WeightWatchers 2010 Annual Report Download - page 30

The We
i
ght Watchers brand could be
i
mpa
i
red due to act
i
ons taken by our
f
ranch
i
sees and l
i
censees
.
We
b
e
li
eve t
h
at t
h
eWe
igh
t Watc
h
ers
b
ran
d
,
i
nc
l
u
di
n
gi
ts w
id
esprea
d
reco
g
n
i
t
i
on an
d
stron
g
reputat
i
on
in
t
h
e mar
k
et,
i
s one o
f
our most va
l
ua
bl
e assets an
d
t
h
at
i
t prov
id
es us w
i
t
h
a compet
i
t
i
ve a
d
vanta
g
e. Ou
r
f
ranc
hi
sees operate t
h
e
i
r
b
us
i
nesses un
d
er our
b
ran
d
.Ina
ddi
t
i
on, we
li
cense t
h
eWe
igh
t Watc
h
ers
b
ran
d
to t
hi
r
d
-
p
art
y
manu
f
acturers o
f
a var
i
et
y
o
fg
oo
d
s,
i
nc
l
u
di
n
gf
oo
d
pro
d
ucts. Because our
f
ranc
hi
sees an
dli
censees are
i
n
d
epen
d
ent t
hi
r
d
part
i
es w
i
t
h
t
h
e
i
r own
fi
nanc
i
a
l
o
bj
ect
i
ves, act
i
ons ta
k
en
by
t
h
em,
i
nc
l
u
di
n
gb
reac
h
es o
f
t
h
e
ir
contractua
l
o
blig
at
i
ons, suc
h
as not
f
o
ll
ow
i
n
g
our pro
g
ram or not ma
i
nta
i
n
i
n
g
our qua
li
t
y
stan
d
ar
d
s, cou
ld h
ar
m
o
ur
b
ran
d
.A
l
so, t
h
e pro
d
ucts we
li
cense to t
hi
r
d
part
i
es ma
yb
esu
bj
ect to pro
d
uct reca
ll
s,
li
t
ig
at
i
on or ot
h
er
d
e
fi
c
i
enc
i
es. An
y
ne
g
at
i
ve pu
bli
c
i
t
y
assoc
i
ate
d
w
i
t
h
t
h
ese act
i
ons wou
ld
a
d
verse
ly
a
ff
ect our
b
ran
d
an
d
ma
y
r
esu
l
t
i
n
d
ecrease
d
meet
i
n
g
atten
d
ance, Internet su
b
scr
i
pt
i
ons an
d
pro
d
uct sa
l
es an
d
, as a resu
l
t,
l
ower revenues
an
d
pro
fi
ts.
O
ur international operations expose us to economic, political and social risks in the countries in which w
e
opera
t
e.
The international nature of our operations involves a number of risks, including changes in US and foreig
n
government regulations, tariffs, taxes and exchange controls, economic downturns, inflation and political an
d
social instability in the countries in which we operate and our dependence on foreign personnel. Foreign
government regulations may also restrict our ability to operate in some countries, acquire new businesses o
r
r
epatriate dividends from foreign subsidiaries back to the United States. We cannot be certain that we will b
e
able to enter and successfully compete in additional foreign markets or that we will be able to continue to
compete in the foreign markets in which we currently operate.
We are exposed to
f
ore
i
gn currency r
i
sks
f
rom our
i
nternat
i
onal operat
i
ons that could adversely a
ff
ect our
fi
nanc
i
al results
.
A
s
ig
n
ifi
cant port
i
on o
f
our revenues an
d
operat
i
n
g
costs are
d
enom
i
nate
di
n
f
ore
ig
n currenc
i
es. We ar
e
t
h
ere
f
ore expose
d
to
fl
uctuat
i
ons
i
nt
h
e exc
h
an
g
e rates
b
etween t
h
eUS
d
o
ll
ar an
d
t
h
e currenc
i
es
i
nw
hi
c
h
ou
r
f
ore
ig
n operat
i
ons rece
i
ve revenues an
d
pa
y
expenses. We
d
o not current
ly h
e
dg
e, an
dh
ave not
hi
stor
i
ca
lly
h
e
dg
e
d
, our operat
i
ona
l
exposure to
f
ore
ig
n currenc
yfl
uctuat
i
ons. Our conso
lid
ate
dfi
nanc
i
a
l
resu
l
ts are
p
resente
di
nUS
d
o
ll
ars an
d
t
h
ere
f
ore,
d
ur
i
n
g
t
i
mes o
f
a stren
g
t
h
en
i
n
g
US
d
o
ll
ar, our reporte
di
nternat
i
ona
l
r
evenues an
d
earn
i
n
g
sw
ill b
ere
d
uce
db
ecause t
h
e
l
oca
l
currenc
y
w
ill
trans
l
ate
i
nto
f
ewer US
d
o
ll
ars. In a
ddi
t
i
on
,
t
h
e assets an
dli
a
bili
t
i
es o
f
our non-US su
b
s
idi
ar
i
es are trans
l
ate
di
nto US
d
o
ll
ars at t
h
e exc
h
an
g
e rates
i
ne
ff
ect
at t
h
e
b
a
l
ance s
h
eet
d
ate. Revenues an
d
expenses are trans
l
ate
di
nto US
d
o
ll
ars at t
h
e avera
g
e exc
h
an
g
e rate
f
or
t
h
e per
i
o
d
. Trans
l
at
i
on a
dj
ustments ar
i
s
i
n
gf
rom t
h
e use o
f diff
er
i
n
g
exc
h
an
g
e rates
f
rom per
i
o
d
to per
i
o
d
are
r
ecor
d
e
di
ns
h
are
h
o
ld
ers’ equ
i
t
y
as accumu
l
ate
d
ot
h
er compre
h
ens
i
ve
i
ncome (
l
oss). Trans
l
at
i
on a
dj
ustments
ar
i
s
i
n
gf
rom
i
ntercompan
y
rece
i
va
bl
es w
i
t
h
our
f
ore
ig
nsu
b
s
idi
ar
i
es are
g
enera
lly
recor
d
e
d
as a component o
f
o
t
h
er expense (
i
ncome). Accor
di
n
gly
,c
h
an
g
es
i
n currenc
y
exc
h
an
g
e rates w
ill
cause our revenues, operat
i
n
g
costs, net
i
ncome an
d
s
h
are
h
o
ld
ers’ equ
i
t
y
to
fl
uctuate
.
We ma
y
not success
f
ull
y
make ac
q
u
i
s
i
t
i
ons or enter
i
nto
j
o
i
nt ventures and we ma
y
not success
f
ull
y
i
ntegrate, operate or real
i
ze the ant
i
c
i
pated bene
fi
ts o
f
such bus
i
nesses.
A
s part o
f
our growt
h
strategy, we may pursue se
l
ecte
d
acqu
i
s
i
t
i
ons or
j
o
i
nt ventures. We cannot assure you
t
h
at we w
ill b
ea
bl
etoe
ff
ect t
h
ese transact
i
ons on commerc
i
a
ll
y reasona
bl
e terms or at a
ll
. Any
f
uture
acqu
i
s
i
t
i
ons or
j
o
i
nt ventures may requ
i
re access to a
ddi
t
i
ona
l
cap
i
ta
l
,an
d
we cannot assure you t
h
at we w
ill
h
ave access to suc
h
cap
i
ta
l
on commerc
i
a
ll
y reasona
bl
e terms or at a
ll
. Even
if
we enter
i
nto t
h
ese transact
i
ons,
we may not rea
li
ze t
h
e
b
ene
fi
ts we ant
i
c
i
pate or we may exper
i
ence
diffi
cu
l
t
i
es
i
n
i
ntegrat
i
ng any acqu
i
re
d
compan
i
es an
d
pro
d
ucts
i
nto our ex
i
st
i
ng
b
us
i
ness; attr
i
t
i
on o
fk
ey personne
lf
rom acqu
i
re
db
us
i
nesses
;
s
i
gn
ifi
cant c
h
arges or expenses;
hi
g
h
er costs o
fi
ntegrat
i
on t
h
an we ant
i
c
i
pate
d
;orun
f
oreseen operat
i
n
g
diffi
cu
l
t
i
es t
h
at requ
i
re s
i
gn
ifi
cant
fi
nanc
i
a
l
an
d
manager
i
a
l
resources t
h
at wou
ld
ot
h
erw
i
se
b
e ava
il
a
bl
e
f
or t
he
o
ngo
i
ng
d
eve
l
opment or expans
i
on o
f
our ex
i
st
i
ng operat
i
ons.
14