of our shares from Artal. In
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