WeightWatchers 2008 Annual Report Download - page 72

Download and view the complete annual report

Please find page 72 of the 2008 WeightWatchers annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 108

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
1. Basis of Presentation
The accompanying consolidated financial statements include the accounts of Weight Watchers International,
Inc. and all of its subsidiaries. The term “Company” as used throughout this document is used to indicate Weight
Watchers International, Inc. and all of its subsidiaries. The term “WWI” as used throughout this document is
used to indicate Weight Watchers International, Inc. and all of its subsidiaries other than WeightWatchers.com,
Inc. and all of its subsidiaries. The terms “WW.com” and “WeightWatchers.com” as used throughout this
document are used to indicate WeightWatchers.com, Inc. and all of its subsidiaries.
As further discussed in Note 4, effective with its formation in February 2008, the Company consolidates the
financial statements of its joint venture entity, Weight Watchers Danone China Limited, and its subsidiaries (the
“Joint Venture”).
2. Summary of Significant Accounting Policies
Fiscal Year:
The Company’s fiscal year ends on the Saturday closest to December 31st and consists of either 52 or
53-week periods. Fiscal year 2008 contained 53 weeks, while fiscal years 2007 and 2006 contained 52 weeks.
WeightWatchers.com’s fiscal year ends on December 31st of each year. This difference in fiscal years does not
have a material effect on the consolidated financial statements.
Use of Estimates:
The preparation of financial statements, in conformity with accounting principles generally accepted in the
United States of America, requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis,
the Company evaluates its estimates and judgments, including those related to inventories, the impairment
analysis for goodwill and other indefinite-lived intangible assets, share-based compensation, income taxes, tax
contingencies and litigation. The Company bases its estimates on historical experience and on various other
factors and assumptions that it believes to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from
other sources. Actual amounts could differ from these estimates.
Translation of Foreign Currencies:
For all foreign operations, the functional currency is the local currency. Assets and liabilities of these
operations are translated into U.S. dollars using the exchange rate in effect at the end of each reporting period.
Income statement accounts are translated at the average rate of exchange prevailing during each reporting period.
Translation adjustments arising from the use of differing exchange rates from period to period are included in
accumulated other comprehensive income (loss).
Foreign currency gains and losses arising from the translation of intercompany receivables with the
Company’s international subsidiaries are recorded as a component of other (income)/expense, net, unless the
receivable is considered long-term in nature, in which case the foreign currency gains and losses are recorded as
a component of comprehensive income (loss).
F-7