WeightWatchers 2009 Annual Report Download - page 66

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On September 10, 2009, Standard & Poor’s affirmed its “BB+” rating on the WWI Credit Facility. On
March 30, 2009, Moody’s affirmed its “Ba1” rating for the WWI Credit Facility.
Dividends
We have issued a quarterly cash dividend of $0.175 per share of our common stock every quarter beginning
with the first quarter of fiscal 2006. Prior to these dividends, we have not declared or paid any cash dividends on
our common stock since our acquisition by Artal in 1999.
Any decision to declare and pay dividends in the future will be made at the discretion of our Board of
Directors, after taking into account our financial results, capital requirements and other factors it may deem
relevant. Our Board of Directors may decide at any time to increase or decrease the amount of dividends or
discontinue the payment of dividends based on these factors. The WWI Credit Facility also contains restrictions
on our ability to pay dividends on our common stock.
The WWI Credit Facility provides that we are permitted to pay dividends and extraordinary dividends so
long as we are not in default under the WWI Credit Facility agreements. However, payment of extraordinary
dividends shall not exceed $150.0 million in any fiscal year if net debt to EBITDA (as defined in the WWI Credit
Facility agreements) is greater than 3.75:1 and investment grade rating date (as defined in the WWI Credit
Facility agreements) has not occurred. We do not expect this restriction to impair our ability to pay dividends, but
it could do so.
Contractual Obligations
We are obligated under non-cancelable operating leases primarily for office and rent facilities. Consolidated
rent expense charged to operations under all our leases for fiscal 2009 was approximately $34.8 million.
The following table summarizes our future contractual obligations as of the end of fiscal 2009:
Payment Due by Period
Total
Less than
1 Year
1-3
Years
3-5
Years
More than
5 Years
(in millions)
Long-Term Debt(1)
Principal ...................................... $1,453.0 $215.0 $712.0 $526.0 $ —
Interest ....................................... 56.9 10.5 37.1 9.3 —
Operating leases .................................... 82.0 27.2 30.7 12.3 11.8
Other long-term obligations(2) ......................... 4.6 0.5 1.3 1.2 1.6
Total ......................................... $1,596.5 $253.2 $781.1 $548.8 $13.4
(1) Due to the fact that all of our debt is variable rate based, we have assumed for purposes of this table that the
interest rate on all of our debt as of the end of fiscal 2009 remains constant for all periods presented.
(2) Other long-term obligations primarily consist of deferred rent costs. The provision for income tax
contingencies included in other long-term liabilities on the consolidated balance sheet is not included in the
table above due to the fact that the Company is unable to estimate the timing of payment for this liability.
We expect to generate the cash necessary to pay our expenses and to pay the principal and interest on all of
our outstanding debt from our cash flows provided by operating activities and by opportunistically using other
means to repay or refinance our obligations as we determine appropriate.
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